Gigsmart, Inc. v. Axlehire, Inc.

226 N.E.3d 1073

2023-Ohio-3807

GIGSMART, INC., Plaintiff-Appellee,

v.AXLEHIRE, INC., Defendant-Appellant.

APPEAL NO. C-230109

Court of Appeals of Ohio, First District, Hamilton County.

Date of Judgment Entry on Appeal: October 20, 2023

Civil Appeal From: Hamilton County Court of Common Pleas, TRIAL NO. A-2201795.

Robbins, Kelly, Patterson & Tucker, Michael A. Galasso, Cincinnati, and Charles E. Rust, for Plaintiff-Appellee.

Littler Mendelson, P.C., Mark A. Romeo, Chad J. Kaldor, Columbus, and Derek S. Hecht, for Defendant-Appellant.

OPINION.

Crouse, Presiding Judge.

{¶1} The crux of this appeal concerns whether defendant-appellant AxleHire, Inc., had notice of online terms and conditions ("T&C") of plaintiff-appellee GigSmart, Inc., before creating an account on GigSmart’s platform. The trial court found that it did, and that, by creating a GigSmart account, AxleHire agreed to be bound by the T&C, including a forum-selection clause and an arbitration provision. Based on its finding that AxleHire agreed to the T&C, the trial court issued an entry that granted GigSmart’s motion to compel arbitration and stay the proceedings and denied AxleHire’s motion to dismiss GigSmart’s complaint, which asserted various claims pertaining to AxleHire’s breach of the T&C. The trial court’s entry also granted GigSmart’s motion for a preliminary injunction to enjoin AxleHire from initiating or prosecuting legal proceedings in any other forum concerning the claims asserted in GigSmart’s complaint.

{¶2} AxleHire appeals from the trial court’s judgment, arguing in two assignments of error that the trial court erred in finding that it had personal jurisdiction over AxleHire because there was no enforceable contract between the parties, and that the trial court abused its discretion by issuing an antisuit injunction. We hold that the trial court did not err in finding that AxleHire had notice of the T&C before creating a GigSmart account, and that the trial court properly acquired jurisdiction over the parties via the forum-selection clause in the T&C. We further find no abuse of discretion on the part of the trial court in granting the preliminary injunction, and we affirm that court’s judgment.

I. Factual and Procedural Background

{¶3} GigSmart is a software-development company that provides staffing for the gig economy. A gig economy is one that "involves the use of temporary or freelance workers to perform jobs typically in the service sector." Merriam-Webster.com Dictionary, https://www.merriam-webster.com/dictionary/gigeconomy (accessed Oct. 2, 2023), GigSmart’s platform connects businesses with workers looking for a gig by allowing the businesses to post gigs, and then allowing workers to apply for the gigs, get hired, and be paid, all through the platform. A business that posts a gig is referred to as a requester, while those that apply for the gigs are referred to as workers. By signing up for a GigSmart account, a requester becomes subject to GigSmart’s T&C. Notification that the requester is agreeing to the T&C is provided to the requester, either on a web platform or mobile app, below the various options provided to create an account. The language providing notice states, "By signing up, I agree to Terms & Conditions & Privacy Policy." Both the phrases "Terms & Conditions" and "Privacy Policy" are hyperlinks that take a requester to those documents if clicked on, therefore providing a requester with the opportunity to review the documents prior to creating an account.

{¶4} On August 20, 2021, a GigSmart account was created for AxleHire, a company that provides last-mile logistic solutions for freight shipment and delivery. On that date, the two companies participated in a sales call. Participating on behalf of GigSmart were Richard Oaks, president of GigSmart, and Rebecca Moore-Leach, a GigSmart sales representative. Participating on behalf of AxleHire were Mary Jackson, AxleHire’s senior manager of transportation, and Aaron Murphy, AxleHire’s director of operations at that time. After this sales call ended, AxleHire’s account on the GigSmart platform was created, and AxleHire posted its first gig that same day.

{¶5} The T&C included a binding-arbitration provision and a forum-selection clause providing that the relationship between GigSmart and the requester "shall be governed in all respects by the laws of the State of Ohio" and that "any claim or dispute you may have against GigSmart that is not subject to arbitration must be resolved by a court located in Hamilton County, Cincinnati, Ohio or a United States District Court, Southern District of Ohio, located in Cincinnati, Ohio." The T&C additionally contained a direct-hire provision. This provision required a requester to pay a "hiring fee" of $500 and to notify GigSmart if the requester hired a GigSmart worker outside of the GigSmart platform in the three-month period following the requester’s last contact with the worker through the platform. This same provision further stated that if the requester fails to provide such notice, it "shall be obligated to immediately pay to GigSmart $2,500 for each GigSmart worker it has Hired."

{¶6} GigSmart filed a complaint against AxleHire in the Hamilton County Court of Common Pleas on May 19, 2022. The complaint alleged that AxleHire breached the direct-hire provision in the T&C by failing to report direct-hire engagement and failing to pay the incurred fees. The complaint contained claims for breach of contract and unjust enrichment, sought a declaratory judgment that GigSmart was entitled to injunctive relief and/or specific performance requiring AxleHire to report all direct-hire engagement and to account for all fees owed to GigSmart, and demanded arbitration pursuant to the arbitration provision in the T&C. The complaint sought approximately $1,902,500 for AxleHire’s failure to comply with the direct-hire provision. GigSmart separately filed a motion to compel arbitration and to stay the proceedings pending arbitration.

{¶7} On July 25, 2022, AxleHire filed a motion to dismiss GigSmart’s complaint, arguing that the trial court lacked personal jurisdiction over AxleHire. It contended that the forum-selection clause in the T&C was not enforceable because AxleHire never assented to the T&C containing that clause, and that, even if the clause was valid, it was unreasonable to enforce it under the circumstances. AxleHire additionally argued that it did not otherwise have minimum contacts in Ohio sufficient for the trial court to acquire jurisdiction. AxleHire also filed a memorandum oppos- ing GigSmart’s motion to compel arbitration.

{¶8} On October 6, 2022, GigSmart filed a motion for a temporary restraining order and a preliminary injunction. The motion was filed in response to a complaint that AxleHire filed against GigSmart in Alameda County, California, seeking a declaratory judgment that GigSmart’s T&C were unenforceable; that California law applies to the parties’ dispute; that there is no enforceable contract between the parties; that the arbitration provision in the T&C is procedurally and substantively unconscionable; that the restrictive covenants in the direct-hire provision are unenforceable; and that the forum-selection and choice-of-law clauses are void. GigSmart’s motion sought to enjoin AxleHire from commencing or prosecuting proceedings in other states, including the action filed in California, concerning the claims and defenses pending in Hamilton County.

{¶9} The trial court held a hearing on the motion for a temporary restraining order and preliminary injunction on October 20, 2022. After hearing argument from both parties, the trial court issued a temporary restraining order that enjoined AxleHire "from initiating or prosecuting litigation or legal proceedings in other forums involving Plaintiff, GigSmart, Inc., pertaining to the claims which are the subject of the Complaint in the case at bar." The order specified that the order included the litigation currently pending in California.

{¶10} On December 14, 2022, the trial court held an evidentiary hearing on the motion for a preliminary injunction. A main point of contention at the hearing was whether AxleHire had notice of GigSmart’s T&C when its account was created, as the trial court’s jurisdiction depended on whether AxleHire had assented to the forum-selection clause contained in the T&C.

{¶11} This case involves what is referred to as a "browsewrap agreement." "[A] browse wrap license is part of the web site [, e.g., license terms are posted on a site’s home page or are accessible by a prominently displayed hyperlink,] and the user assents to the contract when the user visits the web site." Rudolph v. Wright Patt Credit Union, 2021-Ohio-2215, 175 N.E.3d 636, ¶ 55 (2d Dist.), quoting Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 429 (2d Cir. 2004). A requester does not need to click on the terms and conditions link to manifest assent, but rather agrees to be bound by the terms and conditions by signing up for an account.

{¶12} While both parties agreed that AxleHire’s account was created after the sales call between the two companies on August 20, 2021, AxleHire took the position that GigSmart created the account on its behalf after the call ended, and that it was therefore never presented with the webpage stating that a requester agrees to GigSmart’s T&C by creating an account. GigSmart, on the other hand, contended that AxleHire created its own account, and that it could not have done so without seeing the language concerning the T&C.

{¶13} Mitchell Catino, GigSmart’s chief operating officer and chief product officer, testified at the hearing that a requester can access the GigSmart platform via either a web application or a native application that can be downloaded from the Apple App Store or the Google Play Store. He explained that an account can then be created on either platform via Google, Facebook, or email. On certain devices, a requester...