Au Pair Agency Cleared to Arbitrate Claims From Class Action

While decided under California law, 10th Circuit opinion offers takeaways for Colorado employers on making arbitration agreements enforceable

One of the defendants embroiled in a massive au pair class action will get to arbitrate the claims against it, thanks to an appellate court decision last week.

On Tuesday, the 10th Circuit Court of Appeals held that the district court should allow an au pair agency to arbitrate the claims it is facing by severing an unfair provision from the rest of the arbitration agreement. While the appellate court decided the case under California law, its analysis as to what makes an arbitration agreement enforceable gives Colorado employers food for thought.

In Beltran v. InterExchange, current and former au pairs are suing multiple agencies claiming federal antitrust, racketeering and wage-and-hour law violations. In February, U.S. District Court Judge Christine Arguello granted class certification to more than 91,000 au pairs in the lawsuit, which alleges the agencies colluded to keep the au pairs’ wages low.

One of the au pair agencies, AuPairCare, filed a motion to compel arbitration, which the district court denied, having found the agreement unconscionable on multiple grounds. The 10th Circuit, however found only one of the clauses to be substantively unconscionable — that the APC reserved the sole right to select the arbitration provider — and reversed the district court ruling.

To read this story and other complete articles featured in the November 5, 2018 print edition of Law Week Colorado, copies are available for purchase online.