Brown v. Quantcast Corp.

• Decision Date: 11 December 2019
• Docket Number: Case No. 19-cv-05773-EMC
• Court: U.S. District Court — Northern District of California
• Parties: TAG BROWN, Plaintiff, v. QUANTCAST CORP., Defendant.

TAG BROWN, Plaintiff, v. QUANTCAST CORP., Defendant.

Case No. 19-cv-05773-EMC

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

December 11, 2019

ORDER GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION; AND STAYING CASE

Docket No. 22

Plaintiff Tag Brown has filed a putative class and collective action against Defendant Quantcast Corp., his former employer. According to Mr. Brown, "Quantcast is a website analytics company." Compl. ¶ 14. He worked for Quantcast as a sales representative for which he was paid a salary plus commissions. He was deemed exempt from overtime pay. See Compl. ¶ 26. Mr. Brown has brought suit because he maintains that Quantcast misclassified him and others similarly situated as exempt from overtime. Mr. Brown has asserted a claim for failure to pay overtime under the federal Fair Labor Standards Act ("FLSA") as well as a claim for violation of California Business & Professions Code § 17200.¹ Since Mr. Tag has filed suit, five other former employees of Quantcast have opted into the FLSA collective action - namely:

• Jalen Ransome, see Docket No. 6;

• Tyler Berg, see Docket No. 19;

• Sam Awrabi, see Docket No. 20;

• Andrea Primer, see Docket No. 20; and

• Pierce McManus. See Docket No. 21.

Quantcast now moves to compel arbitration with respect to Mr. Brown and each of the five other former employees.

I. FACTUAL & PROCEDURAL BACKGROUND

Quantcast argues that arbitration must be compelled because each individual has an offer-of-employment letter that contains an arbitration provision. According to Quantcast, some of the individuals are also subject to arbitration based on provisions in their sales commission plans and severance agreements. For purposes of the pending motion, the Court need only consider the offer letters. There are two different offer letters that cover the six individuals. The parties have referred to them as the first and second offer letters, respectively, and the Court shall do the same. Mr. Brown and Mr. Berg received the first offer letter. See Schwartz Decl., Exs. A, E. Ms. Primer, Mr. Ransome, Mr. Awrabi, and Mr. McManus received the second offer letter. See Schwartz Decl., Exs. H, J, K, M.

II. DISCUSSION

A. Legal Standard

Quantcast asserts, and Plaintiffs do not dispute, that the Federal Arbitration Act ("FAA") governs the instant case. The FAA provides in relevant part that

[a] written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

9 U.S.C. § 2.

Grounds that exist to support the revocation of an arbitration agreement include no contract formation and contract invalidity, see generally Eiess v. USAA Fed. Sav. Bank, No. 19-cv-00108-EMC, 2019 U.S. Dist. LEXIS 144026 (N.D. Cal. Aug. 23, 2019) (discussing both contract formation and contract validity) - that is, so long as those defenses do not "apply only toarbitration or . . . derive their meaning from the fact that an agreement to arbitrate is at issue." Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425, 432 (9th Cir. 2015) (internal quotation marks omitted). A party may also argue that an arbitration clause in a concededly binding contract does not "'appl[y] to a given controversy.'" Id.

B. First Offer Letter (Mr. Brown and Mr. Berg)

Both Mr. Brown and Mr. Berg received the first offer letter which contained the following arbitration provision:

To ensure rapid and economical resolution of any disputes which may arise under this letter agreement, you agree that any and all disputes or controversies, whether of law or fact of any nature whatsoever (including, but not limited to, all state and federal statutory and discrimination claims, with the sole exception of those disputes which may arise from your confidentiality agreement) arising from or regarding the interpretation, performance, enforcement or breach of this letter agreement shall be resolved by final and binding arbitration under the Judicial Arbitration and Mediation Services Comprehensive Arbitration Rules and Procedures.

Schwartz Decl., Exs. A, E.

Mr. Brown and Mr. Berg challenge the first offer letter on three grounds: (1) the arbitration provision does not cover the claims at issue; (2) there was no "meeting of the minds" regarding arbitration; and (3) the arbitration provision is unconscionable and severance cannot save it.

1. Scope of the Arbitration Provision

Mr. Brown and Mr. Berg argue first that the arbitration provision does not apply to their claims because their claims do not arise under the employment agreement but rather are based on statutes. See Elijahjuan v. Superior Court, 210 Cal. App. 4th 15, 20-21 (2012) (noting that a Ninth Circuit case, Narayan v. EGL, Inc., 616 F.3d 895 (9th Cir. 2010), "explains the distinction between rights arising under a contract and those arising under a Labor Code statute"; "[a]lthough Narayan involved a choice of law provision, its reasoning is applicable here"). The problem with this argument is that it reads out critical language in the arbitration provision. The provision does not state that it covers claims arising from or regarding the employment agreement; rather, the provision states that it covers claims arising from or regarding (inter alia) performance of the employment agreement. Mr. Brown and Mr. Berg's overtime claims do arise from or regardperformance of the employment agreement which classifies and treats Mr. Brown and Mr. Berg as exempt from overtime pay.

2. Meeting of the Minds

Mr. Brown and Mr. Berg argue that, even if their claims fall within the scope of the arbitration provision, the arbitration provision is not enforceable because there was no "meeting of the minds" with respect to the provision. This is essentially a contract formation issue. They contend that, at the time they signed the first offer letter, they also signed a sales commission plan, which also contains an arbitration provision. The arbitration provision in the sales commission plan states as follows:

Quantcast and Seller agree to submit to mandatory binding arbitration any and all claims arising out of or related to Seller's commission under this plan. Seller may bring an administrative claim before any government agency where, as a matter of law, the parties may not restrict Seller's ability to file such claims. However, to the fullest extended permitted under applicable law (including but not limited to the federal Arbitration Act), Seller agrees that arbitration shall be the exclusive remedy for his or her individual claims that are the subject of such administrative complaints. The arbitration shall be conducted in San Francisco, CA, before a single neutral arbitration from the American Arbitration Association ("AAA") and be governed by the AAA Rules and Procedures.

Schwartz Decl., Exs. A, E (Sales Commission Plan ¶ 14) (emphasis added).

Mr. Brown and Mr. Berg contend that there was no meeting of the minds regarding arbitration because the sales commission plan refers to use of the AAA rules whereas, as indicated above, the first offer letter refers to use of the JAMS rules: "The refusal to identify one controlling agreement makes it impossible to know what agreement to enforce." Opp'n at 8. Mr. Brown and Mr. Berg add: "The AAA [itself] has multiple arbitration rules" and, because the sales commission plan "does not clearly identify one set of applicable rules, [this] lead[s] to further uncertainty." Opp'n at 8 n.4; see also https://www.adr.org/Rules (last visited 11/15/2019) (listing arbitration rules for commercial, construction, consumer, employment, labor, international dispute resolution, and optional appellate).

Mr. Brown and Mr. Berg's argument is meritless. As Quantcast points out, it was reasonable to have Mr. Brown and Mr. Berg enter into two arbitration agreements at the sametime: "The Sales Commission Plan could reasonably be interpreted to govern disputes concerning Plaintiffs' commission payments, whereas the Offer Letter relates to broader employment disputes, like the classification claims alleged in this case." Reply at 8 (adding that doubts as to interpretation should be resolved in favor of arbitration).

The Court also notes that, even though the first offer letter and sales commission plan do reference different arbitration rules, Mr. Brown and Mr. Berg have not pointed to any specific conflict between the rules. The main case on which Mr. Brown and Mr. Berg rely is distinguishable precisely because, there, the plaintiffs pointed to specific inconsistencies. See Ragab v. Howard, No. 15-cv-00220-WYD-MJW, 2015 U.S. Dist. LEXIS 148301, at *14 (D. Colo. Nov. 2, 2015) (noting that the plaintiff "identified 74 independent ways in which the six arbitration clauses are not only ambiguous in relation to one another but also inconsistent"; one way was related to the rules governing arbitration). Furthermore, other cases cited by Mr. Brown and Mr. Berg suggest that not every kind of conflict between arbitration provisions precludes a contract. See, e.g., Arevalo Tortilleria, Inc. v. Applied Underwriters Captive Risk Assurance Co., 694 F. App'x 614, 615 (9th Cir. 2017) (concluding that "[t]he district court did not err in holding that the arbitration agreements were not inconsistent[;] [a]lthough the RPA and the Request to Bind provide for arbitration in different locations, the parties indisputably intended that disputes related to the RPA be submitted to arbitration, and the arbitrators can reconcile any dispute about venue").

Finally, to the extent Mr. Brown and Mr. Berg argue that there is uncertainty because the AAA has multiple sets of...