Plaintiff Marcella Johnson originally filed a putative California labor lawsuit seeking class action status. She accused Oracle of withholding millions of dollars in commissions owed to sales representatives by switching up commission formulas that applied to previous sales – sometimes after the commissions had already been paid, according to Johnson’s California labor code claim. The California labor complaint further asserted that paid commissions were reduced to align with Oracle’s “financial forecasts and bottom-line goals.”
Johnson asserts that changes Oracle made to the commission formula, effectively “re-planning” how much she would be paid in commissions for sales she made for the 2013 sales year, left her with a negative commission balance of $20,000 – in other words, a debt of $20,000 to Oracle. Johnson, according to court documents, continued working at Oracle until she cleared the $20,000 debt, as stated by Oracle – after which, she left their employ and subsequently filed her California labor lawsuit.
However, Johnson abandoned her $150 million putative class action lawsuit when Oracle produced a mandatory arbitration agreement. Having duly dismissed her lawsuit, Johnson filed an arbitration demand with JAMS, a noted international dispute resolution enterprise – fulfilling an obligation required in the arbitration agreement.
Oracle responded by insisting there is a second arbitration agreement serving to govern the relationship between the two parties – an agreement that prohibits class arbitration.
The stakes are high, in that attorneys forecast there could be as many as 1,000 individuals available to participate in the class arbitration. Efforts are underway to determine if the second arbitration agreement as identified is valid, although Johnson’s petition argues that it would be unenforceable even if found to be valid, under the Ninth Circuit’s 2016 decision in Morris v. Ernst & Young LLP, which found class waivers violate the National Labor Relations Act. That ruling is currently under review by the US Supreme Court.
Johnson accuses Oracle of stonewalling, and refusing to engage. “Among other things, Oracle has refused to pay its share of the arbitration fee or to participate in the selection of the arbitrator,” the petition says. “Based on Oracle’s recalcitrance, the arbitration cannot proceed.”
Johnson is seeking an order compelling Oracle to engage in arbitration before JAMS at their resolution center in San Francisco, fulfilling a requirement in the arbitration agreement. Johnson also wants Oracle to participate in the selection of an arbitrator, and pay its share of fees including attorney’s fees and costs.
“Oracle seeks to do nothing more than stonewall and delay this case in hopes that Morris may be overturned during the next Supreme Court term,” the petition says. “Oracle’s conduct has had the effect of bogging down both the court system and the arbitral forum with needless protracted litigation.”
The case Johnson v. Oracle America Inc., Case No. 3:17-cv-05157 in the US District Court for the Northern District of California.