18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 217 was still in the beginning stages, with limited discovery and motion practice conducted, and had only been pending for less than a year. Accordingly, the Court reasoned that Defendant did not act inconsistent with the right to arbitration. Further, the Court explained that Plaintiff was aware that to initiate arbitration he must file his demand for arbitration with the AAA and pay the required fee. Since there was no showing that Plaintiff in fact filed the demand, the Court concluded that Defendant did not waive its right to arbitration based on failing to initiate arbitration. Plaintiff further claimed that an order compelling arbitration would result in prejudice to Plaintiff as he had incurred costs that would not have been incurred if arbitration was initiated earlier, and that Defendant benefited from Plaintiff’s initial disclosures, which would not have been obtained in arbitration. The Court noted that Plaintiff’s argument that the additional costs incurred from having to litigate the matter was unpersuasive, as this alone was not sufficient to establish prejudice. The Court also held that Plaintiff’s argument that Defendants benefited from the initial disclosures was without merit, as initial disclosures are not considered extensive discovery. The Court determined that Plaintiff’s claims were within the scope of the agreement, which included all employment-related disputes. For these reasons, the Court granted Defendant’s motion to compel arbitration of Plaintiff’s claims. Pogue, et al. v. Chisholm Energy Operating, LLC, 2021 U.S. Dist. LEXIS (N.D. Fla. May 11, 2021). Plaintiff, a well-site supervisor, brought a putative class and collective action alleging overtime violations pursuant to the FLSA and the New Mexico Wage Act (“NMWA”). Plaintiff signed an independent contractor agreement (“ICA”) with third-party DTC Energy Group, Inc. ("DTC"), an oil consulting firm, in which Plaintiff agreed to perform services for DTC’s client, including Defendant. The ICA contained an arbitration clause and provided that the agreement would be construed in accordance with the laws of the State of Colorado, without giving effect to principles of conflict of laws. Defendant moved to dismiss the complaint and to compel arbitration . The Court denied both of Defendant’s motions. First, Defendant argued that the case should be dismissed pursuant to Rule 12(b)(1), for lack of subject-matter jurisdiction because it was not an employer under the FLSA. The Court was unpersuaded. It found that the existence of an employee/employer relationship under the FLSA was an element of Plaintiff’s meritorious FLSA claim and did not implicate the Court’s threshold subject-matter jurisdiction. Defendant alternatively argued that Plaintiff’s complaint should be dismissed pursuant to Rule 12(b)(6), for failure to state a claim under the FLSA. Defendant largely argued that Plaintiff failed to allege sufficient facts to plausibly state that it was an employer. However, the Court agreed with Plaintiff that he need not provide hyper-detailed facts to adequately state a plausible claim, and only needed to allege that: (i) he was employed by Defendant; (ii) he worked more than 40 hours in a week; and (iii) he was not paid overtime for those hours in excess of 40 hours. Looking to the elements of the “economic realities test,” the Court found that Plaintiff had adequately alleged that Defendant was his employer. Id . at *5. Lastly, the Court denied Defendant’s motion to compel arbitration because there was no arbitration agreement between Plaintiff and Defendant. Defendant, a non-signatory, sought to enforce the arbitration agreement between Plaintiff and DTC through the state law theories of: (i) third-party beneficiary, and (ii) equitable estoppel. The Court disagreed with both of Defendant’s arguments. First, the Court determined that the arbitration clause did not reference arbitration with non-signatories, such as DTC’s clients, and therefore it concluded that Defendant was not a third-party beneficiary. As to Defendant’s equitable estoppel argument, the Court ruled that Defendant failed to establish the elements of equitable estoppel under either Colorado or New Mexico law. Specifically, Defendant failed to establish that Plaintiff: (i) knew Defendant would be covered by the arbitration agreement; and (ii) intended for Defendant to believe it was covered by the arbitration agreement. Moreover, Defendant failed to show that it was not aware of the wording of the agreement’s arbitration provision. For these reasons, the Court declined to compel arbitration. Postmate, Inc. v. 10, 356 Individuals, et al., 2021 U.S. Dist. LEXIS 25119 (C.D. Cal. Jan. 19, 2021). Plaintiffs, a group of 5,057 drivers, filed individual arbitration demands with the American Arbitration Association (“AAA”) requiring Defendant to arbitrate their individual wage & hour claims. Defendant, an online marketplace and mobile platform through which consumers connect with local merchants to purchase and request delivery of products, challenged Plaintiffs’ filings. The drivers alleged that that they were misclassified as independent contractors, which resulted in violations of California wage & hour laws as well as the Fair Labor Standards Act (“FLSA”). Plaintiffs sought to compel arbitration pursuant to the parties’ agreements. After Defendant failed to pay the required arbitration fees of over $4 million, Plaintiffs requested that the Court order Defendant to pay the drivers’ attorney fees and costs pursuant California’s Senate Bill SB 707 (“SB 707”). Defendant sought a