20/20 Commc'ns, Inc. v. Blevins

357 F. Supp. 3d 566
CourtDistrict Court, N.D. Texas
DecidedJanuary 8, 2019
DocketACTION NO. 4:16-CV-810-Y
StatusPublished
Cited by1 cases

This text of 357 F. Supp. 3d 566 (20/20 Commc'ns, Inc. v. Blevins) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
20/20 Commc'ns, Inc. v. Blevins, 357 F. Supp. 3d 566 (N.D. Tex. 2019).

Opinion

TERRY R. MEANS, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Before the Court is Defendants' motion to dismiss for lack of subject-matter jurisdiction (doc. 67). The motion requires this Court to decide whether this Court or an arbitrator should determine whether the underlying arbitration must proceed as a class arbitration or remain as eighteen individual arbitrations. After review of the arbitration agreement at issue, the parties' briefs, and relevant case law, the Court GRANTS the motion based upon the following rationale.

II. FACTUAL & PROCEDURAL BACKGROUND

20/20 Communications, Inc. ("20/20"), is a national direct-sales and marketing company incorporated in the state of Delaware, with its principal place of business located in Fort Worth, Texas. (Compl. (doc. 1) 3; Defs.' Mot. to Dismiss (doc. 68) 7.) 20/20 employs numerous field sales managers to work on a variety of its campaigns. (Compl. (doc. 1) 5; Defs.' Mot. to Dismiss (doc. 68) 7.) 20/20 compels its new hires to sign both an employment agreement and a "Mutual Arbitration Agreement" ("MAA") upon employment. (Id. )

The MAA acts as the sole agreement between the parties regarding dispute resolution. The MAA's various clauses that are relevant to the present motion are detailed below. At the outset, the MAA stipulates that the parties will submit all disputes and claims to arbitration:

Employee and Employer ... both agree that all disputes and claims between them, including those related to Employee's employment with Employer and any separation therefrom ... shall be determined exclusively by final and binding arbitration before a single, neutral arbitrator ... and that judgment upon the arbitrator's award may be entered in any court of competent jurisdiction.... Employer and Employee voluntarily waive all rights to trial in court before a judge or jury on all claims between them.

(Defs.' App. to Mot. to Dismiss (doc. 69) 87) (emphasis added.) With few exceptions, the claims subject to arbitration under the *571MAA include, without limitation, claims for:

discrimination, harassment, or retaliation; wages, overtime, benefits or other compensation; breach of any express or implied contract; violation of public policy; personal injury; and tort claims including defamation, fraud, and emotional distress.

(Id. ) Under its terms, both the Federal Arbitration Act, 9 U.S.C. § 1 et. seq., and Texas law govern actions to enforce the MAA, compel arbitration, or enforce or vacate an arbitration award. (Id. )

The MAA goes on to detail the scope of the arbitrator's authority and the applicable rules governing any arbitration. The arbitrator is limited to determining the disputed matter consistent with controlling law and the MAA. (Id. at 88.) In doing so, the arbitrator will apply the American Arbitration Association's ("AAA") National Rules for the Resolution of Employment Disputes except where these rules are inconsistent with the agreement. (Id. ) Should the parties disagree over issues relating to the MAA's formation or meaning, "the arbitrator will hear and resolve those arbitrability issues." (Id. ) It also contains an integration clause providing that "this is the complete agreement between the parties on the subject of arbitration and supersedes any other understandings on the subject." (Id. at 89.)

Last, the MAA addresses the procedures, or lack thereof, for combining arbitration demands into a collective proceeding:

[T]he parties agree that this Agreement prohibits the arbitrator from consolidating the claims of others into one proceeding to the maximum extent permitted by law. This means that the arbitrator will hear only individual claims and does not have the authority to fashion a proceeding as a class or collective action or to award relief to a group of employees in one proceeding, to the maximum extent permitted by law .... Employer may use this Agreement to defeat any attempt by Employee to file or join other employees in a class, collective, or joint action lawsuit or arbitration, but the Employer shall not retaliate against Employee for any such attempt.

(Pl's. App. in Supp. of Response to Defs. Mot. to Dismiss (doc. 71) 10) (emphasis added.)

Between April 11 and May 13, 2016, eighteen of 20/20's field sales managers individually filed for arbitration of their claims that 20/20 had failed to pay overtime compensation--a violation of the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq. (Defs.' Mot. to Dismiss (doc. 68) 11.) Although each plaintiff brought his claims individually, each demand for arbitration indicated that they sought an "arbitrator with knowledge of employment law, specifically the FLSA, collective actions under the FLSA and the National Labor Relations Act." (Defs.' App. to Mot. to Dismiss (doc. 69) 21-38) (emphasis added.)

On August 5, 2016, 20/20 asserted that one of the defendants filed an amended claim asserting class/collective action claims for arbitration following an initial case-management conference. (Id. at 40.) In that amended claim, the claimant included a collective-action allegation that the arbitrator recognized as causing a conflict with the MAA.1 (Id. at 43.) The arbitrator ordered 20/20 to move to seek a threshold determination that the arbitration *572could proceed as a collective action. (Id. )

20/20 then filed the current action with the Court on August 31, 2016. (Compl. (doc. 1).) 20/20 sought two declaratory judgments declaring that: 1) the Court, not an arbitrator, was the proper adjudicative body to decide whether class arbitration was available under the MAA; and 2) class arbitration was unavailable under the MAA in this instance. (Id. at 2.) 20/20 also requested injunctive relief enjoining Defendants from submitting the class-arbitration issue to any arbitrator and precluding them from pursuing class arbitration of claims addressed in the MAA. (Id. )

In September 2016, 20/20 moved for entry of a preliminary injunction on the rationale that it would be forced to defend eighteen distinct class arbitrations brought by Defendants throughout the country, which would amount to an irreparable injury. The Court disagreed and denied 20/20's motion in February 2017. (Order Den. Mot. for Prelim. Inj. (doc. 52).) In doing so, the Court construed the MAA's delegation clause to stipulate that the parties contemplated that particular issues would be decided by an arbitrator and that class arbitrations were a plausible consideration.2 (Order Den. Mot. for Prelim. Inj. (doc. 52) 4.) The Court also applied Fifth Circuit precedent in circumstances where, as here, parties have incorporated the AAA rules into their arbitration agreements to indicate that they agreed to arbitrate arbitrability. (Id. )

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Related

20/20 Communications, Inc. v. Randall Blevins, et
930 F.3d 715 (Fifth Circuit, 2019)

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Bluebook (online)
357 F. Supp. 3d 566, Counsel Stack Legal Research, https://law.counselstack.com/opinion/2020-commcns-inc-v-blevins-txnd-2019.