From JDSupra, in the November 2018 Independent Contractor Misclassification and Compliance News Update, Richard Reibstein discusses the NFL’s success in compelling arbitration with former security representatives. Richard writes:
The National Football League successfully obtained an order granting its motion to compel arbitration of claims by nine former security representatives alleging violations of the Employee Retirement Income Security Act, the FLSA, the Age Discrimination in Employment Act, and various other New York state laws, based on the NFL’s alleged misclassification of the plaintiffs as independent contractors and not employees. The complaint, filed in federal court in New York, alleged that the security representatives each worked for the NFL between 12 and 26 years; were required to participate in training sessions; did not have autonomy in the means and methods of providing their services; were required to follow the NFL’s dress code and use NFL ID cards; were mandated to follow an NFL Operations Manual; and had to be on-call at all times, day or night.
Each of the plaintiffs provided services under Security Representative Agreements which classified them as independent contractors and provided for compulsory arbitration of all disputes between the parties. The court rejected the security representatives’ argument that they were fraudulently induced to sign the agreements based on the NFL’s knowingly false representation that they were independent contractors and not employees. Instead, the court determined that the plaintiffs’ claims were arbitrable because each of the parties had agreed to arbitrate and the scope of the agreements encompassed the claims at issue. Three of the nine plaintiffs also argued they were not bound by the arbitration provisions of the agreements because they did not sign them in their personal capacities but rather as the president or owner of an entity. The court rejected their argument, holding that a party who receives a direct benefit from a contract containing an arbitration clause is estopped from denying its obligation to arbitrate. Here, the direct benefit the representatives received was the compensation for their services provided for in the agreement. Additionally, in finding the arbitration clause to be enforceable, the court stated that contrary to the plaintiffs’ arguments, the arbitration clause did not prevent them from vindicating their statutory rights and pursuing equitable remedies, including reinstatement. Likewise, the arbitration clause did not prevent the plaintiffs from accessing the legal fee-shifting provisions of statutes like the FLSA and ADEA. Buckley v. National Football League, No. 18 civ. 3309 (LGS) (S.D.N.Y. Nov. 16, 2018).
Read the complete newsletter here: November 2018 Independent Contractor Misclassification and Compliance News Update | Locke Lord LLP – JDSupra