On April 1, 2026, the Ninth Circuit in O’Dell v. Aya Healthcare Services, Inc., 171 F.4th 1173 (9th Cir. 2026) held that the Federal Arbitration Act (“FAA”) protects employers from plaintiffs’ attempts to use inconsistent decisions about the enforceability of an arbitration agreement to invalidate all arbitration agreements in a class action. The court explained that extending a small number of arbitration rulings to bar arbitration for other employees would undermine the individualized nature of arbitration and conflict with the FAA’s strong policy favoring enforcement of arbitration agreements as written.
This decision is a win for California employers. It generally reinforces the enforceability of arbitration agreements in a class action context and prevents isolated arbitration enforcement losses from automatically voiding the agreements for the rest of the putative class.
Former employees of a travel nursing agency filed a putative class action alleging wage and hour violations. The agency’s arbitration agreements included delegation clauses assigning arbitrability issues to the arbitrator.
The district court compelled arbitration for the four named plaintiffs, but arbitrators reached inconsistent results: two upheld the agreements, and two found them unconscionable. After 255 additional plaintiffs joined the litigation, the employer again moved to compel arbitration. The district court denied the motion, applying non-mutual offensive collateral estoppel...
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