Sweeney v. Tractor Supply Co.

390 F. Supp. 3d 1152
CourtDistrict Court, N.D. California
DecidedJune 5, 2019
DocketCase No. 5:18-cv-04848-EJD
StatusPublished
Cited by2 cases

This text of 390 F. Supp. 3d 1152 (Sweeney v. Tractor Supply Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sweeney v. Tractor Supply Co., 390 F. Supp. 3d 1152 (N.D. Cal. 2019).

Opinion

EDWARD J. DAVILA, United States District Judge

Presently before the Court is a Motion to Compel Arbitration and to Dismiss filed by Defendant Tractor Supply Company ("TSC"). Plaintiff Debra Sweeney filed a class action complaint against TSC, her former employer, in Santa Clara Superior Court, and TSC subsequently removed the litigation to federal court. Sweeney seeks to represent a class of similarly situated individuals harmed by TSC's alleged failure include their nondiscretionary bonuses in its calculation of their overtime pay. Under Civil Local Rule 7-1(b), the Court finds this motion suitable for consideration without oral argument. Having considered the Parties' papers, the Court grants the motion to compel, and grants in part and denies in part the motion to dismiss. The action is stayed pending the arbitration.

I. BACKGROUND

Sweeney worked as an hourly, non-exempt employee at a TSC store in Santa Clara County from around early April 2017 until late June 2018. Compl. ¶¶ 7-8. TSC is a retailer of farm and ranch equipment, livestock and pet products, home improvement tools, and sporting goods. Compl. ¶ 10. She, like other non-exempt employees, routinely received nondiscretionary remuneration, including Store Bonuses, in addition to her hourly wage. Compl. ¶ 24. She alleges that her overtime rate of pay did not include her Store Bonuses with her hourly wage in its calculations, and that her wage statements inaccurately identified her overtime pay rate, and gross and net wages. Id. The omission of the Store Bonuses, she alleges, deprived her of the actual rate of overtime pay due to her. Id. She further alleges that when her employment ended, TSC failed to pay her overtime wage that it owed her. Id.

When Sweeney began working at TSC, she completed its onboarding process, which included filling out and executing a *1156number of forms through a computerized, interactive system. See Dkt. 15 ("Williamson Decl.") ¶¶ 4, 7. Sweeney, like other new hires, was able to pause the onboarding process by logging out and then logging back in to resume the process at a later time. Id. ¶ 10. This process included reviewing and agreeing to TSC's California Arbitration Agreement. Id. ¶ 4; Williamson Decl. Ex. D (the "Agreement"). The interactive system presented the Agreement to Sweeney in a text box with a bar to scroll through its 17 paragraphs. Williamson Decl. ¶ 8. At the bottom of the text box, she was presented with the following: "By clicking 'I Agree' below and entering the last 4 digits of my Social Security Number, and clicking 'Submit,' I am electronically signing and agreeing to the Arbitration Agreement, and agree that my electronic signature is as valid as my hand-written signature." Id. The Agreement was "a mandatory term of continued employment," i.e. , she had to accept the Agreement to work for TSC. Agreement ¶ 16. The onboarding system did not allow prospective employees, like Sweeney, to comment on or negotiate the terms of the Agreement. Williamson Decl. Ex. C. On March 11, 2017, Sweeney assented to the Agreement by clicking "I Agree," and entering her name, the last four digits of her Social Security Number and the date. Williamson Decl. ¶ 9. Sweeney does not dispute that she executed the Agreement.

The Agreement provides that "any and all claims or disputes" between TSC and its employees are subject to arbitration. Agreement ¶ 1. It specifically covers "claims for wages, overtime, bonuses, or other compensation due." Id. Arbitration under the Agreement will be administered by an agency agreed upon by the parties, or, if they cannot agree, then by National Arbitration and Mediation ("NAM"), and it will be governed by NAM's Employment Rules and Procedures. Id. ¶ 3. The agreement later states that "[a]propriate limitations on discovery and any rights to additional discovery shall be governed by the Rules of JAMS or the rules of the administering agency selected by the parties." Id. ¶ 8. It specifically provides that parties may subpoena witnesses and documents. Id. ¶ 10.

The Agreement states in bold text, "The parties hereto acknowledge that, by entering into this Agreement, they are waiving their rights to a judicial forum for the determination of any covered Claims or disputes." Agreement. ¶ 17. Under the Agreement, "[t]he Arbitrator shall be an attorney or former judge with substantial experience in deciding employment disputes." Id. ¶ 4. The arbitrator has "the sole and exclusive authority to resolve all Claims between Employer and Employee." Id. ¶ 5. Substantively, arbitrations will be governed by the state and/or federal law that would apply to a judicial action in same state where the arbitration takes place. Id. The arbitrator is able to award any type of legal or equitable relief that would be available in court, including punitive damages if/when appropriate. Id. The arbitrator is required to provide a "reasoned, written decision and award" that includes the findings and conclusions providing the bases for the award. Id. ¶ 14. The decision and award are subject to "confirmation, correction, or vacation" as per the Federal Arbitration Act ("FAA"). Id.

TSC agrees to pay the costs of the arbitration. Id. ¶ 15. TSC may "modif[y] or terminate[ ]" the Agreement "upon thirty (30) days written notice to Employee." Id. ¶ 16. "Any modifications or termination shall be prospective only and shall not apply to any claims that have accrued, are pending in arbitration, or of which the Employer has been given notice by Employee *1157prior to the effective date of the modification or termination." Id.

II. Motion to Compel Arbitration

Sweeney does not contest that she signed the Agreement or that her claims lay within the scope of the Agreement. Rather, she challenges the Agreement itself, contending that (1) it is not valid because TSC did not sign it, (2) that it is procedurally unconscionable, and (3) that it is substantively unconscionable because it is ambiguous as to the rules that govern discovery, it does not provide for sufficient discovery and it is not bilateral.

a. Legal Standard

The FAA provides that "[a] party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction ... for an order directing that such arbitration proceed in the manner provided for in such agreement." 9 U.S.C. § 4. The FAA "sets forth a policy favoring arbitration agreements and establishes that a written arbitration agreement is 'valid, irrevocable, and enforceable.' " Heredia v. Sunrise Senior Living LLC , 2018 WL 5734617, at *2 (N.D. Cal. Oct. 31, 2018) (quoting 9 U.S.C. § 2 ).

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390 F. Supp. 3d 1152, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sweeney-v-tractor-supply-co-cand-2019.