Is Kellogg the First of Many to Exploit Supreme Court Arbitration Victory?

A group of former Kellogg employees are suing the cereal giant claiming that the company shouldn’t have sued them earlier in 2018. Kellogg sued the employees for suing the company. It’s a bit confusing.

Kellogg targeted the group of former employees for defying their arbitration agreements and in doing so, they announced a clear warning to all their employees: not to sue the company. The complicated case has hearings scheduled for February and will be watched by many as one of the first instances when U.S. employees with grievances seek justice after the recent U.S. Supreme Court precedent that is making waves.

Last year a Kellogg employee out of Nevada filed suit against the company in federal court. The suit was filed on behalf of co-workers who were not provided with federally mandated overtime pay. Kellogg denied the accusations and they were able to successfully petition the judge to move the case to arbitration by bringing up the arbitration agreement signed by the employee that required disputes to be handled in arbitration rather than court.

This type of arbitration agreement usually ends up limiting the rights of employees in comparison to the legal rights they would have in the court system. Arbitration also promotes quick and efficient dispute resolution and discourages litigious lawyers’ fighting for plaintiffs. Others claim that the arbitration process limits transparency and removes the right to sue as a class and takes leverage away from employees seeking resolution.

What arbitration means for employees and employees depends on who you ask, but no one can argue that arbitration agreements have become more and more common at U.S. companies in recent years. Thanks to a series of U.S. Supreme Court rulings that quashed attempts to curb them, companies are embracing them more and more actively.

This past May, in a 5-4 ruling, the high court’s Republican-appointed majority held that arbitration agreements that require workers to sign away rights to file a lawsuit as part of a class can be enforced for workplace disputes. Proponents of arbitration insist that this is extremely detrimental to the enforcement of both federal minimum wage and overtime laws. Months later, Kellogg began filing breach of contract claims against former employees that signed onto the overtime lawsuit alleging violations of continued employment agreements that included an agreement that delayed the firing of workers during corporate restructuring in exchange for arbitration of claims.

Kellogg filed suit alleging that the original plaintiff was in breach of contract because he filed an employment claim in court against the company. Kellogg seeks punitive damages and legal costs. Former employees were shocked by Kellogg’s response and their attorneys have sued the company in return alleging that Kellogg’s claims against their former workers are actually illegal because they constitute retaliation as described in the Fair Labor Standards Act.

If you are a victim of retaliation in the workplace or if you need help obtaining overtime pay from your employer, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Is Uber Refusing to Honor the Arbitration Clause in its Terms in Conditions?

More than 12,000 Uber drivers filed a California lawsuit claiming that Uber purposefully delayed arbitration requests. Uber drivers are considered contractors by the company. The drivers claiming that Uber is delaying arbitration requests are making an assortment of complaints, including: minimum wage violations, failure to pay overtime, etc. At the rate the complaints are being processed by the company, it would be a decade before all the complaints were heard.

Uber, like thousands of other companies, requires their drivers to sign an arbitration agreement that limits dispute resolution to company-direct handling instead of going through the court system. Uber’s 21-page terms and conditions does include an option to opt-out of the clause, but it has to be done within 30 days of signing the original agreement and it must be done in writing.

Drivers dealing with the potentially decades long delay are getting fed up with decreasing pay and their questionable status as independent contractors (instead of employees who enjoy more protections through employment law). 12,501 of Uber’s drivers have filed a California lawsuit including allegations that Uber ignored requests for arbitration. According to the suit, there have been 300 pages of partners requesting arbitration and only 47 have been appointed arbiters. Of those appointed arbiters, only six have seen the arbitration process move forward.

Legal counsel involved in the case suggest that this is a typical trend amongst corporations in this situation and has been for decades in the U.S. They insert this type of clause in a mandatory arbitration agreement specifically to block class action lawsuits. When asked about the case, Uber declines to comment. Originally, the case was brought as a class action lawsuit in multiple states addressing driver status as independent contractors vs. employees. Complaints (in numerous states) range from failure to pay overtime, to minimum wage violations, to failure to provide sick leave, etc., which would all be required if the drivers were classified as employees.

If you need to discuss how to qualify for a California class action lawsuit or if you need to file a lawsuit due to overtime violations or minimum wage violations, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

#MeToo Movement Brings to Light a Growing Problem with Mandatory Arbitration Agreements

In the wake of the recent #MeToo movement, many are starting to speak out about the fact that mandatory arbitration agreements may be particularly bad for women. When the #MeToo movement resulted in more and more female workers coming forward to report instances of sexual harassment in the workplace at companies like Fox and the Weinstein Company, many of them quickly realized that they would not be able to seek justice in the courts because of arbitration agreements they were required to sign as employees. 

For instance, Gretchen Carlson, former Fox News anchor, signed a required mandatory arbitration agreement. She sued former Fox News CEO Roger Ailes for sexual harassment and received an undisclosed settlement. But she was not able to sue Fox News for their rose in allowing the sexual harassment to continue. Dozens of other women who experienced similar situations at Fox found themselves in the same situation.

As more women come forward to speak out about sexual harassment on the job, many are putting the pressure on Congress to take action and restrict or even eliminate arbitration clauses from US workplaces.

Recent Legislative Actions:

October 2017 – The Mandatory Arbitration Transparency Act was introduced. The Act prohibits businesses from including a confidentiality clause in arbitration agreements in connection with discrimination claims.

December 2017 – The Ending Forced Arbitration of Sexual Harassment Act was introduced exempting sexual harassment cases from mandatory arbitration.

February 2018 – 56 state attorneys general (5 from US territories) weighed in with a letter urging congressional leaders to vote on the bills.

March 2018 – The Arbitration Fairness Act was proposed, which would let workers and consumers decide where they should pursue their legal claims.

October 2018 - The latest bill, the Restoring Justice for Workers Act, would prohibit employers from banning class-action claims.

If you need to speak with an experienced California employment law attorney because you are experiencing labor law violations and aren’t sure how to seek justice, please get in touch with us at Blumenthal Nordrehaug Bhowmik De Blouw LLP.