Seyfarth Synopsis: On November 9, 2021, the Tenth Circuit issued a ruling beneficial to alleged joint employers in wage and hour lawsuits. The Court held that a customer of staffing agencies could compel arbitration pursuant to arbitration agreements entered into between the plaintiffs and the staffing agencies, even though the customer was not a signatory to the agreements. While the ruling only explicitly addressed Oklahoma law, it is indicative of a clear trend toward courts in a number of states permitting non-signatory enforcement of arbitration agreements within the joint employer context.
The proliferation of wage and hour class and collective lawsuits has forced an increasing number of staffing agencies to enter into arbitration agreements containing class-and-collective-action waivers with their employees. In an effort to circumvent those agreements, plaintiffs’ attorneys have strategically chosen to forego bringing suit against the staffing agencies that directly contract with or employ them, instead suing only the customers of the staffing agencies, claiming that the customers are the direct or at least joint employers of the workers employed by the staffing agencies and thus are the one liable for any alleged wage-hour violations. Because the staffing agency was not named in the lawsuit, the arbitration agreement between the plaintiff and staffing company is inapplicable—or so the argument goes. Joining an increasing number of other courts addressing other...
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