Andersen v. Papa, Inc.
3:21-cv-06326
N.D. Cal.Jan 20, 2023Background
- Papa, Inc. operates an app connecting seniors with “Papa Pals” who provide tasks or companionship; dispute whether Pals are independent contractors or employees.
- Plaintiffs (Pardo, Matthews) filed wage-and-hour claims and obtained conditional certification of an FLSA collective on October 5, 2022.
- While parties were negotiating the collective notice, Papa revised its EULA to add a mandatory arbitration clause with a class/representative-action waiver and a 30‑day email opt-out procedure, and disclosed this action by name in the EULA and cover email.
- Plaintiffs moved (styled a “protective order”) seeking: a declaration that the arbitration provision is invalid as to putative collective members, an injunction against ex parte communications, and a “corrective notice.”
- The court denied the motion: it found Papa’s email and EULA adequately disclosed the pending litigation and provided a simple opt-out; because named plaintiffs timely opted out and no motion to compel arbitration was pending, unconscionability/consent challenges were not before the court.
- The court resolved outstanding disputes over the form/content of the collective notice: rejected a pleading-style header and plaintiffs’ corrective-EULA paragraph, required adding defendant counsel contact info, rejected a fee‑liability warning, and set opt-in statute of limitations to three years.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of arbitration clause imposed during pending collective action | New arbitration provisions imposed while a class/collective is pending are per se invalid; putative members weren’t properly protected | Clause is enforceable if putative members receive clear notice of the litigation, the clause’s effect, and a reasonable opt-out | Denied plaintiffs’ declaration; here email and EULA disclosed the suit and provided a simple opt-out, so the clause was not invalidated |
| Request for corrective notice and injunction against ex parte communications | Papa’s issuance of the revised EULA constituted improper/coercive class communication requiring corrective notice and an injunction | Communications were proper, disclosed the litigation, and included a clear opt-out; no corrective relief warranted | Denied: no improper communication shown; corrective notice and injunction not required |
| Challenges to arbitration on unconscionability/consent grounds | Plaintiffs sought to preserve broader challenges to the clause | Papa noted named plaintiffs timely opted out; no motion to compel arbitration pending | Court declined to reach unconscionability/consent issues because named plaintiffs opted out and no arbitration motion was before the court |
| Form and content of collective notice (caption, dates, EULA reference, contact info, fee warning, statute of limitations) | Plaintiffs sought an "official court notice" caption, inclusion of EULA-update paragraph, broader date framing, and warning about fee liability | Defendant opposed pleading-style caption, EULA corrective language, and fee warning; proposed different wording and contact details | Court: reject pleading-style caption and EULA corrective paragraph; address notice to current/former Pals (no date in address); require three-year lookback for opt-ins; add defendant counsel contact; reject fee‑liability warning |
Key Cases Cited
- Leuthold v. Destination Am., 224 F.R.D. 462 (N.D. Cal. 2004) (describing notice procedures and purposes for conditionally certified FLSA collectives)