18th Annual Workplace Class Action Report - 2022 Edition

212 Annual Workplace Class Action Litigation Report: 2022 Edition Immediato, et al. v. Postmates, Inc., 2021 U.S. Dist. LEXIS 40288 (D. Mass. March 4, 2021). Plaintiffs, a group of couriers, filed a collective action alleging that Defendant misclassified them as independent contractors and thereby failed to pay them the minimum wage, reimburse for business expenses, and failed to provide sick leave in violation of the FLSA. Defendant filed a motion to compel arbitration, which the Court granted. As part of Plaintiffs’ registration on Defendant’s mobile application, they were required to agree to Defendant’s Fleet Agreement, which included a "Mutual Arbitration Provision" that was governed exclusively by the Federal Arbitration Act and applied to all claims including those involving "classification as an independent contractor." Id . at *4. Plaintiffs contended that they were not covered under the FAA because they were engaged in interstate commerce. The Court noted that to be exempt from the FAA, the goods, and not the workers, must be engaged in interstate commerce. The Court observed that the Nine Circuit has determined that "cases involving food delivery services like Postmates and DoorDash are . . . distinguishable" from Amazon’s last-mile delivery workers because Amazon shipments travel through a national network of warehouses in which the in-state warehouse is simply a staging stop in the interstate journey. Id . at *5. The Court held that to fall within the exemption, the workers must be connected not simply to the goods, but to the act of moving those goods across state or national borders. Id . at *6. In addition, the Court ruled that the arbitration provision contained a broad delegation clause, assigning to "an arbitrator, and not any federal, state, or local court or agency . . . exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability, or formation of this . . . Provision, including without limitation any dispute concerning arbitrability." Id . at *7-8. The Court thus determined that because the provision clearly and unmistakably delegated questions about the scope of the provision to the arbitrator, it only needed to assess whether there was a valid agreement to arbitrate between the parties. The Court found that there was, as Plaintiffs were provided reasonable notice that they were entering into an online agreement and were required to assent to the agreement terms by clicking "Agree" before being able to return to the registration process. Id . at *7. For these reasons, the Court granted Defendant’s motion to compel arbitration. Klink, et al. v. ABC Phones Of North Carolina, Inc., 2021 U.S. Dist. LEXIS 158042 (N.D. Cal. Aug. 20, 2021). Plaintiff, a hourly non-exempt sales representative, brought a putative class action under the California Labor Code asserting, among other things, that Defendant failed to: (i) pay minimum and overtime wages; (ii) provide lawful meal and rest periods; (iii) pay wages at the time of separation; (iv) furnish accurate itemized wage statements; and (v) reimburse necessary expenses. Defendant moved to compel arbitration and stay the action pursuant to the Federal Arbitration Act (“FAA”) and the California Arbitration Act (“CAA”). The Court granted in part Defendant’s motion to compel arbitration and stayed the lawsuit pending arbitration. Plaintiff contended that she did not sign or otherwise provide her consent to Defendant’s arbitration agreement. Defendant asserted that Plaintiff provided her consent to the arbitration agreement electronically. The Court held an evidentiary hearing and concluded that there was indeed an agreement to arbitrate between the parties. At the evidentiary hearing, Defendant stablished by a preponderance of the evidence that the parties entered into an arbitration agreement. The Court made three factual findings that supported this conclusion. First, Defendant introduced incontrovertible evidence that Plaintiff clicked on, reviewed, and acknowledged the arbitration agreement on online employee interface, known as the Learning Management System ("LMS"). The LMS system’s time-stamped records unequivocally showed that she completed the arbitration agreement module on the LMS system on her first day of work. Second, Defendant introduced evidence contradicting Plaintiff’s assertion in her declaration that her immediate supervisor was present when she completed the arbitration agreement module, observed her enter the password, and kept a copy of her username and password. In fact, the Court found that evidence at the hearing established that her supervisor was out sick that day. Finally, the Court rejected the argument of Plaintiff’s counsel that the title and descriptor of the arbitration agreement module on the LMS system misled Plaintiff into thinking she was exempt from the agreement. Having determined that the parties entered into an arbitration agreement, the Court proceeded to evaluate whether that agreement was enforceable. Plaintiff argued that the arbitration agreement was unconscionable. The Court opined that Plaintiff had shown slight procedural unconscionability because the parties’ arbitration agreement was contract of adhesion. However, the Court also held that Plaintiff failed to establish that the agreement was plagued with significant substantive unconscionability. In sum, the only unconscionability Plaintiff was able to establish was slight procedural unconscionability from the agreement being a contract of adhesion. There was no substantive unconscionability other than the unilateral modification provision and the PAGA waiver, which the Court severed from the arbitration agreement. As a result, the Court granted in part Defendant’s motion to