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Labor & Employment – Arbitration – Arbitrability – Unsigned Agreement – Arbitrator’s Decision

The defendant-employers contend that, during plaintiff Brumfield’s employment, they sent her a notification of an arbitration agreement, which informed her that it became binding if she continued her employment with them and chose not to opt out within 30 days. Although Brumfield argues that she was not made aware of the notification’s terms, under the terms of the arbitration agreement, the arbitrator is the one who must decide whether the agreement between Brumfield and defendants is valid and enforceable.

The court (1) strikes the collective action; (2) compels plaintiff Tyler to arbitrate his claims; (3) transfers plaintiffs Scoon and Jackson’s cases to the U.S. District Court for the Southern District of Alabama; (4) transfers Brumfield’s case to the U.S. District Court for the Eastern District of Texas; and (5) transfers plaintiff Harris’s case to the U.S. District Court for the Northern District of Georgia.

In this collective action for overtime wages, four of the five plaintiffs have arbitration agreements, which (1) require arbitration of all claims related to wages and overtime, (2) require arbitration in the city in which the employee works or last worked for defendants, (3) delegates authority to the arbitrator to decide whether the arbitration agreement itself is valid and binding (the delegation clause) and (4) waives class/collective actions.

Though plaintiffs challenge the validity of the arbitration agreement as a whole, they have not specifically challenged the delegation clause.

The court acknowledges the unequal bargaining power between large companies and employees like the plaintiffs and recognizes that binding Brumfield to an arbitration clause without the her even needing to sign the agreement appears suspect. However, the court is bound by the Supreme Court’s very clear ruling, Rent–A–Center, West, Inc. v. Jackson, 561 U.S. 63 (2010), and must enforce the arbitration agreement since plaintiffs have not specifically challenged the delegation clause.

Brumfield last worked for defendants in Tyler, Texas. Thus, the court transfers her case to the U.S. District Court for the Eastern District of Texas to allow that court to compel her to arbitrate her claim.

Aside from relying on a since-overruled Seventh Circuit decision, plaintiffs make no argument that the class/collective action waivers are invalid or unenforceable. These waivers prohibit plaintiffs from bringing this collective action.

Those plaintiffs bound by arbitration agreements – Brumfield, Tyler, Scoon, and Jackson – cannot bring their claims in this court as a collective action; rather, their arbitration agreements must be enforced. These arbitration agreements all require that the employees arbitrate their claims in the jurisdiction where they last worked.

Other than Tyler, who last worked in South Carolina, this court cannot compel the remaining plaintiffs to arbitrate because only courts in the jurisdiction where arbitration is required by the agreement can compel the parties to arbitration. Because plaintiffs are bound to arbitrate in different states and this court cannot compel them to arbitration, the court transfers their cases to their respective districts to enable those courts to compel them to arbitration. As for Tyler, the court orders him to arbitrate his claim here in South Carolina.

Harris has no arbitration agreement with defendants. She lives in and last worked for defendants in Georgia. She did not choose this forum; she only opted into a case filed by someone else. Documents and witnesses regarding her case will most likely come from the Georgia office where she worked, and it is more convenient for those witnesses if the litigation proceeds in Georgia. The court transfers Harris’s case to the U.S. District Court for the Northern District of Georgia.

Brumfield v. Kindred Healthcare Inc. (Lawyers Weekly No. 002-141-18, 13 pp.) (David Norton, J.) 2:18-cv-00591; David Wilson Garrison, Jerry Edward Martin, Joshua Art Frank and William Norman Nettles for plaintiffs; Amy Mariko Palesch, Edward Fouad Berbarie and Jerry H Walters Jr. for defendants. D.S.C.

 

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