Supreme Court files lawsuit against Sundance, owner of Taco Bell franchise



The United States Supreme Court has granted certiorari in a case involving hundreds of Taco Bell employees who say they were illegally defrauded of paying overtime.

The group of more than 500 plaintiffs has filed a class action lawsuit against Sundance, Inc. – a company that owns more than 150 Taco Bell franchises – over its wage and hourly practices. Sundance argues that the case should not be heard by a judge, but rather by an arbitrator. The aggrieved workers disagree, arguing that if Sundance wanted to arbitrate, it should have said so from the start.

The principal plaintiff of the lawsuit, Robyn morgan, worked in Iowa as an hourly employee at a Taco Bell owned by Sundance. Morgan and the other complainants allege that Sundance used a number of illegal wage and scheduling practices, such as forcing workers to check in before the end of their shifts and “shifting” employee hours from the week they actually worked. worked the following week in order to deprive workers of overtime pay. Morgan and others filed a lawsuit in 2018 for violating the Fair Labor Standards Act (FLSA) on behalf of all of the company’s hourly employees. The group was also not the first to raise Sundance’s employment practices in a lawsuit. A similar case had been filed in Michigan two years earlier by another group of employees.

After Morgan’s lawsuit was filed, typical court battles ensued. Sundance filed a motion to dismiss (which was dismissed); the company later filed a response to Morgan’s complaint. The case then went to mediation, which was unsuccessful. It was what Sundance did next that brought the case to trial.

After mediation failed to reach a settlement in the case, Sundance filed a motion to force arbitration as an alternative to litigation. Morgan and others argued that the defendant Sundance never even mentioned arbitration and proceeded with the litigation in a manner wholly inconsistent with any expectation that the case would be arbitrated.

The district court sided with the plaintiffs, ruling that Sundance had waived any right to arbitration by failing to seek it earlier in the proceedings. The United States Court of Appeals for the Eighth Circuit, however, reversed, basing its decision on the fact that it had not been shown that the arbitration would harm the plaintiffs. The methodology of this appeals court, however, is at odds with how other circuits have decided the same issue in other cases.

The legal requirements to decide this arbitration issue, according to the plaintiffs’ request for certiorari, “turned into a confused mess”, requiring the intervention of SCOTUS. A group of law professors specializing in contract law and arbitration law also urged judges to resolve the circuit split, arguing that federal courts often incorrectly apply federal arbitration law. The professors further argued that demanding prejudice (as the Eighth Circuit did in deciding that the case should go to arbitration) is inappropriate in law. The judges awarded the friends Monday asks, allowing their brief to be submitted.

Law & Crime spoke with the professor and associate dean of Drexel Law School Richard H. Frankel, council of the amici curiae.

“I hope the Supreme Court will take this opportunity to reiterate that binding arbitration clauses should be treated like any other contract and should not be given special treatment,” Frankel said, explaining that the general principles of equity are at stake. “A party that imposes a binding arbitration clause on its customers or employees,” he said, “should not be able to use the court system and then change its mind when it does. dislike the way the case is going and move the case to arbitration. “

Counsel for the parties did not immediately respond to the request for comment.

[Image via Spencer Platt/Getty Images]

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