Stickles v. Atria Senior Living, Inc.
- William Alsup
- 3:20-cv-09220
- U.S. District Court · Northern District of California
- 5
In Stickles v. Atria Senior Living, Judge Alsup denied defendants’ motion to change the class or compel arbitration after finding they waived arbitration.
The ruling affected the defendants’ attempt to remove certain employees from the certified class or compel them to arbitrate, and it kept those employees in the class for the pending wage-and-hour case.
What happened
Stickles v. Atria Senior Living, Inc. is a wage-and-hour class action about whether the company improperly treated Community Sales Directors as exempt from California overtime and meal-and-rest-break rules. The court had certified a class that included workers who had not signed arbitration agreements.
The defendants later said some workers had been mistakenly included because they had received emailed arbitration agreements. They asked to remove those workers from the class or, alternatively, require arbitration. The court found that the defendants waited too long, litigated the case through summary judgment, and sought arbitration only after losing that ruling. This conduct waived their right to compel arbitration, and the emailed agreements were unsigned.
Judge Alsup denied the defendants’ motion to clarify or modify the class definition or compel arbitration. He also denied the plaintiffs’ motion to intervene as moot and vacated the hearing; the case’s scheduled trial and pretrial conference remained in place.
The detailed version
- Stickles v. Atria Senior Living, Inc. · No. 3:20-cv-09220
- William Alsup
- Feb. 16, 2023
Background
George Stickles and Michele Rhodes worked as Community Sales Directors for Atria Senior Living, Inc. and Atria Management Company, LLC. The lawsuit concerns whether the defendants improperly classified Community Sales Directors as exempt outside salespersons, which would have denied them overtime and California meal-and-rest-break protections.
The court had certified a class of Community Sales Directors who had not signed arbitration agreements and whom the defendants classified as exempt outside salespersons between April 9, 2018, and September 29, 2019. The class was certified only on the classification issue. The parties later litigated cross-motions for summary judgment, and the court granted summary judgment to the plaintiffs on classification, ruling that Community Sales Directors were not exempt outside salespersons.
After settlement efforts failed, the defendants said they had discovered that employees who had received arbitration agreements by email had mistakenly been included in the class. The agreements were sent in March 2019 and stated that employees would be subject to arbitration if they remained employed for 30 days, but the opinion states that the agreements were not signed. The defendants moved to remove those employees from the class or, alternatively, to compel arbitration.
Analysis
The court applied the rule that waiver of arbitration requires knowledge of an existing right to compel arbitration and intentional acts inconsistent with that right. The court also explained that a court generally decides whether litigation conduct waived arbitration.
The court found that the defendants knew by July 2022 that the emailed arbitration agreements did not automatically change the class definition and that motion practice would be needed to compel arbitration. Despite that knowledge, they waited until after the summary-judgment proceedings and the adverse summary-judgment ruling to seek to narrow the class and compel arbitration. The court held that this conduct was inconsistent with the claimed arbitration right. It rejected the argument that waiver requires a specific affirmative act expressly denying the right to arbitrate, explaining that extended silence and a delayed arbitration demand can support waiver. Waiting to see the outcome of summary judgment before pursuing arbitration also supported waiver.
The court concluded that the defendants’ proposed class modification depended on the employees being bound by arbitration. Because the defendants had waived the right to compel arbitration and the agreements were unsigned, the court found no reason to change the class definition. The court did not need to decide whether the defendants’ claimed clerical oversight was credible.
Rulings
Judge William Alsup denied the defendants’ motion to clarify or modify the class definition or to compel arbitrations in the alternative. He denied the plaintiffs’ motion to intervene as moot, vacated the hearing, and left the scheduled trial and final pretrial conference in place.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.