In an important decision for workers seeking to join together to enforce their employment rights, the Ninth Circuit Court of Appeals ruled in Morris v. Ernst & Young (https://cdn.ca9.uscourts.gov/datastore/opinions/2016/08/22/13-16599.pdf) that employers can not impose concerted action waivers in mandatory arbitration agreements. The Ninth Circuit held that employers violate Sections 7 and 8 of the National Labor Relations Act […]
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The Arbitration Struggle Continues: One (more) Courageous Judge Stands Up For Workers
The Chinese philosopher Laozi is reputed to have said that a journey of a thousand miles begins with a single step. A corollary is that a long journey only continues if people are courageous enough to continue it, despite the daunting odds they may face.
A California federal judge recently joined the group of jurists who have been courageous enough to push back against the efforts to force workers and consumers out of court and into binding arbitration. The ills and abuses associated with employment arbitration are well documented, and will not be revisited here. (The New York Times ran an excellent series about those ills and abuses in 2015, which revealed that Chief Justice John Roberts of the United States Supreme Court was among the attorneys who came up with the legal strategy of forcing people into arbitration.) But it is encouraging that the struggle over arbitration is far from over, and there are some glimmers of hope for workers.
In Totten v. Kellogg Brown & Root, U.S. District Judge Dolly M. Gee denied defendant KBR’s motion to compel individual arbitration in a wage and hour class action. Judge Gee did so despite the fact that the plaintiff had signed an agreement to arbitrate his grievances in an individual manner. Judge Gee based her order on the D.R. Horton, Inc. case, a decision of the National Labor Relations Board. In D.R. Horton, the Board found that class actions are protected concerted activity under the National Labor Relations Act (NLRA). As such, private agreements that ban such class actions are unenforceable. Continue reading “The Arbitration Struggle Continues: One (more) Courageous Judge Stands Up For Workers”
Read more...When Are Union Members Required To Arbitrate Their Wage and Hour Claims? Only when the CBA Clearly and Unmistakably Waives Their Right to a Judicial Forum
An issue that sometimes arises for union members who are subject to a collective bargaining agreement (CBA) is whether they must use the grievance and arbitration mechanism provided for in the CBA for any wage and hour claims (failure to pay overtime, failure to provide meal and rest breaks, etc.), or whether they can sue in court. Federal and state authorities establish that the primary test for resolving this question is whether the CBA clearly and unmistakably provides that union members must arbitrate their statutory claims. Under the primary test, broad and vague language is not enough. The CBA must explicitly state that it requires individuals to arbitrate their statutory claims. Federal and state authorities also establish an alternative test. Under the alternative test, a general arbitration clause coupled with an explicit incorporation of statutory requirements elsewhere in the CBA may result in a requirement that the employees arbitrate their statutory claims. These tests are both explored in more detail below. Continue reading “When Are Union Members Required To Arbitrate Their Wage and Hour Claims? Only when the CBA Clearly and Unmistakably Waives Their Right to a Judicial Forum”
An Epic Dissent: Justice Werdegar Nails it in Iskanian
The majority opinion in Iskanian has been discussed at length, both here and in every other employment blog that touches on California law. What has been overlooked, however, is the incredibly eloquent and persuasive dissenting (and concurring in part) opinion written by Justice Kathryn Werdegar.
The fundamental points made by Justice Werdegar are that (1) class actions are a form of collective action; (2) Congress has made it clear for eighty years that contracts that strip employees of the right to engage in collective action are illegal; and (3) therefore class action waivers are illegal and unenforceable.
Continue reading “An Epic Dissent: Justice Werdegar Nails it in Iskanian”
Read more...Ninth Circuit Clarifies Some Issues and Ducks Others Regarding Arbitration Agreements
The Court of Appeal for the Ninth Circuit recently issued a pair of decisions that help to clarify the law surrounding arbitration agreements: Davis v. Nordstrom (holding that no particular form of notice is required to modify existing arbitration agreements) and Johnmohammadi v. Bloomingdale’s (opportunity to opt out of arbitration agreements with class action waiver defeats argument that federal labor laws bar such waivers).
In Davis v. Nordstrom, Inc. (9th Cir.2014) 2014 DJDAR 8019 the court clarified the law with respect to whether and how an employer can modify an existing arbitration agreement so as to prohibit class actions. The plaintiff in Davis had received an employee handbook that required arbitration but permitted class actions. In 2011, Nordstrom revised the arbitration agreement to bar class actions.
Read more...The Wolf Guarding the Henhouse: Should Arbitrators Decide Whether To Enforce Arbitration Agreements?
When an employee files a lawsuit in court, and the employer tries to compel the employee to proceed in arbitration based on an arbitration agreement, who gets to decide whether the arbitration agreement is enforceable? Is it the judge who is presiding over the employee’s case? Or is it an arbitrator? For more than five years, the rule in California-which we think is fair-has been that the judge decides. However, the recent decision of Tiri v. Lucky Chances, Inc. (May 15, 2014) 2014 DJDAR 6103 introduces confusion into this previously settled question. Continue reading “The Wolf Guarding the Henhouse: Should Arbitrators Decide Whether To Enforce Arbitration Agreements?”
The California Supreme Court and the fate of Class Actions
The California Supreme Court heard oral argument on April 3, 2014, in a case that is likely to significantly shape the landscape of class actions in both state and federal court: Iskanian v. CLS Transportation, No. S204032. The Supreme Court granted review in Iskanian to resolve two important questions: Continue reading “The California Supreme Court and the fate of Class Actions”
Read more...The Profoundly Negative Impact of Arbitration on Workers’ Rights
Lawyers who represent employers regularly argue that there is no real difference between arbitration and jury trials. They contend that arbitration does not affect the outcomes of cases. And, it is “cheap and quick,” and the employer pays for the arbitrator. So what are workers complaining about, anyway? But as more and more employment cases […]
Read more...If You Care About Your Rights In The Workplace, You Should Care A Lot About Italian Colors
For many years, the United States Supreme Court has recognized that an agreement to arbitrate will not be enforced if it prevents the effective vindication of federal statutory rights. This rule, called the “effective vindication rule,” has its origins in a case from 1985 called Mitsubishi Motors v. Soler, 473 U.S. 614. Its purpose is simple: to prevent corporations (and others) from crafting arbitration agreements that will for all practical purposes deprive ordinary people of their day in court.
Significantly, from 1985 until now, the effective vindication rule has been repeated and reiterated over and over again. As Justice Kagan’s forceful dissent in American Express v. Italian Colors explains:
[I]n the decades since Mitsubishi, we have repeated its admonition time and again, instructing courts not to enforce an arbitration agreement that effectively (even if not explicitly) forecloses a plaintiff from remedying the violation of a federal statutory right. Slip Op. at 4.
Unfortunately, on June 20, 2013, five justices on the Supreme Court decided that almost 30 years of the effective vindication rule had come to an end. In Italian Colors, those five justices compelled a small company to arbitrate its claims against the gigantic American Express Corporation (“Amex”). Continue reading “If You Care About Your Rights In The Workplace, You Should Care A Lot About Italian Colors”
Read more...Saving Your Constitutional Right To A Day In Court: The Arbitration Fairness Act
Imagine after months of unemployment (not hard to imagine these days), you survive a rigorous application and interviewing process to finally arrive at that climactic moment of landing a job. In your state of euphoria, and as day one as a perfect no-hassle employee. You hastily review and sign the standard new hire documents you’re given, knowing that there is nothing you could do about the content, anyways. You sign everything and vaguely hope you haven’t signed away the soul of your first born.
A while later, well after the new job excitement has worn off, you realize that maybe you should be getting paid for overtime, or maybe your supervisor should stop referring to you by a racial nickname. Maybe you complain about these new discoveries in your workplace, and are promptly fired.
No problem! You know you have rights. You contact an attorney with the intention of filing a lawsuit. Then you realize, those new hire documents you signed on day one have come back to haunt you. You’re informed that you signed an arbitration agreement and have to submit to binding arbitration. Binding arbitration with an arbitrator chosen (and paid) by your now nemesis. Continue reading “Saving Your Constitutional Right To A Day In Court: The Arbitration Fairness Act”
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