1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Natasha York, et al., No. CV-21-01130-PHX-JJT
10 Plaintiffs, ORDER
11 v.
12 Dave & Buster's Incorporated, et al.,
13 Defendants. 14 15 16 At issue is Defendants Dave & Buster’s, Inc. and Dave & Buster’s Management 17 Corp.’s Motion to Compel Arbitration, Strike Class and Collective Claims, and Stay 18 Proceedings Pending Plaintiffs’ Individual Arbitrations (Doc. 21, Mot.), to which named 19 Plaintiffs Natasha York and Gery Pearson filed a Response (Doc. 29, Resp.) and 20 Defendants filed a Reply (Doc. 30, Reply). 21 I. BACKGROUND 22 Plaintiff Natasha York began working for Defendants’ entertainment and dining 23 venue in Glendale, Arizona on or around July 30, 2019. As part of her employment intake 24 process, she electronically signed Defendants’ 2018 version of an Arbitration Agreement, 25 by which she agreed with Defendants to arbitrate any claims arising out of her employment 26 under the rules of the American Arbitration Association (AAA) on an individual basis, 27 waiving any right for a claim to be heard as a collective action. (Doc. 22, Mot. Ex. 1, 28 Walters Decl. Exs. C, D.) York’s employment terminated on February 2, 2020. 1 Plaintiff Gery Pearson began working for Defendants’ El Paso, Texas venue in 2 March 2016. As part of her employment intake process, she electronically signed 3 Defendants’ 2016 version of an Arbitration Agreement, which like the 2018 version 4 provides that she agreed with Defendants to arbitrate any claims arising out of her 5 employment under the rules of the AAA on an individual basis, waiving any right for a 6 claim to be heard as a collective action. (Mot. Ex. 1, Walters Decl. Exs. C, D.) Pearson’s 7 employment terminated on November 8, 2020. 8 Plaintiffs filed a Collective Action and Class Action Complaint on June 29, 2021, 9 raising claims against Defendants for failure to pay the minimum wage under (1) the Fair 10 Labor Standards Act (FLSA), 29 U.S.C. § 206, and (2) the Arizona Minimum Wage Act 11 (AMWA), A.R.S. § 23-363. (Doc. 1, Compl.) Defendants now move to compel arbitration 12 under the Arbitration Agreements, strike the collective and class action claims as brought 13 in contravention of the Arbitration Agreements, and stay these proceedings pending the 14 results of the individual Plaintiffs’ arbitrations. 15 II. LEGAL STANDARD 16 To resolve a motion to compel arbitration under the Federal Arbitration Act 17 (“FAA”), 9 U.S.C. § 1 et seq., a district court must resolve two gateway issues: (1) whether 18 the parties entered into a valid agreement to arbitrate, and (2) whether the arbitration 19 agreement encompasses the dispute at issue. Lifescan, Inc. v. Premier Diabetic Services, 20 Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). Where the arbitration agreement is a part of a 21 more extensive contract between the parties, “the sole question is whether the arbitration 22 clause at issue is valid and enforceable under § 2 of the [FAA],” and “federal courts may 23 not address the validity or enforceability of the contract as a whole.” Ticknor v. Choice 24 Hotels Int’l, Inc., 265 F.3d 931, 937 (9th Cir. 2001). The FAA “mandates that federal courts 25 rigorously enforce agreements to arbitrate.” Coup v. Scottsdale Plaza Resort, LLC, 823 26 F. Supp. 2d 931, 940 (D. Ariz. 2011) (citing Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 27 213, 221 (1985)). “By its terms, the [FAA] leaves no place for the exercise of discretion 28 by a district court, but instead mandates that district courts shall direct the parties to 1 arbitration on issues as to which an arbitration agreement has been signed.” Id. (internal 2 quotation and citations omitted). “In construing the terms of an arbitration agreement, the 3 district court applies general state-law principles of contract interpretation, while giving 4 due regard to federal policy in favor of arbitration by resolving ambiguities as to the scope 5 of arbitration in favor of arbitration.” Id. (quoting Wagner v. Stratton Oakmont, Inc., 83 6 F.3d 1046, 1049 (9th Cir. 1996)). 7 III. ANALYSIS 8 In the Response to Defendants’ Motion, Plaintiffs do not dispute that York entered 9 into a valid, enforceable Arbitration Agreement with a class and collective action waiver. 10 Accordingly, the Court will grant Defendants’ Motion to Compel Arbitration with regard 11 to York. 12 As for Pearson, Plaintiffs argue that the Arbitration Agreement does not contain a 13 signature on behalf of Defendants and is thus not a valid, enforceable agreement. (Resp. at 14 14-18.) As Defendants point out, there is no dispute Pearson electronically signed and 15 agreed to the Arbitration Agreement. With regard to Defendants’ signature, Defendants 16 argue both that Texas law does not require their signature as a condition precedent to the 17 formation of an arbitration agreement that an employer proposed to an employee as a 18 condition of employment, see Wright v. Hernandez, 49 S.W. 744, 756-61 (Tex. App. 2015), 19 and that the form and text of the Arbitration Agreement itself indicate that Defendants’ 20 signature was not required. (Reply at 5-9.) 21 As compelling as Defendants’ arguments are, the Court need not resolve this 22 question, because the Arbitration Agreement (which Pearson signed in agreement) 23 provides that the arbitrator “shall have exclusive authority to resolve any dispute relating 24 to . . . formation of this Agreement.” (Mot. Ex. 1, Walters Decl. Ex. C at 14.) The Supreme 25 Court has stated that “parties may agree to have an arbitrator decide not only the merits of 26 a particular dispute but also ‘gateway’ questions of ‘arbitrability,’ such as whether the 27 parties have agreed to arbitrate or whether their agreement covers a particular controversy.” 28 Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 529 (2019). Because 1 Pearson agreed to delegate the question of arbitrability to the arbitrator, the Court will grant 2 Defendants’ Motion to Compel Arbitration with regard to Pearson. 3 Plaintiffs make the additional argument that because Defendants did not move to 4 compel arbitration for the 19 purported opt-in Plaintiffs (see Doc. 8), the Court should deny 5 Defendants’ Motion to Compel Arbitration. (Resp. at 4-7.) Relatedly, Plaintiffs argue that 6 the 2014 arbitration agreement is unenforceable, even though neither named Plaintiff 7 signed that agreement so it is not before the Court. (Resp. at 7-14.) These arguments are 8 built on improper premises. 9 To begin with, the named Plaintiffs—York and Pearson—brought a collective and 10 class action to this Court in direct contravention of the Arbitration Agreements they signed, 11 which contained express collective and class action waivers. It is unclear to the Court how 12 the named Plaintiffs are proper plaintiffs in this collective action, having waived their right 13 to bring such an action. Indeed, upon this Order compelling York and Pearson to individual 14 arbitrations, the lawsuit is left without lead plaintiffs capable of a collective action. The 15 purported opt-in Plaintiffs are attempting to use the tools of a collective action to become 16 a part of this lawsuit that was in essence improperly brought as a collective action.
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Natasha York, et al., No. CV-21-01130-PHX-JJT
10 Plaintiffs, ORDER
11 v.
12 Dave & Buster's Incorporated, et al.,
13 Defendants. 14 15 16 At issue is Defendants Dave & Buster’s, Inc. and Dave & Buster’s Management 17 Corp.’s Motion to Compel Arbitration, Strike Class and Collective Claims, and Stay 18 Proceedings Pending Plaintiffs’ Individual Arbitrations (Doc. 21, Mot.), to which named 19 Plaintiffs Natasha York and Gery Pearson filed a Response (Doc. 29, Resp.) and 20 Defendants filed a Reply (Doc. 30, Reply). 21 I. BACKGROUND 22 Plaintiff Natasha York began working for Defendants’ entertainment and dining 23 venue in Glendale, Arizona on or around July 30, 2019. As part of her employment intake 24 process, she electronically signed Defendants’ 2018 version of an Arbitration Agreement, 25 by which she agreed with Defendants to arbitrate any claims arising out of her employment 26 under the rules of the American Arbitration Association (AAA) on an individual basis, 27 waiving any right for a claim to be heard as a collective action. (Doc. 22, Mot. Ex. 1, 28 Walters Decl. Exs. C, D.) York’s employment terminated on February 2, 2020. 1 Plaintiff Gery Pearson began working for Defendants’ El Paso, Texas venue in 2 March 2016. As part of her employment intake process, she electronically signed 3 Defendants’ 2016 version of an Arbitration Agreement, which like the 2018 version 4 provides that she agreed with Defendants to arbitrate any claims arising out of her 5 employment under the rules of the AAA on an individual basis, waiving any right for a 6 claim to be heard as a collective action. (Mot. Ex. 1, Walters Decl. Exs. C, D.) Pearson’s 7 employment terminated on November 8, 2020. 8 Plaintiffs filed a Collective Action and Class Action Complaint on June 29, 2021, 9 raising claims against Defendants for failure to pay the minimum wage under (1) the Fair 10 Labor Standards Act (FLSA), 29 U.S.C. § 206, and (2) the Arizona Minimum Wage Act 11 (AMWA), A.R.S. § 23-363. (Doc. 1, Compl.) Defendants now move to compel arbitration 12 under the Arbitration Agreements, strike the collective and class action claims as brought 13 in contravention of the Arbitration Agreements, and stay these proceedings pending the 14 results of the individual Plaintiffs’ arbitrations. 15 II. LEGAL STANDARD 16 To resolve a motion to compel arbitration under the Federal Arbitration Act 17 (“FAA”), 9 U.S.C. § 1 et seq., a district court must resolve two gateway issues: (1) whether 18 the parties entered into a valid agreement to arbitrate, and (2) whether the arbitration 19 agreement encompasses the dispute at issue. Lifescan, Inc. v. Premier Diabetic Services, 20 Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). Where the arbitration agreement is a part of a 21 more extensive contract between the parties, “the sole question is whether the arbitration 22 clause at issue is valid and enforceable under § 2 of the [FAA],” and “federal courts may 23 not address the validity or enforceability of the contract as a whole.” Ticknor v. Choice 24 Hotels Int’l, Inc., 265 F.3d 931, 937 (9th Cir. 2001). The FAA “mandates that federal courts 25 rigorously enforce agreements to arbitrate.” Coup v. Scottsdale Plaza Resort, LLC, 823 26 F. Supp. 2d 931, 940 (D. Ariz. 2011) (citing Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 27 213, 221 (1985)). “By its terms, the [FAA] leaves no place for the exercise of discretion 28 by a district court, but instead mandates that district courts shall direct the parties to 1 arbitration on issues as to which an arbitration agreement has been signed.” Id. (internal 2 quotation and citations omitted). “In construing the terms of an arbitration agreement, the 3 district court applies general state-law principles of contract interpretation, while giving 4 due regard to federal policy in favor of arbitration by resolving ambiguities as to the scope 5 of arbitration in favor of arbitration.” Id. (quoting Wagner v. Stratton Oakmont, Inc., 83 6 F.3d 1046, 1049 (9th Cir. 1996)). 7 III. ANALYSIS 8 In the Response to Defendants’ Motion, Plaintiffs do not dispute that York entered 9 into a valid, enforceable Arbitration Agreement with a class and collective action waiver. 10 Accordingly, the Court will grant Defendants’ Motion to Compel Arbitration with regard 11 to York. 12 As for Pearson, Plaintiffs argue that the Arbitration Agreement does not contain a 13 signature on behalf of Defendants and is thus not a valid, enforceable agreement. (Resp. at 14 14-18.) As Defendants point out, there is no dispute Pearson electronically signed and 15 agreed to the Arbitration Agreement. With regard to Defendants’ signature, Defendants 16 argue both that Texas law does not require their signature as a condition precedent to the 17 formation of an arbitration agreement that an employer proposed to an employee as a 18 condition of employment, see Wright v. Hernandez, 49 S.W. 744, 756-61 (Tex. App. 2015), 19 and that the form and text of the Arbitration Agreement itself indicate that Defendants’ 20 signature was not required. (Reply at 5-9.) 21 As compelling as Defendants’ arguments are, the Court need not resolve this 22 question, because the Arbitration Agreement (which Pearson signed in agreement) 23 provides that the arbitrator “shall have exclusive authority to resolve any dispute relating 24 to . . . formation of this Agreement.” (Mot. Ex. 1, Walters Decl. Ex. C at 14.) The Supreme 25 Court has stated that “parties may agree to have an arbitrator decide not only the merits of 26 a particular dispute but also ‘gateway’ questions of ‘arbitrability,’ such as whether the 27 parties have agreed to arbitrate or whether their agreement covers a particular controversy.” 28 Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 529 (2019). Because 1 Pearson agreed to delegate the question of arbitrability to the arbitrator, the Court will grant 2 Defendants’ Motion to Compel Arbitration with regard to Pearson. 3 Plaintiffs make the additional argument that because Defendants did not move to 4 compel arbitration for the 19 purported opt-in Plaintiffs (see Doc. 8), the Court should deny 5 Defendants’ Motion to Compel Arbitration. (Resp. at 4-7.) Relatedly, Plaintiffs argue that 6 the 2014 arbitration agreement is unenforceable, even though neither named Plaintiff 7 signed that agreement so it is not before the Court. (Resp. at 7-14.) These arguments are 8 built on improper premises. 9 To begin with, the named Plaintiffs—York and Pearson—brought a collective and 10 class action to this Court in direct contravention of the Arbitration Agreements they signed, 11 which contained express collective and class action waivers. It is unclear to the Court how 12 the named Plaintiffs are proper plaintiffs in this collective action, having waived their right 13 to bring such an action. Indeed, upon this Order compelling York and Pearson to individual 14 arbitrations, the lawsuit is left without lead plaintiffs capable of a collective action. The 15 purported opt-in Plaintiffs are attempting to use the tools of a collective action to become 16 a part of this lawsuit that was in essence improperly brought as a collective action. For 17 these reasons, the Court will grant Defendants’ request to strike the class and collective 18 action claims in this matter. See Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1415-19 19 (2019). 20 Even if the claims of the opt-in plaintiffs are somehow properly before the Court 21 based on the lawsuit of Plaintiffs who agreed not to bring a collective action, the Court also 22 finds no merit to Plaintiffs’ argument that the opt-in plaintiffs are now not compelled to 23 arbitrate because Defendants did not include them in their Motion to Compel Arbitration 24 directed at the named Plaintiffs, York and Pearson. Plaintiffs provide no legal support for 25 the proposition that by not addressing the purported opt-in plaintiffs in their Motion, 26 Defendants somehow waived the right to seek a court order compelling those plaintiffs to 27 arbitration. Furthermore, the absence of a motion to compel arbitration does not obviate 28 the enforceability of the underlying arbitration agreements the purported opt-in plaintiffs |} may have agreed to. More generally, a court order compelling compliance with the terms 2|| of a valid, enforceable contract is not required for a contracting party to comply with the 3 || contract; otherwise, the operation of the Court would grind to a halt. A failure to comply 4|| with a valid and enforceable arbitration agreement may only be premised on a meritorious 5|| defense to the validity or enforceability of the agreement.! 6 Defendants ask the Court to stay this matter pending the outcome of the individual 7\| arbitrations of York and Pearson. Under the Federal Arbitration Act, 9 U.S.C. § 3, the Court 8 || is directed to enter a stay to litigation after compelling arbitration under a valid arbitration 9|| agreement if a party requests such a stay. The Court will thus grant Defendants’ request, || but not indefinitely. 11 IT IS THEREFORE ORDERED granting Defendants Dave & Buster’s, Inc. and || Dave & Buster’s Management Corp.’s Motion to Compel Arbitration, Strike Class and 13 || Collective Claims, and Stay Proceedings Pending Plaintiffs’ Individual Arbitrations (Doc. 21). 15 IT IS FURTHER ORDERED compelling Plaintiffs York and Pearson to 16 || individual arbitrations under the terms of the Arbitration Agreements they signed. 17 IT IS FURTHER ORDERED striking the class and collective claims in this 18 |} matter. 19 IT IS FURTHER ORDERED staying this matter for a limited period of time, to || be determined by the parties’ progress in engaging in and completing the arbitration process. The parties shall file a joint status report by December 2, 2022, or within one week of a final arbitration decision, whichever is sooner. 23 Dated this 3rd day of June, 2022. CN ‘wala 25 wefhlee— United StatesDistrict Judge 26 27 | Here, at the very least, York has no such defense.
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