Holmes v. CVS Health

• Decision Date: 30 July 2020
• Docket Number: No. CV-19-04936-PHX-SMB,CV-19-04936-PHX-SMB
• Parties: Mildred Jay Holmes, Plaintiff, v. CVS Health, Defendant.
• Court: U.S. District Court — District of Arizona

Mildred Jay Holmes, Plaintiff, v. CVS Health, Defendant.

No. CV-19-04936-PHX-SMB

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

July 30, 2020

ORDER

Pending before the Court is Defendant CVS Health's Motion to Dismiss and Compel Arbitration. (Docs. 22, 24-25.¹) The Court has considered the pleadings, associated exhibits, and relevant law and will grant the Motion for the reasons explained below.²

I. BACKGROUND

Plaintiff is a CVS Health employee in Phoenix, Arizona. (Doc. 1 at 3.) As part of her onboarding process before officially starting with CVS, she used StarSource, a secure online application portal, to electronically complete her new hire paperwork on August 19, 2016. (See Doc. 25-1 at 2-34.) Among other things, this required that she provide her e-mail address, military status, banking information, and emergency contact information in addition to choosing whether to opt in to an Arbitration Agreement. (Id.) She completed the first document in StarSource at 1:22 P.M. and various other documents within the hour.(Id. at 6, 9-21.) CVS is able to view an employee's submissions through StarSource, but cannot access their login credentials or complete onboarding paperwork on their behalf. (Id. at 3.) One of the final onboarding documents that had to be completed was the Arbitration Agreement. (Id. at 29.) This was completed at 2:05 P.M. that same day and electronically signed by "Mildred Holmes." (Id.)

An employee who opts in to the Arbitration Agreement by electronically signing their name "agree[s] that any dispute between [the employee] and CVS that is covered by this Agreement ("Covered Claims") will be decided by a single arbitrator through final and binding arbitration only and will not be decided by a court or jury or any other forum, except as otherwise provided in this Agreement." (Id. at 26.) These Covered Claims are broad. (See id.) They include those "arising out of or related to [the employee's] employment with CVS or the termination of [their] employment" and those concerning "harassment, discrimination, retaliation, and termination arising under the Civil Rights Act of 1984[.]" (Id.) In addition to requiring arbitration for a wide variety of claims between CVS and its employees who opt in, it also requires that disputes concerning its "validity, enforceability or breach" be decided by the arbitrator. (Id.) Once in arbitration, the Arbitration Agreement generally requires each party to cover their own arbitration costs. (Id.) However, the arbitration initiation fee must be paid by the party bringing the claim(s) and the arbitrator can assign the prevailing party's attorney fees to the other side. (Id.)

Pursuant to the Arbitration Agreement signed by "Mildred Holmes" that was completed during Plaintiff's onboarding process, CVS moves to dismiss her complaint, which alleges CVS discriminated and retaliated against her on the basis of her race in violation of Title VII of the Civil Rights Act of 1964, and compel her to arbitrate her claims. (Docs. 1, 22.)

II. LEGAL STANDARD

Section 2 of the Federal Arbitration Act ("FAA") provides that "[a] written agreement to arbitrate 'in any maritime transaction or a contract evidencing a transaction involving commerce . . . shall be valid, irrevocable, and enforceable, save upon suchgrounds as exist at law or in equity for the revocation of any contract." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983) (quoting 9 U.S.C. § 2). The FAA reflects a "congressional declaration of a liberal federal policy favoring arbitration," id., and "courts must place arbitration agreements on an equal footing with other contracts and enforce them according to their terms," AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (internal and external citation omitted). Indeed, "the [FAA] 'leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.'" Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000) (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985)); Republic of Nicar. v. Standard Fruit Co., 937 F.2d 469, 478 (9th Cir. 1991) ("Our role is strictly limited to determining arbitrability and enforcing agreements to arbitrate, leaving the merits of the claim and any defenses to the arbitrator.").

"The court's role under the [FAA] is therefore limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue." Chiron, 207 F.3d at 1130. "If the court finds that an arbitration clause is valid and enforceable, the court should stay or dismiss the action to allow the arbitration to proceed." Kam-Ko Bio-Pharm Trading Co. Ltd-Australasia v. Mayne Pharma (USA) Inc., 560 F.3d 935, 940 (9th Cir. 2009) (citing Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1276-77 (9th Cir. 2006) (en banc)).

III. DISCUSSION

Without disputing whether the Arbitration Agreement encompasses her alleged claims, Plaintiff argues it is unenforceable because she did not sign it and its terms are unconscionable. (Doc. 24 at 1-3.) She also argues that CVS waived its right to arbitration by engaging in discovery. (Id.) The Court disagrees.

A. Plaintiff Accepted the Arbitration Agreement's Terms.

If a party has not agreed to arbitrate, the law of course does not require them to do so. AT&T Techs., Inc. v. Comm. Workers of Am., 475 U.S. 643, 648-49 (1986). Arizonacommon law principles govern the enforceability of arbitration agreements, just as they would for other contracts. See Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 581, 686 (1996); see also Sec. Alarm Fin. Enters., L.P. v. Fuller, 398 P.3d 578, 582 (App. 2017). Under Arizona law, a valid agreement requires an "offer, an acceptance, consideration, and sufficient specification of terms so that obligations involved can be ascertained." K-Line Builders, Inc. v. First Fed. Sav. & Loan Ass'n, 677 P.2d 1317, 1320 (App. 1983) (citation omitted). Acceptance occurs where there is "manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer." Id. (citation omitted)

Here, Plaintiff challenges only whether she accepted the Arbitration Agreement because she "does not believe the signature on [it] is her own." (Doc. 24 at 1.) The Court finds this "belief" inadequate to override evidence to the contrary. Indeed, nothing shows that her signature was "secured by some fraudulent trick or device as to the context thereof [and] prevent[ed] [her] from reading the document," which would allow her to "avoid the consequences which would otherwise result from such instrument." Ford Motor Co. v. Pearson, 40 F.2d 858, 867 (9th Cir. 1930). Nor does any evidence show who signed the Arbitration Agreement if she did not do it. Notably, Plaintiff does not dispute that she completed the documents immediately preceding the Arbitration Agreement. (Doc. 25-1 at 6-21.) In each of these documents, she provided private information such as her e-mail address, military status, banking information, and emergency contact information. (Id. at 6-21.) Then, a few minutes later, the Arbitration Agreement was signed, but Plaintiff merely "believes" it was not her that did such a thing. (Id. at 29.) Given the evidence concerning the proximity of the previously completed documents and type of private information provided within, the Court finds nothing substantiating Plaintiff's "belief."

Accordingly, and after considering the liberal federal policy under the FAA favoring arbitration, the Court finds that the signature represents Plaintiff's acceptance of the Arbitration Agreement's terms under Arizona law. Cf. K-Line Builders, 677 P.2d at 1320; Nationwide Res. Corp. v. Massabni, 658 P.2d 210, 215 (App. 1982).

B. The Agreement Is Not Unconscionable.

As a general matter, an unconscionable arbitration agreement is unenforceable. WB, The Bldg. Co., LLC v. El Destino, LP, 257 P.3d 1182, 1188 (App. 2011). There are two forms of unconscionability. Clark v. Renaissance W., LLC, 307 P.3d 77, 79 (App. 2013). "Procedural unconscionability addresses the fairness of the bargaining process, which is concerned with unfair surprise, fine print clauses, mistakes or ignorance of important facts or other things that mean bargaining did not proceed as it should." Id. (internal quotation marks and citation omitted). Whereas, substantive unconscionability may result when contract terms, inter alia, are "so one-sided as to oppress or unfairly surprise an innocent party, [result in] an overall imbalance in the obligations and rights imposed by the bargain, [or indicate a] significant cost-price disparity." Maxwell v. Fid. Fin. Serv., Inc., 907 P.2d 51, 58 (1995).

Here, Plaintiff argues that the Arbitration Agreement is unconscionable because it gives CVS "unfair advantages" by (1) "requiring Courts' determination of validity due to signature in question," (2) "stating [CVS's] 'existing internal procedures' could be used to resolve [a] complaint," and (3) "stating costs will be awarded to the prevailing party." (Doc. 24 at 2-4.) The Court disagrees.

None of Plaintiff's three arguments demonstrates that the Arbitration Agreement is unconscionable. Shattuck v. Precision-Toyota, Inc., 566 P.2d 1332, 1334 (1977) ("Parties are, within reason, free to contract as they please, and to make bargains which place one party at a disadvantage." (quoting Naify v. Pac. Indem. Co., 76 P.2d 663, 667 (1938)); Smith v. Saxon, 918 P.2d 1088, 1091 (App. 1996) ("Absent ascertainable public policy to the contrary, parties are free to contract as they wish." (citation omitted)). As an initial matter, "before referring a dispute to an arbitrator, the court determines whether a valid arbitration agreement exists." Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S.Ct. 524, 530 (201...