While the case may ultimately land before an arbitrator, a federal
judge has denied a home care company’s motion to use a company policy to dismiss
and send to arbitration a class action lawsuit filed by a home health aide,
which accused the company of underpaying her and her coworkers.
Home health aide Scharmaine Davis is suing Vanguard Home
Care LLC and its affiliates in a class action alleging she and other employees
were incorrectly classified as exempt from overtime pay and minimum wage and
that the company kept inaccurate records of employees’ hours worked.
Vanguard had filed a motion to dismiss and a motion to
compel compliance with an open door and fair treatment process and arbitration
to settle the dispute. Davis countered that a recent court decision regarding
arbitration required denial of the motion; Vanguard answered that the case law
was inapplicable because it refers only to a challenge to an arbitration
clause, while Davis is challenging the company’s entire Fair Treatment Process,
In the recently decided case cited by Davis, a circuit court
ruled that a motion to enforce an arbitration clause that prevents employees
from seeking class or collective remedies to wage and hour disputes violates
the federal National Labor Relations Act.
Vanguard said all employees, including Davis, are subject to
the company’s employee handbook, which includes a detailed FTP. Employees are
trained on the material in the handbook and sign statements of acknowledgment
upon completing the training. The handbook prohibits employees from joining
disputes in a collective or class action.
“The FTP’s arbitration process is limited to individual
disputes, claims or controversies,” the policy states. The acknowledgment form
employees must sign states that they understand arbitration is the only remedy
to any employment disputes and that they understand they cannot join their
disputes with those of other employees.
In asking the court to force Davis to resolve her dispute
through arbitration, Vanguard says the new case law does not apply because
Davis is not challenging only the arbitration clause, but the entire FTP laid
out in the handbook. According to the handbook, an employee must first take any
dispute to their supervisor. If the issue is not resolved, employees must enter
a formal process in which they carry their dispute up the chain of command,
trying to resolve it at four progressively higher stages before taking it to
arbitration. Vanguard claims Davis did not go through this process, a claim
court documents say Davis has not denied.
Federal Judge Joan Gotschall found that the case law does
apply and Vanguard’s claim that Davis’ complaints must be settled by an
arbitrator, not by a court, misses the mark. The handbook does not include a
delegation clause referring questions of arbitrability to an arbitrator, she
notes. To Vanguard’s assertion that that too must be sent to an arbitrator, she
noted case law finding that “courts, not arbitrators, are charged with deciding
gateway matters” such as whether the arbitration agreement is valid in the
“The ‘Open Door Policy and Fair Treatment Process’ Vanguard
seeks to enforce includes a list of examples of claims it covers, but questions
of the FTP’s scope, validity and enforceability do not appear among them,” she
The judge decided to stay a decision on Davis’ minimum wage
claim, finding that since the Illinois Minimum Wage Law and the Federal Labor
Standards Act generally mirror one another, having an arbitrator decide the
FLSA claim while a judge decides the IMWL claim risks two different answers to
the same question. Once the FLSA claim is properly settled, the IMWL claim will
be reviewed, she wrote.
Vanguard is represented in the case by the firm of Greenberg
Traurig, of Chicago.
Davis and the putative plaintiffs’ class is
represented by the firm of Stephan Zouras LLP, of Chicago.