The 10th Circuit Court of Appeals ruled a customer of staffing agencies could compel arbitration pursuant to arbitration agreements entered into between temporary workers and the staffing agencies, even though the customer was not a signatory to the agreements, attorneys for Seyfarth Shaw report.
Workers assigned to an energy company through staffing firms sued the buyer, alleging denial of overtime. The staffing firms were not included in the lawsuit. The energy company then moved to compel arbitration based on the agreements the plaintiffs had signed with their respective staffing companies. The plaintiffs responded by contending that as a non-signatory to the arbitration agreements, the energy company could not compel arbitration
The court ruled in favor of the buyer, citing the “equitable estoppel theory,” which allows a non-signatory to enforce an arbitration agreement where a complaint raises allegations of “substantially interdependent and concerned misconduct by both the nonsignatory and the signatory to the contract.”
The case is Reeves v. Enterprise Products Partners LP