18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 209 bargaining power. Id . Further, the Court explained that the fact that all employees received the Agreement suggested that Defendants did not disseminate it in response to the lawsuit or target potential Plaintiffs. The Court also determined that Plaintiff failed to meet his burden to show the Agreement was misleading, as it clearly and unambiguously laid out the arbitration terms. However, the Court did note some troubling aspects of the Agreement, including: (i) the fact that it failed to mention the ongoing litigation; and (ii) that Defendants unilaterally implemented the Agreement without requiring any "mutual" acknowledgement of it. Id . at *11. Despite these factors, the Court ruled that Plaintiff failed to meet his burden to show Defendants engaged in misleading communications with potential collective action members. The Court therefore denied Plaintiff’s request for the Court to declare the Agreement unenforceable as to potential collective action members. Glazier, et al. v. True North Energy, LLC , 2021 U.S. Dist. LEXIS 74257 (W.D. Mich. April 19, 2021). Plaintiffs, a group of former store managers, filed a collective action alleging that Defendant misclassified store managers as exempt employees and thereby failed to pay them overtime compensation in violation of the FLSA. Defendant filed a motion to compel arbitration of Plaintiffs’ claims pursuant to an agreement contained in the employee handbook that they signed at the commencement of their employment. The Court denied Defendant’s motion. It found that the arbitration provision in the employee handbook did not amount to binding agreement to arbitrate. Specifically, the handbook stated that it was not "an agreement, contract of employment, express or implied, or a promise of treatment in any particular manner in any given situation, nor did it confer any contractual rights whatsoever." Id . at *10. Moreover, the Court noted that the handbook’s agreement to arbitration was illusory because it stated that Defendant retained the right to revoke any provisions in the handbook at any time. Therefore, the Court determined that the agreement disclaimed the creation of any contract and lacked mutuality of obligations, and thus Plaintiffs were not bound by the arbitration provision in the Handbook. Id . at *11. Additionally, the Court ruled that the handbook acknowledgement form signed by Plaintiffs did not create a binding agreement to arbitrate between the parties because it expressly stated that the handbook was “intended to provide guidelines and general descriptions only; it is not the final word in all cases. Individual circumstances may call for individual attention." Id . at *12. The Court also explained that the acknowledgment did not include any language about how Defendant intended to be bound by its provisions or those in the handbook. Accordingly, because neither the handbook nor the handbook acknowledgment form created an enforceable agreement to arbitrate between the parties, the Court denied Defendant’s motion to compel arbitration. Gonzalez et al. v. Lyft, Inc., 2021 U.S. Dist. LEXIS 17188 (D.N.J. Jan. 29, 2021). Plaintiffs, a group of rideshare drivers, filed a class and collective action alleging that Defendant failed to pay minimum wages and overtime compensation, and failed to reimburse for business expenses in violation of the FLSA and the New Jersey wage & hour laws. Defendant filed a motion to compel arbitration of Plaintiffs’ claims pursuant to an arbitration agreement contained in the terms of service agreement that Plaintiffs had signed. The Magistrate Judge recommended that the motion to compel be denied based on the determination that limited discovery was necessary in order to conclude whether Plaintiffs were exempt from the Federal Arbitration Act (“FAA”) under the interstate transportation exemption. On Rule 72 review, the Court agreed with the Magistrate Judge, adopted the recommendation, denied the motion to compel arbitration, and ordered limited discovery to proceed on the issue. Defendant argued that the Magistrate Judge erred when she determined that there was no minimum threshold level of interstate activity necessary to qualify as being "engaged in foreign or interstate commerce" under § 1, and that Plaintiffs would not qualify because only approximately 2% of their rides crossed state lines. Id. at *3. Defendant contended that under § 1 exemption, only those whose work “typically” consisted of interstate travel would be included. Id . Plaintiffs argued that the analysis was controlled by the Third Circuit’s decision in Singh v. Uber Technologies, Inc ., 939 F.3d 210 (3d Cir. 2019), which found that Uber drivers were members of a class of workers engaged in interstate commerce under § 1. Plaintiffs contended that the cases presented by Defendant were not binding Third Circuit precedent like Singh . The Court agreed with the Magistrate Judge’s conclusion to that interstate movement need not be predominant, and that the alleged localized nature of Plaintiffs’ rides were not dispositive in this matter. The Court also held that Plaintiffs sufficiently introduced facts that placed the issue of arbitrability in dispute, and nothing beyond that was required in order to proceed with limited discovery. For these reasons, the Court adopted the findings of the Magistrate Judge and ordered limited discovery on the issue of whether Plaintiffs were exempt from the FAA as transportation workers.