Earlier this year, security contractors filed their class and collective action lawsuit against Cobra Energy and Espada Security seeking unpaid overtime in the Western District of Texas. In this lawsuit, the contractors were paid a day-rate regardless of the hours they worked during the severe devastation caused by Hurricane Irma and Hurricane Maria in Puerto Rico.
Recently, the Defendants motioned to stay Plaintiff’s proceedings in federal court and force arbitration in London, England pursuant to the parties’ signed arbitration agreement.
Arbitration agreements that require international forums are governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 (“the Convention”). In order to determine whether an arbitration agreement selecting an international forum can be upheld, the Court inquired into the fourth factor of the Convention, which was whether one of the parties was a non-American citizen.
In denying Defendant’s motion, the Court found that both parties were citizens of the United States and had contracted to perform work on the island of Puerto Rico, a United States territory. The Court rejected Defendant’s argument that security contractors flying over international waters to and from job sites was sufficient ties with London, England. As such, the Court reasoned that there was no legal relationship between the parties and England that would warrant arbitration in London.
Fitapelli & Schaffer, LLP is very pleased to have had this motion denied as the case continues and awaits the Court’s decision regarding the pending Motion for Condition Certification on behalf of all workers who were paid a day-rate for all hours worked and are owed unpaid wages. If you or anyone you know has worked as security contractors , they may have a claim for unpaid overtime. Call Fitapelli & Schaffer for a free and confidential consultation at (212) 300-0375 or visit our website for more information.
You may also view the denied motion here.