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Kors’s Arbitration Provision Stricken in Overtime Case

As arbitration agreements between employers and their workers become increasingly common, more and more companies are requiring employees to sign the agreements as a condition of employment. This leaves workers in a tough spot because, although they are technically signing the agreement of their own free will, for those who are in desperate need of a job the option to sign an arbitration agreement or continue looking for work isn’t much of a choice at all.

Tania G., a former warehouse worker for Michael Kors, filed a class action wage and hour lawsuit against her former employer for allegedly denying her and other warehouse workers minimum wage, overtime pay, and regular breaks throughout the day, as required by both the federal Fair Labor Standards Act (FLSA) and California labor law. Michael Kors had the suit moved to federal court and is now trying to get it banned from the courts altogether and moved into arbitration in accordance with an arbitration agreement Terry G. allegedly signed as part of her employment contract.

Galvan denies having ever signed such an agreement. When it was shown with her e-signature and a date of 10/30/14, Terry G. insisted she did not recognize the document, and even if she had signed it, she alleges it is irrelevant to her overtime class action lawsuit against Michael Kors. The employment agreement she allegedly signed was with Adecco SA, which she claims is an unrelated third party. Michael Kors, on the other hand, insists Adecco was Terry G’s true employer while she was on assignment at one of the warehouses owned by Michael Kors.

Michael Kors denies Terry G.’s allegation that she was required to sign the arbitration agreement as a condition of her employment at the warehouse. The company also insists that Galvan was aware that she could opt out of the agreement within 30 days of signing it by getting, filling out, and submitting a form she could have gotten from HR.

Terry G. alleged that Michael Kors intentionally made the opt-out process longer and more complicated than it needed to be in order to discourage employees from completing the process and opting out of the arbitration agreement.

The decision to be reached by the California federal court could be highly influential. Despite executives and business advocacy groups continuing to insist arbitrations benefit workers as much as, if not more than, their employers, employee advocacy groups argue that just the opposite is true and an independent investigation definitively sided with the employees.

Although employees might be more likely to receive a settlement from arbitration than the courts, the way the arbitration system is set up effectively blocks countless lawsuits. Because arbitration is not designed to handle class action lawsuits, plaintiffs with claims that are too small to justify the costs of arbitration never get the opportunity to combine their claims with others who may have suffered similar losses as a result of the same policies.

The inability to file class action and collective action lawsuits, along with the private nature of arbitration, mean a lot of people may have valid complaints against their employer without ever realizing it. The courts are designed to be public and transparent for a reason: for the good of the people. When everything is done behind closed doors in arbitration, it provides countless opportunities for businesses to continue swindling their employees without anyone being the wiser.The Chicago overtime lawyers at the Chicago Overtime Law Center are investigating unpaid overtime claims against large retail chains such as Petsmart, Officemax, Staples, Smart & Final, Apple, Walgreen’s, CVS, Urban Outfitters, GAP, Abercrombie & Fitch, Limited, Forever 21, Macy’s, Target, JC Penney’s, Lowes, Burlington Coat Factory, Marshalls, TJ Max, Victoria’s Secret, Nieman Marcus, Saks Fifth Avenue, Best Buy, Home Depot, Apple, Best Buy, Sears, K Mart, J.C Penney, Walmart, Costco, PetSmart, REI, Office Depot and other retail chains for misclassifying employees as managers, erasing or altering time sheets or time records, pressuring workers not to report or record overtime, failing to pay for time spent on security checks, and otherwise failing to pay workers for overtime and other wages. If you are the victim this practice call us at one of our offices near  and Northbrook, Plainfield and Vernon Hills at (312) 869-4095 or contact us online.