Carrillo v. Roicom USA, LLC

Decision Date14 September 2020
Docket NumberEP-20-CV-00147-PRM-ATB
Citation486 F.Supp.3d 1052
Parties Blanca CARRILLO, Plaintiff, v. ROICOM USA, LLC, Defendant
CourtU.S. District Court — Western District of Texas

Lynn A. Coyle, Christopher Benoit, Law Office of Lynn Coyle, PLLC, EL Paso, TX, for Plaintiff.

Mark D. Dore, Bruce A. Koehler, Mounce, Green, Myers, Safi, Paxson & Galatzan, P.C., EL Paso, TX, for Defendant.

ORDER DENYING MOTION TO COMPEL ARBITRATION AND TO STAY PROCEEDINGS PENDING ARBITRATION

ANNE T. BERTON, UNITED STATES MAGISTRATE JUDGE

On this day, the Court considered Defendant's Motion to Compel Arbitration and to Stay Proceedings Pending Arbitration ("Defendant's Motion"), filed by Defendant ROICOM USA, LLC ("ROICOM").

On July 29, 2020, this matter was referred to this Court by United States District Judge Philip Martinez for Determination pursuant to 28 U.S.C. § 636(b)(1)(A) and Rule 1(c) of Appendix C of the Local Court Rules of the United States District Court for the Western District of Texas. (ECF. No. 9).

For the reasons set forth below, IT IS HEREBY ORDERED that Defendant's Motion to Compel Arbitration and to Stay Proceedings Pending Arbitration is DENIED .

I. BACKGROUND
a. Procedural Background

"Plaintiff's Original Complaint" ("Complaint") was filed in the United States District Court for the Western District of Texas, El Paso Division, on May 21, 2020, by Plaintiff Blanca Carrillo ("Carrillo"), alleging claims of retaliation under the False Claims Act pursuant to Title 31 U.S.C. § 3730(h). (ECF No. 1). On July 27, 2020, ROICOM filed Defendant's Motion seeking to stay the proceedings and to immediately refer it to binding arbitration pursuant to an arbitration agreement. (ECF No. 8, p. 3).

After being granted an extension of time to file her response (Text Order dated July 31, 2020), Carrillo filed her "Plaintiff's Response in Opposition to Defendant's Motion for Stay and to Compel Arbitration" ("Plaintiff's Response") on August 10, 2020. (ECF No. 13). Thereafter, ROICOM filed "Defendant's Reply to Plaintiff's Response in Opposition to Defendant's Motion to Compel Arbitration" ("Defendant's Reply") on August 17, 2020. (ECF No. 15).

After being granted leave to file her surreply (Text Order dated August 24, 2020), Carrillo filed her "Plaintiff's Surreply in Response to Defendant's Reply to Plaintiff's Response to Defendant's Motion for Stay and to Compel Arbitration" ("Plaintiff's Surreply") on August 24, 2020. (ECF No. 19). After being granted leave to file its surreply (Text Order dated August 31, 2020), ROICOM filed its "Defendant's Surreply to Plaintiff's Surreply in Opposition to Defendant's Motion to Compel Arbitration" ("Defendant's Surreply") on August 31, 2020. (ECF No. 21).

b. Factual Background1

The undisputed facts of this case are as follows, unless otherwise noted:

In the fall of 2017, Carrillo was hired by ROICOM to conduct quality control. (ECF No. 13-1, p. 2); (ECF No. 13, p. 1). ROICOM is a company which creates equipment and uniforms for United States military personnel. (ECF No. 1, p. 2 ¶ 7); (ECF No. 5, p. 2 ¶ 7). ROICOM is a related company of ReadyOne Industries, Inc. ("ReadyOne"). (ECF No. 1, p. 2 ¶ 6) ("ROICOM is the for-profit sister company to ReadyOne Industries, Inc."); (ECF No. 5, p. 2 ¶ 6) (ROICOM "is a wholly – owned [sic] subsidiary of ReadyOne Industries, Inc.").

When Carrillo was hired by ROICOM, a company representative ("Representative")2 handed Carrillo a one-page document "Receipt and Arbitration Acknowledgement" ("Acknowledgement Form") for her signature, along with numerous other forms. (ECF No. 13-1, p. 2). According to Carrillo, the ROICOM Representative knew that Carrillo did not speak or read English, and the two spoke with each other exclusively in Spanish.3 (Id. ). When presenting the Acknowledgement Form to Carrillo, the ROICOM Representative informed Carrillo that she "had to sign this document to be able to register and be put on payroll with ROICOM." (Id. ). The ROICOM Representative also told Carrillo that she "had to sign the document to be able to work at the company." (Id. at p. 3).

Attached to Defendant's Motion in the initial affidavit of Ronaldo Alvarez ("Alvarez"), the Director of Human Resources and Compliance for ReadyOne, ROICOM provides the Acknowledgement Form, written exclusively in English, with Carrillo's signature on it. (ECF No. 8-1, p. 13). The Acknowledgement Form states that by signing the document, "[the employee] acknowledge[s] that [they] have received ad [sic] read (or had the opportunity to read) the Mutual Agreement to Arbitrate Claims, effective October 01, 2007." (Id. )4

In Plaintiff's Response, Carrillo asserts that the Acknowledgement Form she received was only in English. (ECF No. 13, p. 5). However, in Alvarez's amended and supplemental affidavit attached to Defendant's Reply, Alvarez asserts that the Acknowledgement Form is "a two — sided [sic] document in English on one side and Spanish on the other. Ms. Carrillo signed the English side .... [T]he document signed by Ms. Carrillo contained both an English side and a Spanish side." (ECF No. 15-1, p. 3) (emphasis added). The Spanish-language Acknowledgement Form, however, is unsigned and does not contain any of Carrillo's identifying information. (Id. ).

Even with the newly produced Spanish-language Acknowledgement Form, "Carrillo stands behind her affidavit testimony that she was only provided the ‘Acknowledgement Form’ in English – not in Spanish." (ECF No. 19, p. 6). According to Carrillo, she only signed the English version of the Acknowledgement Form because she relied upon the ROICOM Representative's representations about the Acknowledgement Form and thus believed it was "necessary to make sure that [she] was going to be registered on the company's payroll." (ECF No. 13-1, p. 3).

ReadyOne keeps, in its regular course of business, English and Spanish-language versions of the "Mutual Agreement to Arbitrate" ("Arbitration Agreement"), which is the "arbitration program adopted by ReadyOne on October 1, 2007, for all employees, including affiliated companies of ReadyOne such as ROICOM." (ECF No. 15-1, p. 3). ROICOM has never provided Carrillo with an English or Spanish-language copy of the Arbitration Agreement, nor has Carrillo ever seen or been given the opportunity to review the Arbitration Agreement in English or in Spanish. (ECF No. 13, p. 2); see (ECF No. 15-1, p. 2-3).

II. LEGAL STANDARDS
a. Motion to Compel Arbitration

Section 2 of the Federal Arbitration Act ("FAA") provides that agreements to arbitrate are "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. Under the FAA, the court must perform a two-step inquiry to determine whether to compel a party to arbitrate. Dealer Computer Services, Inc. v. Old Colony Motors, Inc. , 588 F.3d 884, 886 (5th Cir. 2009). "[T]he first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that dispute." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. , 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985) ; see also Fleetwood Enterprises, Inc. v. Gaskamp , 280 F.3d 1069, 1073 (5th Cir. 2002) ("In adjudicating a motion to compel arbitration under the Federal Arbitration Act, courts begin by determining whether the parties agreed to arbitrate the dispute."). The second step for the court to determine is "whether federal statute or policy renders the claims nonarbitrable." Dealer Computer Services , 588 F.3d at 886.

Courts divide the first step of the analysis—whether the parties agreed to arbitrate the dispute in question—into two separate determinations: "(1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement." Tittle v. Enron Corp. , 463 F.3d 410, 418 (5th Cir. 2006) (quoting Webb v. Investacorp , 89 F.3d 252, 258 (5th Cir. 1996) ); see also Dealer Computer Services , 588 F.3d at 886 ("The courts divide the first step into two more questions: whether a valid agreement to arbitrate exists and whether the dispute falls within that agreement."). Due to the "federal policy favoring arbitration," the "ambiguities as to the scope of the arbitration clause itself [should be] resolved in favor of arbitration." Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University , 489 U.S. 468, 476, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989) ; see also Fleetwood Enterprises , 280 F.3d at 1073 ("In determining whether the dispute falls within the scope of the arbitration agreement, ambiguities are resolved in favor of arbitration.") (internal quotes and punctuation omitted). "However, this federal policy favoring arbitration does not apply to the determination of whether there is a valid agreement to arbitrate between the parties; instead ordinary contract principles determine who is bound." Fleetwood Enterprises , 280 F.3d at 1073 (internal quotes omitted); see also Volt Information Sciences , 489 U.S. at 478, 109 S.Ct. 1248 ("[T]he FAA does not require parties to arbitrate when they have not agreed to do so.").

The Supreme Court has held that, since the FAA is merely a "policy guaranteeing the enforcement of private contractual arrangements, [courts should] look first to whether the parties agreed to arbitrate a dispute, not to general policy goals, to determine the scope of the agreement." E.E.O.C. v. Waffle House , 534 U.S. 279, 294, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002) (internal citations omitted). Furthermore, the Court reiterated that "[i]t goes without saying that a contract cannot bind a nonparty." Id. Finally, in resolving issues regarding the existence of an agreement to arbitrate, the Fifth Circuit has held that "courts apply ordinary state-law principles that govern the formation of contracts." Carter v. Countrywide Credit Industries, Inc. , 362 F.3d 294, 301 (...

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