Judge Strikes Down E&Y Employment Clause Barring Workers from Class Action Suits

By:
Chris Gaetano
Published Date:
Aug 23, 2016
Arbitration

Like many companies, Ernst and Young required their workers to give up their right to pursue work-related claims through class action lawsuits as a condition of employment. However, a recent decision by the 9th U.S. Circuit Court of Appeals in San Francisco said that such requirements are illegal, according to Reuters

Judge Sidney Thomas, chief of the 9th circuit, said that federal law guarantees the rights of workers to act together on a suit, and so forcing each employee to resolve claims via individual arbitration was not legal, as per the National Labor Relations Act. Ernst and Young's attorneys argued, though, that the requirement was legal because of another law, the Federal Arbitration Act, which says courts cannot disfavor arbitration. 

Ernst and Young is the latest company to have anti-class action requirements struck down, joining companies such as American Express Co , Citigroup Inc and Domino's Pizza Inc. Reuters said that the National Labor Relations Board has taken the position that companies cannot force workers to give up their rights to a class action lawsuit. But not every court has agreed with this position: Reuters said that other courts have rejected this claim and found in favor of the company instead. This means that the case will likely have to go before the Supreme Court before any final resolution on the matter is reached. 

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