Pollard v. ETS PC, Inc.
| Decision Date | 12 May 2016 |
| Docket Number | Civil Action No. 16-cv-0097-WJM-MJW |
| Citation | 186 F.Supp.3d 1166 |
| Parties | Carolyn Pollard, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. ETS PC, Inc., formerly known as Eberl's Temporary Services, Inc., ECS PC, Inc., formerly known as Eberl's Claim Service, Inc., EAC PC, LLC, formerly known as Eberl's Acquisition Co., LLC, ETS Holding Company, Inc., Kirk J. Eberl, Defendants. |
| Court | U.S. District Court — District of Colorado |
Amber L. Karns, April L. Walter, Megan M. Mitchell, Michael Allen Starzyk, Starzyk & Associates, P.C., The Woodlands, TX, for Plaintiff.
Jennifer Lynn Anderson, Jones Walker LLP, Baton Rouge, LA, John D. Martin, Martin & Hyman, LLC, Bradford J. Williams, John M. Husband, Holland & Hart, LLP, Denver, CO, Charles Michael Poplstein, Thompson Coburn, LLP, St. Louis, MO, for Defendants.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO COMPEL ARBITRATION AND DISMISS ALL CLAIMS
This is an action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. Plaintiff Carolyn Pollard and those who have opted in to this action ("Plaintiffs") claim that Defendants failed to pay proper overtime compensation. (ECF No. 1.)
Currently before the Court is Defendants' Motion to Compel Arbitration and Dismiss All Claims ("Motion to Compel"). (ECF No. 67.) Defendants assert that the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq. , requires all Plaintiffs to bring their claims in individual arbitrations, rather than through a class action lawsuit or class arbitration.
For the reasons explained below, the Court mostly agrees. The Court finds that Plaintiffs' claims are arbitrable, although certain provisions of their arbitration agreements must be severed. Moreover, the Court finds that Plaintiffs' claims must proceed in arbitration individually, not by way of any class or collective procedure. Accordingly, pursuant to the FAA, the Court will compel arbitration and stay this case, but not dismiss it. See 9 U.S.C. § 3 .
The FAA was enacted in response to judicial hostility to arbitration agreements. See Hall Street Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008). Section 2 of the FAA provides, in relevant part: "A written provision in any ... contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be 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. The Supreme Court has described Section 2"as reflecting both a liberal federal policy favoring arbitration and the fundamental principle that arbitration is a matter of contract." AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 339, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) (" Concepcion ") (internal quotation marks and citation omitted).
In this case, Plaintiffs do not argue that they did not sign a contract requiring arbitration. They also do not dispute that their FLSA claims fall within the scope of what their arbitration agreements intended to cover. Thus, the only issue is whether those arbitration agreements are enforceable. If they are, the Court must compel the parties to arbitrate.
According to Plaintiffs, all Defendants operated as an essentially indistinguishable entity employing Plaintiffs as insurance adjusters. (ECF No. 1 ¶¶ 4–29, 51–71.) Plaintiffs claim that they regularly worked, but were not properly paid for, "20 to 44 hours of overtime per week." (Id. ¶¶ 72, 74.) "In fact," Plaintiffs say, "[they] worked so many overtime hours that several adjusters actually died while on the worksite ... because of the long hours and stressful working conditions." (Id. ¶ 73.)
Each Plaintiff at some point signed a "Temporary Employment Agreement" with Defendant ETS PC, Inc. (See ECF No. 67–2 at 1; ECF No. 67–4 at 1; ECF No. 67–6 at 1.) There are actually three versions of this agreement, which the Court will refer to as the "2012 Agreement," "2013 Agreement," and "2014 Agreement." Each of these Agreements is governed by Colorado law. (ECF No. 67–2 at 9–10, ¶ 3; ECF No. 67–4 at 9–10, ¶ 3; ECF No. 67–6 ¶ 14.) Moreover, each contains important provisions regarding arbitration, discussed next.
The 2012 Agreement's arbitration clause reads as follows:
To the maximum extent permitted by law, the Parties agree and irrevocably consent to resolve any dispute relating to or arising from contractual or statutory compensation paid or payable by ETS to Employee pursuant to this Agreement or any prior agreement between Employee and ETS through binding arbitration by the American Arbitration Association. Employee understands that this agreement to arbitrate all compensation disputes means Employee is agreeing to waive to the maximum extent permitted by law any right Employee may have to ask for a jury or court trial and to pursue claims on a class action or collective action basis in any compensation dispute with the Company. Any arbitration between us will be governed by the arbitrator's procedures or rules then in effect for employment disputes and will take place in Jefferson County, Colorado.
(ECF No. 67–2 at 9, ¶ 11(b).) Moreover, "[i]n addition to any relief, order or award entered, the prevailing Party in any arbitration or litigation between us will be awarded reasonable attorneys' fees, expert witness fees and costs." (ECF No. 67–2 at 9, ¶ 11(d).)1
The 2012 Agreement also contains a severability clause: "Any unenforceable provision of this Agreement will be modified to the extent necessary to make it enforceable or, if that is not possible, will be severed from this Agreement, and the remainder of this Agreement will be enforced to the fullest extent possible." (ECF No. 67–2 at 9–10, ¶ 3.)
The 2013 Agreement's arbitration clause is nearly identical to the 2012 Agreement's arbitration clause, but adds references to "affiliated companies":
To the maximum extent permitted by law, the Parties agree and irrevocably consent to resolve any dispute relating to or arising from contractual or statutory compensation paid or payable by ETS or its affiliated companies to Employee pursuant to this Agreement or any prior agreement between Employee and ETS or its affiliated companies through binding arbitration by the American Arbitration Association. Employee understands that this agreement to arbitrate all compensation disputes means Employee is agreeing to waive to the maximum extent permitted by law any right Employee may have to ask for a jury or court trial and to pursue claims on a class action or collective action basis in any compensation dispute with the Company or its affiliated companies. Any arbitration between us will be governed by the arbitrator's procedures or rules then in effect for employment disputes and will take place in Jefferson County, Colorado.
(ECF No. 67–4 at 9, ¶ 11(b).) The 2013 Agreement contains a fee-shifting clause and severability clause identical to those in the 2012 Agreement. (ECF No. 67–4 at 9–10, ¶¶ 3, 11(d).)2
The 2014 Agreement's arbitration clause is more elaborate and precise than its predecessors:
To the maximum extent permitted by law, the Parties agree and irrevocably consent to resolve any disputes or claims arising under federal, state or local statutory or common law relating to or arising from the compensation paid or payable by ETS or its affiliated companies to Employee pursuant to this Agreement or any prior agreement between Employee and ETS or its affiliated companies through binding arbitration by the American Arbitration Association. Employee understands that this agreement to arbitrate all compensation disputes arising from or relating to this Agreement or any prior agreement between the Employee and ETS or its affiliated companies means Employee is agreeing to waive to the maximum extent permitted by law any right Employee may have to ask for a jury or court trial and that Employee is also agreeing to waive to the maximum extent permitted by law any right Employee may have to pursue claims on a class action or collective action basis in any compensation dispute with ETS or its affiliated companies arising from or relating to this Agreement or any prior agreement between Employee and ETS or its affiliated companies. Any arbitration between us will be governed by the American Arbitration Association's procedure and rules then in effect for employment disputes, except if a party asserts a claim pursuant to a federal, state or local statute or law which provides for a specific allocation or handling of attorney's fees and costs, then the Parties agree that recovery of attorneys' fees and/or costs shall be handled in accordance with the federal, state, or local statute or law governing the Party's claim notwithstanding anything to the contrary in the American Arbitration Association's rules and procedures. The arbitration will take place in Jefferson County, Colorado or the next closest county in Colorado where the American Arbitration Association has facilities to accommodate the arbitration. The Parties acknowledge that ETS and Employee are engaged in or affecting interstate commerce by the performance of their services under this Agreement and that this arbitration provision is governed by the Federal Arbitration Act.
Although the 2014 Agreement contains a fee-shifting clause, it is subject to qualifications not present in the 2012 or 2013 Agreements:
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