United States District Court, M.D. Tennessee, Nashville Division
KIMBERLY BYARS, an individual appearing on behalf of herself and all others similarly situated, Plaintiff,
DART TRANSIT COMPANY, et al. Defendants.
WAVERLY D. CRENSHAW, JR. CHIEF UNITED STATES DISTRICT JUDGE.
putative class action arises out of an employment dispute
concerning alleged unpaid wages. Pending before the Court is
Defendants' Motion to Transfer Venue or, Alternatively,
to Stay Proceedings and Compel Arbitration (Doc. No. 19) and
Memorandum of Law in Support (Doc. No. 20). Plaintiff has
responded in opposition (Doc. No. 27), Defendants have
replied (Doc. No. 33), and Plaintiff has filed a sur-reply
(Doc. No. 39). For the following reasons, Defendants'
motion will be granted in part and denied in part.
December 2016, Defendant Dart Transit Company
(“Dart”), a Minnesota-based interstate trucking
company, hired Plaintiff Kimberly Byars as a truck driver to
transport trailers and freight for its shipping customers.
(Doc. No. 20 at 1.) As part of her pre-employment on-boarding
process in Texas, Plaintiff signed various employment related
documents, including a Business Operating Agreement
(“Dart BOA”) that contained the following
provision regarding its scope:
This Agreement and any properly adopted Addenda shall
constitute the entire agreement and understanding between the
parties and it shall be interpreted under the laws of the
State of Minnesota. If there are any changes, they must be
Case 3:19-cv-00541 Document 46 Filed 10/21/19 Page 1 of 18
PageID #: 661 in writing and signed by both parties unless
otherwise mutually assented to by both parties to the extent
allowed by law. To the extent any disputes arise under this
Agreement or in its interpretation, or that are related in
any way to this Agreement, including those sounding in tort,
DART and CONTRACTOR both agree to submit such disputes to
final and binding arbitration under the commercial rules of
the Transportation ADR Council, Inc., of Lenexa, Kansas at a
point agreed upon or Minneapolis/St. Paul, Minnesota.
Notwithstanding anything to the contrary contained or
referred to herein, the parties agree that no class
arbitrations shall be conducted. . . . Both parties agree to
be fully and finally bound by the arbitration award, and,
where allowed by law, a judgment may be entered on the award
in any court having jurisdiction thereof.
(Doc. No. 20-2 at 7 (emphasis in original).) Directly above
Plaintiff's signature, the Dart BOA also provided that
“THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION
(Paragraph 17) THAT MAY BE ENFORCED BY THE
PARTIES.” (Id. at 9 (bold and caps in
signed various addenda to the Dart BOA that also included
mandatory arbitration provisions. (See id. at 17,
20-21, 23-24.) One of those addenda, the
“Advantage® Fuel Network and Advances Contract,
” included a provision stating that “[a]ny
question about whether Claims are subject to arbitration
shall be resolved by interpreting this arbitration provision
in the broadest way the law will allow it to be enforced.
This arbitration provision is governed by the Federal
Arbitration Act (the ‘FAA').” (Id.
around June 2017, Plaintiff left Dart to provide similar
trucking services for Defendant Mainstream Transportation,
Inc. (“Mainstream”), a Minnesota-based affiliate
company of Dart that provides transportation services at many
of Dart's intermodal ramps. (See Doc. No. 1
¶ 17; Doc. No. 27 at 10.) Plaintiff also signed a
Business Operating Agreement with Mainstream
(“Mainstream BOA”),  which contained the same
arbitration provision as the Dart BOA and the same
arbitration disclaimer above Plaintiff's signature. (Doc.
No. 20-3 at 7, 10.) Plaintiff stopped working for Mainstream
in or around August 2017.
the arbitration provisions in the Dart and Mainstream BOAs
(collectively, “BOAs”), Plaintiff filed suit in
this Court against Dart and Mainstream (collectively
“Defendants”) for alleged violations of the Fair
Labor Standards Act's (“FLSA”) minimum wage
provisions, 29 U.S.C. § 206(a), breach of contract, and
unjust enrichment, and purports to seek relief “on
behalf of herself and all other similarly situated
individuals” under Federal Rule of Civil Procedure 23
and the FLSA's collective action provision, 29 U.S.C.
§ 216(b). Defendants now move to transfer venue to the
District of Minnesota or, alternatively to stay proceedings
and compel arbitration.
trial court is presented concurrently with a motion to
transfer venue and a motion to compel arbitration, it is more
efficient to consider the motion to compel arbitration first.
See Doe #1 v. Déjà Vu Consulting,
Inc., No. 3:17-cv-00040, 2017 WL 3837730, at *8 (M.D.
Tenn. Sept. 1, 2017) (“based on strong federal policy
favoring arbitration, . . . a motion to compel arbitration
must take precedence over virtually any other pending
motion”). “[I]f the court compels arbitration, .
. . [it] need not address the alternative motion to transfer
venue.” Educ. Mgmt. Servs., LLC. v. Ahrens,
No. SA-14-CA-116-OLG, 2014 WL 12586407, at *6 (W.D. Tex. May
23, 2014) (citing Hinnant v. American Ingenuity,
LLC, 554 F.Supp.2d 576, 588 n. 10 (E.D. Pa. 2008)),
report and recommendation adopted, 2004 WL 12586778
(W.D. Tex. June 6, 2014). Accordingly, the Court will first
address Defendants' motion to stay proceedings and compel
Motion to Compel Arbitration and Stay Proceedings
move to stay this action in favor of arbitration based on the
BOAs. In response, Plaintiff does not dispute that she signed
separate BOAs with Dart and Mainstream, both of which include
arbitration provisions. She instead argues against the
BOAs' enforceability generally, claiming that the Court
cannot compel arbitration under any applicable law in this
case, and even if it could, the arbitration provisions in the
BOAs are invalid and unconscionable.
Federal Arbitration Act Does Not Apply to the BOAs
“where a litigant establishes the existence of a valid
agreement to arbitrate the dispute at issue, ” the
Federal Arbitration Act (“FAA”) requires
“the district court [to] grant the litigant's
motion to compel arbitration and stay or dismiss proceedings
until the completion of arbitration.” Amos v.
Lincoln Property Co., No. 3:17-cv-37, 2017 WL 2628820,
at *4 (M.D. Tenn. June 19, 2017) (citing Glazer v. Lehman
Bros., Inc., 394 F.3d 444, 451 (6th Cir. 2005)); 9
U.S.C. §§ 3-4. Earlier this year, however, the
Supreme Court held that section 1 of the FAA excludes from
the Act's coverage contracts between an interstate
trucking company and its driver, regardless of the
driver's status as an employee or independent contractor.
New Prime Inc. v. Oliveira, 139 S.Ct. 532, 543-44
(2019). Thus, New Prime makes clear that the Court
has no authority under the FAA to compel arbitration in this
Choice of Law
New Prime, “the Supreme Court left open the
possibility that a truck driver working for an interstate
trucking company suing under the FLSA who had signed an
arbitration agreement could still be compelled to
arbitration, ” just not under the FAA. See
Merrill v. Pathway Leasing LLC, No. 16-cv-02242-KLM,
2019 WL 1915597, at *2 (D. Col. Apr. 29, 2019) (emphasis in
original) (citing New Prime, 139 S.Ct. at 537). That
is because “[s]ection 1 [of the FAA] does not . . . in
any way address the enforceability of employment contracts
exempt from the FAA. It simply excludes these contracts from
FAA coverage entirely.” Valdes v. Swift Transp.
Co., Inc., 292 F.Supp.2d 524, 529 (S.D.N.Y. 2003)
(“State arbitration law governs [arbitrability],
however, if the FAA does not apply.”); Palcko v.
Airborne Express, Inc., 372 F.3d 588 (3d Cir. 2004)
(enforcing FAA-exempt arbitration agreement under Washington
state law). In other words, “the fact that the [FAA]
doesn't apply only means that its enforcement mechanisms
aren't available, not that the whole dispute can't be
arbitrated by enforcing the contract through another vehicle
(like state law).” Atwood v. Rent-A-Center East,
Inc., No. 15-cv-1023-MJR-SCW, 2016 WL 2766656, at *3
(S.D. Ill. May 13, 2016); Cole v. Burns Int'l Sec.
Servs., 105 F.3d 1465, 1472 (D.C. Cir. 1997)
(“[W]e have little doubt that, even if an arbitration
agreement is outside the FAA, the agreement still may be
enforced. . . .”). “That's true even when the
contract says that the [FAA] applies and mentions no other
law-if the federal act doesn't apply, the agreement to
arbitrate remains viable, and the only question becomes what
state's law applies to the contract to arbitrate.”
Atwood at *3.
argues that the BOAs' arbitration provisions cannot be
enforced under state law because the parties intended that
the FAA was the only law that applied to those
agreements. (Doc. No. 27 at 10-13.) Specifically, she
contends that because the Advantage® Fuel Network and
Advances Contract addenda to the Dart BOA states that the FAA
applies to the arbitration provision in that
addendum, the parties have no valid agreement to arbitrate
under any other law. (Id.) The BOAs, however,
explicitly state that the entire “Agreement and any
properly adopted Addenda . . . shall be interpreted under the
laws of the State of Minnesota, ” and “any
disputes aris[ing] under this Agreement or in its
interpretation, or that are related in any way to this
Agreement” shall be submitted “to final and
binding arbitration. . . .” (Doc. No. 20-2 at 7; Doc.
No. 20-3 at 7.) The addenda to the Dart BOA, including the
Advantage® Fuel Network and Advances Contract, also state
that they should be interpreted under the laws of the State
of Minnesota. (See Doc. No. 20-2 at 17, 20-21, 24.)
Contrary to Plaintiff's argument, this is not a situation
like Rittmann v. Amazon.com where “the FAA is
inapplicable and the contract clearly indicates that state
law is also ...