Chipotle’s Mandatory Arbitration Agreements Are Backfiring | Hacker News Reader

Chipotle’s Mandatory Arbitration Agreements Are Backfiring

huffingtonpost.com

39 pointsmoonka11 comments

Is there any reason the same operation couldn’t be enacted in the future, as a legitimate strategy for psuedo-collective lawsuits? It seems like treating everything the same as a collective lawsuit, then executing it individually, makes for much stronger leverage against the company. In both scenarios where arbitration agreements exist, and don’t.

I’ve always wondered why I haven’t heard about such before this. IANAL, but at worst I figure a Saul Goodman type would have gamed this by now, and maybe it would make economic sense for more upscale firms if it could somehow be made to scale. But I haven’t given it a huge amount of thought, I’m sure there’s a big obvious hole or two in my plan.

It's not cost effective. In this case, it's looking like each arbitration proceeding will cost the employee that files it $400 in arbitration fees, and they will win at most ~$1000. Assuming $200/hour for lawyers (ha! if only), if they spend more than 3 hours dealing with it, they lose. The only reason they're going this route is because it will cost Chipotle even more: $1100 in filing fees, plus the hourly rate of the arbitrator (likely ~$1000/hour), plus their own legal fees. So it's a useful harassing tactic on the part of the class action lawyers.

I'm assuming the total revenue for the lawyer should be similar to what they'd get in a class-action, assuming they actually gather a critical mass (for either case); and then if they treat it as a class-action, where most evidence is somewhat shared... then you could re-enact the scenario

Whats not clear to me is whether a class-action must be treated differently from 300 independent lawsuits, assuming a single lawyer/group handles all the cases, from the perspective of the lawyers. Ignoring I guess the cost of 300 independent filings, but I'm also assuming thats a rather small part of the overall cost.

I'm not an expert in this stuff, but my understanding is that the scope of discovery allowed in each individual arbitration is likely to be substantially less than that which would be allowed in a class action lawsuit. A class action would be able to demonstrate coordinated wrongdoing by presenting evidence from a representative subset of low-level employees, along with testimony from high level employees and huge troves of emails and internal documents. That type of evidence would be sufficient to generalize from what happened to the small subset of employees to what happened to all the class members. An individual arbitration however is likely going to be limited to gathering testimony of the specific low-level employees involved in the specific case under consideration. Without that evidence of centrally coordinated wrongdoing, the proof in one case is not likely to be useful in other individual arbitrations. And because of that, there's not nearly as much economy of scale in doing large numbers of individual cases as there is in class actions.

It sounds like a single entity is helping many workers take individual cases (under unique circumstances). This sounds just like a class-action lawsuit, except with extra steps.

If it proves worthwhile, it could potentially give workers an option to fight back against agreements that prevent class-action suits in the first place.

And with the economy structured as it is, we all certainly know the working class could use a win.

Question: what happens if Chipotle never pays the arbitration fees?

Not sure, but it seems like Uber is also not paying arbitration fees. https://gizmodo.com/ubers-arbitration-policy-comes-back-to-b...

If their agreement with employees says that disputes will be settled by arbitration, then refusing to arbitrate might be a breach of contract, for which they could be sued in a class action.

Even if the breached contract contains a mandatory binding arbitration clause? How ironic.

I'm guessing that a contract that says "if we refuse to arbitrate, you must resolve that by arbitration" wouldn't stand up in court. As Wikipedia says:

"A contract is a promise or set of promises that are legally enforceable and, if violated, allow the injured party access to legal remedies. Contract law recognizes and governs the rights and duties arising from agreements. In the Anglo-American common law, formation of a contract generally requires an offer, acceptance, consideration, and a mutual intent to be bound."[1]

The judge in this article is already upset with Chipotle, and probably won't be happy if they try to delay arbitration any further:

> Chipotle recently asked a federal judge to block the workers from seeking arbitration with lawyers who’d represented them in court ― despite the fact Chipotle had forced arbitration upon its workers via agreements they had to sign when they were hired.

> The judge denied that request, calling Chipotle’s actions “unseemly.”

[1] https://en.wikipedia.org/wiki/Contract

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