West v. Lasership, Inc.

Background

Daniel West, Romaine Clarke, Ryon Morgan, and Saadala Aboulessan brought federal and state wage-and-hour claims against LaserShip, Inc., several subcontractors, and unidentified subcontractor companies in a proposed class action. LaserShip moved to compel arbitration of Morgan’s and Aboulessan’s claims. West and Clarke were not covered by the motion because they worked for LaserShip subcontractors and did not contract directly with LaserShip.

Aboulessan signed two Independent Contractor Agreements with LaserShip, dated March 9, 2016, and November 23, 2016. Morgan signed one dated October 8, 2015. The agreements contained identical arbitration provisions, class- and collective-action waivers, and Virginia choice-of-law provisions. Morgan and Aboulessan did not dispute that they entered into the agreements or that their claims fell within the agreements’ language.

Arguments and Analysis

The plaintiffs argued that New York law should apply instead of the agreements’ selected Virginia law. They maintained that New York’s public policy protecting workers’ ability to pursue workplace claims collectively required invalidating the arbitration and class- and collective-action waiver provisions.

The court rejected that position. It explained that New York courts generally enforce clear contractual choice-of-law provisions and that New York courts also routinely uphold class-action waivers. The court further concluded that courts applying New York law in wage cases brought under the Fair Labor Standards Act and New York Labor Law have upheld class- and collective-action waivers. The court therefore applied Virginia law, under which the parties agreed the waivers were enforceable.

The court also rejected three additional arguments. It did not decide whether the Federal Arbitration Act’s transportation-worker exception applied because, even if it did, that exception would not make an otherwise enforceable arbitration clause invalid under state law. The court rejected the argument that the waivers violated federal or New York labor law. Finally, it rejected the argument that arbitration would prevent the plaintiffs from effectively pursuing their statutory rights because they provided no evidence about their financial hardship or the likely costs of arbitration.

Disposition

The court granted LaserShip’s motion to compel arbitration as to Ryon Morgan and Saadala Aboulessan. It stayed the action as to Morgan and Aboulessan only, pending arbitration. The memorandum order resolved docket entry number 25.