By: Marisa Ratinoff

Like the Second Circuit, the Ninth Circuit recently enforced an Ernst & Young LLP arbitration agreement, reversing the district court's denial of a motion to compel arbitration in a wage and hour suit brought by a former employee.

The lower court initially ruled that Ernst & Young had waived its right to arbitrate by delaying its assertion of the defense, but the Ninth Circuit reversed finding Richards failed to establish that he suffered any prejudice from Ernst & Young's delay.

Richard urged the Court to rely on the National Labor Relations Board's decision in D.R. Horton, in which the NLRB concluded that a waiver of the right to bring a class action claim as a condition of employment violated federal labor laws.  Despite plaintiff's urging, the Court declined to do so due to Richard's failure to raise the argument to the district court.

However, the Ninth Circuit specifically noted that the majority of courts who have considered the issue declined to follow the NLRB's controversial ruling.

Instead, as did the Second Circuit recently, the Ninth Circuit applied the U.S. Supreme Court's decision in American Express Co. v. Italian Colors Restaurant.

Employers should be encouraged by the unity of federal courts declining to follow the NLRB's attack on class action waivers but should be cautious as the enforceability of class action waivers is still unsettled in other jurisdictions.

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