In an important decision for employees in all industries, the U.S. Ninth Circuit Court of Appeals held that companies cannot force workers to surrender their right to file and join class action lawsuits involving wage and hour claims or restrictive employment terms and conditions.

In Morris, et al. v. Ernst & Young, LLP, issued August 22, the federal appellate court said that accounting firm Ernst & Young had violated the federal National Labor Relations Act by requiring workers to sign a class action waiver contained in employee arbitration agreements. The case was brought on behalf of a group of administrative staffers who sought both back pay for work performed during breaks and overtime for when they were asked to stay past the end of their shifts to assist with audits.

A district court dismissed the case the employees, finding the claims were prohibited because of the arbitration agreement the workers were compelled to sign. With support from the National Labor Relations Board (NLRB), the plaintiffs then appealed to the Ninth Circuit, which found these arbitration agreements were unlawful because they attempted to prevent employees from banning together to bring class actions disputing wage and overtime issues.

The Ninth Circuit’s ruling is an important victory for all workers as companies increasingly use arbitration agreements in employment contracts to limit class action litigation. Courts have been divided, but the Ninth Circuit’s opinion sets significant precedent, perhaps paving the way for a final resolution by the U.S. Supreme Court. The NLRB has also been very vocal on the issue, striking down the arbitration agreements of American Express, Citigroup, and Domino’s, among dozens of other companies.

The ability to file class action lawsuits when employers break the law is a crucial right for employees. It protects workers of all types from exploitation and provides a necessary means of recovering lost wages and challenging illegal contract terms.

The attorneys in Sommers Schwartz’s Employment Litigation Group regularly represent workers in class action lawsuits against their employers. If you have a situation you would like to discuss, please contact us today!

Jason J. Thompson

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Jason J. Thompson

Jason Thompson is a nationally board certified trial attorney and co-chairs Sommers Schwartz’s Complex Litigation Department. He has a formidable breadth of litigation experience, including class action and multidistrict litigation (MDL), and practices nationwide in both state and federal courts.