A Blank Rome team achieved a significant win for Motive Energy Telecommunications, Inc. (“Motive”), a telecommunications company specializing in infrastructure solutions for wireless and wireline telecommunications industries. Motive retained Blank Rome to appeal an order denying the company’s motion to compel arbitration of a putative class action lawsuit.
In the underlying lawsuit, a former employee of Motive sued the company and related companies on a class-wide basis, alleging various violations of California’s wage and hour laws. Motive immediately filed a motion to compel arbitration of the plaintiff’s claims on an individual basis based on the arbitration agreement between the company and the plaintiff. The trial court denied the motion on the grounds that Motive did not countersign the agreement, and that the agreement was unconscionable because it purportedly contained two unconscionable terms.
Motive appealed the decision, arguing that under California law, an arbitration agreement is enforceable even if the employer did not sign it (and even though the agreement called for the employer’s signature to “confirm” its agreement to arbitrate), and that one of the two terms identified by the trial court was not unconscionable. Specifically, Motive argued that a carve-out in the arbitration agreement allowing the company to seek injunctive relief was not unconscionable despite a lack of mutuality because the agreement identified a reasonable justification for the lack of mutuality: protecting the employer’s confidential and proprietary information. With only one remaining unconscionable term, it was appropriate for the trial court to sever the term in order to uphold the parties’ agreement to arbitrate.
Natalie Alameddine argued the appeal before a panel of three judges on June 25, 2024, and the justices issued their decision less than one week later—granting Motive’s appeal, reversing the trial court, and concluding that an agreement to arbitrate existed despite the fact that the employer did not sign the agreement and that the injunctive relief carve-out was not mutual.
The Blank Rome team was led by Natalie Alameddine and Nicole Wentworth, with assistance from Howard Knee and Caitlin Sanders.
