Ramsey v. Ayvaz Pizza, LLC

1

OLIVIA RAMSEY and WILLIAM STRATMANN, Plaintiffs, v. AYVAZ PIZZA, LLC and SHOUKAT DHANANI, Defendants.

Civil Action No. 1:23-cv-04801-SDG

United States District Court, N.D. Georgia, Atlanta Division

September 30, 2024

OPINION AND ORDER

Steven D. Grimberg United States District Judge

This matter is before the court on the motion by Defendants Ayvaz Pizza, LLC and Shoukat Dhanani to compel arbitration and either (1) dismiss Plaintiff Olivia Ramsey's and William Stratmann's claims or (2) stay these proceedings pending the outcome of arbitration [ECF 16]. Also before the Court is Plaintiffs' motion to certify the class [ECF 9]. After careful consideration, the Court GRANTS Defendants' motion to compel arbitration, stays this case, and DENIES Plaintiffs' motion to certify the class. It also DENIES Plaintiffs' motion for leave to file a sur-reply [ECF 38].

I. BACKGROUND

Plaintiffs are former pizza delivery drivers for Defendants who claim that Ayvaz paid them below minimum wage in violation of federal law.^[1] They filed this Fair Labor Standards Act (FLSA) putative class action on October 10, 2023, seeking monetary, declaratory, and equitable relief.^[2] Shortly after filing the case, Plaintiffs filed a motion for conditional certification of their FLSA collective action.^[3] Instead of responding to that motion Defendants filed the instant motion to compel arbitration.^[4] Defendants claim that this action is inappropriate because the two named Plaintiffs each signed valid, enforceable arbitration agreements that require them to pursue these claims on an individual basis in arbitration.^[5]Plaintiffs argue that the arbitration agreements are unenforceable for various reasons.

II. LEGAL STANDARD

The Federal Arbitration Act reflects the strong federal policy in favor of arbitration. Howsam v Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002) (noting that the Supreme Court has “long recognized and enforced a ‘liberal federal policy favoring arbitration agreements'”) (quoting Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)). See also Parnell v. CashCall, Inc., 804 F.3d 1142, 1146 (11th Cir. 2015) (“The FAA places arbitration agreements on equal footing with all other contracts and sets forth a clear presumption-‘a national policy'-in favor of arbitration.”) (citations omitted). As a general matter, the FAA governs and renders enforceable arbitration agreements that are part of an employment contract. Cir. City Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001); Rodriguez v. Castforce, Inc., 190 F.Supp.3d 1148, 1149 (N.D.Ga. 2016) (compelling arbitration in an FLSA case).

However, absent a valid arbitration agreement, “a court cannot compel the parties to settle their dispute in an arbitral forum.” Bazemore v. Jefferson Cap. Sys., LLC, 827 F.3d 1325, 1329 (11th Cir. 2016) (quoting Klay v. All Defendants, 389 F.3d 1191, 1200 (11th Cir. 2004)). Thus, before compelling arbitration, a court must first answer the “threshold question of whether an arbitration agreement exists at all,” and this question is “simply a matter of contract.” Id. (internal quotation marks and citation omitted).

Under the FAA, “[i]f the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof.” 9 U.S.C. § 4. A district court should apply a “summary judgement-like” standard of review, and “conclude as a matter of law that parties did or did not enter into an arbitration agreement only if ‘there is no genuine dispute as to any material fact' concerning the formation of such an agreement.” Bazemore, 827 F.3d at 1333. Finally, in determining whether an arbitration agreement exists a court “should apply ordinary state-law principles that govern the formation of contracts.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995); see also Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1368 (11th Cir. 2005) (“[S]tate law generally governs whether an enforceable contract or agreement to arbitrate exists.”).

III. DISCUSSION

Defendants argue that this case must be arbitrated pursuant to valid, enforceable arbitration agreements signed by Plaintiffs. To that end, Defendants have submitted copies of the arbitration agreements containing Plaintiffs' electronic signatures manifesting their assent to the agreements.^[6]

Neither Ramsey nor Stratmann deny that if the arbitration agreements are enforceable, this action must proceed in arbitration. However, both Plaintiffs deny the validity and enforceability of the agreements, each for different reasons. The Court finds that the arbitration agreements signed by both Ramsey and Stratmann are valid and enforceable and thus, compels the parties to arbitrate their claims individually.

A. No genuine issue of material fact exists regarding the formation of a valid arbitration agreement between Ramsey and Ayvaz.

After reviewing the record, the Court concludes that Ramsey signed valid and enforceable arbitration agreements with Ayvaz.

1. Facts surrounding Ramsey's completion of the 2022 and 2023 arbitration agreements.

Ramsey worked as a delivery driver and in-store shift lead for Ayvaz from early 2021 to November 2022 and again from May 2023 to August 2023.^[7] During her time with Ayvaz, she allegedly signed two separate arbitration agreements relevant to this suit: one in January 2022 and another when she was re-hired in May 2023.

Defendants submitted the affidavit of William Henefey, the Human Resources Lead Generalist for Ayvaz.^[8] Henefey testified to the procedures Ayvaz used in 2022 and 2023 with respect to onboarding and document-signing by employees. In early 2022, “Ayvaz used a password-protected online environment,” UltiPro, to grant employees access to documents for signing.^[9]Employees would create a unique password and use a security question and answer system to protect their account.^[10] Ayvez did not have access to employees' passwords.^[11] An employee needed to be logged in to his or her secure account in order to sign documents.

Ayvaz changed its process in August 2022.^[12] Starting then, upon extending an offer for employment, Ayvez sent an email to the employee's personal email address requesting that they complete their on-boarding paperwork.^[13] The email contained a link to a secure website where the documents could be completed.^[14]To gain access to the documents, employees needed to created individualized passwords.^[15] Once logged in to the secure website, employees could review and sign on-boarding documents. This procedure was followed during Ramsey's 2023 onboarding meeting.^[16]

Defendants provided an arbitration agreement electronically signed by Ramsey in January 2022,^[17] but Ramsey does not remember signing it.^[18] When Ramsey returned in 2023, she underwent an onboarding process utilizing the method implemented beginning in August 2022, as discussed above. After her manager completed his own paperwork on an electronic tablet, he handed Ramsey the tablet, on which she remembers filling out her I-9 form.^[19] She remembers this taking about ten minutes.^[20] Under the process attested to by Henefey, Ramsey could not have filled out the I-9 without having been logged into her personal account, using her password. After completing the I-9, she handed the tablet back to her manager.^[21]

2. Analysis

Ramsey calls into question the validity of the two separate agreements she signed by attacking the authenticity of her electronic signatures on them.^[22] She does not affirmatively deny signing the arbitration agreements, but rather claims she does not remember signing them and that her manager might have signed them on her behalf.^[23] Defendants retort that this speculative and conclusory argument is insufficient to raise a genuine dispute of fact in light of the evidence.

Georgia law governs the formation and validity of the Ramsey contract.^[24]Under Georgia law, “[t]o constitute a valid contract, there must be parties able to contract, a consideration moving to the contract, the assent of the parties to the terms of the contract, and a subject matter upon which the contract can operate.” O.C.G.A. § 13-3-1. The formation of a contract with an electronic signature is at issue here.

Two cases, albeit unreported, are particularly helpful here. First, Reed v. Eastside Medical Center, LLC, No 1:19-cv-03967-SDG, 2020 WL 5659436 (N.D.Ga. Sep. 23, 2020). In Reed, the defendants sought to compel arbitration relying on an electronically signed arbitration agreement. The plaintiff contested the authenticity of her signature and presented some evidence calling it into question. First, that she had not initialed the lines on the arbitration agreement itself and second, that she had signed other paperwork at the same time the arbitration agreement was allegedly signed, but the other documents were signed by hand. Defendants in that case presented no evidence whatsoever demonstrating that the plaintiff was the one who signed the agreement. This Court thus denied the motion without prejudice and ordered limited discovery on the alleged formation of the McGill v. Am. Trucking & Trans., Ins. Co., 77 F.Supp.3d 1261, 1264 (N.D.Ga. 2015). Pursuant to this doctrine, “contracts are governed by the law of the place where they were ‘made.'” Id. Contracts are “made” where “the last act essential to the completion of the contract was done.” Gen. Tel. Co. of Se. v. Trimm, 252 Ga. 95, 95 (1984) (citing Peretzman v. Borochoff, 58 Ga.App. 838 (1938)). Here, the last act necessary to “make” the Arbitration Agreement was Ramsey's execution of it in Georgia. ECF 16-1, at 3-10. agreement. After discovery, the defendants again moved to compel arbitration. This Court...