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After Substantial Litigation and Full Arbitration, Second District Reverses Order Compelling Arbitration Finding That Defendants Waived Right to Arbitrate

In Uncategorized on November 15, 2010 at 9:23 am
Day 222 (Or is this Day 1 now?) - Oops!
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The Second District Court of Appeal reversed an order compelling arbitration after the conclusion of an arbitration and judicial confirmation of the arbitration award because defendants waived their right to arbitrate.  Knight v. Toe Brights, Inc., et al., No. B220648, 2010 WL 4542324 (Cal. App. 2d Dist. Nov. 12, 2010).

Background

Plaintiff Knight filed an action against her former employer, Toe Brights, Inc. (TBI), and two of its officers/directors/stockholders, alleging that they failed to pay her more than $9,000 in salary and reimbursement for expenses that was due at the time of her termination, and also failed to repay a loan from her to TBI in the amount of $41,783. Id. TBI filed its answer to Knight’s complaint, and alleged as an affirmative defense that “Plaintiff’s action is barred by any arbitration agreement requiring that this action be arbitrated.”  Id.

Defendants moved to compel arbitration about eight months after plaintiff Knight filed her suit.  Id. *1.  By that time, defendants had propounded multiple sets of discovery to which Knight had responded, and numerous discovery motions were pending.  Id. Defendants had claimed “priority” in discovery, and then refused to respond to Knight’s discovery.  Id. The court ordered the matter to arbitration less than three months before the date set for trial. Id.

The case proceeded through arbitration, and the arbitrator awarded Knight $40,000 for the repayment of her loan plus “interest at the statutory rate from the date she filed her lawsuit”.  Id. *4. Knight did not prevail on her other claims for unauthorized use of her jewelry designs, name and likeness, and the arbitrator awarded defendants $60,000 in attorney fees and $1,160 in filing fees as the prevailing parties on some of Knight’s claims. Id. The arbitrator denied Knight’s motion for attorney fees  and costs. Id. Read the rest of this entry »

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Northern District Finds Factual Determination of Outside Salesperson Exemption Unsuited for Class Treatment

In Certification, Class Notice, Collective Action, FLSA, Opt-in, Outside Salesperson, Overtime, Uncategorized on October 8, 2010 at 5:37 am
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The Northern District of California granted defendant’s motion to decertify a conditional FLSA class in Wong v. HSBC Mortgage Corporation (USA), No. C-07-2446 MMC, 2010 WL 3833952 (N.D. Cal. Sept. 29, 2010).  Plaintiff HSBC loan officers, allege that HSBC improperly classified them as exempt under the Federal Labor Standards Act (“FLSA”), and, consequently, violated the FLSA by failing to pay them overtime compensation. Id. *1. The Court granted plaintiffs’ motion for an order conditionally certifying, for purposes of the FLSA, a class of persons who, as of May 7, 2004, had been employed by HSBC as loan officers within the United States. Id. Notice of the action was sent to the class, and 120 class members filed consent forms, joining the action as plaintiffs.  Id.

Decertification Motion

HSBC argued that individualized factual determinations will be necessary regarding HSBC’s affirmative defense that plaintiffs are/were properly classified as “outside” salespersons and, consequently, are exempt under the FLSA. Id. *2 (citing 29 U.S.C. § 213(a)(1) (providing “maximum hour requirements” in FLSA do not apply to “any employee employed … in the capacity of outside salesman”)). Read the rest of this entry »