Arbitration Agreement Trims Nearly 3000 Wage Claims Against Chipotle
By Tommy Eden
As background, the United States
Supreme Court’s recent ruling in Epic
Systems Corporation v. Lewis resolved the question of whether employees and
employers should be allowed to agree that any disputes between them will be
resolved through one-on-one arbitration.” Epic
Sys., 138 S. Ct. 1612, 1619 (May 21, 2018). The Court concluded that they
should be permitted to do so and rejected the position that mandatory
individualized arbitrations violate the National Labor Relations Act (“NLRA”)
and are therefore unenforceable under the Federal Arbitration Act (“FAA”).”
In one of the very first lower
court cases to be decided under this new standard, almost Chipotle 3000 workers
sought to opt into a Fair Labor Standards Act (FLSA) collective action. The
mandatory employee arbitration agreement signed by all Chipotle Mexican Grill
employees prohibited class and collective action claims. Chipotle contended
that the Arbitration Agreement serves a commercial purpose because it provides
predictability in handling litigation matters and reduces dispute resolution
costs. These benefits do not come at the expense of the employees, Chipotle
maintained, because the Agreement provides that employees cannot be required to
pay any cost of the arbitration that they would not be required to pay if the
matter was heard in court. Further, Chipotle maintained that its decision to
permit only individual claims is commercially reasonable because it allows all
parties to realize the benefits of bilateral arbitration’s informality and many
businesses have selected this route and the Supreme Court has ruled it lawful.
On August 6, a Colorado federal judge trimmed 2,814 opt-in Chipotle Mexican Grill workers from a collective
action accusing the company of not paying hourly employees for off-the-clock
work, pre and post-shift work they were required to perform, since they had
signed the arbitration agreements that barred them from pursuing claims
collectively.
Common Sense Counsel: The Epic Systems case is truly a gift to employers who wish to engage in employment
claims related risk reduction. Such a program increases the prospects that concerns will be
resolved before they ripen into actual EEOC Charges, DOL Investigations,
Lawsuits - you name your worst employment nightmare. In light of the emerging
Supreme Court case law favoring alternatives to court litigation, consider
options for designing an employee dispute resolution program and the potential
business advantages - not the least of which is not having to spend a sunny day
locked in a windowless room with a plaintiff’s attorney with an attitude.
Plaintiff’s attorneys hate these programs for obvious reasons. The best
programs have the following components: 1) an internal complaint process with a
promise of no retaliation; 2) a toll free hot line for multiple location
employers; 3) handbook provisions giving employees at least two channels to
make their complaint and fair investigation process; 4) well drafted and
broadly worded arbitration provision, covering class and collective claims,
that will pass court scrutiny; 5) training for all employees on the process; 6)
private arbitration panel of former local judges, or AAA Arbitration, and
mostly importantly; 7) a Human Resource professional with a listening ear and
risk reduction mindset.
Tommy Eden
is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP
offices in Opelika, AL and can be contacted at teden@constangy.com or
334-246-2901. Blog at www.alabamaatwork.com with link
to case.
