Morris v. Ernst & Young, LLP, 2016 WL 4433080 (9th Cir. 2016)

As a condition of employment, Stephen Morris and Kelly McDaniel were required to sign agreements not to join with other employees in bringing legal claims via arbitration against their employer. Morris and McDaniel filed a class and collective action against the company, alleging they had been misclassified as employees exempt from overtime under the Fair Labor Standards Act and California state law. In response, the employer filed a motion to compel arbitration pursuant to the agreements the employees had signed; the district court ordered individual arbitration and dismissed the case. In this opinion, the United States Court of Appeals for the Ninth Circuit reversed the judgment, holding that the agreement interferes with the employees’ rights under Sections 7 and 8 of the National Labor Relations Act (protecting “concerted activity”). In so holding, the Ninth Circuit joined the Seventh Circuit in adopting the position of the National Labor Relations Board as set forth in D.R. Horton, 357 NLRB No. 184 (2012), enf. denied, 737 F.3d 344 (5th Cir. 2013) and Murphy Oil USA, Inc., 361 NLRB No. 72 (2014), enf. denied, 808 F.3d 1013 (5th Cir. 2015). See also Young v. REMX, Inc., 2016 WL 4386166 (Cal. Ct. App. 2016) (trial court’s order compelling arbitration of individual claims, dismissing class claims, and bifurcating and staying the Private Attorneys General Act (“PAGA”) representative claims was non-appealable).