In one of the first cases applying Concepcion in the Third Circuit, the district court in Brown v. TrueBlue, Inc., No. 1:10-CV-0514, 2011 WL 5869773 (M.D. Pa. Nov. 22, 2011), held that an arbitration clause in an em-ployment agreement that prohibited class arbitration and required that employees provide written consent to be represented in a lawsuit filed by another individual was valid and that the Supreme Court’s decision constituted a change in the law that justified an employ-er’s motion to compel arbitration fifteen months into litigation. In so ruling, the court concluded that Concep-cion abrogated the Pennsylvania Superior Court’s holding in Thibodeau v. Comcast Corp., 912 A.2d 874 (Pa. Super. Ct. 2006) that an arbitration clause is unconscionable and unenforceable where it is “con-tained in an adhesion contract and unfairly favors the drafting party.”
The case arose after two employees of TrueBlue, a temporary staffing agency formerly known as LaborRea-dy, filed a putative class and collective action alleging violations of the Pennsylvania Minimum Wage Act and the Fair Labor Standards Act. Fifteen months after the filing of the plaintiffs’ complaint, and three days prior the scheduled hearing on plaintiffs’ motion for class certification, TrueBlue filed a motion to compel arbitra-tion alleging that the plaintiffs’ employment agreements required them to litigate any claims against TrueBlue in individual arbitrations. Plaintiffs opposed the motion, asserting that the arbitration agreements were uncons-cionable and that TrueBlue had waived its right to seek arbitration by waiting so long to file its motion to compel.
The court rejected both of the plaintiffs’ arguments and stayed the case pending the outcome of the arbitra-tions. With respect to the issue of unconscionability, the court held that “a fair reading of Concepcion must lead the Court to conclude that Thibodeau cannot serve to invalidate an arbitration agreement” and that “the Federal Arbitration Act preempts Pennsylvania’s unconscionability doctrine.” Turning to the plaintiffs’ waiver argument, the court held that while it was “troubled” that TrueBlue’s motion to compel came fifteen months after the case began, “the reason for this delay was that Concepcion represented a significant change in the law [that] excuses Defendants’ delay.”
In reaching this conclusion, the TrueBlue court joined the rapidly growing number of courts that have held that the FAA preempts nearly all state law defenses to the enforcement of arbitration clauses. While it remains to be seen whether the Board’s Horton decision will have any impact on courts’ favorable view of arbitration provisions, it appears likely that employers will continue to be able to rely on well-crafted arbitration clauses to preclude court cases and class claims.
