Nelson v. Gobrands, Inc.
| Decision Date | 20 September 2021 |
| Docket Number | 20-cv-5424-JMY |
| Parties | KEVIN NELSON, et al., Plaintiffs, v. GOBRANDS, INC., et al., Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Plaintiffs Kevin and Aura Nelson, bring this class action lawsuit against Defendants, Gobrands, Inc. and GB Logistics, LLC (hereinafter Defendants), seeking monetary damages under the Illinois Wage Payment and Collection Act (“IWPCA”), 620 ILCS 115/1, et. seq., and the Illinois Minimum Wage Law (“IMWL”), 820 ILCS 105/1, et. seq.[1] (Compl., ECF No. 1-1 ¶¶ 32-43 (Count I and Count II).) Pending before the Court is Defendants' Motion to Compel Arbitration and Stay Proceedings. (“Mot., ” ECF No. 9.) The Court finds the matter appropriate for resolution without oral argument. See Fed.R.Civ.P. 78; L.R. 7.1(f). For the reasons that follow, Defendants' Motion will be granted.
Plaintiffs are local delivery drivers who purport to represent two classes of individuals who work as local delivery drivers for Defendants in the state of Illinois (hereinafter “Delivery Drivers”). (Compl. ¶¶ 23-26.) Defendants operate a business that delivers consumer goods, food and other products directly to its customers from warehouses and/or micro-filling centers located throughout the geographic region of Illinois. (Id. ¶¶ 7-8.) To that end, Plaintiffs aver that Defendants maintain a series of warehouses and filling centers in Illinois where they store various consumer goods, food and products that are directly delivered to customers in and around Illinois. (Id. ¶ 8.)
Plaintiffs allege that Defendants mischaracterized them as independent contractors, and, therefore, failed to reimburse them for business expenses in violation of the IWPCA. (Id. ¶¶ 3237.) Specifically, Plaintiffs assert that they used their own personal vehicles to make deliveries for the Defendants by transporting products from the Defendants' warehouses to customers located in the geographic region of Illinois. (Id. ¶ 15.) In connection with these deliveries, Plaintiffs claim to have regularly incurred unreimbursed expenses including: “expenses related to the acquisition, cost and maintenance of their mobile phone device and wireless data plan; in addition, to vehicle maintenance, gas and insurance.” (Id. ¶ 16.)
In addition to their claim under IWPCA, Plaintiffs also allege that Defendants violated the IMWL by failing to pay overtime for hours worked in excess of 40 hours a week based on Defendants' alleged mischaracterization of their employment status as independent contractors. (Id. ¶¶ 38-43.) Plaintiffs assert that (Id. ¶ 20.) “However, Defendants did not pay Plaintiffs and other Delivery Drivers any extra overtime premium compensation for their overtime hours.” (Id. ¶ 22.)
As previously stated, Plaintiffs bring this case as a putative class action seeking to represent two classes of Delivery Drivers based on dual theories that Defendants violated both the IWPCA and IMWL. First, “Plaintiffs bring their claim under the IWPCA as a class action on behalf of themselves and all individuals who worked as Delivery Drivers for Defendants at any time between October 5, 2010 and the present in the State of Illinois (“IWPCA Class”). (Id. ¶ 23.) Second, “Plaintiffs bring their claim under the IMWL as a class action on behalf of themselves and all individuals who worked as Delivery Drivers for Defendants at any time between October 5, 2017 and the present in the State of Illinois (“IMWL Class”). (Id. ¶ 24.)
The employment relationship between the Parties is governed by a written contract that they refer to as the Technology Services Agreement. (“Technology Services Agreement, ” ECF No. 9-1.) Plaintiffs entered into the Technology Services Agreement with Defendant, GB Logistics, LLC, prior to preforming services for Defendants, and the Arbitration Provision found therein contains specific language that makes its terms appliable to Defendant, Gobrands, Inc., as an affiliated and interrelated company. (Id. § 15.3.i.)
The Technology Services Agreement contains an Arbitration Provision which states in relevant part:
This Arbitration Provision is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (the “FAA”) and evidences a transaction involving interstate commerce. This Arbitration Provision applies to any dispute arising out of or related to this Agreement or termination of the Agreement and survives after the Agreement terminates.... Except as it otherwise provides, this Arbitration Provision is intended to apply to the resolution of disputes that would otherwise be resolved in a court of law or before any forum other than arbitration, with the exception of proceedings that must be exhausted under applicable law before pursuing a claim in a court of law or in any forum other than arbitration. Except as it otherwise provides, this Arbitration Provision requires all such disputes to be resolved only by an arbitrator through final and binding arbitration on an individual basis only and not by way of court or jury trial, or by way of class, collective, or representative action.
(Technology Services Agreement § 15.3.i. (hereinafter “Arbitration Provision”).) The Arbitration Provision includes a Class Action Waiver clause which reads:
You and the Company agree to resolve any dispute that is in arbitration on an individual basis only, and not on a class, collective action, or representative basis (“Class Action Waiver”). The Arbitrator shall have no authority to consider or resolve any claim or issue any relief on any basis other than an individual basis. The Arbitrator shall have no authority to consider or resolve any claim or issue any relief on a class, collective, or representative basis....
(Id. § 15.3.v (hereinafter “Class Action Waiver”).) The first page of the Technology Services Agreement also includes an opt-out provision which calls attention to the Arbitration Provision along with the Class Action Waiver, and it specifically explains that Plaintiffs can opt-out of the Arbitration Provision:
IMPORTANT: PLEASE NOTE THAT TO USE THE GOPUFF SERVICES, YOU MUST AGREE TO THE TERMS AND CONDITIONS SET FORTH BELOW. PLEASE REVIEW THE ARBITRATION PROVISION SET FORTH BELOW CAREFULLY, AS IT WILL REQUIRE YOU TO RESOLVE DISPUTES WITH THE COMPANY ON AN INDIVIDUAL BASIS THROUGH FINAL AND BINDING ARBITRATION UNLESS YOU CHOOSE TO OPT OUT OF THE ARBITRATION PROVISION. BY VIRTUE OF YOUR ELECTRONIC EXECUTION OF THIS AGREEMENT, YOU WILL BE ACKNOWLEDGING THAT YOU HAVE READ AND UNDERSTOOD ALL OF THE TERMS OF THIS AGREEMENT (INCLUDING THE ARBITRATION PROVISION) AND HAVE TAKEN TIME TO CONSIDER THE CONSEQUENCES OF THIS IMPORTANT BUSINESS DECISION. IF YOU DO NOT WISH TO BE SUBJECT TO ARBITRATION, YOU MAY OPT OUT OF THE ARBITRATION PROVISION BY FOLLOWING THE INSTRUCTIONS PROVIDED IN THE ARBITRATION PROVISION BELOW.
(Id. at 1 (capitalization in original).) The Technology Services Agreement also contains a Choice-of-Law Provision that reads:
The choice of law provisions contained in this Section 15.1 do not apply to the arbitration clause contained in Section 15.3, such arbitration clause being governed by the [FAA]. Accordingly, and except as otherwise stated in Section 15.3, the interpretation of this Agreement shall be governed by Delaware law, without regard to the choice or conflicts of law provisions of any jurisdiction. Any disputes, actions, claims or causes of action arising out of or in connection with this Agreement or the goPuff Services that are not subject to the arbitration clause contained in Section 15.3 shall be subject to the exclusive jurisdiction of the state and federal courts located in . . . Philadelphia, Pennsylvania. These provisions, and except as otherwise provided in Section 15.3, are only intended to specify the use of Delaware law to interpret this Agreement and the forum for dispute asserting a breach of this Agreement, and these provisions shall not be interpreted as generally extending Delaware law to you if you do not otherwise reside or provide services in Delaware. The foregoing choice of law and forum selection provisions do not apply to the arbitration clause in Section 15.3 or to any arbitrable disputes as defined therein. Instead, as described in Section 15.3, the [FAA] shall apply to such disputes. The failure of Company to enforce any right or provision in this Agreement shall not constitute a waiver of such right or provision unless acknowledged and agreed to by Company in writing.
(Id. § 15.1 (Choice-of-Law Provision).) The Technology Services Agreement contains a severability clause (Id. § 14.3), and the Arbitration Provision contains a separate severability clause. (Id. § 15.3.ix.) The severability clause in the Arbitration Provision specifically states:
This Arbitration Provision is the full and complete agreement relating to the formal resolution of disputes arising out of this Agreement. Except as stated in subsection V, above, in the event any portion of this Arbitration Provision is deemed unenforceable, the remainder of this Arbitration Provision will be enforceable. (Id. § 15.3.ix.)
Plaintiffs filed this action in the Philadelphia County Court of Common Pleas. Nelson v. Gobrands, Inc., No. 0217 (C.P Philadelphia October 5, 2020) (Complaint). Defendants then filed a Notice of Removal in the Eastern District of Pennsylvania. (ECF No. 1.) Plaintiffs filed a Motion to Remand the action to state court (Motion to Remand, ECF No. 10), and Defendants filed an Opposition to the Motion to Remand. (Opposition to Motion...
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