United States District Court, M.D. Tennessee, Nashville Division
WILLIAM FINCHUM, NICHOLETTE MATTHEWS, ALECIA MORROW, and KEELON ELLIS, Plaintiffs,
SPRING COMMUNICATIONS HOLDING, INC., Defendant.
MEMORANDUM OPINION AND ORDER
WAVERLY D CRENSHAW, JR., CHIEF UNITED STATES DISTRICT JUDGE
are all former employees of Spring Communications Holding,
Inc. During the course of their employment, each Plaintiff
signed the “GameStop C.A.R.E.S. Rules of Dispute
Resolution Program Including Arbitration.” (Doc. No.
19-2 at 6). GameStop C.A.R.E.S. is “an agreement to
arbitrate pursuant to the Federal Arbitration Act, 9 U.S.C.
Section 1-4.” (Id. at 7). “Covered
Claims” are defined to include employment
discrimination, harassment, retaliation, along with federal
and state law relating to wages. (Id. at 8).
the arbitration agreement, Plaintiffs filed suit in this
Court under the Fair Labor Standards Act of 1938
(“FLSA”), 29 U.S.C. §§ 201 et
seq. claiming that they were not paid time and a half
for overtime work. Defendant now moves to dismiss or stay
because of the arbitration clause.
is strong federal policy in favor of arbitration of disputes.
O.J. Distrib., Inc. v. Hornell Brewing Co., 340 F.3d
345, 356 (6th Cir. 2003); Decker v. Merrill Lynch,
Pierce, Fenner & Smith, Inc., 205 F.3d 906,
911 (6th Cir. 2000). “Because of the strong presumption
in favor of arbitration, waiver of the right to arbitration
is not to be lightly inferred.” Glazer v. Lehman
Bros., 394 F.3d 444, 450 (6th Cir. 2005); accord
Highlands Wellmont Health Network, Inc. v. John Deere Health
Plan, Inc., 350 F.3d 568, 573 (6th Cir. 2003). In fact,
“any doubts concerning the scope of arbitrable issues
should be resolved in favor of arbitration, whether the
problem at hand is the construction of the contract language
itself or an allegation of waiver, delay, or a like defense
to arbitrability.” Moses H. Cone Mem'l Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983).
the strong preference favoring arbitrations, Plaintiffs
object to enforcing the agreement in this case on three
grounds. None are persuasive, particularly because the
“party resisting arbitration bears the burden of
proving that the claims at issue are unsuitable for
arbitration.” Green Tree Fin. Corp.-Alabama v.
Randolph, 531 U.S. 79, 91 (2000).
Plaintiffs argue that Defendant is not a party to the
arbitration agreement it is attempting to enforce. As
support, Plaintiffs point to language in the agreement
stating that “GameStop C.A.R.E.S. covers all GameStop
employees in the U.S. and Puerto Rico, including employees of
GameStop, Inc. GameStop Texas, Ltd., and Sunrise
Publications, Inc.” (Doc. No. 19-2 at 5). Because
Spring Communications in not mentioned in this clause,
Plaintiffs argue it cannot compel arbitration. They analogize
the facts in this case to those in Weckesser v. Knight
Enterprises S.E., LLC, 735 Fed.Appx. 816 (4th Cir.
2018), a Fourth Circuit unpublished opinion.
Weckesser, the court held Knight Enterprises could
not enforce an arbitration agreement where “[t]he text
of the [arbitration agreement] doesn't show a clear
intent to make Knight Enterprises a third-party
beneficiary” to the contract between Patrick Weckesser
and Jeffrey Knight. Id. at 824. Here, in contrast,
there was a clear intent to make Spring Holding
Communications - a GameStop subsidiary - a party to the
arbitration agreement. GameStop C.A.R.E.S. specifically
defines “GameStop” and the “Company”
to “mean GameStop, Inc., GameStop Texas, LTD and
Sunrise Publications, Inc., and all present and past
subsidiaries, and affiliated
companies[.]” (Doc. No. 19-2 at 20) (emphasis
added). Given this language, Weckesser is
inapposite, and the facts in this case are much closer to
those presented in Broaddus v. Rivergate Acquisitions,
Inc., No. 3:08-0805, 2008 WL 4525410 (M.D. Tenn. Oct. 1,
2008) and Aldrich v. University of Phoenix, Inc.,
No. 3:15-CV-00578-JHM, 2016 WL 915287 (W.D. Ky. Mar. 4, 2016)
Broaddus, Judge Todd Campbell found plaintiff's
discrimination and retaliation claims against his former
employer Rivergate Acquisitions, Inc. to be arbitrable under
an agreement that defined the “Company” to
include “its owners, directors, officers, managers,
employees, [and] agents.” 2008 WL 4525410 at *2.
Because the “Company” was the parent of
“its agent and subsidiary corporation” Rivergate
Acquisitions, Inc., plaintiff's claims were subject to
arbitration. In Aldrich, the University of Phoenix
was covered by an arbitration agreement as a subsidiary of
the Apollo Group where the agreement defined the
“Company” as including “Apollo Group, Inc.
and its subsidiaries.” 2016 WL 915287, at *7. Just as
in Broaddus and Aldrich, Spring
Communications is a subsidiary and party to the arbitration
Plaintiffs argue the agreement to arbitrate is invalid and
unenforceable because it is an unconscionable contract of
adhesion “offered on what amounts to a ‘take it
or leave it' basis[.]” (Doc. No. 24 at 5). They
note that “the agreement is a standard form and clearly
provides no negotiation as evidenced by simply requiring the
employee's signature rather than any back and forth
between the parties.” (Id.). Plaintiffs also
argue, the agreement is unconscionable because it
“fails to reference any waiver of a jury trial.”
(Id. at 6).
and unconsciounability of an arbitration agreement cannot be
“simpl[y] assumed, ” Cooper v. MRM Inv.
Co., 367 F.3d 493, 503 (6th Cir. 2004), and
“[m]ere inequality in bargaining power . . . is not a
sufficient reason to hold that arbitration agreements are
never enforceable in the employment context, ”
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S.
20, 32 (1991). While Plaintiffs rely on Walker v.
Ryan's Family Steak Houses, Inc., 400 F.3d 370, 384
(6th Cir.2005) to support their contract of adhesion
argument, the Sixth Circuit in that case merely
“reiterated Tennessee's standard for finding a
contract of adhesion in an employment context: ‘To find
their Arbitration Agreements adhesive, the district court was
required to cite evidence that [Plaintiffs] would be unable
to find suitable employment if [they] refused to sign [the
arbitration] agreement.'” Seawright v. Am. Gen.
Fin. Servs., Inc., 507 F.3d 967, 976 (6th Cir. 2007);
see also, Howell v. Rivergate Toyota, Inc.,
144 Fed.Appx. 475, 478 (6th Cir. 2005) (internal citations
omitted) (“In the employment context . . . an
arbitration agreement is not a contract of adhesion unless
the employee would be unable to find a suitable job if he
refused to agree to arbitrate. The employee bears the burden
of showing that other employers would not hire him.”);
Cooper, 367 F.3d at 502 (emphasis in original)
(“To find this contract adhesive, however,
there must be evidence that [plaintiff] would be unable to
find suitable employment if she refused to sign [the]
agreement. She presented no such evidence. For instance, she
did not allege that she looked for comparable jobs but was
unable to find one. Generalizations about employer practices
in the modern economy cannot substitute for such
evidence.”). Plaintiffs have offered the Court no
evidence to support such a finding in this case.
the arbitration agreement unconscionable simply because it
does not inform the employees that they are giving up the
right to a jury trial. The Sixth Circuit “has flatly
rejected the claim that an arbitration agreement must contain
a provision expressly waving the employees right to a jury
trial.” Cooper, 367 F.3d at 508. After all,
“‘a party who enters an arbitration agreement
necessarily consents to the clear and obvious consequence:
the surrender of his right to go to trial.'”
Id. (quoting Burden v. Check Into Cash of
Kentucky, LLC, 267 F.3d 483, 492 (6th Cir.2001); see
also, Smiley v. American Famila Care, Inc., No.
3:18-CV-00994, 2019 WL 3231366, ...