Delegation, PAGA: Ninth Circuit Amends Uber Drivers Opinion So As Not To Foreclose Argument That Class Action Waivers In Arbitration Agreements Violate National Labor Relations Act

Material Amendment To A Footnote?

     On September 11, 2016, we posted about the Uber Drivers cases, Mohamed v. Uber Technologies, Inc., et al., and Gillette v. Uber Technologies, Inc., Nos. 15-16178 and 15-16181 (9^th Cir. 9/7/16). The 9^th Circuit opinion penned by Judge Clifton held that the issue of arbitrability was effectively delegated to the arbitrator by "clear and unmistakable" language.  Similarly, the issue of arbitrability of the PAGA claims was clearly and unmistakably delegated to the arbitrator in Mohamed's case, but Gillette's PAGA claim could proceed in court on a representative basis under the holding of Iskanian v. CLS Transp. L.A., LLC, 327 P.3d 129 (Cal. 2014).

     On December 21, 2016, an Order and Amended Opinion was issued, deleting a single sentence from a single footnote in a 28 page opinion. With this amendment, the panel voted to deny the Petition for rehearing en banc. The Petition was circulated to the full court, without garnering any support.

     Very interesting. So what was footnote 6, and what was deleted from it?

     Footnote 6 noted that Plaintiffs had raised the argument that the class and collective action waivers in the arbitration agreements may violate the NLRA. However, since this was raised for the first time in a sur-reply, the untimely submission waived the argument. Okay so far. The argument that class and collective action waivers violate NLRA rules prohibiting "concerted activity" was adopted by two judges on the panel in the 9^th Circuit case, Morris v. Ernst & Young, with Judge Ikuta strenuously dissenting. See our August 23, 2016 blog post on Morris.

     This is what has been deleted from footnote 6:

"Even if the argument had been properly raised, however, the option to opt out meant that Uber drivers were not required 'to accept a class-action waiver as a condition of employment,' and thus there was 'no basis for concluding that [Uber] coerced [Plaintiffs] into waiving [their] right to file a class action' in violation of the NLRA. Johnmohammadi v. Bloomingdale's, Inc., 755 F.3d 1072, 1075 (9th Cir. 2014); see also Morris v. Ernst & Young, No. 13-16599, 2016 WL 4433080 at n.4 (Aug. 22, 2016)."

     Perhaps some judges felt uncomfortable with dictum in footnote 4 of Morris, stating that there is no violation of the NLRA just because an employee could have opted out of the individual dispute resolution agreement and chose not to?

     Usually changes to footnotes are not very important. This change strikes us as important, because of the ongoing issue regarding concerted activity, class action waivers, and the NLRA.