Delay Does Not Equal Prejudice
The Ninth Circuit has reversed the judgment of the district court denying Ernst & Young’s motion to compel arbitration, because the 9th Circuit concluded the employer’s delay in asserting arbitral rights did not result in prejudice. Richards v. Ernest & Young LLP, No. 11-17530 (9th Cir. Aug. 21, 2013) (per curiam) (published).
Why this result, given the fact that the motion to compel was brought after years of litigation?
A dismissal of certain of plaintiff’s claims in court, without prejudice, was not “a decision on the merits.” Discovery conducted in the court proceedings could have also been gained through arbitration. Expenses in court proceedings were a “self-inflicted” wound, given that the plaintiff employee was a party to a mandatory arbitration agreement, and she made a “deliberate choice of an improper forum.”
Finally, the 9th Circuit refused to entertain an argument that relied on D.R. Horton, 357 N.L.R.B. No. 184 (Jan. 3, 2012), that the arbitration agreement was unenforceable under the NLRA. Unfortunately for plaintiff, she raised the argument too late, only after the district court had denied the motion to compel. However, the cases addressing D.R. Horton trend toward the position that the NLRA did not explicitly overrule any provision in the FAA.
Reversed.
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