Ninth Circuit Affirms Order Compelling Class Arbitration in Employment Dispute Involving Two Employment Agreements With Varying Arbitration Provisions
Oracle America Inc. appealed the trial court’s order compelling class arbitration in an employment dispute in which there were two agreements at issue, one with, and one without, a class action waiver. The Ninth Circuit rejected Oracle’s arguments that the trial court should have selected the former agreement (with the class waiver) over the latter (without the class waiver). First, the court rejected Oracle’s argument that the trial court, as opposed to the arbitrator, should have decided whether there was an enforceable agreement to arbitrate. Here, the Ninth Circuit held, both contracts clearly delegated the issue of arbitrability to the arbitrator. Next, the Ninth Circuit was not persuaded by Oracle’s argument that the trial court should have decided which of the two agreements the arbitrator should enforce, ruling that there was no dispute that the agreement on which the arbitrator relied (the one lacking a class action waiver) was properly entered into by the parties. Finally, the Ninth Circuit rejected Oracle’s argument that the trial court should have considered Oracle’s argument that the second agreement was a novation of the first agreement. The issue of novation was not a defense to the agreement’s validity that should have been decided by the trial court; it was an issue that was to be decided by the arbitrator.
Johnson v. Oracle America, Inc., No. 17-17489 (9th Cir. Mar. 21, 2019).