Nearly four years ago, the U.S. Supreme Court held that employers can enforce arbitration agreements that waive an employee’s right to joining a class action lawsuit. Since then, many companies have avoided what would be costly class action lawsuits, particularly in the wage and hour context, by requiring individual arbitration with employees.
Despite this, there was often a gap for joint employers, specifically those companies that use staffing agencies to perform some type of labor. For instance, oil and gas companies may use vendors or staffing companies to provide labor on an oil rig. Or, a company may contract with a janitorial services provider to clean its offices. In those instances, the staffing companies would have the direct relationship with the workers. As staffing companies increasingly used arbitration agreements with class action waivers, it became increasingly difficult for plaintiffs to file to class action lawsuits. To get around this, more plaintiffs were suing the companies that used the staffing agencies and did not have arbitration agreements with the workers, arguing that they were either a direct employer or joint employer. Applying Oklahoma law, a federal court of appeals recently restricted, if not completely foreclosed, this increasingly common litigation tactic by plaintiff lawyers.
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