Seventh Circuit Establishes Class Notice Standard in Facebook Arbitration Dispute

Originally published by Beth Graham.

The United States Court of Appeals for the Seventh Circuit has established a class notice standard related to workers who sign arbitration agreements in a wage and hour dispute filed against social media giant Facebook.  In Bigger v. Facebook, Inc., No. 19-1944 (7th Cir., January 24, 2020), a Facebook employee, Bigger, filed a putative class action lawsuit against Facebook in the Northern District of Illinois.  According to Bigger, the company failed to provide her and other workers with overtime pay as required by the Fair Labor Standards Act (“FLSA”).  Bigger also asked the court to authorize notice to a large group of proposed class members.

In response, Facebook filed a motion for summary judgment claiming Bigger was exempt from the FLSA’s wage and hour requirements.  Facebook also claimed many of the proposed class members signed an agreement to arbitrate any claims against the company individually.  The company did not, however, supply the court with proof regarding which proposed class members signed the collective action waiver.  Over Facebook’s objections, the district court conditionally certified the class and authorized notice to each of the proposed class members.  Facebook then filed an interlocutory appeal with the Seventh Circuit Court of Appeals.

On appeal, the Seventh Circuit stated:

We hold that when a defendant opposing the issuance of notice alleges that proposed recipients entered arbitration agreements waiving the right to participate in the action, a court may authorize notice to those individuals unless (1) no plaintiff contests the existence or validity of the alleged arbitration agreements, or (2) after the court allows discovery on the alleged agreements’ existence and validity, the defendant establishes by a preponderance of the evidence the existence of a valid arbitration agreement for each employee it seeks to exclude from receiving notice.

The appellate court also affirmed the district court’s order denying Facebook’s request for summary judgment on two grounds:

First, while duties supporting an enterprise’s core function may qualify as an administratively exempt duty, actually engaging in that core function may not. And second, for us to decide as a matter of law that an employee customarily and regularly performed duties “directly related to management or general business operations,” 29 C.F.R. § 541.201(b), we need a clear factual picture of those duties, including how they relate to the employer’s and customers’ enterprises.

Here, the record does not present a clear picture of Bigger’s duties and how they relate to Facebook’s and its customers’ enterprises.

Ultimately, the Seventh Circuit Court of Appeals vacated the district court’s order regarding providing all putative class members with notice and remanded the case.

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