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Brayman et al. v. KeyPoint Government Solutions, Inc.
The plaintiffs brought two actions against KeyPoint Government Solutions: a collective action under the Fair Labor Standards Act on behalf of KeyPoint employees nationwide and a state-law putative class action on behalf of California employees. They allege KeyPoint violated the FLSA through policies requiring employees to work uncompensated overtime and also violated certain provisions of California’s wage and hour laws.
Before the 10th Circuit Court of Appeals on interlocutory appeal are two district-court rulings challenged by KeyPoint: the denial of KeyPoint’s motion to compel arbitration of California state-law claims by some California plaintiffs; and the certification under Federal Rules of Civil Procedure 23 of the California employee class. Exercising jurisdiction under 9 U.S. Code 16(a)(1)(C) and Rule 23(f), the 10th Circuit reversed the district court’s denial of KeyPoint’s motion to compel arbitration, vacated the court’s certification of the Rule 23 class and remanded for further proceedings.
According to the opinion, KeyPoint provides investigative services and background screening for federal government agencies. These services are performed by field investigators, whose duties include performing interviews, searching public records and writing reports of their investigations. Field investigators work remotely out of their homes, but are assigned to geographic regions and are required to travel to and from interviews and record-collection sites. They are expected to generally work Monday through Friday but have the flexibility to decide how to structure their workday.
Field investigators are supervised by field managers, who monitor investigator performance, manage investigator workloads, approve timecards and overtime, adjust investigation deadlines, enforce KeyPoint’s overtime policy and take disciplinary action, the opinion noted. Field managers don’t assign work to investigators. All assignments are distributed to investigators by KeyPoint’s logistics team. The California plaintiffs were supervised by at least 15 different field managers, but the field managers for California reported to a single regional field director.
The opinion further explained field investigators are hourly employees covered by the FLSA (no exemption applies) and are required to report their time on weekly time sheets. KeyPoint’s employee handbook states: “When an employee works, he/she must report all time worked. Non-exempt employees should not work any time that is not authorized by their supervisors. Do not start work early, finish work late, work during a meal break, or perform any other extra or overtime work unless directed to do so.” Each investigator, upon submission of the weekly timesheet, must “certify as to the accuracy and completeness of the information included” on the time sheet.
KeyPoint contended on appeal the district court erred in declining to compel arbitration and granting class certification under Rule 23.
After evaluation, the 10th Circuit reversed the district court’s denial of KeyPoint’s motion to compel arbitration of California state-law claims, vacated the district court’s certification of the Rule 23 class and remanded for further proceedings.