What It Felt Like to Be on the Receiving End

Picture this. You work as a recruiter at TEKsystems. You have been there for years, placing IT contractors with clients, hitting your targets, getting your paycheck. You have no idea that four of your former colleagues filed a lawsuit against the company almost two years ago, alleging the company never paid any of you overtime it legally owed. Nobody from the company told you about it. Nobody from the legal team reached out. The lawsuit has been grinding through federal court in California while you kept showing up, doing your job.

Then it is December 19, two weeks before Christmas. You have plans. Holiday parties. Family travel. You are mentally checked out of work email. Your inbox gets two messages from HR with the subject lines “Mutual Arbitration Agreement” and “Mutual Arbitration Agreement and Current Class Action Suit.”

You read the first one. It talks about arbitration agreements like they are normal and harmless, comparing them to cell phone contracts and credit card agreements. It says class action lawsuits are wasteful, inefficient, mostly benefit lawyers, and would force the company to ignore your individual concerns. It tells you that if you keep working past December 31, you have automatically agreed. It asks for your signature but makes clear the signature doesn’t actually matter. You will be bound either way, unless you quit.

Then you read the second email. There is a lawsuit. You are apparently in it. You have until January 9 to sign a form if you want to stay in it. Except one of the two emails says the deadline is January 9, 2023, a date that has already passed by more than a year. The other says January 9, 2024. Which is it? The company told you not to share these emails with anyone. Can you even show this to a lawyer? The email says you are “free to consult your attorney,” which means you would presumably have to pay for one. The same email has already told you that class action attorneys charge “exorbitant fees.”

You have 13 days, most of them across the Christmas holiday, to figure out whether you have legal rights, who can help you for free, whether the typo in the email means the deadline already passed, and whether staying at your job means you have permanently given up the right to take your employer to court alongside your coworkers. If you do nothing, the default outcome is that you lose your place in the class. Under every other court rule in this country, doing nothing would keep you in.

That is the trap TEKsystems built. It was not a miscommunication. The court record shows the company approved this plan in September 2023, waited until five days after class certification briefing closed to pull the trigger, then timed the rollout for the holiday season. The Ninth Circuit found, explicitly, that these communications “appear designed to prevent putative class members from opting into the lawsuit.” Seventy-five percent of the workers who received the opt-out email did not opt out. TEKsystems called that a success. The federal courts called it a violation.

Verbatim: What TEK Actually Said to Its Workers

These are direct quotations from TEK’s own emails and documents, entered into the court record. The Ninth Circuit and the district court each analyzed this language and found it misleading.

From Email 1 (sent to all internal employees, December 19, 2023)

“In our experience, litigation 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.”

“All new and current employees will be subject to this Agreement as a condition of working for the Company. If you choose to continue working here after December 31, 2023 you’ll be deemed to have accepted the Agreement, and we are asking for your signature to reflect that.”

From TEK’s FAQ Document (linked in Email 1)

“A class claim requires the Company to ignore individual employee issues and concerns. Additionally, attorneys, 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.”

From Email 2’s Opt-Out Notice (sent only to putative class members)

“Accordingly, unless 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 and that you can bring claims only in individual arbitration.”

“You of course are free to consult your attorney.”

The Bigger Picture: What This Case Means Beyond TEKsystems

Public Health

Wage theft and the suppression of workers’ ability to seek collective remedies carries documented public health consequences that compound over time, particularly for hourly and contract workers who have no secondary safety net.

• TEK’s recruiters were denied overtime pay and required meal and rest breaks under California law. Missing legally mandated rest breaks over months and years creates cumulative physical and psychological stress, particularly in high-pressure quota-driven recruiting roles where continuous availability is expected.
• When workers cannot access class action remedies, they face the practical impossibility of pursuing individual arbitration for relatively small wage claims. The transaction costs of individually arbitrating months of missed overtime payments, even in a low-cost JAMS forum, are high enough that the rational economic choice for most workers is to do nothing. The injury is absorbed, not remedied. The effect is a long-term suppression of income that is indistinguishable from chronic underpayment.
• The psychological toll of the coercive rollout itself is not addressed in the court record, but the structure of the communications, which forced workers to choose between their job security and their legal rights in a 13-day window over Christmas, is a textbook example of a take-it-or-leave-it ultimatum imposed from a position of total power asymmetry.

Economic Inequality

Forced arbitration, when deployed to extinguish pending class actions, is one of the most efficient legal tools available to large employers to permanently suppress wage recovery at scale. This case is a study in that mechanism and its class-based economic effects.

• Recruiters, the workers affected by this lawsuit, are not minimum-wage earners; they are salaried professionals who were misclassified as exempt from overtime. The misclassification of salaried workers as exempt is one of the most common and highest-value forms of wage theft in the professional services sector. When class actions are neutralized, this category of worker has almost no practical legal recourse.
• Of 164 class members who received TEK’s opt-out email, 123 did not opt out. Under TEK’s scheme, those 123 workers were automatically stripped of their class membership and limited to individual arbitration. For workers who lack legal sophistication and knowledge of class action procedures, the default TEK engineered was the worst possible outcome.
• The specific financial stakes are not quantified in the appellate opinion, but California overtime law requires time-and-a-half pay for hours worked over 8 in a day or 40 in a week. A salaried recruiter working 50-hour weeks over multiple years represents a potentially significant unpaid wage claim. Multiplied across a class of current and former TEK recruiters in California, the suppressed liability is substantial.
• The playbook TEK used here, which is to wait until late in litigation before rolling out mandatory arbitration targeted at pending class members, has been documented by courts in the Fourth, Sixth, and Eleventh Circuits as well. The Ninth Circuit’s ruling closing this loophole matters nationally, but companies in states within circuits that have not addressed this issue remain free to attempt the same strategy.
• The staffing agency model TEK operates amplifies the power imbalance further. Staffing company employees are already one layer removed from standard employment protections, more easily classified as contractors, and more exposed to at-will termination. TEK’s email made clear that continued employment was the mechanism of consent. In that environment, “consult your attorney” is not meaningful advice; it is theater.

By the Numbers: The Arithmetic of Stripping Rights

The court record gives us specific numbers. They tell the story of what TEK’s gamble was actually worth.

What Workers and Advocates Can Do With This Ruling

The Ninth Circuit’s ruling in Avery v. TEKsystems is a tool. Here is who needs to know about it and what to do with it.

Key Players to Watch at TEKsystems

• TEKsystems, Inc. is headquartered in Hanover, Maryland and is a subsidiary of Allegis Group. The individual executives who approved the September 2023 plan to expand mandatory arbitration to internal employees are not named in the appellate record. They are identified only by corporate role in the source document.
• Seyfarth Shaw LLP was TEK’s defense counsel and argued the appeal. Attorneys Lennon B. Haas, Alexander W. Simon, Brian P. Long, and Andrew Scroggins are named in the record as counsel of record for TEK.
• Plaintiffs’ counsel who won this appeal: Public Justice PC, Werman Salas PC, Lichten & Liss-Riordan PC, and Olivier & Schreiber LLP. These are the organizations that fought this case to the Ninth Circuit.

Regulatory Watchlist

• California Labor Commissioner’s Office (DLSE): The wage and hour violations alleged in this case, including overtime misclassification and denial of meal and rest breaks, are enforceable by the California Labor Commissioner independently of private litigation. Workers outside the class period can file wage claims directly.
• U.S. Department of Labor (Wage and Hour Division): Federal wage enforcement applies to overtime violations under the Fair Labor Standards Act. Staffing company employees in other states who are misclassified as exempt can file complaints regardless of any arbitration agreement TEK has in place at their specific location.
• National Labor Relations Board (NLRB): Mandatory arbitration agreements that restrict workers from acting collectively may, in certain circumstances, implicate NLRA Section 7 rights. The NLRB has been active on this issue in recent years; a charge may be worth filing if you are a worker facing a similar rollout from any employer.
• Consumer Financial Protection Bureau (CFPB): The CFPB has authority over forced arbitration in consumer financial contracts. While not directly applicable to employment, the same corporate entities that deploy forced arbitration against workers often deploy it against customers. That exposure is worth monitoring.

What You Can Actually Do Right Now

• If you are or were a TEK recruiter in California: The class action Avery v. TEKsystems, Case No. 3:22-cv-02733-JSC (N.D. Cal.) is ongoing. Contact Werman Salas PC or Lichten & Liss-Riordan PC. Their contact information is available through the court docket. You do not need to pay out of pocket to consult class counsel.
• If your employer rolled out a mandatory arbitration agreement after filing or learning of a class action against it: This ruling and its companion decisions in the 4th, 6th, and 11th Circuits establish that such agreements can be invalidated under FRCP 23(d). Contact an employment attorney or a workers’ rights legal organization in your state immediately.
• If you received an employer email about arbitration over a holiday period with confusing deadlines: Document everything. Save every email and attachment. Print them. Screenshot them. Share them with an attorney. The timing and content of corporate communications are exactly the kind of evidence that courts look at in cases like this one.
• Mutual aid and local organizing: Know Your Rights trainings run by local worker centers, labor unions, and legal aid organizations are the most effective way to spread awareness of forced arbitration tactics before they work. Organizations like the National Employment Law Project (NELP) and Jobs With Justice publish worker-facing guides on arbitration. If your workplace does not have a union, this ruling is a concrete example of why collective organization matters before a crisis occurs, not after.
• Demand transparency from your employer now: If you signed an arbitration agreement as a condition of employment and have not read it recently, read it. Check whether it contains a class action waiver. Check whether it has a delegation clause (language saying that disputes about the agreement itself go to the arbitrator). Understanding what you signed is the first step to knowing what you can challenge.