18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 223 the Agreements, including: (i) that the final and binding arbitration proceedings would be subject to judicial review pursuant to the California Arbitration Act; and (ii) that the arbitrator’s discretion to award attorneys’ fees and costs was limited to essentially ensure Plaintiffs would be awarded their fees and the Club would not. Id . at *5. Plaintiff asserted that if the Agreements were not interpreted as suggested, they were unconscionable. The Court disagreed. It noted that unconscionability requires both a procedural and substantive component and the party opposing arbitration bears the burden of proof. Id . at *6. The Court observed that Plaintiffs failed to provide any evidence or argument that the Agreements were oppressive, overly harsh, or one-sided. The Court further ruled that by the plain language of the Agreements, the arbitrator must resolve any disputes. The Court explained that the Agreements required that disputes "will be submitted to and resolved by final and binding arbitration as provided for by the California Arbitration Act; " and that the “arbitrator will have the authority to require either party to pay the fee for the other party’s representation during the arbitration, as is otherwise permitted under federal or state law . . ." Id . at *9. Accordingly, the Court found no ambiguity in the Agreements. For these reasons, the Court granted Defendant’s motion to compel arbitration and dismissed the action. Young, et al. v. Shipt, Inc., 2021 U.S. Dist. LEXIS 184847 (N.D. Ill. Sept. 27, 2021). Plaintiff, a former shopper with Defendant, a technology company that directed retail customers to local merchants and shoppers for same- day delivery of groceries and household goods, filed a collective action alleging that Defendant misclassified shoppers as independent contractors and thereby failed to pay minimum wages and overtime compensation in violation of the FLSA, the Illinois Minimum Wage Law, and the Illinois Wage Payment and Collection Act. Defendant filed a motion to compel arbitration of Plaintiff’s claims pursuant to an agreement she signed at the beginning of the relationship. The Court granted Defendant’s motion. The relationship between the parties was governed by an Independent Contractor Services Agreement (“ICSA”). The ICSA contained an Arbitration Agreement that stated that "any and all disputes, claims, or controversies" arising out the relationship between the parties must "be resolved through mandatory, binding arbitration." Id . at *3-4. Plaintiff contended that she was exempt from the Arbitration Agreement by § 1 of the Federal Arbitration Act (“FAA”) under the transportation-worker exemption. To qualify under the exemption, the Court explained that Plaintiff must be in a "class of workers engaged in foreign or interstate commerce." Id . at *8. The Court looked to the overall occupation to determine whether the class of shoppers engaged in interstate commerce and whether Plaintiffs was a member of that class. The Court opined that pertinent case law authorities "have repeatedly emphasized transportation workers are those who are actually engaged in the movement of goods in interstate commerce" as a core component of their job. Id. at *9. Qualifying workers must "be connected not simply to the goods" that travel across state or national lines, "but to the act of moving those goods across state or national borders," such that the class of workers themselves "are engaged in the channels of foreign or interstate commerce." Id. Using that framework, the Court held that even though goods Plaintiff delivered have crossed state lines in the past, the only inquiry was "what the worker does," not "where the goods have been." Id. at *10. The Court held that the shoppers were not engaged in the actual enterprise of moving goods across state lines and only goods from local stores to local customers. Accordingly, the Court held that the FAA exemption did not apply to Defendant’s shoppers. Since Plaintiff did not contest that a valid, enforceable arbitration agreement existed, and the Court found that she was not exempt from the agreement, the Court granted Defendant’s motion to compel arbitration of Plaintiff’s claims. (iii) Awards Of Attorneys ’ Fees And Costs In FLSA Collective Actions Charbonneau, et al. v. Mortgage Lenders Of America LLC , 2021 U.S. Dist. LEXIS 4537 (D. Kan. Oct. 13, 2021). Plaintiffs, a group of mortgage Loan Officers, filed a collective action alleging that Defendants failed to pay overtime compensation in violation of the FLSA. The parties ultimately settled the matter and the Court granted preliminary settlement approval. Plaintiffs’ counsel thereafter moved for an award of attorneys’ fees and costs. The Court granted in part the motion. The settlement agreement had a gross total of over $3.9 million. Plaintiffs sought an award of $2.2 million in attorneys’ fees and $131,000 in costs. Defendants argued that Plaintiffs should be awarded less than $1 million in attorneys’ fees and $30,000 in costs. The Court found that Plaintiffs’ proposed attorney rates were unreasonable, as they equated to a blended rate of $585 per hour. The Court reduced the rates suggested by counsel because it found the rates to be on the high-end of a reasonable range. The Court also explained that the requested attorney hours were unreasonable. Plaintiffs asserted that counsel staffed and managed the case efficiently and that all 3,761 hours were reasonable and necessary. Defendants argued that Plaintiffs sought to recover for duplicative work, excessive time spent on tasks,