Yesterday, June 23, 2014, the California Supreme Court agreed that an arbitration class action waiver in Iskanian v. CLS Transportation Los Angeles was enforceable. See my June 23 post. On the same day, the Ninth Circuit Court of Appeals agreed that class action waivers are valid – at least in the circumstances of the two cases decided that day. One case involved an opportunity to “opt out” of arbitration. The other case concluded that the employer had given employees reasonable notice of a change in its arbitration policy.
The panel in Johnmohammadi addressed, then ducked, an issue raised by Justice Werdegar’s dissent yesterday in Iskanian: whether the class-action waiver, enforceable under California law, is nevertheless unenforceable under the Norris-LaGuardia Act, and the National Labor Relations Act, making it illegal for an employer “to interfere with, restrain, or coerce employees in the exercise” of certain rights, including certain “concerted activities” protected by the Norris-LaGuardia Act. While the panel concluded that “[t]here is some judicial support for her position,” the plaintiff failed to show interference, restrain, or coercion. Why? Because the employer, Bloomingdale’s, offered plaintiff an opportunity to “opt out” of arbitration, and she did not take that opportunity. Had she opted out, explained Judge Watford, “she would be free to pursue this class action in court.”
In an opinion penned by Judge Smith, the panel reversed the district court’s order denying Nordstrom’s motion to compel arbitration of an employee’s claims brought as a putative class action. The key issue here was whether Nordstrom’s complied with a provision requiring it to give employees 30 days written notice of any substantive changes to the arbitration provision – and the change in arbitration policy, precluding most class action lawsuits, was substantive. Here, sending a letter to Davis and other employees “informing them of the modification, and not seeking to enforce the arbitration provision during the 30 day notice period,” constituted reasonable notice of a change.