The interplay between arbitration clauses in employment contracts and labor laws

A recent case out of the Southern District of California, Davis v. Red Eye Jack’s Sports Bar, Inc., Case No.: 3-17-cv-01111-BEN-JMA (behind paywall), found an arbitration clause in an employment contract unenforceable because it contained a concerted action waiver. Such a waiver violates labor law policy protecting employees’ right to concerted legal claims. The court found that the waiver rendered the entire arbitration agreement unenforceable. 

However, the Supreme Court has granted review in the Ninth Circuit case of Morris v. Ernst & Young, LLP, whose precedent this court followed in its ruling. Therefore, the court stayed the action pending the Supreme Court’s decision in Morris, as a reversal of Morris would dictate a different outcome to this case.