Ninth Circuit Finds Employers Can Stop Class Actions with Arbitration Clauses
In the recent Ninth Circuit decision in O’Connor v. Uber, the Ninth Circuit reversed an order of the district court denying Uber’s Motion to Compel Arbitration. Rather than address the issue of whether Uber Drivers were employees or independent contractors, the Ninth Circuit simply reversed the lower court decision that the arbitration provisions were unenforceable. In so ruling, the Ninth Circuit relied on the Federal Arbitration Act (“FAA”) which requires enforcement of arbitration provisions, and the recent decision by the Supreme Court Epic Systems Corp. v. Lewis which held that class action waivers are enforceable under the FAA.
For employers, this means that mandatory arbitration provisions may be included in contracts to minimize risk and employment litigation. Further, employers may avoid class action claims by including a class action waiver in the contract. However, there may still be risk of state employment law litigation. For the employee, it will be more difficult to pursue employment law claims or class action litigation.