18th Annual Workplace Class Action Report - 2022 Edition

216 Annual Workplace Class Action Litigation Report: 2022 Edition received his room assignment. Further, Plaintiff believed that if he did not sign the DRA and related arbitration agreements, he would have to pay for his own lodging, food, and transportation home, and that since the fishing season had already started, he would not be able to find another seafood processing job. Id . at *14. The Court concluded that the DRA and the arbitration provisions contained in the other agreements were procedurally unconscionable and void. Plaintiff also argued that the DRA was substantively unconscionable because of the one-sided, multi-step pre-arbitration process, the shortened statute of limitations, the one-sided termination right, the "Costs of Arbitration" clause, and the confidentiality provision. Id . at *15. The Court determined that the provision requiring the employee to follow a multi-step pre-arbitration process did not render the arbitration agreement one-sided because both parties agreed to the arbitration. The provision also required all claims to be brought within 12 months, which essentially shortened the statute of limitations of possible claims. The Court agreed with Plaintiff that the provision’s shortened limitations period, in combination with the DRA’s lack of a tolling provision, the fact that the time for completing the process was completely within Defendant’s control, and it being presented in a contract of adhesion, made the provision substantively unconscionable. The Court further concluded that the DRA’s termination clause and confidentiality provision were substantively unconscionable. The Court declined to sever the unconscionable provisions and invalidated the entire DRA as substantively unconscionable. As a result, the Court denied Defendant’s motion to compel arbitration. Oldham, et al. v. Nova Mud, Inc., 2021 U.S. Dist. LEXIS 169456 (D. N.Mex. Sept. 7, 2021). Plaintiff filed a collective action alleging that Defendant, her former employer, misclassified workers as independent contractors and thereby failed to pay them overtime compensation in violation of the FLSA. Defendant filed a motion to compel arbitration of Plaintiff’s claims pursuant to an agreement contained in the job search website that Plaintiff utilized to apply for employment with Defendant called RigUp. The Court denied the motion. Although it did not sign the agreement, Defendant argued that it could compel arbitration against Plaintiff under the third-party beneficiary theory. The Court found that there was nothing in the arbitration provision indicating that the parties intended that Defendant would be a beneficiary of the arbitration provision or have the right to enforce it. Id . at *12. Defendant argued that the second paragraph in the dispute resolution provision stated that Plaintiff agreed "that every dispute arising in connection with these Terms will be resolved by binding arbitration." Id . at *20. The Court, however, explained that Defendant ignore the preceding part of the arbitration provision which stated that "in the interest of resolving disputes between you and RigUp in the most expedient and cost effective manner, you and RigUp agree that every dispute arising in connection with these Terms will be resolved by binding arbitration.” Id . Further, the Court noted that the agreement provided that "any interactions or disputes between you and a Company are solely between you and that Company. RigUp and its licensors shall have no liability, obligation or responsibility for any interaction between you and any Company.” Id . Moreover, the Terms of Service provision regarding third-party disputes contained an express statement that third-parties would not be subject to the arbitration clause. Id . at *21. Accordingly, the Court concluded that there was no indication that Plaintiff and RigUp intended to grant third-parties the right to enforce the arbitration agreement. Id . For these reasons, the Court denied Defendant’s motion to compel arbitration. Pitman, et al. v. Macy ’ s West Stores, 2021 U.S. Dist. LEXIS 123699 (E.D. Cal. July 1, 2021). Plaintiffs, a former employee, filed a collective action alleging that Defendant misclassified him and others similarly-situated as exempt employees and thereby failed to pay overtime compensation in violation of the FLSA. Defendant filed a motion to compel arbitration of Plaintiff’s claims pursuant to the new hire paperwork he had filled out at the commencement of his employment, which included an arbitration agreement. The Court granted the motion. The arbitration agreement was part of Defendant’s dispute resolution program, and provided that "all employment- related legal disputes, controversies, or claims arising out of, or relating to, employment or cessation of employment, whether arising under federal, state, or local decisional or statutory law are covered claims and shall be settled exclusively by final and binding arbitration." Id . at *3. Plaintiff argued that Defendant breached the arbitration agreement and therefore waived its right to compel arbitration. Plaintiff asserted that Defendant had knowledge of the right to compel arbitration because it drafted the agreement, which Defendant did not dispute. Plaintiffs contended that Defendant acted inconsistently with the right to compel arbitration by denying Plaintiff’s demand for arbitration and failing to pay the arbitration fees within 30 days of the demand. Defendant argued that Plaintiff never made a demand for arbitration or initiated arbitration as required. Id . at *10. Specifically, Defendant contended that on Plaintiff submitted to the Defendant an "advance notice of intent to file a demand for arbitration," but did not send the demand or the fee to the AAA. The Court found that the action