Shirk v. Jackie Gonzales, Specialty Retailers, Inc.
| Decision Date | 29 May 2018 |
| Docket Number | No. 17-CV-1129 MCA/KK,17-CV-1129 MCA/KK |
| Court | U.S. District Court — District of New Mexico |
| Parties | KRISTINE SHIRK, Plaintiff, v. JACKIE GONZALES, SPECIALTY RETAILERS, INC. d/b/a BEALLS, Defendants. |
THIS MATTER is before the Court on Defendants' Motion to Compel Arbitration under 9 U.S.C. § 3, or, Alternatively, Under the New Mexico Arbitration Act. [Doc. 19] The Court, having considered the submissions, the relevant law, and otherwise being fully informed in the premises, hereby GRANTS the Motion.
Defendants bring this Motion to Compel Arbitration. [Doc. 19] Defendants argue that when Plaintiff accepted employment with Defendant Specialty Retailers, she agreed to a "Dispute Resolution Program," which requires that dispute be submitted to arbitration. [Doc. 19, p. 2] Plaintiff, however, resists arbitration on several grounds. First, she asserts that the Court need not apply the Federal Arbitration Act (FAA) because "Plaintiff was not engaged in interstate commerce" - instead she was "a clerk who sold makeup over the counter in a small town." [Doc. 22, p. 1] Plaintiff further argues that the arbitration agreement is unconscionable under New Mexico law because "the only disputes that are subject to the arbitration agreement are those claims that likely may be brought by employees." [Doc. 22, p. 3] Plaintiff also argues that Defendant Jacque Gonzales is not a party to the arbitration agreement, and thus her claims against Defendant Gonzales do not need to be arbitrated. [Doc. 22, pp. 5-6] Finally, Plaintiff submits that Defendant Specialty Retailers has refused to provide her with a copy of her personnel file to date, which Plaintiff states "may contain information or evidence or other agreements or personnel rules bearing on the issues raised herein[.]" [Doc. 22, p. 7] Thus, Plaintiff requests this Court to "stay resolution of this motion pending some nominal discovery by the Plaintiff." [Doc. 22, p. 7] The Court addresses the parties arguments below, though not in the order set out in their briefs.
Plaintiff asks this Court to "stay resolution of this motion pending some nominal discovery by the Plaintiff." [Doc. 22, p. 7] Plaintiff states that her personnel file "would presumably contain this arbitration agreement, any other agreements she executed with Defendants, and anything else relating to her employment with Defendants." [Doc. 22, p. 7] Plaintiff thus submits that her "personnel file may contain information or evidence or other agreements or personnel rules bearing on the issues raised herein." [Doc. 22, p. 7]
Plaintiff has not demonstrated that the discovery she requests would assist her in opposing Defendant's Motion to Compel Arbitration.
In enacting the FAA, Congress intended that proceedings to compel arbitration be "expeditious and summary," "with only restricted inquiry into factual issues." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 22, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). To obtain discovery in opposition to a motion to compel arbitration, the arbitration opponent must at least show how discovery would "assist[ ] them in opposing the motion to compel arbitration." Wolff v. Westwood Mgmt., LLC, 558 F.3d 517, 521 (D.C.Cir. 2009).
THI of New Mexico at Hobbs Ctr., LLC v. Spradlin, 532 F. App'x 813, 819 (10th Cir. 2013) (unpublished decision). Instead, she makes an overly broad request for her entire personnel file. Moreover, while she states that she "may" have executed some other agreements with Defendants, but she does not state the subject of those hypothetical agreements, or how they would contradict the "Dispute Resolution Program," or otherwise have any bearing on the Motion to Compel Arbitration. As such, Plaintiff has not met her burden of demonstrating that she needs discovery to assist her in opposing the Motion to Compel Arbitration. Plaintiff's requests for discovery and to stay this matter are denied.
The FAA defines commerce as:
commerce among the several States or with foreign nations, or in any Territory of the United States or in the District of Columbia, or between any such Territory and another, or between any such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation.
9 U.S.C. § 1. The FAA goes on to declare that:
Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56 (2003). "Congress' Commerce Clause power may be exercised in individual cases without showing any specific effect upon interstate commerce if in the aggregate the economic activity in question would represent a general practice subject to federal control." Id. at 56-57 ().
Plaintiff argues that she was not involved in interstate commerce - she submits that she merely sold makeup in a small town. [Doc. 22, p. 1] Moreover, she argues that there has been no showing that "Plaintiff, while performing her duties under the employment contract was working 'in' commerce, was producing goods for commerce, or was engaging in activity that affected commerce," citing Bernhardt v. Polygraphic Company, 350 U.S. 198, 200-201 (1956) (). [Doc. 22, p. 1]
Supreme Court cases more recent than Bernhardt, however, have elucidated the type of "showing" that is sufficient to evidence a transaction involving commerce. First, in Allied-Bruce Terminix, 513 U.S. at 281-82, the Court held that a contract between a homeowner in Alabama and a local franchise of a national pest treatment company to inspect and treat for termites involved interstate commerce and thus was within the Court's jurisdiction pursuant to the FAA. The Court reasoned: "In addition to the multistate nature of Terminix [the national company] and Allied-Bruce [the franchise, which operated in multiple states], the termite-treating and house-repairing material used by Allied-Bruce in its (allegedly inadequate) efforts to carry out the terms of the Plan, came from outside Alabama." Id. at 282. The Court distinguished Bernhardt because it turned on a lack of a showing1 concerning whether the petitioner was engaged in an activity that affected commerce. Id. at 271-72. By contrast, the showing in Allied-Bruce Terminix was sufficient. Id. at 282.
Even more recently, our Supreme Court rejected the argument that the "involving commerce" provision within 9 U.S.C. § 2 does not apply to employment contracts, relying heavily on Allied-Bruce Terminix. Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 113 (2001). In Circuit City, the plaintiff signed an agreement to arbitrate when he applied for employment with Circuit City, "a national retailer of consumer electronics." Id. at 109. In addition to holding that Section 2 of the FAA applies to employment contracts, the Court also rejected the plaintiff's alternative argument that an exception to the application of the FAA within 9 U.S.C. § 1 applied to employment contracts. The exception states that the FAA shall not "apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." (Emphasis added). However, the Court determined that, while "involving commerce" as used in Section 2 (the general rule) "signals an intent to exercise Congress' commerce power to the full," the words "engaged in commerce" as used in Section 1 (the exception) are "words of art" "understood to have a more limited reach." Circuit City Stores, 532 U.S. at 115 (internal quotation marks omitted). Accordingly, the Court held that the FAA applies to most employment contracts, and that the Section 1 exception only applies to transportation workers. Id. at 119; see also EEOC v. Waffle House, Inc., 534 U.S. 279, 289 (2002) ().
Applying these cases to the facts at hand, the showing in this case is sufficient for this Court to hold that the contract evidences "a transaction involving commerce" as required by Section 2 of the FAA. Here, Plaintiff alleges that she was living in Texaswhen she accepted employment with Defendant Specialty Retailers. [Doc. 1-1, ¶ 11] Defendant Specialty Retailers is incorporated in Texas and its principal place of business is in Texas. [Doc. 1, ¶¶ 9-10] Defendant Specialty Retailers owns and...
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