Cabanillas v. 4716 Incorporated

District Court, D. Arizona·Decided August 25, 2021·No. 2:20-cv-00894·Unknown

Opinion

WO

Alexia Cabanillas, et al., No. CV-20-00894-PHX-MTL

Plaintiffs, ORDER

v.

4716 Incorporated, et al.,

Defendants. Before the Court is Defendants 4716 Inc., Frank Zanzucchi, Jason Brown, John Zanzucchi, William V. Zanzucchi, and Paul Johnson’s (collectively, “Defendants”) Renewed Motion to Compel Plaintiffs Cabanillas, Ingram, and Garcia to Binding Arbitration (the “Motion to Compel”).1 (Doc. 43.) Also before the Court is Plaintiffs Alexia Cabanillas, Christen Ingram, and Gabriela Garcia’s (collectively, “Plaintiffs”) Renewed Motion for Conditional Certification and Issuance of Notice Pursuant to Fair Labor Standards Act, 29 U.S.C. § 216(b) (the “Motion for Certification”). (Doc. 46.) The Court will grant the Motion to Compel, deny the Motion for Certification, and dismiss this case.2 1 Defendants’ Motion to Compel incorporates by reference, see LRCiv 7.1(d)(2), the arguments raised in their previous motions to compel (Docs. 8, 19, 28) and their prior replies (Docs. 17, 22, 37). The Court will allow that incorporation in these circumstances. See Ulloa v. Potter, No. CV07-1567-PHX-SMM, 2008 WL 2561939, at *3 n.3 (D. Ariz. June 24, 2008). Consequently, the Court will also consider Plaintiffs’ oppositions to those pleadings. (Docs. 10, 21, 33.) 2 Both parties have fully briefed the issues and oral argument would not have aided the Court’s decisional process. See Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998); see also LRCiv 7.2(f); Fed. R. Civ. P. 78(b). Defendants own and operate Hi Liter Gentlemen’s Club (“Hi Liter”) in Phoenix, Arizona. (Doc. 42 ¶¶ 29.) Plaintiffs are current or former exotic dancers at Hi Liter. (Id. ¶¶ 3, 32.) On Plaintiffs first day of employment, each signed an Entertainment License Agreement (“ELA” or “ELAs”). (See Docs. 17-2, 17-3, 28-1.) The ELAs provide a notice at the beginning of the document, which provides:

NOTICE: THIS IS A LEGAL CONTRACT. DO NOT AGREE TO ALL OF ITS TERMS (AND PLEASE NOTE THAT THIS CONTRACT CONTAINS AN DISPUTES AND CLAIMS, WHICH IS FOUND IN PARAGRAPH 21). IF YOU HAVE ANY QUESTIONS, MANAGER. WE SUGGEST THAT BEFORE SIGNING, YOU HAVE THIS CONTRACT REVIEWED BY AN OF YOUR CHOICE. (See, e.g., Doc. 17-2 at 3.) The ELAs outline the purpose of the agreement and several terms of the agreement, including privacy, entertainment fees, taxes, license fees, and severability. (Id. at 3–6.) Each ELA also includes provisions relating to arbitration and waivers of class and collective actions. (Id. at 6–9.) The non-mandatory arbitration provision reads: NOTE: PROCEEDINGS IN ADMINISTRATIVE AGENCIES, SUCH AS THE NATIONAL LABOR LABOR, AND THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, ARE NOT THIS PARAGRAPH 21. YOU MAY FILE ANY CLAIM YOU WANT WITH ANY ADMINISTRATIVE IN ORDER TO RESOLVE DISPUTES THAT MAY ARISE OUT OF YOU PERFORMING AT THIS “ARBITRATION” PROCESS SET OUT IN THIS SECTION 21. ARBITRATION IS SIMILAR TO A LESS TIME-CONSUMING, AND CAN BE LESS EXPENSIVE THAN GOING TO COURT. IF YOU DO COME UP IN THE FUTURE THROUGH ARBITRATION, YOU MAY EXCLUDE YOURSELF SET OUT IN SECTION 21(H) BELOW.

(Id. at 6.) The other ELAs contain substantially similar language. (See Docs. 17-3, 28-1.) The document then sets out detailed arbitration procedures and allows dancers the opportunity to opt out. (See Doc. 17-2 at 8.) The ELAs end with language stating:

OF, AND HAS FULLY READ, THIS LICENSE AGREEMENT; THAT SHE UNDERSTANDS AND AGREES TO BE BOUND BY ALL OF ITS TERMS; THAT SHE IS UNDER NO DISABILITY THAT OR BEING BOUND TO, THE TERMS OF THIS LICENSE AGREEMENT; THAT NO ONE HAS SIGNING THIS LICENSE AGREEMENT; AND THAT SHE HAD OPPORTUNITIES TO BOTH ASK AGREEMENT’S CONSENT AND HAVE IT REVIEWED BY PERSONS OF HER CHOICE, (Id. at 9.) Plaintiffs filed this action, contending that Defendants misclassified them as independent contractors, rather than employees, and in turn denied them minimum wage and overtime payments in violation of the Fair Labor Standards Act (“FLSA”). (Doc. 1 ¶¶ 3, 5–7.) Based on the ELAs, Defendants filed motions to compel arbitration for Plaintiffs Cabanillas, Ingram, and Garcia. (Docs. 8, 19, 28.) Plaintiff Kristen Ellis then filed a motion for conditional certification under the FLSA.3 (Doc. 29.) This Court then granted Plaintiffs’ request to file an amended complaint and denied those pending motions as moot. (Doc. 41.) Plaintiffs and Defendants have since refiled those same motions. (Docs. 43, 46.) A. Motion to Compel 1. Legal Standard The Federal Arbitration Act (“FAA”) was enacted in response to widespread judicial hostility toward arbitration agreements. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011). Section 2 of the FAA states that “[a] written provision in . . . a 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 this provision of the FAA as both a “liberal federal policy favoring arbitration,” and the “fundamental principle that arbitration is a matter of contract.” AT&T Mobility LLC, 563 U.S. at 339 (citing Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983), and Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 67 (2010)). In line with these principles, courts must place arbitration agreements on equal footing with other contracts and enforce them according to their terms. AT&T Mobility LLC, 563 U.S. at 339 (citations and quotations omitted); Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). The FAA “leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” Chiron Corp., 207 F.3d at 1130 (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985)). The Court’s role under the FAA, therefore, is limited to

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Cabanillas v. 4716 Incorporated, (D. Ariz. 2021).

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