18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 215 with its right to arbitrate or that arbitration would prejudice Plaintiff in any way. The Eighth Circuit reasoned that although there was an eight-month delay, the parties spent very little of this time actively litigating and no time on the merits of the case and no discovery was conducted. The Eighth Circuit further ruled that no efforts would be duplicated and thus there was no showing of prejudice to Plaintiff. Accordingly, the Eighth Circuit held that Defendant did not waive its contractual right to invoke arbitration. For these reasons, the Eighth Circuit reversed and remanded the District Court’s ruling. Murphy, et al. v. The Finish Line, Inc., 2021 U.S. Dist. LEXIS 100784 (N.D. Cal. May 27, 2021). Plaintiff, a retail employee, filed a state court class action alleging violations of the California Labor Code and the California Private Attorney General Act (“PAGA”). Defendant removed the action to the District Court. The Court thereafter granted Defendant’s motion to compel arbitration of Plaintiff’s individual claims and stayed the PAGA claim pending arbitration. Plaintiff subsequently moved to dismiss his individual claim without prejudice and to remand his PAGA claim to state court. Defendant argued that the Federal Arbitration Act (“FAA”) required that this case remain stayed until arbitration was complete. The Court agreed that the FAA’s stay provision required that the arbitrable claims be resolved first. Thus, the Court determined that allowing Plaintiff to dismiss the individual claims without prejudice would circumvent the FAA’s stay provision. The Court opined that even if its interpretation of the FAA was incorrect, it had discretion to lift the stay, and it would decline to exercise its discretion to do so. The Court reasoned that leaving the stay intact until the completion of arbitration served the interests of judicial economy and advances Congress’s purpose in “enacting the FAA: ‘to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings.’" Id . at *12. Accordingly, the Court denied Plaintiff’s motion to dismiss and to remand the PAGA claim. Naveja, et al. v. Primerica, Inc., 2021 U.S. Dist. LEXIS 93191 (E.D. Cal. May 17, 2021). Plaintiffs, a group of independent contractors, filed a class action alleging that Defendant misclassified them as independent contractors and thereby violated various provisions of the California Labor Code. Defendant filed a motion to compel arbitration of Plaintiffs’ claims pursuant to an arbitration agreement included in their independent contractor agreement. The Court granted the motion to compel. Upon becoming an independent contractor for Defendant, Plaintiffs each signed a “Basic Agreement” that stated in relevant part that any dispute between the parties would be settled by arbitration in accordance with the rules of the American Arbitration Association ("AAA"). Id . at *2-3. Plaintiff argued that the entire arbitration clause was unconscionable and invalid. Defendant contended that the arbitration clause delegated the question of arbitrability to the arbitrator because the agreement expressly incorporated the AAA rules. Plaintiffs asserted that the arbitration agreement did not "clearly and unmistakably" delegate arbitrability to the arbitrator. Id . at *14-15. Further, Plaintiffs argued that the agreement was unconscionable "because there was surprise." Id . at *15. The Court ruled that there no reason to require the arbitration agreements to be subject to higher standards than general contracts and no reason under Nevada law to analyze Plaintiff’s arguments for substantive unconscionability. Therefore, the Court concluded that the parties agreed to arbitrate the issue of arbitrability. The Court therefore granted the motion to compel arbitration and stayed the action pending the results of the arbitration. Ohring, et al. v. UniSea, Inc. , 2021 U.S. Dist. LEXIS 130528 (W.D. Wash. July 13, 2021). Plaintiff, a seafood processor, filed a collective action alleging that Defendant failed to pay for time spent donning and doffing protective gear in violation of the FLSA. Plaintiff was employed as a seafood processor in Alaska under a six- month employment agreement. Defendant moved to compel arbitration of Plaintiff’s claims pursuant to an arbitration agreement and Employee Dispute Resolution Agreement ("DRA") in the employment agreement, which Plaintiff signed at the time he commenced his employment. Plaintiff argued that the arbitration provisions in the employment agreement and DRA were procedurally and substantively unconscionable. Defendant asserted that through the U DRA, the parties expressly delegated arbitrability issues to the arbitrator, and not the Court, and therefore the arbitrator must decide whether the arbitration provisions in the DRA and other agreements were valid. Id . at *5-6. Plaintiff contended that the DRA’s delegation clause was also procedurally and substantively unconscionable. Plaintiff claimed that the delegation clause was procedurally unconscionable because he did not have a meaningful choice in agreeing to it. The Court agreed that the undisputed facts surrounding Plaintiff’s signing of the DRA demonstrated that he lacked a meaningful choice, as he did not know about the delegation clause until after he had already accepted the seafood processor position, travelled to Dutch Harbor in Alaska, quarantined for two weeks, been drug tested, attended a housing orientation, and