Another court has weighed in in favor of enforcing an arbitration agreement containing a class action waiver in the wake of the United States Supreme Court’s decision in AT&T Mobility, LLC v. Concepcion, 131 S. Ct. 1740, 1746 (2011).
In Brown v. TrueBlue, Inc.pdf., Case No. 1:10-CV-0514 (M.D. Pa. Nov. 22, 2011), the plaintiffs were employees of a staffing agency. The agency paid the workers either by check or, if they preferred cash, through a voucher system. The vouchers, however, required the use of a machine for which a fee was charged. As a result of these fees, the plaintiffs sought to assert both class action wage and hour claims under Pennsylvania law and federal collective action claims under the FLSA. Fifteen months after the suit was filed, and after the plaintiffs had moved for certification of both the class and collective action claims, the defendant moved the court to compel arbitration.
In ruling on the defendant’s motion, the court noted that the plaintiffs had signed employment agreements containing promises to arbitrate all claims. Those agreements also provided in pertinent part that neither party “shall be entitled to join or consolidate claims as a representative or member of a class, representative, or collective action.” The question therefore was not whether the agreement was one requiring arbitration on an individual basis, but, rather, whether it was enforceable at all.
The court found that while the agreement likely would not have been enforceable under prior Pennsylvania law due to the class action waiver (see Thibodeau v. Comcast Corp., 912 A.2d 874-885-86 (Pa. Super. Ct. 2006)), that case was no longer good law in light of Concepcion. Indeed, it found that the statute at issue in Thibodeau was “strikingly similar” to the one considered in the California Supreme Court’s Discover Bank case the Supreme Court had rejected in Concepcion. It therefore found that the agreement was enforceable, and, implicitly, that the claims would need to be arbitrated on an individual basis.
A second, interesting part of the opinion related to waiver, as the defendant had waited fifteen months after the complaint was filed to file its motion, and only did so on the eve of the hearing on class certification. Although the court was troubled by the passage of time, and noted that such a delay would ordinarily resulted in a waiver, it found that the delay was excusable because Concepcion represented a “significant change” in the law. It also found that the plaintiffs could not articulate any prejudice from the delay as the work they had performed would have been done in arbitration as well as before a court. Accordingly, the court compelled arbitration of the dispute.
The Bottom Line: Courts are enforcing Concepcion to compel the arbitration of class and collective claims on an individual basis. Further, they recognize that Concepcion has changed the law so significantly that waiver arguments may not apply.