24 HOUR EMPLOYEES PREVAIL IN PRELIMINARY HEARING
On April 13, 2005, current and former employees of 24 Hour Fitness prevailed in a contested hearing relating to the ongoing class action arbitration for unpaid wages, overtime, commissions and bonuses. The ruling by the Arbitrator, Yaroslav Sochynsky, provides that the matter may proceed as a class action.
To view the Arbitrator’s Award, click here
The issue presented before the arbitrator was whether a written arbitration of disputes policy enacted in 2001 by 24 Hour Fitness prevented arbitration or litigation of class actions. All 24 Hour Fitness employees were required to submit all employment related disputes exclusively to final arbitration. Attorneys for 24 Hour Fitness argued that the arbitration agreement precluded class actions. Attorneys for the employees argued that under California law such clauses purporting to ban class actions are unconscionable. In a major procedural victory for the employees, the arbitrator agreed with the employees and ordered that the arbitration to proceed, notwithstanding the clause in the arbitration agreement attempting to ban class actions.
The employees also obtained a favorable ruling on a procedural dispute as to who would pay fees of the arbitrator. The arbitrator ruled that, pursuant to the arbitration agreement, all fees and costs associated with the arbitration will be advanced and paid by 24 Hour Fitness.
The clause construction award may be appealed to the California Superior Court within (thirty) 30 days.
Other class actions, alleging similar claims, are now pending in other state and federal courts. No purported class action settlements have been given preliminary or final approval by any court. All class action settlements require approval by either the arbitrator or a judge. This arbitration case on behalf of a nationwide class of current and former employees of 24 Hour Fitness has not settled.
On repeated occasions, 24 Hour Fitness has attempted to stay the arbitration; both the Los Angeles Superior Court and the Arbitrator have rejected those attempts. On April 25, 2005, the employees’ attorneys in this class action arbitration filed an application to stay the competing litigation in the United States Federal District Court, Southern District of California. To view a copy of that application, click here.