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Smiley v. American Family Care, Inc.

United States District Court, M.D. Tennessee, Nashville Division

July 18, 2019

BRITTANY SMILEY, individually, and on behalf of others similarly situated, Plaintiff,
v.
AMERICAN FAMILY CARE, INC., and AMERICAN FAMILY CARE OF TENNESSEE, LLC, Defendants.

          MEMORANDUM OPINION

          ELI RICHARDSON UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Defendants' Motion to Dismiss and Compel Arbitration. (Doc. No. 18.) For the reasons stated herein, Defendants' Motion will be DENIED, and this action will be STAYED pending arbitration.

         BACKGROUND

         This action arises from a Complaint filed by Plaintiff Brittany Smiley, on behalf of herself and other similarly situated current and former employees, which alleges violations of the Fair Labor Standards Act, 29 U.S.C. § 216(b) (“FLSA”). (Doc. No. 1 at ¶ 2.) Plaintiff alleges that she and other similarly situated current and former employees were not properly compensated overtime wages. (Id.) Plaintiff seeks collective action status on behalf of the class. Plaintiff prays for damages to include unpaid back wages due to Plaintiff and others who may join the suit, costs, and attorney's fees. (Id. at 6.)

         Defendants American Family Care, Inc. and American Family Care of Tennessee, LLC (“AFC”) filed a Motion to Dismiss and Compel Arbitration in accordance with the arbitration agreement signed by the Plaintiff on January 22, 2017 (“Agreement”), which all employees are required to sign as a condition of their employment with AFC. (Doc. No. 18-1 at ¶ 7.) Plaintiff electronically signed the Agreement and could access a copy of the Agreement thereafter. (Id. at ¶¶ 8-9.) The Agreement requires all employees, including Plaintiff, to resolve claims against AFC through arbitration. The Agreement states:

As a condition of my continued employment with American Family Care, Inc. (hereinafter referred to as “AFC”), AFC and Employee agree to settle any controversy, dispute or claim arising out of or relating to my employment with AFC or the cessation of my employment with AFC, by final and binding arbitration administered by the American Arbitration Association under its National Rules for the Resolution of Employment Disputes (then in effect), and a judgment upon the award rendered by the single arbitrator may be entered by any court having jurisdiction thereof. By way of example only, such claims shall include, but not be limited to, claims asserted under any federal, state, or local statutory or common law, such as the Pregnancy Discrimination Act (as amended), the Americans with Disabilities Act (as amended), the Age Discrimination Act (as amended), the Civil Rights Act (as amended), the Rehabilitation Act (as amended), the Immigration Reform and Control Act (as amended), the law of contract and the law of tort. The location of the arbitration hearing shall be in Birmingham, Alabama. AFC and Employee shall share equally all of the administrative costs associated with the filing and prosecution of the Arbitration. Employee understands that he/she shall bear the expense of his/her own legal counsel, if necessary. The arbitrator shall, however, have the power to grant any relief available under the applicable federal or state statute, including attorneys' fees and costs. AFC and Employee acknowledge and understand that employment with AFC involves and affects interstate commerce.

(Doc. No. 18-1, Ex. A.)

         Plaintiff argues that, because the Agreement is devoid of any language referring to class or collective action disputes, the parties did not agree to waive their rights to collective adjudication. (Doc. No. 22 at 1-2.) Moreover, Plaintiff argues that the Agreement is an unconscionable contract of adhesion and that Plaintiff did not knowingly and voluntarily waive her rights to pursue a jury trial when she signed the Agreement. (Id. at 3-8.)

         LEGAL STANDARD

         The Federal Arbitration Act (“FAA”) states that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or inequity for the revocation of any contract.” 9 U.S.C. § 2 (2018). When asked to compel arbitration, a federal court must determine: whether the parties agreed to arbitrate; the scope of the arbitration agreement; whether Congress intended those claims to be nonarbitrable; and if some claims are nonarbitrable, whether to stay the remainder of the proceedings pending arbitration. See Stout v. J.D. Byrider, 228 F.3d 709, 214 (6th Cir. 2000). Additionally, the party seeking to avoid arbitration must show there is a genuine issue of material fact as to the validity or applicability of the arbitration agreement. See Great Earth Cos., Inc. v. Simons, 288 F.3d 878, 889 (6th Cir. 2002). The FAA creates a presumption in favor of arbitration and “places arbitration agreements on equal footing with all other contracts.” Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006); Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 652-53 (6th Cir. 2003); see also Saunders v. Am. Intercontinental Univ., No. 3:14-1045, 2014 WL 5776172, at *3 (M.D. Tenn. Nov. 5, 2014).

         DISCUSSION

         I. PLAINTIFF CANNOT AVOID AN OTHERWISE APPLICABLE REQUIREMENT TO ARBITRATE MERELY BECAUSE THIS IS A COLLECTIVE ACTION.

         Plaintiff asserts that she is not required to arbitrate this action, because it is a collective action. (Doc. No. 22 at 2.) However, the Sixth Circuit has held that an arbitration clause that does not mention class-wide arbitration requires plaintiffs to proceed through arbitration individually. See Huffman v. Hilltop Cos., 747 F.3d 391, 398-99 (6th Cir. 2014); see also Reed Elsevier Inc. ex rel LexisNexis Div. v. Crockett, 734 F.3d 594, 596 (6th Cir. 2013). In Huffman, the plaintiffs attempted to bring a collective action under the FLSA against their employer. See 747 F.3d at 394. The employees signed an arbitration agreement that did not mention class or collective actions. See id. at 388-89. The court held that the arbitration clause did not authorize a class or collective action, so the plaintiffs had to proceed individually. Id.

         Similarly, Plaintiff cannot avoid an otherwise applicable requirement simply because the Agreement does not expressly mention class or collective actions. As in Huffman, Plaintiff alleges an FLSA violation and attempts to bring a collective action, while the Agreement is silent on Plaintiff's ability to do so. Id. Therefore, ...


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