Bufford v. VXI Glob. Sols. LLC

Ayana Bufford, Plaintiff, v. VXI Global Solutions LLC, Defendant.

No. CV-20-00253-TUC-RCC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

January 22, 2021

ORDER

Pending before the Court is Defendant VXI Global Solutions, LLC's ("VXI") Motion to Dismiss and Compel Arbitration (Doc. 10) and Plaintiff Ayana Bufford's Motion for Conditional FLSA Class Certification and to Authorize Notice to Similarly Situated Persons Under 29 U.S.C. § 216(b) and for Expedited Discovery (Doc. 11). After briefing was complete, opt-in Plaintiff Kristan Grayson joined this suit. (Doc. 34.) The Court then ordered supplementary briefing as to Grayson's claims. (Docs. 35-37.) Because Plaintiff Ayana Bufford and opt-in Plaintiffs Caroline Dugan and Kristan Grayson's claims must be decided through arbitration, the Court will grant Defendant's motion. In addition, because all claims are subject to arbitration and there is no indication any putative opt-in Plaintiff could raise collective claims, the Court denies Bufford's request for collective certification and dismisses this case.

I. SUMMARY

a. Current Suit and Motion to Dismiss and Compel Arbitration

Plaintiff Bufford filed this lawsuit against VXI for failure to pay overtime and incentive pay, in violation of the Fair Labor Standards Act ("FLSA") and the Arizona Wage Statute. (Doc. 1.) The suit was filed individually and as a collective action. (Id.) Plaintiff Bufford and opt-in Plaintiff Caroline Dugan (collectively "Plaintiffs")¹ are former call center employees at VXI. (Doc. 10-4 at 2, ¶2; Doc. 11-5 at 2, ¶2.) VXI asserts that Plaintiffs' claims are subject to arbitration (Doc. 10), but Plaintiffs believe VXI cannot compel arbitration because their arbitration agreements were unconscionable (Doc. 22).

b. Arbitration Agreement

After a verbal offer of employment, Plaintiffs attended a new-hire orientation. (Docs. 11-4 & 11-5 at ¶¶ 16-17.) There, Plaintiffs were provided numerous electronic documents to sign, including a Mutual Agreement to Arbitrate Individual Claims ("Arbitration Agreement" or "Agreement"). (Id.) Plaintiffs assert that prior to signing, they "were not given the opportunity to ask questions" or "to speak to an attorney," and were not "told anything about the employment documents . . . other than to review and electronically sign them if they wanted to start working." (Doc. 22 at 4.) However, they did not have time to thoroughly review the documents. (Id.) Plaintiffs also allege the documents were incomplete, including approximately forty-five pages of paperwork that were mere "snippets" of the Employee Handbook." (Id.)

Plaintiffs attached the electronic orientation documents to their response, including their signed Agreements. (Bufford's Agreement, Doc. 22-1 at 16-18; Dugan's Agreement, Doc. 22-2 at 16-18.) Plaintiffs do not recall reviewing or signing these Agreements. (Doc. 22 at 4.) However, Plaintiffs do not challenge the validity of their signature on the Agreement, nor do they assert the full Agreement was not provided to them.

The Agreement states the signor agrees "to resolve, by arbitration, all individual claims or controversies," including "claims for wages, bonuses, commissions or any other form of compensation." (Docs. 22-1 & 22-2 at 16.) The Agreement also delegates disputesabout the validity of the Agreement to an arbitrator ("Delegation Provision"). (Id.) The Delegation Provision provides, "The Arbitrator, and not any federal . . . court . . . , shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability, or formation of this agreement, including but not limited to any claim that all or any part of this Agreement is void or potentially void." (Id.) Below this, in bold, the Agreement notes, "Except as otherwise provided in this Agreement, [VXI] and I agree that neither of us shall initiate nor prosecute any lawsuit in any way related to this claim." (Id. at 16-17.) On the third page — in a standalone paragraph in a larger font size and directly above Plaintiffs' signatures — the Agreement indicates: (1) the signor has carefully read the Agreement; (2) the Agreement is the complete understanding about arbitration; (3) the signor is giving up a right to "a trial in a court of law"; (4) the signor is not relying "on any premises or representations other than those contained in this Agreement"; and (5) the signor has "had an opportunity to discuss this Agreement with attorneys of [her] choice prior to signing it," and has "used that opportunity to the extent [she] wish[es] to do so." (Id. at 18.)

c. Plaintiffs' Position

Plaintiffs argue that the Agreement was unconscionable, therefore, no enforceable contract was formed, and they cannot be forced to arbitrate. (Doc. 22 at 2-3.) Specifically, Plaintiffs contend the Agreement was unconscionable because the Employee Handbook was incomplete. (Id. at 6.) Second, Plaintiffs were not given the chance "to bargain for or ask questions about" the Agreement - they were simply told they must sign to start work. (Id. at 2). Finally, under the Agreement Plaintiffs are forced to pay for the transcription of arbitration proceedings. (Id.)

Regardless of unconscionability, Plaintiffs assert they may proceed in federal court because the Agreement applies only to individual claims, not collective actions. (Doc. 16 at 14-15.) Therefore, the collective FLSA and Arizona Wage claims are beyond the scope of the Agreement. (Id.)

Finally, even if Plaintiffs Bufford and Dugan are subject to arbitration, Plaintiffs askthe Court to retain jurisdiction over this matter because public policy encourages putative opt-in Plaintiffs to receive notice. (Id. at 3.)

II. STANDARD OF REVIEW

A defendant may compel arbitration by filing a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1). ROI Properties Inc. v. Burford Capital Ltd., No. CV-18-03300-PHX-DJH, 2019 WL 1359254, at *2 (D. Ariz. Jan. 14, 2019) (citing Cancer Ctr. Assocs. for Research and Excellence, Inc. v. Phila. Ins. Cos., No. 1:15-CV-00084 LJO MJS, 2015 WL 1766938, at *3 (E.D. Cal. Apr. 17, 2015)). When deciding whether to compel arbitration, the district court's review is limited. The inquiry focuses on two questions: (1) "whether a valid agreement to arbitrate exists," and (2) "whether the agreement to arbitrate encompasses the dispute at issue." Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000); see also 9 U.S.C. § 4. If the answer is "yes" to both inquiries, arbitration must be enforced. Chiron Corp., 207 F.3d at 1130.

The Federal Arbitration Act ("FAA") "provides that written agreements to arbitrate controversies arising out of an existing contract 'shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'" Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (quoting 9 U.S.C. § 2); see also Broemmer v. Abortion Servs. of Phx., Ltd., 840 P.2d 1013, 1015 (Ariz. 1992). The courts "cannot expand the [p]arties agreement to arbitrate," Bonner v. Michigan Logistics Inc., 250 F. Supp. 3d 388, 394 (D. Ariz. 2017), but "[a]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration . . . ." Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 719 (9th Cir. 1999). This analysis requires that a court view the pleadings and supporting documents in the light most favorable to the non-moving party. Coup v. Scottsdale Plaza Resort, LLC, 823 F. Supp. 2d 931, 939 (D. Ariz. 2011) (applying summary judgment standard to arbitration disputes).

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III. DISCUSSION

a. Valid Arbitration Agreement

State law determines whether the parties entered into a valid agreement to arbitrate disputes. Chalk v. T-Mobile USA, Inc., 560 F.3d 1087, 1092 (9th Cir. 2009). In Arizona, "[f]or an enforceable contract to exist, there must be an offer, an acceptance, consideration, and sufficient specification of terms so that the obligations involved can be ascertained." Pakter v. Dunne, No. CV-18-04559-PHX-JZB, 2020 WL 3050573, at *3 (D. Ariz. June 8, 2020).

Defendant's offer of employment was accepted by Plaintiffs when they signed both the Employee Handbook and Arbitration Agreement. The parties' consideration consisted of the mutual obligation to arbitrate any employment disputes.

Plaintiffs argue they were only provided portions of the Employee Handbook, and the "failure to provide all material information inhibited their ability to review, understand, and assent to the terms." (Doc. 22 at 6.) This argument fails. Plaintiffs were given the complete terms of the Arbitration Agreement, even though some of the Employee Handbook was missing. Plaintiffs do not claim that the Agreement was incomplete, nor do they point to any missing portions of the Employee Handbook that would have changed the terms of arbitration. The Agreement clearly states "that all understandings . . . relating to the subject matter of arbitration are contained" within the Agreement. (Docs. 22-1 & 22-2 at 18.) In fact, an excerpt of the Employee Handbook included in the new hire orientation demonstrates the contractual nature of the Arbitration Agreement, in contrast to the more flexible guidelines contained in the rest of the Employee Handbook. (See Docs. 22-1 & 22-2 at 13 ("I understand that from time to time it may be necessary to change the policies . . . described in this handbook. Accordingly, [VXI] reserves the right to modify . . . any provisions of this handbook, other than . . . the commitment to arbitrate disputes." (emphasis added)). Thus, the missing portions of the Handbook have no bearing on the terms of the Agreement, and Plaintiffs had all the information they needed to assent.

In sum, the Court finds the Agreement, signed by Plaintiffs and made withconsideration of the mutual obligations of both parties to arbitrate, formed a contract to arbitrate the FLSA and Arizona wage disputes raised in this suit....