Duane Morris Class Action Review - 2023 - Report - Page 74
The California court of appeal’s decision in Towell, et al. v. O'Gara Coach Co., 2022
Cal. App. Unpub. LEXIS 6527 (Cal. App. 2d Dist. Oct. 27, 2022), is also a good
reminder of the importance of a stand-alone arbitration agreement. In Towell, the
named plaintiff in a putative wage and hour class action signed multiple employment
documents containing inconsistent terms. The plaintiff first electronically signed an
online employment application, which included an arbitration agreement and class
action waiver. Twelve days later, she then signed an at-will employment agreement, but
checked a box opting out of the class action waiver. Two days after that, she re-signed
the employment application with a wet signature acknowledging her prior online
application. The court of appeal held that the plaintiff had not waived her right to pursue
a class action. It construed her wet signature as merely authenticating her initial online
signature. The court of appeal noted that, if the parties intended for the second wet
signature to void her prior opt out, such an intention should have been stated. Further,
the court of appeal highlighted that the employer had control over the documents it
presented to the plaintiff and that its own practices had caused the inconsistency and
confusion.
The Impact Of The Execution Process
In a remarkably pro-employer decision, the Ninth Circuit reversed a district court’s order
denying a motion to compel arbitration in Martinez-Gonzalez, et al. v. Elkhorn Packing
Co., 25 F.4th 613 (9th Cir. 2022). The plaintiff there was an agricultural worker who
brought a putative wage and hour class action against his employer. Id. at 619. The
employer transported the plaintiff from Mexico to California and provided him housing.
Id. After he began work, he and 150 other workers were asked to form lines to sign
employment paperwork in a hotel parking lot. Id. The employer flipped through the
pages and told each employee where to sign, and hurried the employees along since
the lines were so long. Id. The paperwork, which was in Spanish, included an arbitration
agreement. Id. The plaintiff did not read the paperwork and simply signed. Id. The
district court refused to enforce the agreement on grounds it was procured by undue
influence and economic duress. Id. at 620. In reversing, the Ninth Circuit held that the
employer had not engaged in any wrongful act to support a finding of economic duress,
indicating it was unaware any case holding that asking an employee to sign an
arbitration agreement was wrongful. Id. at 621-22. The Ninth Circuit also noted that the
plaintiff had the option not to sign the agreement, and could have simply asked if he had
to do so to keep his job. Id. at 623. Additionally, the agreement provided for revocation,
a right the plaintiff did not exercise even after the rushed signing process. Id. at 624. As
to undue influence, the Ninth Circuit held that the plaintiff’s modest financial situation did
not support such a finding, and that it was “implausible” that the plaintiff’s will had been
overborne by high pressure tactics. Id. at 626-27.
Decisions Addressing Challenges To Assent
There were a number of decisions this past year in which consumers pursuing putative
class actions successfully challenged their alleged assent to an arbitration agreement.
These decisions highlight best practices for making arbitration clauses conspicuous.
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© Duane Morris LLP 2023
Duane Morris Class Action Review – 2023
