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  • Ninth Circuit: Mandatory Waiving of Class-Action Rights Invalid; Other Cases Affected
    Posted On: Aug 25, 2016

    By JoAnne Powers, August 26, 2016:  

    On Monday, the Ninth Circuit Court of Appeals in San Francisco ruled that companies cannot force workers to abide by agreements requiring them to use private arbitration and give up their right to file a class action lawsuit over workplace issues.

    Seth Goldstein, Senior Business Rep at Office and Professional Employees International Union Local 153 in New York, has been involved in several cases involving such agreements:

    [Seth Goldstein]: “It’s overwhelming.  It’s a seminal decision.  The mandatory arbitration issue is really the yellow-dog contract of the 21st century.  It’s really freezing employees out of the legal system and saying that the courts are only for big corporations.”

    Tara Zoumer was fired from officesharing company WeWork for refusing to sign an arbitration agreement that would have waived not only class action claims but also the right to trial by jury. 

    [Tara Zoumer]: “I didn’t have a choice.  I was told that my continue employment would count as consent to the new agreement.  I didn’t realize that companies had the power to take away the rights of citizens.  And that is a power they should never have.  I had my job taken away from me for refusing to sign.  To have it part of a basic employment contract…to force people into a private system that is unregulated…is pretty terrifying.”

    Zoumer says companies have been increasingly using these arbitration agreements over the last decade:

    [Tara Zoumer]: “Honestly, I’m hoping one day that the Supreme Court will rule that it’s absolutely illegal for a company to prevent employees from collective action, which is really what arbitration agreements do.  They make it much cheaper and easier for a company to fight individuals, one at a time, instead of as a group.  Really, the only person it’s more cost-effective and easy to, are the companies that are utilizing this system.  We really need the government and our judicial system to start supporting its citizens rather than companies.”

    Monday’s ruling is already influencing other cases currently underway, including the WeWork’s case.  Thursday the NLRB has found merit to several charges, and is now issuing issue a complaint against TriNet, Inc, a co-employer that administers WeWork’s benefits.    Goldstein sees a change in the legal landscape for these agreements following the February death of Supreme Court Justice Antonin Scalia:

    [Seth Goldstein]: “At least initially, some of the courts were invalidating the board’s position, saying that a class action was not a substantive right, but basically a civil procedure process.  And that comes down from a series of decisions with Judge Scalia.  The courts have now been going the other way.  The ninth circuit decision now undercuts completely WeWork’s position on this.  We believe that this decision will be before the Supreme Court sometime next year.”

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