Dominguez v. Better Mortgage Corp., 88 F.4^th 782 (9th Cir. 2023)

Underwriter Lorenzo Dominguez filed this putative class and collective action against his former employer, alleging that the company failed to pay proper overtime to him and other similarly situated underwriters. After Dominguez filed the lawsuit, his former employer allegedly attempted to persuade other underwriters at the company not to participate in the lawsuit, offering each of them $5,000 in exchange for an agreement to release all of their non-FLSA claims. The employer also circulated a new draft employment agreement to the underwriters that did not specifically call attention to the existence of the arbitration provision contained therein. Dominguez challenged the enforceability of these new agreements, and in response the district court issued an order invalidating the agreements because they were signed “coercively.” The district court also ordered the employer to refrain from communicating with any putative class members about the lawsuit, except by way of court-approved writings.

The employer appealed the order restricting its communications, and in this opinion, the Ninth Circuit confirmed its jurisdiction to hear the interlocutory appeal and affirmed the district court’s communication restriction as a “tailored response.” However, the Ninth Circuit concluded it did not have appellate jurisdiction to determine the enforceability of the nullified employment agreements. The Court concluded that the communication restriction and the order nullifying the employment agreements were not “inextricably intertwined” and that the lower court’s nullification of the employment agreements did not constitute injunctive relief. Thus, the appellate court could not decide that issue at this stage of the litigation.