Barrows v. Brinker Rest. Corp.

• Decision Date: 31 May 2022
• Docket Number: 21-606-cv,August Term, 2021
• Parties: Savannah BARROWS, individually and on behalf of all other persons similarly situated, Michael Mendez, individually and on behalf of all other persons similarly situated, Plaintiffs-Appellants, v. BRINKER RESTAURANT CORPORATION, dba Chili's Grill & Bar, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

36 F.4th 45

Savannah BARROWS, individually and on behalf of all other persons similarly situated, Michael Mendez, individually and on behalf of all other persons similarly situated, Plaintiffs-Appellants,

v.BRINKER RESTAURANT CORPORATION, dba Chili's Grill & Bar, Defendant-Appellee.

No. 21-606-cv

August Term, 2021

United States Court of Appeals, Second Circuit.

Submitted: April 5, 2022

Decided: May 31, 2022

James E. Murphy, Michele A. Moreno, Virginia & Ambinder, LLP, New York, NY, for Plaintiffs-Appellants.

Vincent E. Polsinelli, Kristi Rich Winters, Jackson Lewis P.C., Albany, NY, for Defendant-Appellee.

Before: Calabresi, Lynch, and Lohier, Circuit Judges.

Calabresi, Circuit Judge:

A restaurant worker sued her former employer, alleging a variety of employment law violations. The restaurant moved to dismiss her suit and to compel arbitration. It supported this motion by presenting an arbitration agreement bearing what appeared to be the worker's electronic signature. In a sworn declaration, however, the worker categorically and specifically denied that the signature was hers. She also pointed to other circumstantial evidence as to its inauthenticity. The district court (Sharpe, J. ) concluded that the worker's evidence was insufficient to create a triable issue of fact, and so granted the restaurant's motion. Because that finding was erroneous, we VACATE the district court's judgment and REMAND for further proceedings.

BACKGROUND

Starting in March 2015, Savannah Barrows worked at a Chili's chain restaurant in Liverpool, New York. When she was hired, the restaurant was operated by Pepper Dining, Inc. ("PDI"). In June 2015, however, that Chili's location was acquired by Brinker International Payroll Company, L.P. ("Brinker").¹

In January 2019, Barrows's employment with Brinker came to an end. She then sued Brinker, alleging that she and a putative class of similarly situated workers had suffered a variety of employment law violations.² Her suit was joined by one other named plaintiff, Michael Mendez, who began work at the same restaurant in 2017.

Brinker responded by moving to dismiss the suit (per Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) ), and to compel arbitration (per the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq. ). The district court denied this motion with leave to renew, essentially because some of Brinker's argument and evidence came only in its reply, thus preventing plaintiffs from responding.

Brinker then filed a renewed motion to dismiss and compel arbitration, shifting its original reply material into its new opening brief. Its main supporting evidence against Barrows was a set of arbitration agreements and other related documents, each of which purportedly bore Barrows's electronic signature. The record also showed that Brinker was the registered owner of the IP address of the computer on which the arbitration agreements and related documents were completed, suggesting that these were executed at the restaurant where Barrows worked. Further, Brinker's timesheets showed that Barrows was working at the restaurant on the day the electronic signatures were affixed to the documents.

Brinker further supported its renewed motion with the declaration of Brandon Loeffler, who assisted in overseeing and maintaining the company's online employee onboarding system. Loeffler stated that the onboarding process, which required employees to sign various documents electronically, was completed on "Taleo" platform software. The first time a Brinker employee formerly employed with PDI used Taleo, she would have to log in with a temporary password comprised of her work location state, birth month, birth year, and the last four digits of her social security number. After this first login, Loeffler indicated, such users would create and use new, unique passwords. After doing so, they could use the Taleo platform to review and sign any number of electronic forms. And each time an employee wished to execute a document in Taleo via electronic signature, she would be required to retype her unique password.

Brinker also produced the declaration of Joshua Planty, the restaurant's general manager. Planty stated that "[a]ll [former] PDI employees," such as himself and Barrows, "went through Brinker's onboarding process in 2015." App'x 186. Planty further averred that he had "never completed any onboarding documents for Plaintiff Barrows ... or any other Team Member," that he "never instructed any other manager to complete onboarding paperwork for Plaintiff Barrows ... or any other Team Member," and that it was his "understanding that if [he] ever created a username and/or password for a Team Member using their personal information or if [he] electronically signed onboarding documents on behalf of another Team Member without their authorization, that would be a serious violation of Company policy, for which [his] employment could be terminated." Id. at 187.

Daniel Michels, an assistant manager during Barrows's employment, offered a nearly identical declaration: that he, and all former PDI employees, had completed Brinker's onboarding process and "signed [an] Agreement to Arbitrate electronically through the Taleo system"; that he had never filled out anyone else's onboarding documents on their behalf; that he had never instructed any other manager to do so; and that he understood that it would have been considered serious misconduct if he had done so. Id. at 200–01.

Finally, Shawn Hand, also an assistant manager, offered essentially the same statements as Planty and Michels.³

In addition to these declarations, Brinker also produced a paper arbitration agreement that Mendez, the other named plaintiff, had signed by hand in 2017. Based on this document, Mendez concedes that his individual claims were arbitrable. See Appellants’ Br. at 7 n.3. Brinker produced no such hand-signed agreement for Barrows.

Barrows, for her part, opposed Brinker's renewed motion to dismiss with a sworn declaration in which she adamantly, and categorically, denied having electronically signed any arbitration agreement. Specifically, she stated she had never:

- Completed any electronic employment paperwork for PDI during her initial hiring (but instead completed all paperwork at that time by hand);

- Completed any additional employment paperwork, of any kind, after Brinker took over, or at any time after her initial hiring;

- Used any of her employer's computers at the Chili's store for any purpose;⁴

- Accessed Chili's website, electronic systems, or any of its "intranet" sites, except to watch training videos on a cellphone app;

- Heard of, accessed, or had any username or password for accessing, the Taleo system;

- Saw or signed the arbitration agreement;

- Received, or signed any document showing receipt of, Brinker's policies and procedures; or

- Owned, or lived in a house with, a computer while employed at Chili's.

App'x 243–45.

Ultimately, the district court granted Brinker's motion and dismissed Barrows's suit. See Barrows v. Brinker Rest. Corp. , No. 19-cv-144, 2021 WL 638271, at *2–3 (N.D.N.Y. Feb. 18, 2021). This appeal followed.

DISCUSSION

In considering an order compelling arbitration, we review de novo whether the parties have contractually bound themselves to arbitrate, and review for clear error the factual findings supporting that conclusion. See Meyer v. Uber Techs., Inc. , 868 F.3d 66, 72–73 (2d Cir. 2017). Because motions to compel arbitration are governed by a standard "similar to that applicable for a motion for summary judgment," a court must "draw all reasonable inferences in favor of the non-moving party." Nicosia v. Amazon.com, Inc. , 834 F.3d 220, 229 (2d Cir. 2016).⁵ And if there is a disputed question of material fact, such that "the making of the arbitration agreement ... [is] in issue," then "the court shall proceed summarily to the trial thereof." 9 U.S.C. § 4 ; see Bensadoun v. Jobe-Riat , 316 F.3d 171, 175 (2d Cir. 2003).⁶

Where parties are bound to an arbitration agreement, courts are instructed to favor arbitration as a form of dispute resolution. See 9 U.S.C. § 2 ; New York v. Oneida Indian Nation of N.Y. , 90 F.3d 58, 61 (2d Cir. 1996). But on the antecedent question of whether the parties actually agreed to arbitration (that is, whether an arbitration agreement between them exists at all), we show no such special solicitude. See Opals on Ice Lingerie v. Bodylines Inc. , 320 F.3d 362, 369 (2d Cir. 2003). Instead, we resolve such agreement-formation questions as we would most any contract dispute: by applying the law of the state at issue (which, as the parties here agree, is that of New York). See Schnabel v. Trilegiant Corp. , 697 F.3d 110, 119 (2d Cir. 2012). And under New York law, unsurprisingly, parties that have not agreed to arbitrate claims may not be forced to do so. See TNS Holdings, Inc. v. MKI Sec. Corp ., 92 N.Y.2d 335, 680 N.Y.S.2d 891, 703 N.E.2d 749, 751 (1998) ; Marlene Indus. Corp. v. Carnac Textiles, Inc. , 45 N.Y.2d 327, 408 N.Y.S.2d 410, 380 N.E.2d 239, 242 (1978).

When moving to compel arbitration, "[t]he party seeking ... arbitration bears an initial burden of demonstrating that an agreement to arbitrate was made." Hines v. Overstock.com, Inc. , 380 F. App'x 22, 24 (2d Cir. 2010) (summary order). But "[t]his burden does not require the moving party to show initially that the agreement would be enforceable, merely that one existed." Id. Brinker produced an arbitration agreement that appears to bear Barrows's electronic signature, and thereby cleared this bar.

Accordingly, the burden shifted to Barrows, who needed to counter with at least "some evidence ... to substantiate [her] denial" that an agreement had been made. Interocean Shipping Co. v. Nat'l Shipping & Trading Corp. , 462 F.2d 673, 676 (2d Cir. 1972) (emphasis added) (explaining that, to create a genuine issue for trial, a nonmovant must make an unequivocal denial and substantiate it with some evidence); accord Sphere Drake...