Waltrip v. Pilot Travel Ctrs.

• Decision Date: 08 March 2022
• Docket Number: 21-cv-0643 SMV/KRS
• Court: U.S. District Court — District of New Mexico
• Parties: JUSTON WALTRIP, NATHANIEL COOLEY, CANDELARIO CO-JAIME, JEREMIAH HEISEY, DANIEL MADRID, JAVIER MARTINEZ, MANUEL MORENO, SERGIO OLIVAS, MELVIN SANCHEZ, ANDRES ROCHA, MCKANNIN YOUNG, AND JONATHAN WINCKLER, Plaintiffs, v. PILOT TRAVEL CENTERS, LLC and PILOT CORPORATION, Defendants.

JUSTON WALTRIP, NATHANIEL COOLEY, CANDELARIO CO-JAIME, JEREMIAH HEISEY, DANIEL MADRID, JAVIER MARTINEZ, MANUEL MORENO, SERGIO OLIVAS, MELVIN SANCHEZ, ANDRES ROCHA, MCKANNIN YOUNG, AND JONATHAN WINCKLER, Plaintiffs,
v.
PILOT TRAVEL CENTERS, LLC and PILOT CORPORATION, Defendants.

No. 21-cv-0643 SMV/KRS

United States District Court, D. New Mexico

March 8, 2022

MEMORANDUM OPINION AND ORDER

STEPHAN M. VIDMAR United States Magistrate Judge.

THIS MATTER is before the Court on Defendants' Motion to Compel Arbitration, Motion to Enforce Class Action Waiver, and Motion to Dismiss. [Doc. 24]. The Court will grant Defendants' Motion to Compel Arbitration as well as Defendants' Motion to Enforce Class Action Waiver. The Court will deny Defendants' Motion to Dismiss and stay this action pending completion of arbitration. Plaintiffs' oral Motion for Leave to file a Sur-Reply and Motion for Jury Trial on Arbitrability [Doc. 51] will be denied.

BACKGROUND

The Worker Adjustment Retraining Notification Act (the “WARN Act”) requires most employers with 100 or more employees to provide notification 60 days in advance of plant closings. 29 U.S.C. §§ 2101-109 (2018). Plaintiffs are truck drivers who transported oil within the

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State of New Mexico for Defendant Pilot Travel Centers, LLC. They allege that Defendants failed to provide sufficient advance written notice before terminating their employment as required by the WARN Act. [Doc. 1]. They also seek certification as a class under Federal Rule of Civil Procedure 23. Id.

When Plaintiffs applied for employment with Defendants, they executed Mediation and Arbitration Agreements (the “MAAs”) which provided for mandatory arbitration of all disputes arising out of their employment. The MAAs contained class action waivers. Defendants ask the Court to compel arbitration and enforce the class action waivers [Doc. 24]. Finally, Defendants request dismissal of Plaintiffs' claims once they are referred to arbitration. Id.

DISCUSSION

Section 2 of the Federal Arbitration Act (the “FAA” or the “Act”) provides that a written agreement to arbitrate “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. “This provision reflects ‘a liberal federal policy favoring arbitration agreements,' and creates ‘a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act.'” BOSC, Inc. v. Bd. of Cnty. Comm'rs of Cnty. of Bernalillo, 853 F.3d 1165, 1170 (10th Cir. 2017) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). “A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition” a district court “for an order directing that such arbitration proceed in the manner provided for in such agreement.” 9 U.S.C. § 4. “But before the Act's heavy hand in favor of arbitration swings into play, the parties themselves must agree to have their disputes arbitrated.” Howard v. Ferrellgas Partners, L.P., 748 F.3d 975, 977 (10th Cir. 2014).

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Courts evaluate whether the parties agreed to arbitrate in two steps. The Court must first assess “whether [the agreement at issue] constitutes a valid agreement to arbitrate” and then “whether the asserted dispute falls within the scope of the arbitration clause.” Soc'y of Pro. Eng'g Emps. in Aerospace, Int'l Fed'n of Pro. & Tech. Emps., Loc. 2001 v. Spirit Aerosystems, Inc., 681 Fed.Appx. 717, 721 (10th Cir. 2017) (unpublished) (citing Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 299 (2010)). The first question “must always be decided by a court . . . .” Fedor v. United Healthcare, Inc., 976 F.3d 1100, 1105 (10th Cir. 2020). The second question must also be decided by a court unless the arbitration agreement includes a clause that clearly and unmistakably delegates it to the arbitrator. Dish Network L.L.C. v. Ray, 900 F.3d 1240, 1244 (10th Cir. 2018).

I. The MAAs are Valid Agreements to Arbitrate.

On a motion to compel arbitration, the moving party “bears the initial burden of presenting evidence sufficient to demonstrate the existence of an enforceable agreement; if it does so, the burden shifts to the nonmoving party to raise a genuine dispute of material fact regarding the existence of an agreement.” Bellman v. i3Carbon, LLC, 563 Fed.Appx. 608, 612 (10th Cir. 2014) (unpublished). “[T]his framework is similar to summary judgment practice.” Hancock v. Am. Tel. & Tel. Co., 701 F.3d 1248, 1261 (10th Cir. 2012) (abrogated on other grounds by Atl. Marine Constr. Co. v. U.S. Dist. Ct. for the W. Dist. of Texas, 134 S.Ct. 568 (2013)).

Like in the summary judgment context, a party must offer admissible evidence to prove the existence of an agreement. Clowdis v. Colorado Hi-Tec Moving & Storage, Inc., No. 11-CV-00036-CMA-KMT, 2011 WL 5882191, at *8 (D. Colo. Nov. 3, 2011) (unreported), adopted, 2012 WL 895701 (citing World of Sleep, Inc. v. La-Z-Boy Chair Co., 756 F.2d 1467, 1474 (10th

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Cir. 1985) (only admissible evidence may be considered when ruling on a motion for summary judgment)). When considering such evidence, the Court draws all reasonable inferences in favor of the nonmoving party. Hancock, 701 F.3d at 1261. While a general presumption in favor of arbitration applies when interpreting an arbitration agreement, “this presumption disappears when the parties dispute the existence of a valid arbitration agreement.” Dumais v. Am. Golf Corp., 299 F.3d 1216, 1220 (10th Cir. 2002).

A material fact is one that “might affect the outcome of the suit under governing law” and a dispute is “genuine” if ‘reasonable jury could return a verdict for the nonmoving party.'” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.'” Finlinson v. Millard Cty., 455 F.Supp.3d 1232, 1238 (D. Utah 2020) (quoting Scott v. Harris, 550 U.S. 372, 380 (2007)). However, if the nonmoving party shows that there is a genuine dispute of material fact related to the formation of an agreement to arbitrate, the Court must hold a summary trial to decide whether an agreement exists. Bellman, 563 Fed.Appx. at 612. Once the facts are clear, the courts apply state-law contract principles to determine whether the parties agreed to arbitrate. Hancock, 701 F.3d at 1255; Salazar v. Citadel Commc'ns Corp., 2004-NMSC-013, ¶ 8, 135 N.M. 447, 90 P.3d 466.

A. Defendants' Evidence Shows Valid Agreements to Arbitrate.

In support of the Motion, Defendants submitted an affidavit by Defendants' records custodian, Katrice Yancey. They also proffered the MAAs and several other documents. The MAAs take two forms, one used for Plaintiffs Cooley, Cordero-Jaime, Heisey, Madrid, Martinez,

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Moreno, Rocha, Waltrip, Winckler, and Young (“MAA 1”)^[1] and another used for Plaintiffs Olivas and Sanchez (“MAA 2”).

MAA 1 provides, in relevant part:

Except as otherwise provided in this Agreement, PFJ and Employee hereby consent to the resolution of all disputes covered by this Agreement in accordance with the [American Arbitration Association's] Rules. This Agreement applies to any dispute arising out of or related to Employee's employment with PFJ or termination of employment regardless of its date of accrual and survives after the employment relationship terminates.

[Doc. 24-1] at 2. On the signature page are the following statements:

EACH PARTY TO THIS MEDIATION AND ARBITRATION AGREEMENT ACKNOWLEDGES CAREFULLY READING THIS AGREEMENT, UNDERSTANDING ITS TERMS, AND ENTERING INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY PROMISES OR REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS AGREEMENT ITSELF.

EACH PARTY FURTHER ACKNOWLEDGES HAVING THE OPPORTUNITY TO DISCUSS THIS MEDIATION AND ARBITRATION AGREEMENT WITH PERSONAL LEGAL COUNSEL AND HAS USED THAT OPPORTUNITY TO THE EXTENT DESIRED.

Id. at 6. Except for Plaintiff Rocha, Plaintiffs wrote or printed their names on, or electronically signed, the signature page of the MAAs.

MAA 1 includes a provision stating that the disputes to be arbitrated “include without limitation disputes arising out of or relating to interpretation or application of this Agreement, including the enforceability, revocability or validity of the Agreement or any portion of the

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Agreement (with the exception of the Class Action Waiver described in Paragraph 8 . . . .).” Id. Paragraph 8 provides, among other things discussed below, that “[d]isputes regarding the validity or enforceability of the Class Action Waiver may be resolved only by a civil court of competent jurisdiction and not by an arbitrator.” Id.

MAA 2 is substantially the same as MAA 1, except for three key differences. First, MAA 2 does not state clearly that arbitration will be subject to the American Arbitration Association's rules.^[2] [Doc. 46-1] at 35. Instead, MAA 2 states, “[T]he Arbitrator has exclusive authority to resolve any dispute relating to the applicability or enforceability of this Agreement.” [Doc. 24-2] at ¶ 17. Second, MAA 2 provides that

[a]ny Claim [as defined in MAA 2] shall be filed no later than one (1) year from the date the Claim should have reasonably been discovered or one (1) year from the last date of employment, whichever comes first. Employee agrees to waive its right to file any claims which Employee fails to file within the above stated time period.

Id. at 3. Third, MAA 2 does not address class or collective actions.

Defendants also submitted three other types of documents to show that Plaintiffs agreed to arbitrate their disputes. These documents are (1) applications for employment with Pilot signed by Plaintiffs (the “Applications”), (2) Plaintiffs' acknowledgments...