Pro-employer arbitration decision from the 9th Circuit

Part of the 9th Circuit's "liberal" reputation is that it is quick to deny employers' motions to compel arbitration, and thus favors employees over employers. The per curiam decision in Richards v. Ernst & Young (9th Cir 08/21/2013) is shedding a different light on the court. The district court had denied the employer's motion to compel arbitration, which was made after "years of litigation," on the ground that the delay resulted in a waiver. Not so, said the 9th Circuit, for the simple reason that the employee-plaintiff was not prejudiced by the delay.

  • No prejudice resulted from the trial court's dismissal of one of Richards' claims because that dismissal was without prejudice.
  • No prejudice resulted from the trial court's resolution of another claim because it was resolved on the basis of standing - not on the merits.
  • No prejudice resulted from the discovery process because the employer did not gain any information that it could not have gained in arbitration.
  • No prejudice resulted from the expenses involved in the discovery process because these were "self-inflicted" expenses. Richards chose an improper forum in contravention of her contract.

The 9th Circuit also discussed the NLRB's decision in D. R. Horton, 357 NLRB No. 184 (2012), which held that requiring employees to agree to class action waivers is an unfair labor practice. However, Richards didn't raise this argument until after the trial court denied the employer's motion to compel. Further, the 9th Circuit laid out a series of arguments against (and none for) following D. R. Horton.  So, the court enforced the class action waiver.