18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 213 compel all provisions of the parties’ arbitration agreement except for the PAGA waiver and the unilateral modification provision. Levine, et al. v. Vitamin Cottage Natural Food Markets, 2021 U.S. Dist. LEXIS 186188 (D. Colo. Sept. 27, 2021). Plaintiffs, a group of assistant store managers (“ASMs”), filed a collective action alleging that Defendant misclassified ASMs 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. The Court denied the motion. Defendant argued that that the arbitration agreements signed by the opt-in Plaintiffs required them to submit their claims to binding arbitration. Plaintiffs responded that: (i) Defendant failed to provide sufficient evidence to demonstrate the existence of the arbitration agreements; and (ii) even if the Court found any valid agreement, the agreements should be invalidated by generally applicable contract defenses. First, as to 34 opt-in Plaintiffs who did not filed declarations, the Court determined that Defendant met its initial burden of demonstrating the existence of an enforceable arbitration agreement, and Plaintiffs failed to overcome this evidence by identifying a material dispute of fact. Further, the Court ruled that as to the 23 Plaintiffs who did file declarations stating they signed electronic documents regarding the terms of the agreements, those agreements were either part of the same document where they manifested an electronic signature or through a link that individuals were required to click on and review before manifesting agreement by clicking "Accept." Id . at *18. Accordingly, the Court ruled that Plaintiff provided no competent evidence that, under such circumstances, these opt-in Plaintiffs did not have notice of the terms of the agreement. Id . The Court determined that Plaintiffs has not shown that the content and terms of the agreements were substantively unconscionable. The Court reasoned that all the agreements contained a term stating that “any dispute, controversy or claim arising out of or relating to my employment with the Company or the termination thereof will, to the fullest extent permitted by applicable law, be settled exclusively by binding arbitration." Id . at *59. As a result, the Court held that Plaintiffs’ claims fell within the scope of the arbitration agreements. For these reasons, the Court granted Defendant’s motion to compel arbitration. Lim, et al. v. TForce Logistics, LLC, 8 F.4th 992 (9th Cir. 2021). Plaintiff, a delivery driver, filed a class action alleging that Defendant misclassified drivers as independent contractors and thereby failed to pay them all wages due in violation of the California Labor Law. Defendant filed a motion to compel arbitration of Plaintiff’s claims pursuant to an arbitration provision in its independent contractor agreement with Plaintiff. The District Court denied the motion. On appeal, the Ninth Circuit affirmed the District Court’s ruling. Viewing the evidence as a whole, the District Court had found that Plaintiff was presented with a contract of adhesion, i.e. , a take-it-or- leave-it offer. Plaintiff received the contract on the day it was to be executed, material terms – including the delegation clause – were preprinted, and there were no negotiations as to any of the contract terms. Id . at 994. The District Court also had noted that Plaintiff believed that his continued employment required him to sign the contract, and that his only choice was to agree to the delegation clause and the rest of the contract or stop delivering. The Ninth Circuit agreed with the District Court that these allegations established some degree of procedural unconscionability. With respect to unfair surprise, the Ninth Circuit opined that Defendant presented the delegation clause in the middle of 31 numbered paragraphs, within more than nine pages of single-spaced, 10-point font, with no attention to the delegation clause, and no requirement for Plaintiff to sign or initial that specific provision. The Ninth Circuit further determined that the District Court correctly found that the agreement was substantively unconscionable because of the agreement’s cost-splitting, fee-shifting, and Texas venue provisions. For these reasons, the Ninth Circuit ruled that the District Court did not err in denying Defendant’s motion. Maharaj, et al. v. Charter Communications, 2021 U.S. Dist. LEXIS 208470 (S.D. Cal. Oct. 27, 2021). Plaintiff, a maintenance technician, filed a class action alleging various violations of the California Labor Code. Defendant filed a motion to compel arbitration of Plaintiff’s claims, and the Court denied the motion. Defendant contended that Plaintiff "expressly agreed to arbitrate all disputes" when he applied internally for new positions in 2019. Id . at *3. Defendant asserted that Plaintiff submitted the application through Defendant’s online interface, and through his submission he agreed: (i) to participate in Defendant’s "employment-based legal dispute and resolution and arbitration program;" and (ii) to be bound by the terms of Defendant’s Mutual Arbitration Agreement (“MAA”). Id . Plaintiff argued that: (i) the parties never agreed to arbitrate claims arising out of his employment as a technician; (ii) Defendant waived its right to compel arbitration; and (iii) the MAA was