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Second Circuit reinstates lawsuit against restaurant chain

Complaint accuses Chili's of Labor Law violations

By: Bennett Loudon//June 1, 2022

Second Circuit reinstates lawsuit against restaurant chain

Complaint accuses Chili's of Labor Law violations

By: Bennett Loudon//June 1, 2022

A federal appeals court has reinstated a lawsuit against a restaurant chain, ruling that an adequately detailed plaintiff’s declaration is sufficient to establish a triable question of fact.

Plaintiff Savannah Barrows sued her former employer in U.S. District Court for the Northern District of New York in Syracuse.

The lawsuit claims that the company didn’t pay workers for all hours worked, retained employee tips, failed to provide uniform maintenance pay, and failed to provide required wage notices and statements to employees.

Lawyers for Brinker Restaurant Corp., the owner of Chili’s Bar & Grill, filed a motion to dismiss her claims and compel arbitration to settle the claim, as required under an agreement Barrows supposedly agreed to when she was hired.

U.S. District Court Senior Judge Gary L. Sharpe ruled in March that Barrows failed to raise any triable issue of fact and granted Brinker’s motion.

In a decision released Tuesday, the United States Court of Appeals for the Second Circuit reversed Sharpe’s ruling and sent the case back to the lower court “to consider the merits of Barrows’ claim further.”

Barrows’ complaint accuses the company of a variety of employment law violations while she worked at the Chili’s in Liverpool, Onondaga County. The lawsuit seeks to establish a class of plaintiffs that includes more than 100 workers at any Chili’s location.

Attorneys Brinker presented an arbitration agreement with what they said was Barrows’ electronic signature. But in a sworn declaration, Barrows “categorically and specifically denied that the signature was hers,” according to the Second Circuit decision.

Sharpe ruled that Barrows’ declaration was not enough to create a triable issue of fact.

Barrows worked at the restaurant from March 2015 until January 2019. The lawsuit was filed in February 2019. Co-worker Michael Mendez subsequently joined the lawsuit as a second named plaintiff.

In support of the motion to dismiss the complaint and compel arbitration, Brinker showed that the company was the registered owner of the IP address of the computer on which the arbitration agreements and related documents were completed, suggesting that these were executed at the restaurant where Barrows worked.

In addition, timesheets showed that Barrows was working at the restaurant on the day the electronic signatures were affixed to the documents.

Brinker also presented declarations from company officials explaining that Barrows would have completed various documents electronically on the company’s software system, which required her to log in with her work location, birth month and year, and the last four digits of her Social Security number.

Another declaration from a company official explained the all new employees went through the electronic onboarding process and that doing so in their place without their authorization would be a serious violation of company policy and could result in termination.

In a footnote to the decision, the Second Circuit pointed out that, after Sharpe issued his ruling to compel arbitration, one of the company officials asked to recant his declaration.

He said that, while working for Chili’s, he and other managers completed “onboarding documents” for workers “and were instructed to do so by upper management.”

The Second Circuit did not consider his revised declaration in deciding Barrows’ appeal. But Sharpe is free to take into account the new information when the case is sent back down, the Second Circuit wrote.

Brinker also produced a paper arbitration agreement signed by Mendez by hand in 2017.

To succeed in her effort to defeat the motion to compel, Barrows would have to provide some evidence of her denial that she agreed to resolve disputes through arbitration.

Sharpe “completely discounted the evidentiary value of her sworn declaration,” the Second Circuit wrote.

“Although Barrows makes unequivocal denials that she saw or electronically signed the arbitration agreement, she has produced no evidence to substantiate these denials,” Sharpe wrote in his ruling.

“That approach was incorrect,” the Second Circuit wrote.

The plaintiff’s affidavit alone can serve to defend against a motion to compel, the court wrote.

“A plaintiff’s testimony alone may be independently sufficient to raise a genuine issue of material fact,” the court wrote.

“The district court erred when it disregarded Barrows’ sworn declaration as “nothing more than a de facto extension of Barrows’ pleadings,” the Second Circuit ruled.

A declaration may not always be enough to defeat a motion to compel. For example, simply stating that they don’t remember signing an agreement would not be sufficient.

But Barrows’ declaration went much further.

“In specific and exacting terms, and under penalty of perjury, she categorically denied ever completing any electronic paperwork … using any of her employer’s computers at her workplace; receiving or signing any documents showing receipt of Brinker’s arbitration policies,” the court wrote.

“This detailed accounting, submitted under oath, is surely “some evidence” that she did not agree to arbitration.”

“Brinker’s position is further undercut by its production of Mendez’s paper, hand-signed arbitration agreement. That document, executed the same day that Mendez purportedly also signed his electronic … agreement, casts doubt on Brinker’s suggestions that all of its employees must have completed such electronic paperwork. And of course, it also raises the question of why Brinker was able to produce a hand-signed agreement for Mendez, but not Barrows.”

“Combined, this evidence makes clear that Barrows has created a triable issue of fact as to the validity of the signature on her electronic … arbitration agreements.”

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