The Ninth Circuit recently held in Morris v. Ernst & Young, LLP that employees have a substantive right to pursue work-related claims collectively, and employers may not force employees to waive this right as a condition of employment. As a result, class action waivers in arbitration agreements signed as a condition of employment are no longer enforceable in California.
Like many employers throughout the country, Ernst & Young required that all its employees sign arbitration agreements as a condition of employment, and each agreement required that the employees promise not to join with other employees in bringing legal claims against the company. Specifically, the agreements required that the employees pursue legal claims (1) exclusively through arbitration, and (2) only as individuals and in "separate proceedings." As a result, employees could not initiate concerted legal claims against the company in any forum, whether court, arbitration proceedings or elsewhere.
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