To date, a common practice when hiring in California, and throughout the nation, has been to have new hires sign an employment contract. And, often times, there’s a little– but mighty– clause in there requiring the use of arbitration to solve any future disputes between employee and employer.

What’s more, these agreements sometimes have something called a class-action waiver attached to them, meaning that employees can’t join together to bring issues to court.

A California judge this week weighed in on a part of that agreement, saying that employers cannot preclude employees from joining together in lawsuits for unpaid hours, wages or other terms of employment.

It all stemmed from a case brought to light by employees at Ernst & Young who sued for not being paid overtime, as they felt they should have been. And they did it together, contrary to that agreement they’d signed.

Chief Judge Sidney Thomas wrote in the court’s opinion:

“The 9th Circuit’s ruling is significant, as it fundamentally reinforces the purpose of the NLRA, enacted in 1935, to give employees the right to join in concerted activity, whereby their collective might can be used to enforce their rights under various labor laws and assure fair treatment for all workers,” Attorney Peter Carlson of the Riverside-based law firm Fernandez & Lauby tells Patch.

Carlson says that the larger, class-action suits tend to have more of a lasting impact and are more likely to force employers to address issues.

“Employee groups contend that arbitration agreements with a class action waiver allow employers to engage in non-compliant pay practices without fear of consequence because employees are less likely to bring smaller unpaid wage cases individually in arbitration,” he says. “And individual cases in arbitration for one employee’s unpaid wages are unlikely to cause the employer to modify non-compliant practices, whereas a class action (or the risk of a class action) often causes employers to ensure that its pay practices are compliant with state and federal laws.”

Chief Judge Thomas’ opinion seems to echo that idea.

“This case turns on a well-established principle: employees have the right to pursue work-related legal claims together,” he wrote. “Concerted activity—the right of employees to act together—is the essential, substantive right established by the NLRA.”

However, not everyone agrees with Thomas. One of the three judges on the 9th Circuit panel wrote a dissent.

“This decision is breathtaking in its scope and in its error,” Judge Sandra S. Ikuta says. “[I]t is directly contrary to Supreme Court precedent and joins the wrong side of a circuit split. I dissent.”

As far as this case is concerned, the buck won’t likely stop here. Ernst & Young will likely seek an appeal, or even try for the Supreme Court, Carlson notes.

For more information visit the source link below.