18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 205 commencement of their employment. The Court granted the motion to compel arbitration. Defendant argued that: (i) the agreements’ delegation clause required the arbitrator to determine the enforceability and applicability of the agreements; (ii) alternatively, valid agreements existed between Plaintiffs and Defendant; and (iii) the agreements encompassed Plaintiffs’ claims. Plaintiffs challenged the existence of an agreement to arbitration because Defendant’s employee handbook, in which the agreement was contained, disclaimed any contractual obligations, and therefore Plaintiffs argued the agreement was unenforceable. However, the Court determined that the handbooks in question contained provisions exempting the agreement from the contractual disclaimer. Id . at *9-10. Accordingly, the Court concluded that a valid contract was formed as to the agreements when Plaintiffs electronically signed them in 2017 and in 2018. Plaintiffs also contended that the delegation clause was procedurally and substantively unconscionable, and thus the Court, not an arbitrator, should decide whether the agreement was enforceable. Id . at *12. The Court noted some degree of procedural unconscionability because nothing called Plaintiffs’ attention to the delegation clause, and Plaintiffs were not required to sign or initial the delegation clause itself. As for substantive unconscionability, Plaintiffs challenged the delegation clause only on the basis that it imposed filing fee costs that they could not recover in arbitration. Id . at *17. The Court concluded that the agreement absolved Plaintiffs of any fee if they could not afford it and in any event, filing fees did not render an agreement unconscionable. Id . at *18. The Court explained that since no substantive unconscionability existed, the delegation clause was not unconscionable and therefore was valid and enforceable. Id . at *18-19. The Court thus ruled that whether the agreements were valid and whether Plaintiffs’ disputes fell within the scope of the agreement were questions for the arbitrator, not the Court, to decide. For these reasons, the Court granted Defendant’s motion to compel arbitration. Bell, et al. v. Redfin Corp., Case No. 20-CV-2264 (S.D. Cal. Aug. 12, 2021). Plaintiff, a retail sales agent and also hired as independent contractor as an associate agent, filed a class action alleging that Defendant failed to pay overtime compensation in violation of the California Labor Code. Defendant moved to compel arbitration of Plaintiff’s claims pursuant to arbitration agreements he signed at the commencement of employment and his independent contractor relationship. The Court granted the motion to compel arbitration. Although Plaintiff was subject to two separate arbitration agreements, they both contained identical delegations clauses vesting the arbitrator with the authority to determine the enforceability of the clause, any questions of procedural or substantive unconscionability, and the application of the agreements to any disputes between the parties. Defendant argued that the agreements’ delegation clause required the arbitrator to determine both the enforceability and applicability of the agreements. The Court agreed that a plain reading of the delegation clause showed a clear and unmistakable intent to delegate threshold matter to the arbitrator. Id . at 8. Plaintiff argued that the agreements were unconscionable. The Court, however, noted that Plaintiff failed to advance any viable arguments specific to the delegation provision. The Court thus ruled that whether the agreements were valid and whether Plaintiffs’ disputes fell within the scope of the agreement were questions for the arbitrator, not the Court, to decide. For these reasons, the Court granted Defendant’s motion to compel arbitration. Bryant, et al. v. Toppers International, Inc. , 2021 U.S. Dist. LEXIS 16019 (M.D. Ga. Jan. 28, 2021). Plaintiff, an exotic dancer at an adult night club, filed a collective action alleging that Defendant misclassified dancers as independent contractors and thereby failed to pay them overtime compensation and minimum wages in violation of the FLSA. Defendants filed a motion to compel arbitration, which the Court granted. First, the Court noted that it was undisputed that Plaintiff entered an arbitration agreement with Defendant, which stated that any “covered claim” Plaintiff "may have presently or hereafter acquire against" Defendant, "its owners, directors, officers or its agents . . . shall be submitted exclusively to and determined exclusively by binding arbitration under the Federal Arbitration Act." Id . at. *2. Plaintiff argued that Defendant waived its right to insist upon arbitration by responding to Plaintiff’s previously filed motion for conditional certification. However, the Court found that in answering Plaintiff’s complaint, Defendant asserted several affirmative defenses, including the agreement that Plaintiff signed that she would submit FLSA claims against Defendant to binding arbitration. Accordingly, the Court determined that Defendant placed Plaintiff on notice of its intent to invoke arbitration at the outset of the litigation. Further, the Court explained that Defendant specifically opposed Plaintiff’s motion for conditional certification based on the fact that she had signed a binding arbitration agreement. Under these circumstances, the Court found that Defendant did not waive their right to move to compel arbitration. Accordingly, since it was undisputed that Plaintiff signed an arbitration agreement that required her to arbitrate her FLSA claims against Defendant, the Court granted Defendant’s motion to compel and dismissed the action.