Employer Seeking to Avoid Its Own Arbitration Agreements Forced to Arbitrate With Employees Represented By Nichols Kaster, LLP

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The court found that the employees did not waive their right to arbitration by joining a previously-filed collective action before it was decertified.

Nichols Kaster, PLLP
Prospect must comply with the arbitration agreements it required its employees to sign. We look forward to beginning these arbitrations, so our clients can have their claims heard

On September 5, 2013 a court ordered that Prospect Mortgage, LLC must individually arbitrate the claims of loan officers represented by Nichols Kaster, LLP. In the case of Aguilera, et al. v. Prospect Mortgage, LLC, the court found that the employees did not waive their right to arbitration by joining a previously-filed collective action before it was decertified, and granted the employees’ motion.

According to the order, these 70 employees previously joined a district court case certified as a collective action, after receiving court-authorized notice of the case. After they joined, Prospect produced their personnel files, which contained agreements to arbitrate. The order also explains that the parties subsequently agreed to decertify the nationwide collective action, and, according to Plaintiffs’ counsel Matthew C. Helland of Nichols Kaster, LLP, “Plaintiffs filed 37 district court cases for those who did not sign arbitration agreements, and 188 demands for individual arbitration for those who signed arbitration agreements.” However, Prospect refused to participate in the arbitral forum its arbitration agreements mandated, arguing in opposition to Plaintiffs’ motion to compel arbitration, that employees waived their right to pursue arbitration by opting into the earlier district court action.

The court found there was no waiver by the employees, explaining “Prospect has not met its heavy burden to prove [the employee Petitioners took] actions inconsistent with arbitration when viewing the actions attributable solely to Petitioners after they joined the Sliger litigation.” The court also found that Prospect was not prejudiced by the Aguilera Petitioners joining the previous litigation, noting that “many of the Sliger Plaintiffs did not sign arbitration agreements and, therefore, much of the [Sliger] litigation activity would have occurred even if Petitioners had never opted into the collective action.” Thus, the court held: “Prospect has not demonstrated that it suffered prejudice as a result of Petitioners’ conduct in the Sliger action.”

Matthew C. Helland further commented: “We are pleased with the result. Prospect must comply with the arbitration agreements it required its employees to sign. We look forward to beginning these arbitrations, so our clients can have their claims heard.” Nichols Kaster also represents 54 employees who have filed a similar petition to compel arbitration against Prospect Mortgage in the Northern District of California. That case is Aldrich, et al. v. Prospect Mortgage, Case No. 3:13-cv-03711-RS (N.D.Cal.).

Petitioners are represented by Matthew C. Helland of Nichols Kaster, LLP in San Francisco, California. The case is filed in the United States District Court for the Central District of California as Aguilera v. Prospect Mortgage, LLC, case number 2:13-cv-05070-DMG-CW.

Additional information about this case can be found at http://www.nka.com/case/prospect-mortgage/ or by contacting Nichols Kaster, LLP toll free at (877) 448-0492.

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