Gustave v. SBE ENT Holdings, LLC

• Decision Date: 30 September 2020
• Docket Number: Civil Action No. 19-23961-Civ-Scola
• Parties: Deceide Gustave and others, Plaintiffs, v. SBE ENT Holdings, LLC and others, Defendants.
• Court: U.S. District Court — Southern District of Florida

Deceide Gustave and others, Plaintiffs, v. SBE ENT Holdings, LLC and others, Defendants.

Civil Action No. 19-23961-Civ-Scola

United States District Court for the Southern District of Florida

September 30, 2020

Omnibus Order

This matter is before the Court on the Defendants' motion to compel arbitration and stay the proceedings with respect to 15 of the 19 Plaintiffs who are alleged to have signed agreements requiring them to arbitrate their claims. (Defs.'s Mot., ECF No. 10.) The Plaintiffs' related motion to preclude the Defendants' reliance on certain declarations is also before the Court. (Pls.'s Mot., ECF No. 114.) The Defendants' motion to compel applies to 15 of the Plaintiffs. They are Carmen Duffoo, Teresa Echevarria, Eduardo Flores, Deceide Gustave, Yvon Hilaire, Miguelina Jimenez, Sophia Leon, Moises Madriz, Joseph Metellus, Celamene Pierre, Edmond Raymond, Jose Salazar, Jose Sanchez, Rodnet Theoc, and Sanders Villier. The motion is not directed at Plaintiffs - Terencius Delphin, Larry Nelson, Camereze Saint Fort, or Lucienne Victorare. While the motion to compel arbitration is not directed at all of the Plaintiffs in the case, for ease of reference this Order uses the term "Plaintiffs" to refer to the 15 Plaintiffs as to whom the Motion to Compel Arbitration is directed.

The Defendants moved to compel arbitration on the basis that each of the Plaintiffs signed a document (an "Acknowledgement") in which they agreed to arbitrate certain claims against the Defendants. The fact that the Plaintiffs signed those documents is not in dispute. Rather, the Plaintiffs challenge the enforceability of the Acknowledgements on several grounds, including unconscionability, scope, waiver, and novation. (Pls.'s Resp., ECF No. 115.) The Plaintiffs' motion to preclude seeks to strike the Defendants' declarations generally because they contain statements that are purportedly not based on personal knowledge. The Defendants dispute that position, but also appear to concede that the Court need not rely on the declarations in order to grant the motion to compel. (Defs.'s Resp., ECF No. 121.) Having reviewed the record, the parties' briefs, and the relevant legal authorities, the Court grants the motion to compel arbitration (ECF No. 10) and denies as moot the motion to preclude (ECF No. 114).

I. Background

This case was brought by nineteen Plaintiffs who are former food and beverage or kitchen workers at the Delano Hotel (the "Delano"), an "SBE" hotel, in Miami Beach, Florida. The Plaintiffs assert claims against the Defendants for violations of the Civil Rights Act of 1964, Section 703 of Title VII, 42 U.S.C. § 2000e-2 (Count I); unlawful employment practices under the Florida Civil Rights Act, § 760.10, Fla. Stat. (Count II); violations of the Age Discrimination in Employment Act, 29 U.S.C. § 623, et seq. (Count III); violations of the Americans with Disabilities Act, 29 U.S.C. § 701, et. seq. (Count IV); and hostile and abusive working environment (Count V).

In 2016, the Defendants purchased the Delano (and other hotels that are not relevant to this case). (ECF No. 114 at 2.) In the months following this transaction, the Defendants allegedly implemented a discriminatory strategy to re-brand the Delano Hotel and its restaurants by hiring and employing younger employees. (Id.) The Plaintiffs claim that this strategy resulted in the termination of long-time employees of the Delano, including the Plaintiffs. (Id.) In or about 2017, the Plaintiffs filed charges of discrimination with the Equal Employment Opportunity Commission ("EEOC"), and the EEOC initiated an investigation. (Id.) The Defendants purportedly participated in that EEOC investigation, which resulted in the EEOC's issuance of right to sue letters. (Id.) Following the issuance of the right to sue letters, the Plaintiffs filed the instant suit against their former employers, the Defendants, for violation of federal and state discrimination laws for engaging in age, disability, racial, and national origin discrimination. (Compl., ECF No. 1.)

On November 27, 2019, the Defendants filed their motion to compel arbitration, seeking to compel arbitration as to 15 of the 19 Plaintiffs. (ECF No. 10.) In support of their motion, the Defendants submitted the declarations of Lourdes Paredes and James Greely. (ECF Nos. 10-1; 10-2.) However, briefing on the motion to compel was stayed for approximately six months to allow the Plaintiffs to take arbitration-related discovery. (ECF Nos. 37, 53, 66.) During that time, the parties exchanged interrogatories and answers, and the Plaintiffs deposed at least four witnesses. (ECF Nos. 112, 122.)

The motion to compel was accompanied by an excerpt of an Acknowledgement providing:

I specifically state that I have read those parts of this Handbook that require Binding and Final Arbitration of any dispute that I have relating to my employment that is not resolved directly with management. I accept and agree to all terms and conditions of thepolicy for Binding and Final Arbitration as they are described in this Handbook.

(ECF No. 112-4 at 70.) The parties dispute whether the "Handbook" referenced in the Acknowledgements is the 2009 Morgans Hotel Group Handbook (the "2009 Handbook"), or one of several other subsequently created handbooks. Although the 2009 Handbook refers to Morgans Hotel Group ("Morgans"), the parties do not dispute that Morgans was acquired by Defendant SBE ENT Holdings, LLC ("SBE"). (ECF No. 10 at 3.)

There is no dispute that the Plaintiffs signed the Acknowledgements. (ECF No. 115 at 10 ("Plaintiffs acknowledge their signatures [on the Acknowledgements].").) The Plaintiffs admitted to signing the Acknowledgements in their responses to the Defendants' interrogatories. (See, e.g., Pl. Echevarria's Answers to Interrogatories, ECF No. 112-12 at 4 ("The signature . . . on Exhibit A [(the Acknowledgement)] to Defendants' First Requests for Admission to Arbitration Plaintiff Teresa Echevarria is my signature."); see also Pl. Flores's Answers to Interrogatories, ECF No. 112-13 at 4 (same).) However, the Plaintiffs were unable to read English, the language in which the Acknowledgements were written, and the Plaintiffs' native languages are either Creole or Spanish. (ECF No. 115 at 10.) The Plaintiffs admit that a Spanish interpreter was present when they signed the Acknowledgements. (Id.) The Plaintiffs do not claim that they asked for a translation of any portion of the Acknowledgements or handbooks, or that they asked to read or be provided with copies of same. Rather, they claim that there was an affirmative misrepresentation with respect to the terms that they signed and that they were never given copies of any of the handbooks.

Between 2009 and 2016, several handbooks came into existence. The 2009 Handbook provides that:

Morgans Hotel Group agrees and each employee is required to submit any dispute related to that individual's employment to arbitration in accordance with the Employment Arbitration Rules of the American Arbitration Association (AAA), if it was not previously resolved. All right to reconsideration, appeal and enforcement are contained in the AAA arbitration rules.

(ECF No. 10-1 at 11.) The critical post-2009 handbook is the handbook created by SBE sometime in 2016 (the "2016 Handbook"). (ECF No. 112-7.) Where the 2009 Handbook provides for mandatory arbitration, the 2016 Handbook provides that "the employee may proceed to arbitration . . . ." (ECF No. 112-7 at 62 (emphasis added).)

In support of their motion to compel arbitration, the Defendants rely upon declarations made by Lourdes Paredes and James Greeley, employees of SBE. Ms. Paredes asserts in her declaration that all of the Acknowledgements at issue correspond to the 2009 Handbook. (ECF No. 131 at 5.) Mr. Greeley's declaration states that at all relevant times, "Morgans Hotel Group Management, LLC" was the Plaintiffs' employer. (ECF No. 10-2.) During the six months of arbitration-related discovery, the Plaintiffs deposed Paredes and Greeley. Based on information uncovered during those depositions, the Plaintiffs moved to preclude the Defendants' reliance on the declarations of Paredes and Greeley.

II. Legal Standard

The Federal Arbitration Act ("FAA") governs the validity of an arbitration agreement. Walthour v. Chipio Windshield Repair, LLC, 745 F.3d 1326, 1329 (11th Cir. 2014) (citation omitted). The FAA "embodies a liberal federal policy favoring arbitration agreements." Id. (internal quotations omitted). The FAA provides that a written agreement to arbitrate is "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." Id. (internal quotations and citations omitted). Under Florida law, the party seeking enforcement of an arbitration agreement has the burden of establishing that an enforceable agreement exists. See CEFCO v. Odom, 278 So. 3d 347, 352 (Fla. 1st DCA 2019) (citing Palm Garden of Healthcare Holdings, LLC v. Haydu, 209 So. 3d 636, 638 (Fla. 5th DCA 2017) ("Appellants, as the proponents of arbitration, have the burden of establishing an enforceable written agreement to arbitrate.")). Additionally, "a district court considering the making of an agreement to arbitrate should give to the party denying the agreement the benefit of all reasonable doubts and inferences that may arise." Magnolia Capital Advisors Inc. v. Bear Stearns & Co., 272 F. App'x 782, 786 (11th Cir. 2008) (internal quotation marks omitted).

III. Analysis

The Plaintiffs oppose the motion to compel arbitration for five reasons. First, they argue that the Defendants have failed to establish that there is a valid and enforceable arbitration agreement. Second, they argue that the Defendants waived their right to arbitration. Third, they argue that the Defendants anticipatorily repudiated the arbitration agreement. Fourth, the Plaintiffs argue that the scope of the arbitration agreement does not encompassthe claims...