The Ninth Circuit recently addressed a significant question for employers: can employees rely on rulings denying arbitration in other cases to avoid arbitration under their own agreements?
In O’Dell v. Aya Healthcare Services, Inc., the court answered no.
Case Background
The issue arose in a case involving a dispute that began when several former employees of Aya Healthcare Services (“Aya”), a travel nursing agency that places nurses and clinicians with hospitals, filed a putative class action alleging a variety of claims, including breach of contract, fraudulent inducement, state wage-and-hour violations, and violations of the Fair Labor Standards Act.
As a condition of employment, each employee signed an arbitration agreement containing a delegation clause requiring an arbitrator, not a court, to decide challenges to the agreement’s validity. After the complaint was filed, Aya moved to compel arbitration and the district court granted the motion as to four named plaintiffs.
Aya then proceeded to four separate arbitrations. In arbitration, each employee challenged the validity of the agreement. The results, however, were mixed: two arbitrators found the agreements unconscionable based on the fee and venue provisions, while two others upheld the agreements as valid because a savings clause in the agreements cured any unconscionability.
An additional 255 plaintiffs later opted into the action under the Fair Labor Standards Act (“FLSA”). Aya moved to compel arbitration as...
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