On August 21, 2013, in Richards v. Ernst & Young, LLP, the US Court of Appeals for the Ninth Circuit issued an opinion enforcing an arbitration agreement with a class action waiver in the context of wage and hour claims.

Michelle Richards brought state wage and hour claims against her former employer, Ernst & Young LLP. After the Supreme Court's decision in AT&T Mobility LLC v. Concepcion, Ernst & Young filed a motion to compel arbitration of Richards' state wage and hour claims. The district court denied the motion to compel arbitration, holding that Ernst & Young had waived its right to arbitrate the claims because it had failed to assert that right as a defense in an action brought by two other former employees whose action had been consolidated with Richards' claims. Ernst & Young appealed the district court's ruling to the Ninth Circuit.

The Ninth Circuit reversed the district court’s denial of Ernst & Young's motion to compel arbitration. Specifically, the Ninth Circuit rejected Richards' argument that she was prejudiced by Ernst & Young's delay in moving to compel arbitration. The Ninth Circuit also vacated the district court's order certifying a class because the arbitration agreement between Richards and Ernst & Young precluded class arbitration.

Richards also argued that the Ninth Circuit should affirm the district court's ruling based on the NLRB's decision in D.R. Horton, which held that arbitration agreements with class action waivers create an unfair labor practice under the NLRA. The Ninth Circuit declined to rule on this issue because Richards failed to raise this argument before the district court. The Ninth Circuit, however, opined that the NLRB's decision in D.R. Horton is inconsistent with Supreme Court precedent. The Ninth Circuit also noted that the overwhelming majority of courts to consider the issue "determined that they should not defer to the NLRB's decision in D.R. Horton because it conflicts with the explicit pronouncements of the Supreme Court . . . "

Employers in the Ninth Circuit should consider this case a victory. It highlights that federal courts are bound by Supreme Court precedent holding that courts should rigorously enforce arbitration agreements, despite the NLRB's decision in D.R. Horton.