EvilCorporations.com · Corporate Accountability Project
TEKsystems, Inc. · Class Action · 2022–2026
TEKsystems Rigged the System Against Its Own Workers
A staffing giant buried a mandatory arbitration agreement in holiday emails, stripped recruiters of class action rights, and called their lawsuit wasteful. A federal appeals court said otherwise.
🔴 HIGH SEVERITY
TL;DR
TEKsystems, a major IT staffing company, underpaid its recruiters by misclassifying them as exempt from California overtime law. When those workers sued as a class, TEKsystems waited nearly two years, then quietly rolled out a mandatory arbitration agreement designed to kill the case. The agreement was sent in holiday emails, buried in confusing deadlines, and laced with false claims about class actions. Workers who did nothing lost their right to participate in the lawsuit unless they quit. A federal court and then the Ninth Circuit both refused to let the company get away with it.
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164
Recruiters targeted with the arbitration rollout
123
Class members who did not opt out under the misleading scheme
22 mo.
TEKsystems waited this long into litigation before deploying arbitration
13 days
Window given to workers to act, spanning the Christmas holiday
6
Wage and hour causes of action under California law
⚠️ The Allegations: A Breakdown
Core Allegations
What TEKsystems did to its workers
| 01 | TEKsystems misclassified its California recruiters as exempt from state overtime laws, denying them overtime pay and legally required meal and rest breaks. | high |
| 02 | After 22 months of litigation and after class certification briefing had closed, the company introduced a new mandatory arbitration agreement designed to prevent recruiters from participating in the class action. | high |
| 03 | TEKsystems structured the arbitration rollout so that workers who did nothing automatically lost their class action rights, reversing the legal default under federal court rules. | high |
| 04 | The only ways for workers to keep their lawsuit rights were to quit their jobs before December 31, 2023, or affirmatively opt out within a 13-day holiday window. | high |
| 05 | TEKsystems sent the arbitration emails on December 19, 2023, a time when many employees were on vacation, unlikely to seek legal advice, or able to respond before the deadline. | med |
| 06 | The company’s communications contained a factual error in the opt-out deadline year, listing “January 9, 2023” in one document and “January 9, 2024” in another, creating confusion about when action was required. | med |
Profit Over People
How business interests were prioritized over worker rights
| 01 | TEKsystems knew it could impose mandatory arbitration before it even removed the case to federal court in May 2022, but waited 18 months into the litigation to do so, after class certification was fully briefed. | high |
| 02 | The arbitration agreement was timed to go into effect just five days before the close of the class notice period, a window specifically chosen to maximize its legal impact on the case. | high |
| 03 | Rather than pay workers the overtime they were legally owed, TEKsystems invested resources in rolling out an arbitration system designed to prevent collective accountability. | med |
| 04 | The district court found that TEKsystems engaged in “wait and see conduct” throughout the litigation, deliberately holding back its arbitration strategy until it would cause maximum disruption to the plaintiffs. | med |
Worker Exploitation
Wage theft and stripping workers of the tools to fight back
| 01 | TEKsystems denied California recruiters overtime pay and meal and rest breaks by misclassifying them as exempt employees, a violation of state wage and hour law. | high |
| 02 | When workers organized to recover what they were owed, TEKsystems required them to either quit their jobs or opt out of an agreement in order to keep their legal rights, applying economic pressure to silence the class. | high |
| 03 | The company told workers not to share the arbitration emails, effectively instructing them to keep information about their rights from outside advisors, including possible legal counsel. | med |
| 04 | TEKsystems stated that class members were “free to consult their attorney” but simultaneously implied that doing so would cost money out of pocket, discouraging workers from seeking legal guidance by warning about “exorbitant fees.” | high |
| 05 | TEKsystems did not inform workers that they could consult with the plaintiffs’ class counsel without any out-of-pocket cost, a critical omission that limited workers’ ability to make informed decisions about their rights. | high |
The PR Machine
Manipulating workers’ perceptions of their own rights
| 01 | TEKsystems repeatedly told workers that class actions are “wasteful, inefficient means for resolving disputes” and “tend to enrich only attorneys,” framing collective legal action as harmful to the very workers it protects. | high |
| 02 | The company falsely stated that a class action “requires the Company to ignore individual employee issues and concerns,” misrepresenting how class action law actually works. | high |
| 03 | This anti-class action messaging was the first communication many putative class members received about the case, meaning TEKsystems shaped workers’ initial understanding of their rights through a deliberately misleading lens. | high |
| 04 | The court found TEKsystems’ disparaging language about class actions “appear[ed] designed to prevent putative class members from opting into the lawsuit and opting out of the Agreement.” | high |
| 05 | The company framed arbitration as a neutral and mutual benefit, comparing it to cell phone contracts and rental agreements, obscuring the fact that the agreement was specifically designed to end a pending lawsuit. | med |
Corporate Accountability Failures
How legal tools were weaponized against workers
| 01 | TEKsystems attempted to exploit a delegation clause in its arbitration agreement to have an arbitrator, rather than a judge, decide whether the agreement was even enforceable, removing the dispute from public court scrutiny. | med |
| 02 | When the court refused to enforce the arbitration agreement, TEKsystems argued a simple corrective notice would have been sufficient, minimizing the severity of its own misleading conduct. | med |
| 03 | The Ninth Circuit rejected TEKsystems’ argument, finding that acknowledging misleading communications while still binding workers to agreements obtained through those communications would not be adequate relief. | high |
| 04 | TEKsystems’ conduct fits a documented pattern used by corporations in multiple circuits: rolling out mandatory arbitration during pending class actions to reduce class size and avoid collective accountability. | high |
🕐 Timeline of Events
Jan 2022
Plaintiffs Bo Avery, Jill Unverferth, Kristy Camilleri, and Phoebe Rogers file a class action in California state court alleging TEKsystems misclassified its recruiters as overtime-exempt.
May 2022
TEKsystems removes the case to federal court. The company already has the legal ability to impose mandatory arbitration at this point but chooses not to.
Sep 2023
TEKsystems internally approves a plan to expand mandatory arbitration to its internal employees, including the very recruiters who are suing the company.
Oct–Dec 2023
Plaintiffs file for class certification. TEKsystems files its opposition. Class certification briefing closes on December 14. Five days later, TEKsystems rolls out the mandatory arbitration agreement.
Dec 19, 2023
TEKsystems sends two emails to workers during the holiday season. Email 1 announces the arbitration agreement to all employees. Email 2 notifies class members specifically, giving them until January 9 to opt out. The deadline year is misstated in one document.
Dec 22, 2023
Plaintiffs’ counsel files an emergency protective order seeking to invalidate the arbitration agreement and restrict TEKsystems’ communications with class members.
Feb 2024
The district court grants class certification. Of 164 workers who received the opt-out notice, 123 did not opt out of the arbitration agreement under the misleading rollout.
Jun 10, 2024
Five days before the class notice period closes, TEKsystems moves to compel arbitration against class members who did not opt out of the agreement.
Aug 21, 2024
The district court denies TEKsystems’ motion to compel arbitration, finding the company’s communications were misleading, omitted key information, and converted a legal opt-out process into a coercive opt-in scheme.
Jan 28, 2026
The Ninth Circuit affirms the district court’s ruling, holding that courts have broad authority to refuse to enforce arbitration agreements obtained through misleading communications during class actions.
💬 Direct Quotes from the Legal Record
QUOTE 1
TEKsystems disparages class actions to its own workers
The PR Machine
“[L]itigation in court – particularly class and collective actions – are wasteful, inefficient means for resolving disputes, and tend to enrich only attorneys rather than the individuals who may have legitimate claims.”
💡 This is what TEKsystems told workers about the very lawsuit those workers had filed. The company used its own communication channels to undermine workers’ confidence in their legal rights.
QUOTE 2
TEKsystems misrepresents how class actions work
The PR Machine
“A class claim requires the Company to ignore individual employee issues and concerns.”
💡 This statement is false. The court found it “inaccurate.” Class actions are specifically designed to address individual workers’ shared claims collectively. TEKsystems told its workers the opposite.
QUOTE 3
Workers faced job loss or legal silence
Worker Exploitation
“[U]nless you separate from your employment with TEKsystems before January 1, 2024, or take action as described below before January 9, 2024, TEKsystems will take the position in Avery that, if a class is certified, you could not be a part of it.”
💡 TEKsystems told its employees plainly: quit your job or lose your lawsuit rights. This is the definition of coercive conduct during pending litigation.
QUOTE 4
Court’s conclusion on the opt-out inversion
Corporate Accountability Failures
“TEK turned this Rule 23 opt-out class proceeding into an opt-in proceeding, and to ensure as few current employee class members as possible opted in, TEK disparaged class actions and hid important information from the putative class members.”
💡 The district court named what TEKsystems did with precision. This is not a close legal question. The company deliberately engineered a process designed to strip workers of their rights.
QUOTE 5
Holiday timing made the confusion worse
Core Allegations
“The confusing nature of the emails is heightened because the emails were sent on December 19 – just before the Christmas holidays, and during a time when many employees were likely on vacation or otherwise engaged and thus unlikely to be able to obtain advice.”
💡 The district court identified the holiday timing as a deliberate aggravating factor. Workers were given a 13-day window over Christmas and New Year’s to make a legally consequential decision with incomplete information.
QUOTE 6
Misrepresenting legal fees to discourage consultation
Worker Exploitation
“[A]ttorneys, not employees, are often the biggest winners in class actions, often charging exorbitant fees to both the class and the employer involved, reducing the money actually received by class members.”
💡 TEKsystems told workers that attorneys charge “exorbitant fees” while never disclosing that plaintiffs’ class counsel could be consulted for free. This was designed to make workers afraid to seek legal advice.
QUOTE 7
The Ninth Circuit’s conclusion
Corporate Accountability Failures
“TEK’s communications were misleading and threatened the fairness of the class action proceedings.”
💡 The Ninth Circuit’s plain-language finding: TEKsystems’ conduct was misleading and threatened the fairness of the legal system for its own workers. The arbitration agreement was unenforceable as a result.
💬 Commentary
What exactly did TEKsystems do wrong?
▼
TEKsystems misclassified its California recruiters as exempt from overtime laws, meaning workers were not paid for all the hours they worked. When those workers filed a class action to recover their wages, TEKsystems waited nearly two years, then rolled out a mandatory arbitration agreement during the holiday season. The agreement was structured so that workers who did nothing lost their right to be part of the lawsuit. Workers who wanted to keep their rights had to either quit their jobs or formally opt out in a 13-day window over Christmas. The company also sent misleading emails that misrepresented how class actions work and failed to tell workers they could get free legal advice from the plaintiffs’ attorneys.
Is this lawsuit legitimate, and how strong is the workers’ case?
▼
Yes. The Ninth Circuit affirmed the district court’s ruling in favor of the workers, and a class was certified. The court’s opinion is detailed and specific, citing clear legal precedent from four federal circuits. The Ninth Circuit did not rule on the underlying wage theft claims in this opinion, but the case is now cleared to proceed as a class action. The workers allege six separate violations of California wage and hour law.
Why does mandatory arbitration hurt workers?
▼
Mandatory arbitration removes disputes from public courts and places them in private proceedings controlled by companies. Workers cannot pool their claims, which makes small-dollar wage cases economically impossible to pursue individually. Arbitration outcomes are largely private, shielding companies from reputational consequences and preventing patterns of harm from becoming public. Companies that use arbitration to block class actions often pay far less in individual proceedings than they would in court. This case shows the extreme: TEKsystems tried to use arbitration not just to resolve future disputes, but to end an existing lawsuit mid-stream.
Why were the emails sent over the holidays?
▼
The court found the holiday timing “especially concerning.” TEKsystems rolled out the arbitration agreement on December 19, 2023, with a 13-day window to respond that spanned Christmas and New Year’s. During this period, many workers were on vacation, less likely to monitor their work email carefully, and less able to consult attorneys. The court concluded this timing compounded the already misleading nature of the communications and made it harder for workers to make informed decisions about their rights.
Is this a pattern, or is TEKsystems an outlier?
▼
This is a documented pattern. The Ninth Circuit’s opinion cites nearly identical conduct in cases from the Fourth, Sixth, and Eleventh Circuits. In each case, an employer facing a class action rolled out a new, mandatory arbitration agreement mid-lawsuit with the intent of reducing class membership. Courts have consistently refused to enforce these agreements when obtained through misleading or coercive communications. The practice is widespread enough that the courts have developed a clear legal framework for stopping it.
What does the ruling mean for the workers in this case?
▼
The ruling means TEKsystems cannot use the arbitration agreement it deployed in December 2023 to force class members into individual arbitration. The 123 workers who did not opt out of the agreement remain eligible class members. The class action can now proceed toward trial or settlement on the underlying wage and hour claims. Workers who were misclassified and denied overtime can collectively seek compensation.
What can I do to prevent this from happening again?
▼
Several concrete actions matter. First, support legislation limiting forced arbitration in employment contracts: the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act passed in 2022, and similar legislation is pending for wage and labor disputes. Second, if your employer sends you any new agreement during an active lawsuit or shortly after joining a job, consult a labor attorney immediately. Many employment attorneys offer free consultations. Third, share information about your rights with coworkers. Companies rely on workers not knowing that class counsel is often free to consult. Fourth, support organizations like the Economic Policy Institute, Public Justice, and the National Employment Law Project, which fight forced arbitration and wage theft at the policy level.
This case is about legal procedure. Why does it matter to ordinary workers?
▼
Because access to class actions is the difference between workers recovering stolen wages and getting nothing. Individual wage claims are often too small to litigate alone. When employers can strip workers of class action rights through misleading agreements, they effectively make wage theft consequence-free. The procedural ruling here protects the fundamental right of workers to collectively pursue justice when their employer breaks the law. TEKsystems understood this, which is why it worked so hard to kill the class action.
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