18th Annual Workplace Class Action Report - 2022 Edition

208 Annual Workplace Class Action Litigation Report: 2022 Edition Plaintiff’s claims against SemGroup unquestionably comprised "substantially interdependent and concerted misconduct" with Cypress. Id . at *11. The Tenth Circuit ruled that Cypress employed Plaintiff, paid his wages, and withheld his taxes, and Plaintiff only performed work for SemGroup by virtue of his employment with Cypress. Given these facts, any alleged FLSA violations committed by SemGroup, a non-signatory to Plaintiff’s employment agreement, were inherently "interdependent" on the alleged misconduct of Cypress, a signatory to Ferrell’s employment agreement. Id . The Tenth Circuit found that the appropriate course of action would to require Plaintiffs to honor the contract he agreed to and arbitrate his claims. Accordingly, the Tenth Circuit reverse and remanded the District Court’s ruling denying the motions to compel arbitration. Finch, et al. v. Lowe ’ s Home Centers, 2021 U.S. Dist. LEXIS 132035 (D.S.C. July 15, 2021). Plaintiff, an installer, filed a collective and class action alleging that Defendant misclassified installers as independent contractors and thereby failed to pay them overtime compensation and provide benefits in violation of the FLSA and state wage & hour laws. Defendant filed a motion to compel arbitration of Plaintiff’s claims pursuant to the "Contract for Installation Services" that Plaintiff signed on December 10, 2014. The Court granted the motion. Plaintiff argued that the contract’s modifications clause rendered Defendant’s promise to arbitrate illusory, and thus Defendant did not bind itself and there was no mutual promise to arbitrate. The Court found the modifications clause did not render Defendant’s promise to arbitrate illusory because the clause did not give it unfettered discretion, and any modifications made to the provisions of the contract did not come into effect until those modifications were accepted by the Installers through their "acceptance of Orders and performance of Installation Services." Id . at *14. Plaintiff contended that when he received the contract via email, the email contained a list of the changes made to the contract from previous iterations but did not mention the changes to the arbitration agreement. Id . at *17. However, the Court opined that: (i) Plaintiff had sufficient time to read the contract and inform himself of its contents before signing it, and (ii) the entire arbitration clause was printed in all bold font and large sections of it are in all capital letters. Plaintiff also contended that the manner of delivery of the contract was “the essence of unfair surprise," because it was sent via electronic communication directly from Defendant’s corporate office, and prior policy changes came from the District Sales Manager in person and on paper. Id . at *20-21. The Court opined that Plaintiff provided no pertinent case law authority to support the argument that a switch to electronic contracts was in any way unconscionable. Therefore, upon consideration of the issues, the Court found that Plaintiff failed to meet his burden to establish procedural unconscionability. Plaintiff further argued that the arbitration clause was "decidedly one-sided” and lacked mutuality because the contract’s indemnification clause would require Plaintiff to indemnify Defendant’s on the claims asserted in this case. Id. at *23. The Court disagreed. It found a reading of the clause showed that Plaintiff’s interpretation was incorrect. Finally, Plaintiff argued that the that the arbitration agreement was one-sided because Plaintiff did not have the right to unilaterally modify the contract without notice as did Defendant. Id. at *26. However, the Court ruled that there was no evidence to suggest that the power of Defendant to unilaterally modify or the prescribed method for acceptance of such modifications was substantively unconscionable. For these reasons, the Court granted Defendant’s motion to compel arbitration of Plaintiff’s claims. Garcia-Alvarez, et al. v. Fogo De Chao Churrascaria Pittsburgh LLC, 2021 U.S. Dist. LEXIS 234194 (E.D. Tex. Dec. 7, 2021). Plaintiff, a restaurant employee, filed a class and collective action alleging that Defendant failed to pay minimum wages in violation of the FLSA and various states’ wage & hour laws. While this case was pending, Defendants sent a "Mutual Arbitration Agreement" ("Agreement") to all employees, which provided that all disputes between the parties would be subject to binding arbitration. Id . at *2. At the time the Agreement was distributed to employees, only one opt-in Plaintiff was still employed with Defendants, and she voluntarily terminated her employment prior to signing the Agreement. Plaintiff filed a motion requesting that the Court invalidate the Agreement as to potential collective action members. Id . at *3. The Court denied the motion. Plaintiff argued that Defendants’ implementation of the arbitration program was an improper, coercive, and misleading communication to litigants because: (i) the agreement was sent out to employees after the collective action was filed; (ii) the Agreement failed to inform potential collective members of the impact that signing the Agreement would have on their rights in the action; and (iii) failed to provide a clear and unambiguous opportunity to reject the Agreement. Id . The Court found that although Plaintiff generally argued that the Agreement was coercive, he failed to provide any specific evidence of coercion or efforts to undermine the potential collective action by Defendants. Id . at *6. The Court noted that there was no evidence that Defendants targeted the putative collective action members, or pressured them or took advantage of the disparity in