Duane Morris Class Action Review - 2023 - Report - Page 78
Dec. 1, 2022), the plaintiff brought a nationwide class and collective action under the
FLSA and Kentucky state law. The plaintiff sought to certify a collective and class action
on behalf of delivery drivers for Papa John’s alleging minimum wage violations. The
defendants filed a motion to compel arbitration on an individual, bilateral basis. The
plaintiff responded by filing a myriad of consent to join forms by other drivers opting-in to
the action. The named plaintiff also denied that he had ever seen the arbitration
agreement during an electronic onboarding process, and alleged that a manager must
have falsely signed it on his behalf during the onboarding process and did not tell him.
However, he did admit that he recalled quickly clicking through documents during
orientation, and he did not unequivocally deny signing the agreement in his affidavit.
The plaintiff also responded by asking the court to stay the motion to compel arbitration
and allow discovery on the substance of the arbitration agreement and its signing (or
non-signing) by him. The court ruled in Papa John’s favor by granting the motion to
compel arbitration; dismissing the lawsuit, rather than staying it; and rejecting the
plaintiffs’ request for discovery and determining that he had failed to raise a viable
factual dispute sufficient to avoid arbitration – or even to secure discovery about it.
E.
Scope Of Binding Arbitration Agreements
Because commercial affairs often involve parties signing interlocking and related
contracts, arbitration disputes can arise where a party that did not sign any agreement
to arbitrate must demonstrate to a court that it should not be bound to such an
agreement. These cases tend to be highly fact-specific since they depend on
contractual language and the conduct of the parties. This legal issue surfaced in several
cases decided in 2022.
One interesting case relating to an individual claiming he did not sign an arbitration
agreement, yet he was found to be bound by it, involved a small business owner reopening his shop after the emergency COVID-19 shutdown order was lifted in the state
of New York. He discovered his internet service had been terminated due to unpaid bills
that were delivered to the shop during the shutdown, and his internet service provider
required him to pay a fee to reinstate his service. In Shalomayev, et al. v. Altice USA,
Inc., 2022 U.S. Dist. LEXIS 116144 (E.D.N.Y. June 30, 2022), the barbershop owned by
the plaintiff was required to close under a COVID-19 emergency order issued by the
Governor of New York. As a result, the plaintiff did not receive bills for internet service,
and the ISP provider terminated the service for lack of payment. When the barbershop
re-opened after the lifting of the emergency COVID-19 order, the defendant, the ISP
provider, required the barbershop to initiate a new service for a fee of $180. The plaintiff
filed a class action to recover the fee and the defendant moved to compel arbitration
and dismiss the case. The court found that the ISP’s arbitration agreement from the
initial service agreement signed in February 2020 applied to the second initiation of
internet service because the agreement contained a clause in a section related to
severability and survival that provided that the terms of the arbitration agreement
survive termination of service. The barbershop’s class action lawsuit was stayed
pending the outcome of the arbitration.
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© Duane Morris LLP 2023
Duane Morris Class Action Review – 2023
