Supreme Court hears oral argument in Taco Bell wage theft case

Nine Supreme Court justices pose for a group photo in 2021

Seated from left: Associate Justice Samuel Alito, Associate Justice Clarence Thomas, Chief Justice John Roberts, Associate Justice Stephen Breyer and Associate Justice Sonia Sotomayor, standing from left: Associate Justice Brett Kavanaugh, Associate Justice Elena Kagan, Associate Judge Neil Gorsuch and Deputy Attorney General Amy Coney Barrett.

A group of more than 500 Taco Bell employees brought their pay-stealing case before Supreme Court judges on Monday, arguing they should not be forced to arbitrate their major dispute. surname. Some judges have solicited the staff’s attorney for the position.

The case is Morgan sues Sundance, Inc.One litigation involved hundreds of Taco Bell employees who said they were scammed for illegal overtime by Sundance, Inc., a company that owns more than 150 Taco Bell brands. Main Plaintiff Robyn Morgan was an hourly employee at a Sundance-owned Taco Bell store in Iowa. Morgan said Sundance forced workers to clock the end of their shifts, failed to pay employees overtime and engaged in massive wage theft. Morgan and more than 500 others sued in 2018 for violations of the Fair Labor Standards Act (FLSA) on behalf of all of the company’s hourly employees.

The issue before the judges is whether the case should be heard by a judge (as the workers argue) or by an arbitrator (as Sundance argues). After the class action was filed, the parties attempted to resolve the case by mediation. However, when the settlement was unsuccessful, Sundance filed a request for arbitration. Despite the fact that workers have entered into an arbitration agreement with their employer, Sundance has never given any indication before that time that it intends to arbitrate the dispute.

The district court sided with the plaintiffs, ruling that Sundance waived any right to arbitration by not claiming it earlier in the proceedings. However, the United States Court of Appeals for the Eighth Circuit reversed, saying the arbitration would not prejudice the plaintiffs. The plaintiffs allege that the Eighth Circuit was wrong in asking for a bias, arguing that it was unfair to allow a party to a court case only to abruptly turn the wheel when that party believes arbitration would produce a better outcome. .

The judges can not only decide whether these particular claimants are subject to arbitration as a matter of fact, but also the broader question of whether the dispute is governed by the Arbitration Act. Federal (FAA) or state contract law.

In oral arguments, the judges (except Justice Clarence Thomaswho is Hospitalize recently with flu-like symptoms), all are active in questioning lawyers Karla Gilbride for Robyn Morgan and former United States Attorney General Paul Clement for Sundance.

Some judges cast doubt on Gilbride’s arguments, arguing that her position was one that could contradict both the contract between the parties as well as the typical court handling of arbitration disputes. federal.

Justice Amy Coney Barrett pressed Gilbride over a clause in the arbitration agreements stating that “no proceeding” on the subject of arbitration “shall be deemed to waive a party’s right to arbitrate.”

“Why wouldn’t that be more effective if the appropriate place to look here is substantive contract law?” Barrett asked.

“Non-waiver provisions are often waived by subsequent acts,” Gilbride argues.

“But what is their point? So what is the benefit of including them? ‘ replied Barrett.

Justice Samuel Alito expressed some skepticism about what the law was controlling in the case, asking Gilbride: “All of the appellate courts, as I understand them, have applied common law here. Is it right?”

“And now you want the case to be retried and decided under Iowa law, am I right?” Alito continued.

As Gilbride explained his point, Alito remarked, “You have a strong argument, but it would represent a significant shift.”

Justice Sonia Sotomayor also began the question, asking Gilbride, “How do we move from federal law to state law?” Sotomayor later commented on the concerns raised by the judges.

“Some of my colleagues seem troubled by the fact that states differ on how they define waivers,” she said. “I’m troubled by the fact that circuits define prejudice in different ways.” She points out, “So there’s change no matter what we do.”

Judge John Roberts asked more difficult questions for Gilbride.

“The whole point of the FAA – or at least an important one – is to expedite disputes,” says Roberts. “It seems to me that you are creating a whole new battlefield before going to arbitration on whether or not there is an exemption under state law.” Roberts commented that the source of such a delay seems “totally contrary” to the FAA’s general intentions.

However, when attorney Paul Clement argued on behalf of Sundance, he faced a tough investigation from Justice. Elena Kagan. Justice described the dispute as essentially a dispute as to whether the arbitration agreement was “enforceable and enforceable”.

“It is a question that the FAA mandates for state law,” said Kagan, who went on to remark that she does not see a meaningful difference between the procedure that should be used to decide cases. default in a contract with respect to the arbitration clauses relative to the other terms of the contract. .

“Companies cannot initiate litigation in court, ask a judge to dismiss the case or transfer it to another court as Sundance did in,” Gilbride said in an emailed statement to Law & Crime. here, and then switched tactics a few months later and argued the case shouldn’t be ‘out of court at all and should instead go to arbitration.”

“Those types of actions would suffice to satisfy the generally applicable waiver of contract test under most states’ law,” Gilbride said. “Line 8 was wrong to add a step to this waiver test simply because the contract involved arbitration and we hope that the Supreme Court will rule against the arbitration approach. that particular and reiterates that arbitration agreements must be treated fairly in the same way as any other contract. ”

Law & Crime did not immediately respond to a request for comment from Sundance’s attorney.

[image via Erin Schaff/POOL/AFP via Getty Images]

Is there a trick we should know? [email protected] Supreme Court hears oral argument in Taco Bell wage theft case

James Brien

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