Attys Group Opposes Delayed Arbitration in Taco Bell Franchisee Class Action

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Taco Bell Franchisee Wage Theft Class Action Lawsuit Overview:

• Why: The organization argues that the defendant missed its opportunity for arbitration months ago.
• Who: The American Association for Justice opposes a Taco Bell franchisee’s motion to move a class action case into arbitration.
• Where: The class action lawsuit faces the U.S. Supreme Court.

The American Association for Justice, a professional group of trial attorneys, has publicly opposed the attempt by Sundance Inc., a Taco Bell franchisee, to move a 2018 class action lawsuit into arbitration despite already being eight months into litigation.

The AAJ (formerly the Association of Trial Lawyers of America) filed an amicus brief with the Supreme Court arguing that such a move by a defendant amounted to “gamesmanship” that would “defeat any semblance of the efficiency and timeliness” of the arbitration system. Allowing such a delayed arbitration would result only in “the waste of precious court time and resources, the abuse of opposing parties’ time, and the wide-spread inefficient delays.” 

Class Action Alleges Taco Bell Franchisee Wage Theft

The original class action lawsuit was filed in Iowa federal court in September 2018. The lead plaintiff, Robyn Morgan, used to work for Sundance. Morgan alleged that the franchisee violated labor laws by logging her work hours across several weeks so it looked as though she never exceeded 40 hours in a single week so as to avoid paying her overtime. 

Sundance first filed a motion to dismiss the case, which was denied. Eight months into litigation, Sundance filed a motion to compel arbitration, which was denied in June 2019 on the grounds that the company had waived its right to arbitrate by waiting so long.

In March 2021, an Eighth Circuit panel ruled that Sundance hadn’t waived its right to arbitrate thus reversing the previous denial. 

Court Needs Clearer Arbitration Rules, AAJ Says

In its Supreme Court brief, the AAJ points to the lack of “clear timeliness rules” for when parties are first required to file a motion for arbitration as a “serious procedural problem,” one that inhibits speed and efficiency in the court system. Parties, the AAJ argues, take advantage of this lack and take months or even years for “extracting information out of the opposing party before moving to compel arbitration — and then generally only after an adverse result.

The organization urges the Supreme Court to require that the right to arbitration be filed at the earliest stage of a case and, at the very latest, pled as an affirmative defense in the answer to a complaint. Failure to file early on would waive a party’s right to arbitration, the AAJ says.

Do you think it’s fair to allow arbitration after months, or even years, of litigation? Sound off in the comments section below!

The class action plaintiff is represented by Karla Gilbride and Leah Nicholls of Public Justice PC, Charles R. Ash IV and Jason J. Thompson of Sommers Schwartz PC, Beth M. Rivers of Pitt McGehee Palmer & Rivers PC and Paige Fiedler of Fiedler Law Firm PLC.

The AAJ is represented by Jeffrey R. White and Navan Ward of the AAJ, Gerson Smoger of Smoger & Associates PC and David Arbogast of Arbogast Law.

The Taco Bell Franchisee Wage Theft Class Action Lawsuit is Morgan v. Sundance Inc., Case No. 21-328, in the U.S. Supreme Court.

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