ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Monday, August 18, 2014

Arbitration Agreement Entered into during Pendency of FLSA Claim Ruled Enforceable

Mata_Hari_6The named plaintiffs in Stevenson v. The Great American Dream, Inc. are former employees of Pin Ups Nightclub.  They brought suit claiming entitlement to minimum wage and overtime compensation under the Fair Labor Standards Act (FLSA).  They sought class certification in December 2012, which was granted in August 2013.   Kwanza Edwards attempted to join the class on October 2013.  Unfortunately for her, she had signed an arbitration agreement in February 2013.  On July 15, 2014, the District Court for the Northern District of Georgia granted defendants' motion to compel Edwards to arbitrate her claim.  

On motion for reconsideration, Edwards argued that the arbitration agreement was unconscionable, given that a FLSA action had already been filed, with class certification pending.  The Court found that the timing of the agreement did not affect its substantive terms.  

The Court was unimpressed with Edwards' citations to cases from other Circuits.  Plaintiff does not seem to have cited to Russell v. Citigroup, Inc., about which we previously posted here.  The case is probably distinguishable, but that was a case where the court refused to compel arbitration where a plaintiff signed an arbitration agreement after the class action litigation had already commenced.  The difference is that Russell was himself already a party to a class action when he signed the new arbitration agreement.  Edwards was not yet a party to the FLSA class when she signed her arbitration agreement.

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