Plaintiff Kaitlin Jaramillo sued defendant North Restaurants LLC in the United States District Court for the District of Kansas, raising claims of violations of the Fair Labor Standards Act (FLSA) and state wage laws. Defendant filed a Motion to Compel Arbitration and Dismiss Complaint.
Factual Overview
Kaitlin Jaramillo worked as a server/bartender at North Italia, a restaurant chain operated by North Restaurants LLC, in Leawood, Kansas from September 2018 through August 2023. On April 22, 2023, Jaramillo signed a Mutual Agreement to Arbitrate Claims with the defendant. This agreement required both parties to arbitrate covered claims rather than litigate in court, and it included a class and collective action waiver. The agreement also contained a delegation clause giving the arbitrator exclusive authority to resolve disputes related to the interpretation, applicability, enforceability, or formation of the agreement, except for issues concerning the validity of the class action waivers.
On March 26, 2024, Jaramillo filed a lawsuit on behalf of herself and others similarly situated, alleging violations of the FLSA and state wage laws. In response, North Restaurants LLC filed a Motion to Compel Arbitration and Dismiss Complaint on May 8, 2024.
Legal Analysis
Validity of the Arbitration Agreement:The court found that the defendant met its initial burden of showing that a valid arbitration agreement exists by providing evidence that Jaramillo knowingly signed the agreement. The burden then shifted to Jaramillo to show a genuine issue of material fact regarding the agreement’s validity.
Delegation Clause:The court noted that the agreement contained a delegation clause giving the arbitrator exclusive authority to resolve disputes about the agreement’s interpretation, applicability, enforceability, or formation. Because Jaramillo did not specifically challenge the delegation clause, the court determined that questions regarding the validity of the agreement should be decided by the arbitrator, not the court.
Class and Collective Action Waiver:The court addressed Jaramillo’s argument that the mutuality of the class and collective action waiver did not constitute consideration. The court found that this argument was not a challenge to the validity of the waiver itself but to the validity of the entire agreement, which falls under the purview of the arbitrator according to the delegation clause.
Stay of Proceedings:While the defendant requested dismissal of the case, the court noted that it was obligated to stay the litigation rather than dismiss the action, in accordance with the Federal Arbitration Act.
The court granted the defendant’s motion to compel arbitration, stayed the case pending arbitration, and denied the request to dismiss the complaint.
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