Court also holds that arbitrability questions must be resolved by the arbitrator
The 10th Circuit has decided two significant issues in an otherwise garden-variety off-the-clock case, one relating to arbitration and the other to one inherent problem in such cases. Brayman v. Keypoint Government Solutions, Inc., Case Nos. 22-1118 & 22-1168 (10th Cir. 2023).
The facts of the Brayman case were generally unremarkable. The defendant was in the business of performing investigations and background checks for various federal agencies. It employed field investigators to undertake the necessary interviews, public records searches, and the writing of investigation reports. Like most employers, it required advance approval of overtime. As is often the case in this type of litigation, the plaintiffs contended that they could not complete all of their work without overtime, and that they underreported their time to avoid the possibility of discipline.
The district court conditionally certified the case and 214 individuals opted in, 63 of whom were from California. The plaintiffs then asserted a Rule 23 set of claims for all California employees based on similar off-the-clock allegations and claimed missed meal and rest breaks.
The defendant asserted arbitration agreements as to most of the California employees, which the district court found to be unenforceable. The court also certified Rule 23 class and granted "final FLSA certification" as to the rest.
The 10th Circuit reversed on both counts. As to arbitration, the plaintiffs raised what appear to be colorable arguments that the arbitration agreements did not apply, but the court of appeals found that the agreements also provided that such determinations were to be made by the arbitrator. That provision meant that, indeed, the arbitrator and not the court should have decided that question.
As to the off-the-clock claims, the court found that the lower court's analysis was lacking and did not constitute the required "rigorous" inquiry Rule 23 required. It found multiple questions, such as whether there was common evidence (i.e., common to the class) that the employer was aware that off-the-clock work was being performed. The district court similarly did not analyze whether, in fact, the work could be done in the allotted time or whether some employees' difficulties stemmed from purely local concerns or even their own performance.
Tellingly, in a comment that would apply to many such cases, the court stated:
"There is no illegality in setting very high (perhaps unrealistic) productivity requirements. Those requirements might lead to dismissal of many, perhaps even a large majority, of those hired. But as long as they are paid what they are due, they have no complaint [under applicable law]."
The decision in Brayman is a reminder that the terms of the arbitration agreement can determine questions of arbitrability. More broadly, it also highlights a problem common to many off-the-clock cases, which is that they almost always devolve into individual inquiries even if the employees may claim that the employer's policies overall were too strict.
The bottom line: Almost by their very nature, off-the-clock cases often involve individual inquiries that may make them unsuitable for class or collective treatment.
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