PHILADELPHIA – A Pennsylvania district court has granted U-Haul and two subsidiaries a motion to compel arbitration in a Fair Labor Standards Act lawsuit filed by an employee.
The United States District Court for the Eastern District of Pennsylvania sided with defendants U-Haul International, Inc., Collegeboxes and eMove Inc. on Aug. 27, in plaintiff Michael Kauffman's class action lawsuit.
Kauffman worked as a mover for the defendants for five years but claims he never received overtime pay despite working more than a 40-hour week. He claims they violated the Fair Labor Standards Act and Pennsylvania regulations.
All three defendants responded to his lawsuit with a motion to compel arbitration and a motion to dismiss his claims. The court granted the motion to compel but denied the motion to dismiss and put a stay on the case pending arbitration.
Kauffman’s working relationship with the companies became difficult, he claims, after he and other workers were "misclassified" as independent contractors when they were actually treated as employees, according to the lawsuit.
The defendants said Kauffman has to undergo arbitration because of an agreement he signed that said, “any and all disputes, lawsuits, legal controversies, legal actions or legal claims arising out of or relating to this agreement shall be settled by mandatory and binding arbitration,” according to the opinion.
While Kauffman said the arbitration portion of the agreement can’t be enforced for a number of reasons, the court determined it didn’t need to rule on this issue, because even if he is exempt from the arbitration clause under the Federal Arbitration Act, the clause still has to be implemented via Pennsylvania state regulations.
As for Kauffman’s argument that portions of the arbitration clause are unacceptable, the court determined those provisions can be removed from the arbitration clause. But Kauffman would still have to undergo arbitration.
The court decided to grant the defendants’ motion to compel arbitration but removed the part of the agreement that said each party has to pay its own arbitration expenses, and that eMove would be able to regain its attorneys’ fees from the motion to compel arbitration. It also ordered eMove to pay the arbitration fees.
U.S. District Judge Joseph F. Leeson, Jr. authored the opinion.