Longnecker v. Am. Express Co.

• Decision Date: 28 May 2014
• Docket Number: No. 2:14–cv–0069–HRH.,2:14–cv–0069–HRH.
• Citation: 23 F.Supp.3d 1099
• Parties: Jonathan LONGNECKER, et al., Plaintiffs, v. AMERICAN EXPRESS COMPANY, et al., Defendants.
• Court: U.S. District Court — District of Arizona

23 F.Supp.3d 1099

Jonathan LONGNECKER, et al., Plaintiffs

v.AMERICAN EXPRESS COMPANY, et al., Defendants.

No. 2:14–cv–0069–HRH.

United States District Court, D. Arizona.

Signed May 28, 2014.

Charles P. Yezbak, III, Yezbak Law Offices, Nashville, TN, David William Ricksecker, Theodore Reid Coploff, Woodley & McGillivary, Washington, DC, Kaitlyn Alissa Redfield–Ortiz, Nicholas Jason Enoch, Lubin & Enoch PC, Phoenix, AZ, for Plaintiffs.

Dawn L. Dauphine, William J. Maledon, Osborn Maledon PA, Phoenix, AZ, Pamela S. Richardson, Richard G. Rosenblatt, August W. Heckman, III, Morgan Lewis & Bockius LLP, Princeton, NJ, Sharon A. Lisitzky, Morgan Lewis & Bockius LLP, Miami, FL, for Defendants.

ORDER

H. RUSSEL HOLLAND, District Judge.

Motion to Compel Arbitration

Defendants move to compel arbitration.¹ This motion is opposed.² Oral argument was requested and has been heard.

Background

Plaintiffs are Jonathan Longnecker, Erandi Acevedo, Jennifer Flynn, Bonita Kathol, and Janet Seitz.³ Defendants are American Express Company and AMEX Card Services Company.

Plaintiffs are former employees at defendants' Phoenix call center. In their complaint, plaintiffs allege that defendants have violated the Fair Labor Standards Act (FLSA) because defendants did not pay overtime for pre-shift work and work performed during meal breaks and because defendants miscalculated plaintiffs' rate of overtime pay by failing to include incentive payments and shift differentials in their regular rates of pay. Plaintiffs bring their FLSA claims on behalf of themselves and other similarly situated current and former employees.

Defendants contend that plaintiffs are subject to defendants' Arbitration Policy, which was introduced in 2003. Since 2003, all new hires are required to sign an Employment Arbitration Acknowledgment Form as a condition of their commencement of employment.⁴ Longnecker, Acevedo, and Flynn were all hired after 2003, and all signed a New Hire Employment Arbitration Acknowledgment Form.⁵ The Acknowledgment Forms that Longnecker, Flynn, and Acevedo signed provide that the employee “acknowledge[s] that [he] ha[s] received and been given the opportunity to review the American Express Company Employment Arbitration Policy” and that the employee “understand[s] that arbitration is the final and exclusive forum for the resolution of all employment-related disputes between American Express and [the employee] that are based on a legal claim.”⁶ Longnecker, Flynn, and Acevedo do not dispute that they signed Acknowledgment Forms when they were hired.

In 2007, defendants extended the Arbitration Policy to employees who had been hired prior to 2003.⁷ These employees were given an opportunity to “opt out” of the Arbitration Policy.⁸ Plaintiff Seitz was hired by defendants prior to 2003 and thus was given the opportunity to “opt out” of the Arbitration Policy, but she did not do so.⁹

The 2007 Arbitration Policy provides that “[t]he agreement between each individual and American Express to be bound by the Policy creates a contract requiring both parties to resolve all employment-related disputes that are based on a legal claim through final and binding arbitration.”¹⁰ The Arbitration Policy provides that

disputes subject to arbitration under this Policy include: i) all legal claims that an individual had or in the future has against the Company or its officers, directors, shareholders, employees, and/or agents and which arise out of or relate to an individual's application for employment, employment with the Company or separation from the Company[.¹¹ ]

More specifically, the Arbitration Policy provides that

“Covered Claims” include, but are not limited to:

* * *

2. failure to pay wages, bonuses or other compensation;

* * *, and

7. claims for alleged violations of any other common law, federal, state, or local statute, ordinance, regulation or public policy, including, but not limited to, Title VII of the Civil Rights Act of 1964 ..., the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, and the Employee Retirement Income Security Act of 1974.¹²

The Arbitration Policy further provides that “[a]ll claims subject to arbitration under the Policy MUST be submitted on an individual basis. THERE SHALL BE NO RIGHT OR AUTHORITY FOR ANY CLAIMS TO BE ARBITRATED ON A CLASS OR COLLECTIVE BASIS. ”¹³

The Arbitration Policy provides that it “shall be governed by and construed and enforced in accordance with the laws of the State of New York without regard to principles of conflicts of law.”¹⁴ Covered claims, however, are decided by the arbitrator based on the “rules of law of the state in which events giving rise to the Covered Claim took place, any applicable federal law and the rules stated in this Policy.”¹⁵

The Arbitration Policy further provides that

American Express reserves the right to alter, amend, modify, or revoke this Policy with 30 days' written notice to employees, except that all Demands filed with the Company at the time such written notice issues shall be subject to the Policy then in effect. Any alteration, amendment, modification, or revocation to the Policy may be done only in writing, and approved by either the Executive Vice President of Human Resources or the Managing Counsel of the Employment Law Group.¹⁶

By signing the Acknowledgment Forms, Longnecker, Flynn, and Acevedo acknowledged that they had received a copy of the Arbitration Policy, had an opportunity to review the Arbitration Policy, and understood “that arbitration is the final and exclusive forum for the resolution of all employment-related disputes between American Express and [the employee] that are based on a legal claim.”¹⁷ The Acknowledgment Forms further provide that the employee

understand[s] that the employment related disputes subject to arbitration under the Policy include any claims arising under any federal, state or local statute, regulation, or common law doctrine regarding or relating to employment discrimination, terms and conditions of employment or termination of employment ..., including but not limited to the following:

• Title VII of the Civil Rights Act of 1964

• The Employee Retirement Income Security Act of 1974, as amended

• The Civil Rights Act of 1991

• The Age Discrimination in Employment Act

• The Americans with Disabilities Act

• The Family and Medical Leave Act

• State human rights or anti-discrimination laws

• Breach of contract, promissory estoppel, or any other contract claims

• Whistleblower or retaliation claims

• Defamation, employee negligence, or any other tort claims

• Disputes related to certain Company employee benefits plans[.¹⁸ ]

The Acknowledgment Forms also provide that the employee “understand[s] and agree[s] that [he] shall have no right or authority for any claims to be arbitrated on a class action basis or on bases involving claims brought in a representative capacity on behalf of any other employees or other persons similarly situated[.]”¹⁹ The Acknowledgment Forms further provide that the employee “understand[s] and agree[s] that American Express may amend or modify the Policy in the future with notice to me and that I will be bound by such modifications.”²⁰ And finally, the Acknowledgment Forms provide that the employee “agree[s] to submit any and all employment related disputes based on a legal claim to arbitration, and agree[s] to waive [his] right to trial before a judge or jury in federal or state court in favor of arbitration under the Policy.”²¹

Defendants now move to compel arbitration of plaintiffs' FLSA claims.

Discussion

“A motion to compel arbitration is decided according to the standard used by district courts in resolving summary judgment motions pursuant to Rule 56, Fed.R.Civ.P.” Coup v. Scottsdale Plaza Resort, LLC, 823 F.Supp.2d 931, 939 (D.Ariz.2011). “However, federal courts are required to enforce agreements to arbitrate vigorously, according to their terms, and to resolve ambiguities in favor of arbitration.” Ross Sinclaire & Assocs. v. Premier Sr. Living, LLC, Case No. 11–CV–5104 YGR, 2012 WL 2501115, at *5 (N.D.Cal. June 27, 2012). “The [Federal Arbitration Act] ‘leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.’ ” G & K, P.A. v. Willett, Case No. CV12–0373–PHX–DGC, 2012 WL 1438474, at *2 (D.Ariz. April 25, 2012) (quoting Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985) ). “ ‘The court's role under the Act is therefore limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.’ ” Ross Sinclaire, 2012 WL 2501115, at *5 (quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir.2000) ). “Generally, ‘the party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.’ ” Id. (quoting Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 91, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) ). “However, where the issue is whether there exists an agreement to arbitrate, the party seeking to enforce an arbitration agreement bears the burden of showing that it exists.” Id. “Only when there are no disputed issues of material fact as to the existence of a binding agreement should the court rule on the question of compelling arbitration.” Id. “When the party opposed to arbitration does so on the ground that no binding agreement to arbitrate exists, the district court should give the opposing party the benefit of all reasonable doubts and inferences that may arise.”Id.

There is no real dispute here that if there are valid and enforceable arbitration agreements, plaintiffs' FLSA claims fall within the scope of those agreements. Rather, the parties' dispute focuses on whether valid and...