Law360: Ex-Chase Appraisers Push for Class Arbitration In OT Fight

Law360: Ex-Chase Appraisers Push for Class Arbitration In OT Fight

“Ex-Chase Appraisers Push for Class Arbitration In OT Fight”
Law 360, October 21, 2013

By Ben James Law360, New York (October 21, 2013, 7:28 PM ET) — Former JPMorgan Chase & Co. appraisers told a California federal court Friday that it lacked the authority to force them to arbitrate their wage claims individually, arguing that an arbitrator — not a court — should decide whether they can pursue class and collective claims in arbitration.

Ex-appraisers Kenneth Lee and Mark Thompson — along with David Agree, identified in court papers as a current Chase appraiser — said they had already agreed to refile their Fair Labor Standards Act collective action, California state law class claims and Private Attorneys General Act representative claims in arbitration, and urged the court to deny Chase’s bid to compel individual arbitration.

The plaintiffs, who aren’t contesting that their arbitration agreement with Chase is enforceable and covers their claims, argued that the “overwhelming weight of authority” holds that the district court doesn’t have the power to do what Chase is asking for.

“To compel plaintiffs to individual arbitration as defendants urge, the court would have to interpret the agreement and determine that it precludes arbitration on a collective, class, and representative basis, despite the absence of an express waiver of these rights. No authority grants the court the power to make this determination,” the plaintiffs said in a response to Chase’s motion to compel.

But even if the court concludes that it has the authority to decide if the arbitration agreement between Chase and the plaintiffs allows their class, collective and representative claims, it should find that those claims are permissible, Lee and Thompson argued.

The Federal Arbitration Act envisions a limited role for courts when it comes to interpreting arbitration pacts — specifically, whether the arbitration agreement is valid and whether it requires arbitration of particular kind of dispute, the plaintiffs said, pointing to the U.S. Supreme Court’s 2010 Rent-A-Center decision.

Whether an agreement forbids class arbitration doesn’t bear on either the validity of the arbitration language or its applicability to the parties’ dispute, the plaintiffs added, drawing on the high court’s 2003 Bazzle ruling.

“Accordingly, once a court has made the gateway determination that an agreement to arbitrate is valid and applies to the dispute, the question of whether class or collective arbitration is permitted is a ‘matter of contract interpretation … for the arbitrator, not the courts, to decide,’” said the ex-appraisers, quoting Bazzle.

And if the court does rule on the question of whether class arbitration claims are allowable, it should give the plaintiffs a green light, because the terms of the agreement make it clear that the parties wanted to make the same rights and remedies that would be available in court or before a government agency available in arbitration, the plaintiffs asserted.

The agreement’s broad language covers all employment-related civil claims and sends everything — including class claims — to arbitration, the response said, adding that the agreement says that all FLSA claims must be arbitrated without any carve-out or exception for collective claims.

An arbitration pact doesn’t have to expressly provide for class or collective proceedings to permit them, the plaintiffs said. And any implicit waiver of substantive rights to bring a PAGA claim would be unenforceable under California law, they added.

The plaintiffs filed suit in March, claiming Chase misclassified production and review appraisers as exempt from overtime pay requirements. Attorneys for both sides could not be immediately reached for comment on Monday. The plaintiffs are represented by David Borgen, Laura Ho and Katrina Eiland of Goldstein Borgen Dardarian & Ho, and Bryan Schwartz and William Weeks of Bryan Schwartz Law, P.C.

Chase is represented by Daryl Landy, Sarah Drechsler and Alexander Grodan of Morgan Lewis & Bockius LLP. The case is Kenneth J Lee et al. v. JPMorgan Chase and Co et al., case number 8:13-cv- 00511, in the U.S. District Court for the Central District of California.

–Editing by Jeremy Barker.