Cobble v. 20/20 Commc'ns, Inc.
| Decision Date | 23 February 2018 |
| Docket Number | No.: 2:17-CV-53-TAV-MCLC,: 2:17-CV-53-TAV-MCLC |
| Parties | JAMES COBBLE, et al., Plaintiffs, v. 20/20 COMMUNICATIONS, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Tennessee |
This civil action is before the Court on multiple motions filed by the parties. These are: (1) defendant's Motion to Dismiss or, in the Alternative, Transfer Venue [Doc. 5]; (2) defendant's Motion for Sanctions Pursuant to 28 U.S.C. § 1927 [Doc. 7]; (3) defendant's Motion to Transfer the Claims of the Opt-In Plaintiffs [Doc. 46]; (4) defendant's Motion for Rule 16 Conference and for a Stay of Discovery and Other Pretrial Deadlines [Doc. 55]; (5) defendant's Supplemental Motion to Transfer the Claims of the Opt-In Plaintiffs [Doc. 66]; and (6) plaintiff James Cobble's1 Expedited Motion to Conditionally Certify Collective Action and Facilitate Notice to Potential Opt-In Plaintiffs [Doc. 71].
The Court previously referred motions (3), (4), (5) and (6) above to United States Magistrate Judge Clifton L. Corker for his consideration [Docs. 58, 76-77]. On November 2, 2017, Magistrate Judge Corker entered a Report and Recommendation (the "R&R"), inwhich he recommends that the Court grant motions (3) and (5), transfer this action to the United States District Court for the Northern District of Texas, and deny motions (4) and (6) as moot. Pursuant to 28 U.S.C. § 636(b)(1)(C), the parties had fourteen days from service of the R&R in which to file any objections. Plaintiff timely filed several objections to the R&R on November 16, 2017 [Doc. 87], to which defendant responded [Doc. 88]. For the reasons explained below, the Court will adopt the recommendations of the R&R in whole and transfer the claims of all plaintiffs to the Northern District of Texas.
This case concerns allegations of unpaid overtime wages under the federal Fair Labor Standards Act (the "FLSA"), 29 U.S.C. §§ 201-19. Plaintiff seeks to represent all similarly situated Field Sales Managers (the "FSMs") whom defendant employed in the past three years to service its account with Samsung Electronics America, Inc., and to whom it allegedly failed to pay overtime wages [Doc. 1 ¶¶ 1-2]. Plaintiff's complaint asserts that defendant employed hundreds of FSMs who worked over forty hours per week but did not receive sufficient overtime pay [Id. ¶¶ 28-29].
The heart of the present dispute is, however, identifying the proper forum for this action. Defendant submits that, as a condition of employment, all FSMs signed various employment agreements (the "Agreements") [Doc. 6 p. 2]. One of these was a Mutual Arbitration Agreement (the "MAA"), which allegedly requires the FSMs to submit all non-excepted disputes to arbitration [Id.]. The MAA also contains a waiver of the FSMs' rightto bring a collective action [Id. at 2-3]. Defendant notes that the MAA provides a mechanism for employees to opt out of the agreement by delivering a completed opt-out form to the Director of Human Resources within fifteen days of receipt of the MAA [Id. at 3 (citing Doc. 6-2 ¶ 10)]. Defendant submits that none of the FSMs involved in this litigation ever completed this procedure [Id.].
Defendant further submits that the Agreements contain a provision selecting Texas law to govern and fixing venue in Tarrant County, Texas [Id. at 13]. These choice of law and forum selection clauses reside in a document distinct from the MAA (the "Employment Agreement"), but are expressly made applicable to all of the Agreements [Doc. 6-3 pp. 19-20]. The sample Employment Agreement provided by defendant states as follows:
These Agreements shall be governed by the laws of the State of Texas, notwithstanding the application of any choice of law principles. The Mutual Arbitration Agreement shall be governed by the Texas Arbitration Act and the Federal Arbitration Act. Any litigation or proceeding that may be brought by either party involving the enforcement of these Agreements or the rights, duties, or obligations of any party to these Agreements shall be brought exclusively in Tarrant County in the state of Texas. [The FSM] hereby consents to jurisdiction and venue in Tarrant County, Texas as consideration for these Agreements.
[Doc. 6-3 p. 20]. Defendant asserts that all plaintiffs here signed identical choice of law and forum selection clauses at the time they began their employment.
Defendant has, however, been able to produce signed Agreements for only some of the FSMs. Specifically, defendant has produced Agreements for many of the opt-in plaintiffs, but not for others and not for plaintiff Cobble [See id. at 2 n.2; Docs. 47-2-47-16; Docs. 66-1-66-3]. Defendant explains that many of the original images of theelectronic Agreements—including the MAAs and Employment Agreements—were lost after defendant's business relationship with its former onboarding software vendor, Enwisen, ended [Doc. 6 p. 2 n.2]. But defendant asserts that it would have been impossible for any putative plaintiff to have completed the hiring process without executing the Agreements, given the nature of the onboarding software in use at the time [Id. at 2]. Indeed, according to defendant, a prospective employee who tried to complete the onboarding process without signing the Agreements would have received an error message and could not have moved forward in the process [Id. (citing Doc. 6-3 ¶ 13)].
Defendant has provided the declaration of Director of Human Resources Chian Burks to substantiate this explanation [Doc. 6-3]. Burks explains that, to apply to work for defendant, an FSM would have had to submit an application through the Enwisen portal and provide an email address [Id. ¶ 3]. If defendant decided to hire her, the FSM would then have received an email with a link to the Enwisen onboarding portal and a unique username and password [Id. ¶ 4]. Once the FSM logged in, the onboarding software would have prompted her to complete a series of steps, including reviewing and acknowledging the Agreements [Id. ¶ 6]. For the Employment Agreement in particular, the FSM was required to scroll through the entire document and sign her name in the empty box next to the words "Employee Signature" [Id. ¶ 7]. The FSM could not advance to the next step without doing so [Id.]. The onboarding software would fill in the date of execution field, mark the document as "Signed Electronically," and save a copy in PDF format [Id. ¶ 8]. The FSM was also given an opportunity to save or print a copy [Id. ¶¶ 7, 10]. Burks furtherexplains that defendant ended its use of the Enwisen software in late 2015, after which Enwisen stored electronic copies of past Agreements "for only a relatively short window of time" [Id. ¶ 12]. Burks thus avers that, while defendant no longer has access to plaintiff's original Agreements, he did complete the onboarding process [Id. ¶¶ 11, 13].
Plaintiff denies that he ever signed an MAA, noting that defendant has been unable to produce the original, signed documents [Doc. 16 pp. 5-7]. Defendant has also been unable to produce the email that defendant allegedly would have sent to him with links to the onboarding documents [Id. at 6]. Plaintiff asserts that this shows no such email was ever sent, as defendant admits that several of its human resources personnel would have been copied on the email [Id.]. Plaintiff has also submitted a sworn declaration in which he states that he: (1) was never given nor signed an MAA; (2) has searched his email but has been unable to find an email from defendant containing an MAA; and (3) was never told that his employment was governed by an arbitration agreement [Doc. 16-1 ¶¶ 8-10]. This declaration does not, however, address the Employment Agreement or the choice of law and forum selection clauses. Furthermore, none of the opt-in plaintiffs have submitted declarations or other evidence denying they consented to the Agreements.
According to defendant, plaintiff and his counsel have repeatedly engaged in forum shopping to attempt to evade the Agreements' arbitration, class action, and forum selection provisions [Doc. 6 p. 3]. Defendant asserts that plaintiff's counsel originally filed a class action complaint on behalf of all FSMs in the Middle District of Florida, but then dismissedthe case after defendant's counsel brought the MAA to plaintiff's counsel's attention [Vine v. 20/20 Commc'ns, Inc., No. 2:15-cv-687, Doc. 9 (M.D. Fla. Dec. 7, 2015)]. Plaintiff's counsel then filed a complaint with the National Labor Relations Board, where the parties stipulated that all of defendant's employees had to sign an MAA through the Enwisen onboarding portal before being hired [Doc. 6 pp. 3-4; Doc. 6-4 ¶¶ 5-6]. Next, plaintiff's counsel filed eighteen separate, but substantively identical arbitrations on behalf of various FSMs, including plaintiff [Doc. 6 p. 4]. According to defendant, plaintiff's counsel later amended these submissions to assert collective action claims, contrary to the MAA [Id.]. Defendant believes this was an attempt to sidestep the American Arbitration Association ("AAA")'s threshold review for collective action waivers [Id. at 4-5].
Defendant then brought suit in the Northern District of Texas, asking that court to enjoin the FSMs from pursuing class arbitration [20/20 Commc'ns, Inc. v. Blevins, No. 4:16-cv-810-Y, Doc. 1 (N.D. Tex. Aug. 31, 2016)]. Defendant asserts that plaintiff here and his co-defendants in that action specifically admitted to having signed MAAs and to having instituted arbitration proceedings because the MAAs required them to do so [No. 4:16-cv-810-Y, Doc. 11 pp. 2-4]. Around the same time, plaintiff's counsel filed a class action in the Northern District of Illinois, asserting the same claims as in the pending arbitrations [Richmond v. 20/20 Commc'ns, Inc., No. 1:16-cv-6051, Doc. 1 (N.D. Ill. June 9, 2016)]. Defendant believes this was an attempt to take advantage of recent Seventh Circuit case law on the...
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