Droesch v. Wells Fargo Bank, N.A.
- Jacquelyn Corley
- 3:20-cv-06751
- U.S. District Court · Northern District of California
- 10
In Droesch v. Wells Fargo Bank, Judge Corley granted arbitration of Droesch’s and four opt-in plaintiffs’ claims and stayed them.
Denise Droesch and opt-in plaintiffs Taishia Bell, James Galligan, Jonathan Harrison, and Tavares Speer must arbitrate their claims, and those claims are stayed in court. Shakara Thompson’s claims were not compelled to arbitration and the action continues as to her.
What happened
In Droesch v. Wells Fargo Bank, Denise Droesch and others claimed Wells Fargo failed to pay wages for work performed before and after shifts. They brought proposed class and collective claims under federal and state wage laws.
The court granted Wells Fargo’s motion to compel arbitration of Droesch’s and four opt-in plaintiffs’ claims. It rejected their arguments that the arbitration agreement was unfair, that their wage claims could not be arbitrated, and that the case should await possible new legislation. The court stayed those claims while arbitration proceeds; it did not order dismissal.
Judge Jacquelyn Scott Corley ruled that the arbitration agreement covered the claims and was enforceable. Because Wells Fargo had not sought arbitration of Shakara Thompson’s claims, the case would continue in court as to her claims.
The detailed version
- Droesch v. Wells Fargo Bank, N.A. · No. 3:20-cv-06751
- Jacquelyn Corley
- May 6, 2021
Background
Denise Droesch and Shakara Thompson filed a proposed class and collective action against Wells Fargo Bank, N.A., alleging employment-related wage violations under the Fair Labor Standards Act and state law. Droesch alleged that she performed unpaid work before and after her shifts as a Premier Phone Banker. Four opt-in plaintiffs—Taishia Bell, James Galligan, Jonathan Harrison, and Tavares Speer—later filed consents to join the action under the Fair Labor Standards Act.
Before beginning employment, Droesch signed Wells Fargo’s Mutual Arbitration Agreement. The agreement covered legal claims arising from employment, including wage claims and claims under the Fair Labor Standards Act. It also required claims to be brought in arbitration individually and waived participation in class, collective, or representative actions. The four opt-in plaintiffs signed the same agreements.
Motion to Compel Arbitration
Wells Fargo moved to compel arbitration of Droesch’s claims and the claims of the four opt-in plaintiffs, and sought dismissal or, alternatively, a stay. The court applied the Federal Arbitration Act and California contract law. It concluded that Wells Fargo had shown valid arbitration agreements covering the disputed claims.
The court rejected the plaintiffs’ unconscionability arguments. It found only a minimal degree of procedural unfairness because the agreement was an employment contract presented on a take-it-or-leave-it basis. The court also found no sufficiently serious substantive unfairness in the agreement’s scope, discovery provisions, or fee provisions. The agreement covered employment-related disputes, allowed adequate discovery, required Wells Fargo to pay costs unique to arbitration, and did not improperly require employees to bear expenses they would not have faced in court.
The court also rejected the argument that Fair Labor Standards Act claims could not be compelled to arbitration. It held that the individual arbitration agreements were enforceable as to those claims. Finally, it declined to pause the case while the House of Representatives considered H.R. 963, proposed legislation concerning forced arbitration.
Disposition
The court granted the motion to compel arbitration of Droesch’s and the four opt-in plaintiffs’ claims. It stayed those claims pending completion of the arbitration proceedings and directed the plaintiffs to notify the court within 14 days after arbitration ended and seek appropriate relief, including lifting the stay.
The court did not compel arbitration of Thompson’s claims because Wells Fargo had not moved to do so. The court therefore stated that the action would continue in court, although without the California claims then subject to arbitration. The order disposed of Docket No. 28. Judge Jacquelyn Scott Corley vacated the scheduled hearing and entered the order on May 6, 2021.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.