Blocker v. U.S. Express Enters., Inc.

Decision Date04 March 2021
Docket NumberCase No. 20-cv-01633
PartiesAAEON BLOCKER, Plaintiff, v. U.S. EXPRESS ENTERPRISES, INC., a Nevada Corporation, together with its consolidated subsidiaries, Defendant.
CourtU.S. District Court — Northern District of Illinois

Judge Mary M. Rowland


Plaintiff Aaron Blocker sued Defendant U.S. Xpress Enterprises Inc. ("Xpress") for alleged violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. §1681 et seq., Fair Labor Standards Act (FLSA), 29 U.S.C. §201 et seq., and for fraudulent inducement. Xpress moved pursuant to Federal Rule of Civil Procedure 12(b)(3) to stay this action and compel arbitration, or, in the alternative, to dismiss Blocker's claims pursuant to Rule 12(b)(6). Dkt. 22. For the reasons stated herein, Defendant's motion is converted to a Rule 12(b)(3) motion for improper venue [22] and is granted because the claims are subject to arbitration in Tennessee.

I. Background

On July 19, 2019, Blocker applied for a position with Xpress through an online application. Dkt. 1 (Compl.), ¶¶21-22.1 As part of the employment application toXpress, on that same date, Blocker signed two documents addressing arbitration: the (1) "Xpress Resolution Program and Rules for Arbitration" (hereafter, "Resolution Program") and (2) the "Arbitration Program Agreement" (hereafter, "Arbitration Agreement"). Dkt. 22-1 (McGraw First Decl., Exh. 1).2

The Resolution Program states, in relevant part, that it:

is designed to provide quick, fair, and inexpensive resolution of disputes among U.S. Xpress, Inc. and its applicants and employees. Except as otherwise stated herein, the Xpress Resolution Program creates the only process for resolving such disputes, and no such dispute can be pursued before a judge and jury in court.

The Resolution Program again reiterates in paragraph 5 that "[t]his Program is the exclusive method through which Legal Disputes may be resolved." The Arbitration Agreement states, in relevant part:

I have applied to be considered for employment with [Xpress]. I understand that consideration of my application, as well as any offer of employment, by U.S. Xpress is contingent on my agreement to be bound by the terms and conditions of U.S. XPRESS's alternative dispute program known as Xpress Resolution Program and Rules for Arbitration (the "Program"). I acknowledge that US Xpress has provided me a copy of the Program and that I have reviewed it...I consent to, and agree to be bound by, the terms of the Program...I confirm my understanding and agreement that work disputes in which I am involved that fall within the Program's definition of "Legal Dispute" will be resolved exclusively through final and binding arbitration.

(McGraw First Decl., Exh. 1). Blocker electronically signed both agreements on July 19. (Id.)

On July 24, Blocker received an email from third-party vendor Asurint, notifying him that Asurint was providing Xpress with a report about Blocker that may containadverse information about him. Compl. ¶23; Dkt. 22, p. 2. On July 26, Xpress recruiter Kristina Christie emailed Blocker and requested additional information regarding certain felony convictions that had been revealed in the Asurint report. Compl. ¶24; Dkt. 22, p. 2. The same day Blocker responded to Christie, but Xpress maintains that Blocker provided only part of the requested information. Dkt. 22, p. 2. Christie then provided Blocker with a conditional employment offer. Compl., Exh. E. Her email emphasized that the offer was a "conditional offer of employment" and was "conditional and dependent upon, including other factors," completing a D.O.T. drug screen and physical, road test, a physical standard test, and successfully completing the company's orientation program. Id. (emphasis added). Christie's email also contained information about an orientation session for the following week. Id. Blocker says that on July 27 he resigned from his position with a different company. Compl. ¶ 26.

Blocker attended the Xpress orientation. Dkt. 22, p. 3. He claims that he satisfied the conditions of his conditional offer and signed an employment agreement on July 29. Compl. ¶ 28. After the second day of orientation, Blocker says that he was informed that he would be assigned a tractor the following day. Id. ¶ 29. On July 31, however, Blocker was notified that his prior felony disqualified him from employment with Xpress. Id. ¶ 30. That same day he received a pre-adverse action notice advising him of his rights under the FCRA. Dkt. 22, p. 3. On August 14, Blocker received a formal adverse action notice advising him that Xpress was not hiring him at least in part due to information in his background check. Compl. ¶ 33; Dkt. 22, p. 3.

Blocker filed this lawsuit on March 6, 2020. He alleges Xpress violated the FCRA by failing to provide him with a pre-adverse action notice within three business days of obtaining the consumer report, and violated the FLSA by not compensating him for attending the orientation. He also brings a state law claim of fraudulent inducement. In response to Xpress' current motion, Blocker argues that no arbitration agreement exists between him and Xpress. Dkt. 29, p. 2.3

II. Standard

Congress' principal purpose in enacting the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (the "F.A.A."), was to ensure that private arbitration agreements are enforced according to their terms. Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 109 S.Ct. 1248, 1255 (1989). Section 2 of the F.A.A. "requires federal courts to place arbitration agreements upon the same footing as other contracts." GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637, 1643, 207 L. Ed. 2d 1 (2020) (cleaned up). Further, "[w]here, as here, the parties have agreed to abide by state rules of arbitration, enforcing those rules according to the terms of the agreement is fully consistent with the goals of the FAA." Volt, 109 S.Ct. at 1256.

Here, the Tennessee Uniform Arbitration Act (TUAA) applies because of the choice of law provision in paragraph 13, "Choice of Law and Venue" in the ResolutionProgram agreement.4 The TUAA was adopted "(1) to promote private settlement of disputes, and (2) to ensure the enforceability of private agreements to arbitrate." Morgan Keegan & Co., Inc. v. Smythe, 401 S.W.3d 595, 603 (Tenn. 2013) (cleaned up). Arbitration agreements are favored in Tennessee. Benton v. Vanderbilt Univ., 137 S.W.3d 614, 617-18 (Tenn. 2004). In Tennessee, "[a]n agreement to arbitrate does not affect the rights and duties of the parties but simply shifts the forum of dispute settlement." Green v. U.S. Xpress Enterprises, Inc., 434 F. Supp. 3d 633, 638-39 (E.D. Tenn. 2020) (cleaned up). Further, the TUAA states that a written agreement to arbitrate is "valid, enforceable and irrevocable" and the Act does not contain an exemption for transportation workers. See id.; T.C.A. § 29-5-302.

In addressing the pending motion, the Court proceeds "as if it is deciding a motion to compel arbitration," but if the relevant arbitration provision "is valid and the parties' dispute falls within its scope" the Court will convert Xpress's motion to compel arbitration into a Rule 12(b)(3) motion to dismiss for improper venue. Bahoor, 152 F. Supp. 3d at 1096-97; Nandorf, Inc. v. Applied Underwriters Captive Risk Assurance Co., Inc., 410 F. Supp. 3d 882, 891 (N.D. Ill. 2019) (converting motion to compel arbitration into a motion to dismiss under Rule 12(b)(3), granting that motion, and dismissing case).5

III. Analysis
A. Valid Agreement to Arbitrate

"Before compelling an unwilling party to arbitrate, [a] court must engage in a limited review to determine whether the dispute is arbitrable." Bratt Enterprises, Inc. v. Noble Intern. Ltd, 338 F.3d 609, 612 (6th Cir. 2003). This involves a two-step inquiry: 1) does a valid agreement to arbitrate exist between the parties, and 2) does the specific dispute fall within the substantive scope of that agreement. Id.

Thus the Court first determines whether a valid agreement to arbitrate exists between Blocker and Xpress. In determining the existence of an agreement to arbitrate, federal courts apply state-law principles of contract formation. See Sgouos v. TransUnion Corp., 817 F.3d 1029, 1034 (7th Cir. 2016); Taylor v. Butler, 142 S.W.3d 277, 284 (Tenn. 2004). Under Tennessee Law, a contract is enforceable if it represents "mutual assent to its terms," is "supported by sufficient consideration" and sufficiently definite, and is free from fraud and undue influence and not contrary to public policy. T.R. Mills Contractors, Inc. v. WRH Enterprises, LLC, 93 S.W.3d 861, 865 (Tenn. Ct. App. 2002). Further, "[i]n the typical case, assent to a contract is shown by the signature of the parties." Flanary v. Carl Gregory Dodge of Johnson City, LLC, 2005 WL 1277850, at *8 (Tenn. Ct. App. May 31, 2005).6 The record in this case shows that the arbitration agreement in this case is an enforceable contract.

Here, in exchange for applying for the job with Xpress, Blocker was required to agree to Xpress's mandatory arbitration provision. The Resolution Program, which he signed, expressly states that it applies to "applicants and employees." Blocker maintains that he never received or signed an arbitration agreement. Dkts. 29, 30. Blocker concedes, however, that he submitted an online application for the position with Xpress on or about July 19, 2019, and concedes that he did not attach that application to his filings in this case. Dkt. 29, pp. 2, 7.

The documents attached to Xpress's sworn declarations show that Blocker signed two separate documents demonstrating his agreement to arbitrate. The Resolution Program, titled in bold, large font "Xpress Resolution Program and Rules for Arbitration" is a six-page document listing the specific terms and conditions of the arbitration agreement between Blocker and Xpress. (Dkt. 22-1). On...

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