In March of this year, the US Supreme Court (“SCOTUS”) ruled in the matter of Morgan v. Sundance Inc., a seminal case that resolved a circuit split concerning the test for determining when a party has waived its right to arbitrate.
The Ninth Circuit will soon become the first federal appeals court to weigh the extent of which Morgan dials back companies’ latitude to move lawsuits out of open court and into private arbitration, as they hear arguments in the matter of Armstrong v. Michaels Stores Inc..
Background of the Dispute
Teresa Armstrong, a former employee of the defendant, brought the dispute against Michaels Stores Inc. in an attempt to revive her wage-and-hour class action.
A San Francisco federal judge ruled on the matter, sending Armstrong’s claim to arbitration after it had been litigated for ten (10) months.
The dispute arose before the Ninth Circuit following Armstrong’s allegation that Michaels Stores violated various provisions of California’s wage-and-hour law. Armstrong’s complaint was initially filed in state court in 2017 before Michaels Stores transferred to federal court.
Michaels Stores emphasized their intention to enforce the arbitration agreement with Armstrong in multiple filings before it had formally filed its motion to compel arbitration. However, the company believed it could not proceed until SCOTUS ruled that class action waivers in employment contracts are enforceable. Despite the company waiting ten (10) months to compel arbitration, it...
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