Monday, April 4, 2016

Arbitration to the Main Stage

In an action by several exotic dancers and entertainers against the operators of Rachel’s Adult Entertainment and Steakhouse in West Palm Beach, a federal judge granted a the strip club’s motion to compel arbitration in a Fair Labor Standards Act (FSLA), finding the entertainers' objections to agreements they signed unpersuasive or incorrect. Plaintiffs sought unpaid wages, claiming they were misclassified as independent contractors and that defendants failed to pay them a proper minimum wage and overtime as workers. Enforcement of the arbitration clause had been objected to because it was asserted all pages were not provided to dancers when they signed the agreements, which they claimed was under duress. Others argued they did not understand the arbitration clause due to language barriers. However, testimony given at an evidentiary hearing was deemed not fully credible by U.S. District Judge Robin Rosenberg. The club provided evidence that the documents were prepared by a third party who routinely stapled the pages together before delivering them. “The court can discern no credible basis for defendants or agents of defendants to choose to extract signature pages for certain dancers, and not others,” Judge Rosenberg wrote. “Thus, the court concludes that plaintiffs must rise or fall together. Either defendants systematically engaged in a pattern of practice of removing signature pages at the time of execution or defendants did not.” She also found the dancers’ claim of duress was without merit because the defendants provided evidence that no one was penalized for asking for more time to read the documents. “Florida law also places a strong duty on signatories to read the contents of the contract before signing,” wrote the court. Apparently, language barrier claims were exaggerated and mostly raised by a claimant who provided substantial testimony in English. The judge further stated that FLSA claims are routinely arbitrated, that the plaintiffs’ counsel had recently moved for arbitration on FLSA claims in an analogous case, that the arbitrator has the authority to sever portions of the agreement that are invalid or unenforceable, and that the Eleventh Circuit has held that when an arbitration agreement invokes the rules of the American Arbitration Association (AAA), as this one does, then it is clear the arbitrator is expected to determine if the agreement is valid. See more on story here-- and case-- Monteverde et al. v. West Palm Beach Food and Beverage LLC, case number 9:15-cv-81203, U.S. District Court for the Southern District of Florida