Townsend v. Stand Up Mgmt., Inc.
| Decision Date | 08 August 2019 |
| Docket Number | CASE NO.1:18CV2884 |
| Parties | JAMES TOWNSEND, ET AL., Plaintiffs, v. STAND UP MANAGEMENT, INC.,ET AL., Defendants. |
| Court | U.S. District Court — Northern District of Ohio |
OPINION AND ORDER
This matter is before the Court on Plaintiffs' Motion for Class Certification and Court Authorized Notice (ECF # 9), the Motion of Defendants DePere Concepts, Inc., Stand Up Management, Inc., Cole Heeg and Brian Tidwell to Dismiss for Lack of Jurisdiction or, in the Alternative, Motion to Compel Arbitration and Stay all Proceedings (ECF # 16) and Plaintiffs' Amended Motion for Evidentiary Hearing or Trial. (ECF # 26). For the following reasons, the Court denies, subject to refiling, Plaintiffs' Motion for Class Certification; grants, in part, Defendants' Motion to Compel Arbitration and orders Plaintiffs' to arbitrate their claims against Defendants and denies Plaintiffs' Motion for Evidentiary Hearing.
On December 14, 2018, Plaintiffs James Townsend, Florzell Pippen and Dione Christian filed their Collective and Class Action Complaint against Defendants Stand Up Management, Inc. ("Stand Up"), DePere Concepts, Inc. ("DePere"), Exelon Generation Company, LLC. d/b/a as Constellation Energy ("Constellation"), Brian Tidwell ("Tidwell") and Cole Heeg ("Heeg") alleging violations of the Fair Labor Standards Act ("FLSA") and Ohio Minimum Fair Wage Standards Act ("OMFWSA") and Ohio Revised Code 4111 et seq. and the Ohio Constitution ("state law claims"). Plaintiffs assert that Defendants market and sell natural gas and/or electricity to residential and commercial customers. Plaintiffs were employed by Defendants to go door-to-door to market Defendants energy services to potential customers. Plaintiffs were managed and supervised by Defendants DePere, Stand Up, Heeg and Tidwell. Plaintiffs did not make sales as part of their duties. Plaintiffs were required to work more than 40 hours per week but were not paid at the statutory rate of one and one-half times their regular rate of pay for hours worked in excess of 40 hours per week. Plaintiffs allege Defendants are all joint employers of Plaintiffs and Plaintiffs bring their claims on behalf of themselves and other similarly situated employees of Defendants.
On January 24, 2019, Plaintiffs moved for conditional certification and on February 15, 2019, Defendants filed their Motion to Dismiss. On May 1, 2019, Plaintiffs filed their Amended Motion for Evidentiary Hearing or Trial asking the Court for a hearing to determine what, if any, claims should be arbitrated and which Defendants can enforce the arbitration agreements.
According to Defendants, all the Plaintiffs signed arbitration agreements requiring all disputes be submitted to final and binding arbitration. Furthermore, the arbitrationagreements waive any right to bring an action collectively. These matter are now ripe for ruling.
According to Defendants, the Court lacks subject matter jurisdiction over Plaintiffs' claims because each Plaintiff executed a valid agreement with Defendants to resolve disputes through final and binding arbitration. These agreements further waived any rights Plaintiffs had to assert their claims on a class or collective basis.
Plaintiffs oppose the Motion, contending that the arbitration agreements only apply between one discrete Plaintiff and one Defendant. For instance, Plaintiffs Townsend and Pippen worked for Stand Up and Plaintiff Christian worked for DePere. Thus, even if the arbitration agreements are enforceable, they would only be enforceable as to the claims between the contracting parties. In addition, on the agreement purportedly signed by Townsend the name of the employer is blank, therefore, Townsend cannot be compelled to arbitrate his claims due to a lack of an enforceable agreement.
Plaintiffs further assert that procedurally it is proper to first determine whether Plaintiffs have met the standard for conditional certification, then send out notice to potential collective action members and, once all opt-ins have appeared, determine the arbitration issues.
Defendants move the Court to Dismiss under Fed. R. Civ. P. 12(b)1) or 12(b)(6) or alternatively to compel arbitration. The FAA provides that an arbitration clause in a "transaction involving commerce ... shall be valid, irrevocable, and enforceable, save uponsuch grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. The FAA further mandates that when the Court is "satisfied that the making of the agreement for arbitration ... is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement." 9 U.S.C. § 4. The FAA establishes a liberal policy favoring arbitration agreements, and any doubts regarding arbitrability should be resolved in favor of arbitration over litigation. See Fazio v. Lehman Bros., Inc., 340 F.3d 386, 392 (6th Cir. 2003). "A central purpose of the FAA is 'to reverse the longstanding judicial hostility to arbitration agreements ... and to place arbitration agreements upon the same footing as other contracts.'" Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991). The FAA requires courts to "rigorously enforce" arbitration agreements. Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221 (1985). Yet, arbitration clauses are subject to the same defenses or bars as other contract provisions. 9 U.S.C. § 4. The Court must ascertain whether the parties agreed to arbitrate the dispute at issue. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985). A party cannot be required to arbitrate any dispute if the party has not agreed to do so. Steelworkers v. Warrior & Gulf Co., 363 U.S. 574, 582 (1960). The FAA does not confer an absolute right to compel arbitration, but only a right to obtain an order directing that "arbitration proceed in the manner provided for in [the parties'] agreement." Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 469 (1989). The "party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration." Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 91 (2000); Gilmer, 500 U.S. at 26.
"Before compelling an unwilling party to arbitrate, the court must engage in a limited review to determine whether the dispute is arbitrable." Javitch v. First Union Secs., Inc., 315 F.3d 619, 624 (6th Cir. 2003). If the "validity of the agreement to arbitrate is 'in issue,' the court must proceed to a trial to resolve the question." Great Earth Cos. v. Simons, 288 F.3d 878, 889 (6th Cir. 2002). The burden is on the party opposing arbitration to show that the agreement is not enforceable. Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91-92, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000). In order to meet this burden, "the party opposing arbitration must show a genuine issue of material fact as to the validity of the agreement to arbitrate, a showing that mirrors the summary judgment standard." Great Earth, 288 F.3d at 889.
"As plaintiffs are opposing arbitration, they must offer "'concrete evidence from which a reasonable juror could' find that this matter should not be compelled to arbitration." Mounts v. Midland Funding LLC, 257 F. Supp. 3d 930, 936 (E.D. Tenn. 2017) quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "[M]ere conclusory and unsupported allegations, rooted in speculation, do not meet that burden." Bell v. Ohio State Univ., 351 F.3d 240, 253 (6th Cir. 2003) (citation omitted).
Once a court determines a suit is referable to arbitration under the terms of a written agreement, the matter shall be stayed "until such arbitration has been had in accordance with the terms of the agreement." 9 U.S.C. § 3 (2003).
In determining whether to grant motions to dismiss or stay proceedings and compel arbitration, courts must apply a four-pronged test: (1) whether the parties agreed to arbitrate; (2) the scope of that agreement; (3) if federal statutory claims are asserted, whether Congressintended those claims to be arbitrated; and (4) whether to stay the remainder of the proceedings pending arbitration. Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir.2000). Ohio law favors the arbitration of disputes. Williams v. Aetna Fin. Co., 83 Ohio St.3d 464, 471 (1998). An agreement to arbitrate will be enforced unless "it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute." Academy of Medicine of Cincinnati v. Aetna Health, Inc., 108 Ohio St.3d 185 (2006).
"The Supreme Court has repeatedly held that contracts to arbitrate federal statutory claims are enforceable unless 'Congress has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.'" Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 90 (2000). Moreover, the United States Supreme Court has repeatedly emphasized its holding that an arbitration forum adequately preserves statutory rights and may satisfactorily adjudicate statutory claims. Circuit City, 532 U.S. at 122-23; Green Tree Fin. Corp., 531 U.S. at 90; Gilmer, 500 U.S. at 35.
Agreed to Arbitrate
"Before compelling an unwilling party to arbitrate, the court must engage in a limited review to determine whether the dispute is arbitrable; meaning that a valid agreement to arbitrate exists between the parties and that the specific dispute falls within the substantive scope of that agreement." Hergenreder v. Bickford Senior Living Group, LLC, 656 F.3d 411, 416 (6th Cir. 2011). "Because arbitration agreements are fundamentally contracts, we review the enforceability of an arbitration agreement according to the applicable state law of contract formation." Id. Applying Ohio law, "a part...
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