SAN FRANCISCO (CN) — A federal judge ruled Thursday to compel arbitration in a class action claiming that TikTok’s software may have exacerbated harm to contract content moderators whose jobs required them to view disturbing content, including child pornography.
U.S District Judge Vince Chhabria, an Obama appointee, ordered a former TikTok content moderator to enter arbitration talks with the third party company Telus, since she signed an arbitration agreement them. The ruling was a win for TikTok, which had sought to compel arbitration.
Ashley Velez is part of a class action against the social media app’s parent company ByteDance brought by moderators who say the company did not adopt reasonable measures to mitigate harm from having to watch disturbing content.
Those moderators say they were unable to take breaks from graphic videos because queues of videos which were not supposed to contain graphic content often did. They also say the harms they suffered were exacerbated by ByteDance's strict productivity standards.
In 2021, Velez accepted a job in Nevada with the outsourcing company Telus to moderate content for TikTok on its mobile app. She signed a standard contract that included an agreement to send any disputes to arbitration.
She later joined the suit against TikTok directly, claimed that moderating content for TikTok put her at an increased risk of mental health problems and that the company was responsible for her risk of injury due to strict quotas.
TikTok argued that the state-law doctrine of equitable estoppel precluded Velez from bringing a dispute about the conditions of her employment with Telus, and that it's up to an arbitrator to resolve any disagreements between her and that company. In California, equitable estoppel means a litigant may be prevented from raising a defense in a lawsuit due to their prior action or statements.
In his 10-page ruling filed Thursday, Chhabria said the delegation provision in the arbitration agreement in question does not apply to disputes between Velez and nonparties like TikTok.
Still, he said that “TikTok’s argument, if accepted, would also lead to absurd results."
“Say, for example, someone were to assault Velez shortly after her work shift was over," Chhabria wrote. "And say Velez sued her attacker. Could the attacker hijack that lawsuit by invoking the delegation provision within Velez’s arbitration agreement with Telus, filing a motion to compel, and insisting the arbitrator must decide arbitrability?”
Nonetheless, the judge also said that equitable estoppel applies in this case. As he saw it, Velez was suing based on her employment relationship with Telus and yet sought to avoid arbitration by not suing Telus directly.
“As a general matter, it’s hard to see how TikTok could have implemented any of its alleged policies and practices without exercising influence and control over Telus, Velez’s immediate employer,” he said.
While Velez argued that equitable estoppel should apply only if her claims are also “intimately founded in and intertwined with” her contract with Telus, Chhabria found that equitable estoppel should in fact bind her since her employment is “central to her claims.”
“Think of it this way: Velez could have also sued Telus on essentially the same set of allegations,” the judge said. “Had she done so, the arbitration agreement would no doubt apply. Equitable estoppel prevents Velez from sidestepping that agreement by bringing claims only against TikTok instead.”
Chhabria also noted that although "Nevada law indisputably governs the issue," as Velez had accepted her job with Telus in that state, she had cited "no Nevada case law on the topic."
He dismissed Velez’s claims in the case without prejudice. The claims from the other named plaintiff, Reece Young, will proceed.
Attorneys for both parties did not respond to requests for comment before press time.
Chhabria dismissed the plaintiffs’ unfair competition law claim with prejudice in May, finding the moderators worked outside California and that state law couldn't apply to them. But he also said that once ByteDance exercised control over even one aspect of moderators’ work, it had a duty to use reasonable care — something the company may not have done if it set unreasonable productivity standards.Follow @nhanson_reports
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