EDNY Bars PPL From Sending an Arbitration Agreement to Settlement Class Members in a $162M Deal

A court blocks an arbitration agreement to settlement class members one fortnight before opt-outs close

A federal court in Brooklyn has told a defendant that it may not put an arbitration agreement in front of the people it is about to pay. In Calderon v. Public Partnerships, LLC, No. 25-cv-02320, Magistrate Judge Lara K. Eshkenazi of the Eastern District of New York ruled on 4 September 2026 that Public Partnerships, LLC (PPL) may not distribute a proposed dispute resolution agreement carrying a Class Action Waiver to settlement class members during the window between preliminary and final approval of a $162 million wage-and-hour settlement covering roughly 200,000 New York home care workers. The restriction is about timing, not content: the court did not find the agreement coercive, did not hold it unenforceable, and did not stop PPL from offering it to workers outside the settlement class.

The order matters this week because the window it protects is closing. The deadline for class members to opt out of or object to the settlement is 19 September 2026, and the final approval hearing is set for 10 November 2026. An arbitration agreement landing in 200,000 inboxes during those weeks is not an abstract risk of confusion; it is a document that arrives next to a settlement notice and asks the same person to sign away the same kind of claim. That is the collision Rule 23(d) exists to prevent, and it is why an order restricting an arbitration agreement to settlement class members is worth more attention than its two-page docket entry suggests.

What did the court decide in Calderon v. Public Partnerships?

The court held that PPL may not distribute its proposed dispute resolution agreement — referred to in the litigation as the DRA — to settlement class members between preliminary and final approval of the class settlement. PPL raised the DRA at the preliminary approval hearing on 1 July 2026, explaining that it wanted a standing mechanism to resolve disputes raised by personal assistants without becoming the defendant in further lawsuits over its role as New York's statewide fiscal intermediary. Class counsel opposed the rollout as to settlement class members, arguing that a new agreement arriving mid-notice would confuse recipients and could cause them to opt out of the settlement by mistake.

Judge Eshkenazi accepted the confusion rationale and drew the line at the class boundary. Four features of the ruling define its scope. First, it restrains distribution, not the agreement itself — nothing in the order declares the DRA void or unenforceable against anyone. Second, it contains no finding that the DRA is coercive or misleading, which distinguishes it from the mid-litigation cases in which courts have invalidated agreements after the fact. Third, it does not reach personal assistants who fall outside the settlement class, who may still be asked to sign. Fourth, it is time-limited by its own terms: the concern is the pendency of the settlement, and the court noted that PPL offered no explanation for the urgency of communicating with settlement class members about the DRA rather than waiting a matter of months for the risk of confusion to pass.

That last point is the operative one for drafters. PPL lost not because its Arbitration Agreement was defective but because it could not articulate why the agreement had to go out now.

The $162 million CDPAP settlement behind the order

The dispute arises out of New York's 2025 consolidation of the Medicaid-funded Consumer Directed Personal Assistance Program under a single statewide fiscal intermediary. Four personal assistants — Philip Calderon, Farshad Pinchasi, Allison Fields and Dana Folgar — sued PPL, alleging that the transition left workers paid inaccurately and late and delivered benefits that did not comply with the New York Home Care Worker Wage Parity Act. The proposed settlement provides at least $162 million to a class of approximately 200,000 downstate personal assistants who were paid through PPL for CDPAP services in New York City, Nassau, Suffolk or Westchester counties at any time between 1 March 2025 and 30 April 2026.

Date	Event
1 March 2025	Class period opens
30 April 2026	Class period closes
1 July 2026	Preliminary approval granted from the bench; PPL raises the proposed dispute resolution agreement
21 July 2026	Notice issued to the class by email and text message
4 September 2026	Order barring distribution of the DRA to settlement class members
19 September 2026	Deadline for exclusion requests and objections
10 November 2026	Final approval hearing

The sequence explains the court's sensitivity. Notice reached the class in late July. By early September, PPL wanted to send a second, unrelated document to the same population, in the same channels, on the same subject matter — how future disputes with PPL get resolved. The overlap between the settlement's exclusion mechanism and the DRA's own opt-out structure is precisely what creates the hazard: a worker who receives both may reasonably, and wrongly, conclude that declining one means declining the other, or that signing the DRA is a condition of participating in the settlement.

Why did the court block PPL's dispute resolution agreement?

Because the timing created a risk that settlement class members would misunderstand their rights, and PPL had no countervailing reason to accept that risk. The court's concern was that recipients could take acceptance of the arbitration agreement to be a condition of accepting the settlement, or could otherwise be confused about the relationship between two documents arriving weeks apart from the same company. The court also observed that the risk would not vanish the moment the exclusion deadline passed, because class members continue to learn about their settlement rights — and to act on them — through the final approval stage.

That is a materially different theory from the one that defeats an arbitration clause on the merits. Unconscionability asks whether a contract is so one-sided that a court will not enforce it. Rule 23(d) asks whether a communication threatens the integrity of a pending class proceeding. A company can lose the second question while winning the first, which is what happened here. For defendants who assume that a clean, non-coercive, genuinely optional agreement is safe to circulate at any point, Calderon is the correction: the document's fairness is not the only variable, and the calendar is not a neutral fact.

What is Rule 23(d), and when can a court restrict communications with class members?

Rule 23(d) of the Federal Rules of Civil Procedure lets a district court issue orders that determine the course of proceedings and protect class members, including orders governing communications with absent class members. The governing standard comes from Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981), where the Supreme Court held that an order limiting communications between parties and potential class members must rest on a clear record and specific findings that reflect a weighing of the need for the limitation against the potential interference with the rights of the parties. Gulf Oil also warns against the opposite error: the mere possibility of abuse does not justify a routine communications ban, and the district court in that case abused its discretion by adopting a blanket order without particularized findings.

Two practical consequences follow. A court need not find that misconduct has already occurred — a threat of abuse or a potential for interference with class members' rights is enough. But the court does have to explain itself on the record of the case in front of it, which is why orders of this kind are narrow and heavily fact-bound. The Calderon order fits that mold: it is tied to one defined period, one defined population, and one articulated hazard, and it leaves PPL free to do the same thing later, or elsewhere.

How does Calderon compare with Avery v. TEKsystems?

Calderon is the settlement-stage member of a family whose best-known case is now Avery v. TEKsystems, Inc., No. 24-5810 (9th Cir. 28 January 2026). In Avery, recruiters sued TEKsystems in San Francisco Superior Court in January 2022 over alleged misclassification and missed meal and rest breaks; the case was removed to the Northern District of California. On 19 December 2023, days after class certification briefing closed, TEKsystems rolled out a mandatory arbitration agreement to internal employees including putative class members, telling them that class actions were "wasteful" and "inefficient" and that participants could face "exorbitant fees," and providing that employees would be deemed to have accepted by continuing to work after 31 December 2023. The Ninth Circuit affirmed the district court's refusal to enforce the agreement, holding that Rule 23(d) authorizes a court to invalidate an arbitration agreement obtained through misleading communications without offending the Federal Arbitration Act, and that the agreement's Delegation Clause did not strip the court of authority to decide the question because the challenge went to how the whole agreement was obtained.

	Avery v. TEKsystems (9th Cir. 2026)	Calderon v. PPL (E.D.N.Y. 2026)
Stage of case	Days after class certification briefing closed	Between preliminary and final approval of a settlement
What the company did	Rolled out a mandatory agreement with deemed acceptance	Proposed to distribute a dispute resolution agreement with a Class Action Waiver
Court's characterization of the communication	Misleading, disparaging of class litigation, inverted the opt-out structure	No finding of coercion or misrepresentation
Relief	Refusal to enforce the agreement as to class members	Prospective bar on distribution to settlement class members
Delegation Clause	No obstacle to judicial review	Not reached
Practical lesson	Content and framing of the rollout	Timing of the rollout

Read together, the two decisions bracket the problem. Avery shows what happens when a company's messaging attacks the class device and converts Rule 23's opt-out architecture into an opt-in; the agreement does not survive. Calderon shows that even a rollout with none of those defects can be stopped if it lands in the wrong week. The through line is that a court managing a class action treats the defendant's channel to absent class members as part of the proceeding, and will police it under Rule 23(d) whether or not the Arbitration Agreement is otherwise lawful.

When can a company roll out an arbitration agreement during a class action?

Before suit, almost always; during a pending class action, only with care; during the approval window of a class settlement covering the same people, effectively not at all without leave. Agreements formed before litigation begins are ordinary contracts and are enforced as such. Agreements introduced after a class action is filed invite scrutiny under Rule 23(d), and the scrutiny intensifies as the case approaches the moments when absent class members must make decisions — certification notice, the exclusion deadline, and final approval. The safest sequence, on the current authority, is to wait until after final approval, to exclude settlement class members from the rollout population, or to seek the court's blessing in advance with a proposed communication and a stated business reason for not waiting.

The related question — whether a Motion to Compel Arbitration based on such an agreement will succeed — has a separate answer. Avery confirms that a district court may decline to enforce an agreement procured through improper class communications, and that a delegation provision does not insulate the agreement when the challenge is directed at the circumstances of its formation. A defendant that pushes a rollout through a contested window is therefore risking more than an adverse Rule 23(d) order; it is risking the agreement it went to the trouble of drafting.

What it means for defendants, class counsel and clause drafters

For defendants and their counsel. Treat the class calendar as a gating item in any arbitration program launch. If a pending case covers the target population, identify the certification and settlement milestones first and schedule around them; if the launch cannot wait, be prepared to explain why, because the absence of an articulated urgency is what sank PPL's request. Segment the distribution list so that settlement class members can be carved out without abandoning the wider rollout, and assume that any communication touching dispute resolution will be read against the class notice the same people already received.

For class counsel and claimants' firms. The remedy is available on a showing of potential interference, not proven harm, but Gulf Oil requires a record. Raise the issue at the preliminary approval hearing, as plaintiffs did here, rather than after the mailing; preserve the actual communications; and frame the objection around identifiable confusion between the settlement's exclusion mechanism and the new agreement's opt-out, which is the concrete overlap courts respond to. Where a rollout has already gone out, curative or corrective notice is the conventional ask.

For drafters and mass arbitration program owners. The lesson generalizes beyond employment. Any consumer or workforce Arbitration Clause refresh — a new Mass Arbitration Protocol, a Batching provision, a revised Mass Filing Threshold, a Bellwether Provision (Arbitration) — is a communication to a population that may be someone's class or someone's claimant pool. Where coordinated counsel are already assembling filings, or a settlement is in the approval pipeline, a refresh that lands mid-window is exposed on two fronts at once: Rule 23(d) in the class case, and the enforceability challenge that follows in every individual Demand for Arbitration. The cheap protection is a documented business rationale and a distribution schedule that does not intersect a court-supervised notice period.

Frequently asked questions

Can a company send an arbitration agreement to settlement class members?

Not during the approval window of a class settlement covering those members, on the reasoning of Calderon. The court barred PPL from distributing its dispute resolution agreement to settlement class members between preliminary and final approval because the timing risked confusing recipients about their settlement rights. Distribution to people outside the settlement class was not restricted.

Does the order mean PPL's arbitration agreement is unenforceable?

No. The 4 September 2026 order restricts distribution during a defined period; it does not adjudicate the agreement's validity, and it contains no finding that the agreement is coercive or misleading. Enforceability as to anyone who signs it remains open.

Who is covered by the $162 million PPL settlement, and what are the deadlines?

The class is approximately 200,000 personal assistants paid through PPL as New York's statewide CDPAP fiscal intermediary for services in New York City, Nassau, Suffolk or Westchester counties between 1 March 2025 and 30 April 2026. Exclusion requests and objections are due 19 September 2026, and the final approval hearing is scheduled for 10 November 2026.

What is the legal basis for restricting a defendant's communications with class members?

Rule 23(d) of the Federal Rules of Civil Procedure, as construed in Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981). A court may limit communications where there is a threat of abuse or potential interference with class members' rights, but the order must rest on a clear record and specific findings weighing the need for the limitation against interference with the parties' rights.

How does this ruling affect mass arbitration strategy?

It adds a scheduling constraint to clause deployment. Companies revising an Arbitration Agreement to manage Mass Arbitration exposure now have to check whether the recipients are absent members of a pending class proceeding, because a refresh distributed inside a certification or settlement notice window can be enjoined under Rule 23(d) and, on the Avery reasoning, later refused enforcement even if the text itself is unobjectionable.

This article is analysis of publicly reported court proceedings and is not legal advice.