Lexology (02/21/12)

In the case Brown v. TrueBlue Inc., two employees of the temporary staffing firm TrueBlue accused the company of violating the Pennsylvania Minimum Wage Act and the Fair Labor Standards Act. The case applies the U.S. Supreme Court’s ruling in AT&T Mobility v. Concepcion, which holds that the Federal Arbitration Act pre-empts nearly all state law defenses to the enforcement of arbitration clauses.

The staffing firm filed a motion to compel arbitration 15 months after the plaintiffs’ complaint was filed and three days before a hearing on the plaintiffs’ motion for class certification. TrueBlue said that under their employment agreements, the plaintiffs were required to litigate complaints in individual arbitrations. The district court deemed valid an arbitration clause in an employment agreement that prohibited class arbitration and required employees to provide written consent to be represented in a lawsuit filed by another individual. The plaintiffs’ arguments were rejected by the court, and the case was stayed pending the outcome of the arbitrations. The Supreme Court’s decision in Concepcion abrogated the Pennsylvania Superior Court’s ruling in a different case that “[an arbitration clause is unconscionable and unenforceable where it is] contained in an adhesion contract and unfairly favors the drafting party.”