Ninth Circuit protects California workers’ right to bring class action lawsuits against their employer

Under the National Labor Relations Act, employees have the right to work and act together in order to improve working conditions. 

However, in recent years, employers have attempted to undermine the law’s protection by forcing employees to give up their right to join together to take legal action against their employer.  If employees want to be hired or keep their job, they are required to sign onto agreements or handbooks containing “class action waivers,” parts of an agreement that effectively bar employees from suing their employer as a group.  The National Labor Relations Board has consistently maintained that this is an unfair labor practice because it infringes on workers’ right to engage in collective action

Despite the opinion of the NLRB, some federal courts have refused to strike down class action waivers. The Eighth, Fifth, and Second Circuits have upheld such waivers, claiming that employers have the right to require employees to give up the right to class action lawsuits as part of an arbitration agreement, or as a condition of employment.

In Morris v. Ernst & Young on August 22, 2016, the Ninth Circuit Court of Appeals disagreed with the Eighth, Fifth, and Second Circuits and instead sided with the NLRB and the Seventh Circuit.  The Ninth Circuit held that employers may not require employees to sign class action waivers giving up their right to join together to improve their working conditions. 

The disagreement among the federal courts makes it likely that the United States Supreme Court will review the issue in the near future.  For now, the Ninth Circuit decision means that workers in California, Oregon, Washington, Nevada, Hawaii, Alaska, Arizona, and Montana are protected in their right to bring collective and class actions.  

Stay tuned for further developments as more courts weigh-in on class action waivers.   

By Caitlin Gray | November 2, 2016

Legal Developments