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Archive for the ‘Conservative Policy’ Category

Employers: Be Careful What You Wish For - Your Motion to Compel Arbitration Can Lead to Expensive, Class-Wide Arbitration

Thursday, December 27th, 2012

In the wake of ATT Mobility v. Concepcion and Stolt-Nielsen v. AnimalFeeds,* many employers have sought to enact new arbitration agreements or to enforce arbitration provisions in older agreements to eliminate their employees’ ability to come together when seeking to vindicate their rights to enforce statutory protections for workers. Employers should be careful what they wish for, in seeking to compel arbitration. They may indeed wind up in arbitration – but unable to strike class allegations, and required to pay the full and exorbitant costs of class-wide arbitration. 

In a case on which Bryan Schwartz Law serves as local counsel for Richard J. Burch of Bruckner Burch, in Houston, Texas, the employer is now feeling the danger of a Stolt-Nielsen-based strategy seeking to compel individual arbitration in a putative, wage-hour class action. In the Laughlin v. VMWare case, in which VMWare employees assert they were misclassified as exempt employees and denied overtime and other compensation to which they were entitled, the company moved to compel arbitration based on an agreement which did not specifically provide for class-wide arbitration. 

Judge Edward Davila of the Northern District of California struck some of the more offensive provisions of the arbitration agreement under Armendariz v. Foundation Health Psychcare Services (2000) 24 Cal.4th 83, such as a provision which would have required Plaintiff to share the costs of arbitration. However, Judge Davila found these unlawful provisions severable (i.e., refused to kill the whole arbitration agreement). Perhaps most importantly, though, Judge Davila referred to the arbitrator the decision on the Stolt-Nielsen argument – namely, as argued by VMWare, the notion that class-wide arbitration cannot proceed where the parties’ arbitration agreement did not expressly consent to class arbitration. His initial decision from early 2012 is available here: 

http://www.bryanschwartzlaw.com/VMWare.pdf

In arbitration, AAA arbitrator LaMothe then rejected the employer’s Stolt-Nielsen motion to strike class allegations, notwithstanding the fact that the agreement did not expressly give permission to bring class allegations, finding the parties’ agreement intended to encompass all claims by Plaintiff Laughlin, including her class claims. The AAA order is available here: 

http://www.bryanschwartzlaw.com/Laughlin.pdf

In the last 18 months, numerous other arbitrators from JAMS, AAA, and other nationwide arbitration services have likewise denied motions to strike class allegations, employing similar reasoning. 

On review, Judge Davila confirmed the arbitrator’s partial final clause construction award allowing class allegations to proceed, meaning – in light of all the foregoing – that VMWare will now be forced to arbitrate a putative class action, and will be forced to bear all of the costs of doing so: 

http://www.bryanschwartzlaw.com/VMWare-12-20-12.pdf

Be careful what you wish for, employers. You may find that sometimes, allowing employees their day in court is better than the alternative. 

DISCLAIMER: Nothing in this article is intended to form an attorney-client relationship with the reader. You must have a signed representation agreement with the firm to be a client. 

*See our numerous prior blog posts relating to the subject of arbitration class waivers in light of Concepcion andStolt-Nielsen, including: http://bryanschwartzlaw.blogspot.com/2012/09/california-supreme-court-grants-review.html

http://bryanschwartzlaw.blogspot.com/2012/09/wage-and-hour-class-actions-sky-is.html;

http://bryanschwartzlaw.blogspot.com/2012/01/landmark-decision-by-national-labor.html

http://bryanschwartzlaw.blogspot.com/2011/05/civil-rights-lawyer-and-employee.html.

This post was originally posted on December 26, 2012 on Bryan Schwartz Law. Reprinted with Permission.

About the Author: Bryan Schwartz is an Oakland, CA-based attorney specializing in civil rights and employment law.

Michael Steele and the Demise of Working America

Tuesday, June 23rd, 2009

Back in April 2009, GOP chairman Michael Steele appeared as a guest on a republican-oriented talk radio show. A caller to the program voiced his opinion and stated he did not believe the U.S. is in a state of economic crisis. Steele laughed in agreement and claimed that “[t]he malls are just as packed on Saturday.”

San Rafael, California is located 20 minutes north of the Golden Gate Bridge along U.S. Highway 101. With a population of approximately 50,000, it retains the flavor of a small town without sacrificing any of the amenities you’ll find in the most sophisticated of communities.

Nearly every week for the last six months, as I drive along “Mainstreet” on my way to work, I’ve noticed a new storefront that has gone vacant. These are not the vacant addresses that once housed “Old Navy” or “The House of Knives;” and 4th Avenue is not a strip mall. These were shops and boutiques that operated and prospered for the last 20 or more years by catering to the desires and whims of what had been one of the most prosperous communities in the nation. But ever since the mask was removed from Bush’s depression last summer, many of these privileged professionals are finding themselves squeezed financially in the same wringer as the rest of America’s middle class has been for quite some time. As a result, one by one, these shops are falling by the wayside.

The American economy we see today is the end-result of political policies that have been transforming American society for the past 30 years. Based on slogans such as privatization, de-regulation, free trade, out-sourcing, “conservatism,” tax reform, and right to work, legislators have been giving American business what it wants since the days of President Regan. They have turned this country into a place that no longer resembles the country it was when I grew up in the 1950’s and 1960’s.

San Rafael, CA is a long way from Flint, Michigan, the town where I grew up.

Flint was never a place that you would mistake as being a center of sophisticated culture. It had always been a blue-collar town. But in its own way, it had once been a pretty prosperous place. Flint was probably the first urban center in America to feel the crunch created by those economic and business policies that destroyed industrial America. You could say that Flint had been America’s canary in a cage, because that town began dying in the 1970’s.

Type the words “Flint Michigan” into your browser or into the search bar over at You Tube. Take a look at what conservatism has done to America. Flint residents living next door to an abandoned property are now able to purchase that property for $1.00. The city will come in, demolish and remove any existing building on that property and fill in the holes. Thereafter, the new owner only needs to keep the property looking presentable. Another strategy being used is to provide incentives for residents in out-lying areas of the city to move in closer to the city center, so that city services can be discontinued to the abandoned areas.

In the wake of the policies listed above, community after community across America have been pushed over the brink of the same slippery slope as Flint, Michigan was abandoned to years ago when business (General Motors) moved out. Michael Steele’s words prove he remains as ignorant of where America stands today as John McCain was during his failed presidential bid, and Steele’s words are just as irrelevant as is the Republican party. The trouble is, that leaves America with only one other political party. From the looks of it, the Democrats have been cowed for so long by their minority status that following their return to a leadership position, they immediately bowed the knee to the masters of corporate Amerika. That being the case, I can’t see how we’ll ever emerge from the wreckage that’s been left behind.

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