Opinion ID: 2784712
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: On January 2, 2014, Conners, a former server at a Gusano’s Pizza restaurant, filed this collective action on behalf of herself and other current and former Gusano’s Pizza restaurant servers, alleging the employees were subjected to illegal tip pooling in violation of the FLSA. Several other former employees soon opted into the action. A month later, the Gusano’s Pizza restaurants each implemented a new arbitration policy in the form of an agreement1 that purports to bind all current employees who did not opt out of the arbitration agreement. At the top of the first page of each arbitration agreement, the following text appears: This Agreement to Arbitrate Disputes (called the “Agreement”) is a contract between you and [employer name]. The Agreement sets out your rights and the rights of [employer name] in connection with the resolution of employment-related disputes. You have the right to ask independent advisors of your choice, including lawyers, to explain this Agreement to you if that is your choice, but you are not required to do so. The agreement goes on to explain its scope, the required procedures for invoking arbitration, the effect the agreement will have on the employee’s ability to pursue relief in court, the right of every employee to opt out of the agreement free of retaliation, and how to opt out effectively. Along with the arbitration agreement, each employee received an opt-out form and an explanatory memorandum from the restaurant’s general manager. The memorandum is a two-page document, describing the agreement’s fundamental terms in plain English. The memorandum specifically explains that one effect of the agreement, should an employee not opt out, is to prevent the employee from joining Conners in the present collective action. 1 Although each restaurant adopted its own policy, the parties do not dispute that the substance and format of each is identical. -3-
Shortly after Gusano’s Pizza began introducing the new agreement to its current employees, Conners and the other plaintiffs—who at that time were all former employees, not subject to the agreement (collectively, former employees)—filed an “emergency motion to prohibit improper communications with putative class members,” in which the former employees asked the district court, among other matters, to (1) “invalidat[e] the [arbitration] agreement as it applies to the claims in this litigation,” (2) “prohibit[] the named defendants from communicating with represented opt-in plaintiffs and putative class members regarding the subject matter of this litigation,” and (3) “authoriz[e] Plaintiffs to issue a Court-approved corrective notice at the named defendants’ expense.” Simultaneously, in another emergency motion, the former employees also sought conditional class certification. The district court denied both motions but avoided ruling definitively on the substance of the first motion, scheduling a hearing “to determine whether there has been improper communications with the putative class members and whether defendants’ communications with putative class members should be enjoined or curtailed.” Throughout the hearing, the district court explained its primary concern with this case is the “disincentive to plaintiffs’ lawyers in bringing these types of cases.” The district court feared employers would “jump in real quick” “every time somebody gets ready to get a class going” “and give [its employees] arbitration agreements and cut the plaintiffs off at the knees.” “[A]s a policy concern,” the district court questioned whether it “should engage in allowing disincentives to class actions” that might make it infeasible to pursue legitimate claims with small payouts. Upon hearing the evidence and arguments, the district court deferred its final conclusion, stating it needed to reexamine the filings and law before reaching a decision. Several days later, the district court granted the former employees’ “motion for a temporary injunction . . . for the reasons stated during the . . . temporary injunction hearing and to prevent a chilling effect on future collective actions under the [FLSA].” The district court concluded its one-page written order by “enjoin[ing Gusano’s Pizza] -4- from enforcing the arbitration agreement against any plaintiffs who choose to join this action.” Gusano’s Pizza timely filed this interlocutory appeal, asserting appellate jurisdiction under 28 U.S.C. § 1292(a)(1).