United States District Court, D. Maine
ROBERT CURTIS and ROBERT LOWELL on behalf of themselves and all others similarly situated, Plaintiffs,
v.
CONTRACTOR MANAGEMENT SERVICES, LLC; 3RD PARTY LOGISTICS ME, LLC; and MICHAEL WILLIAMS, Defendants.
ORDER ON DEFENDANTS' MOTIONS TO COMPEL
ARBITRATION
Nancy
Torresen United States Chief District Judge
Plaintiffs
Robert Curtis and Robert Lowell filed this putative class and
collective action against Defendants 3RD Party Logistics ME,
LLC (“3PL”) and Michael Williams
(together the “3PL Defendants”)
and Defendant Contractor Management Services, LLC
(“CMS”) to assert federal and
state wage and hour law violations and related state-law tort
claims. Before me are CMS's renewed motion to compel
arbitration (“CMS Motion”) (ECF
No. 70) and the 3PL Defendants' motion to compel
arbitration (“3PL Motion”). (ECF
No. 71.) For the reasons that follow, I
GRANT the Defendants' motions.
PROCEDURAL
BACKGROUND
On
November 25, 2015, the Plaintiffs filed their initial
Complaint in this action solely against CMS. On April 25,
2016, CMS moved to compel arbitration of the Plaintiffs'
claims and for a stay of proceedings in this Court. At the
time of CMS's motion, the First Circuit had yet to decide
whether employee arbitration agreements containing class
action waivers were enforceable in light of the National
Labor Relations Act (“NLRA”),
and the Circuits were split on that issue. On September 29,
2016, I denied CMS's motion to compel arbitration,
joining those courts that had found that class action waivers
like those in the CMS Agreement violated the NLRA and
therefore were unenforceable under the savings clause of the
Federal Arbitration Act (“FAA”).
(ECF No. 42.)
On
October 17, 2016, CMS appealed my order on the motion to
compel arbitration to the First Circuit. (ECF No. 45.)
Shortly thereafter, on November 3, 2016, the Plaintiffs filed
a First Amended Complaint
(“FAC”) to add claims against
the 3PL Defendants. (ECF No. 50.) On February 16, 2017, I
stayed the action as against the 3PL Defendants until
CMS's appeal was resolved. (ECF No. 63.)
While
CMS's appeal was pending, the United States Supreme Court
decided Epic Systems Corp. v. Lewis, which held that
class action waivers in employee arbitration agreements do
not violate the NLRA and are enforceable under the FAA. 584
U.S. __, 138 S.Ct. 1612 (2018). On June 14, 2018, the First
Circuit vacated my September 29, 2016, order in light of
Epic Systems and remanded this action to me for
further proceedings. (ECF No. 64.) On July 11, 2018, I
directed CMS to resubmit its motion to compel arbitration. On
August 10, 2018, CMS filed its renewed motion and the 3PL
Defendants filed a motion to compel arbitration of the claims
asserted against them in the FAC. CMS Mot.; 3PL Mot.
FACTUAL
BACKGROUND
Curtis
and Lowell, both Maine residents, worked as delivery drivers
for Scholarship Storage, Inc., which did business under the
name Business as Usual (“BAU”),
and subsequently for 3PL. CMS is an Arizona-based company
that markets itself as the “leading full-service firm
for companies utilizing Independent Contractors.” FAC
¶ 44. The Plaintiffs allege that CMS provided a number
of services for BAU and later for 3PL, including drafting
employment contracts, processing payroll checks, and
“taking out deductions for equipment drivers were . . .
required to lease or purchase” and for other expenses.
See FAC ¶ 45. CMS also allegedly deducted a
payroll processing fee from the Plaintiffs' BAU and 3PL
paychecks. FAC ¶ 45. The Plaintiffs allege that CMS and
3PL improperly classified the Plaintiffs and their fellow
drivers as independent contractors and, as a result, failed
to adequately compensate the Plaintiffs for their hours
worked and required the Plaintiffs to remit fees and to bear
costs that they should not have been required to pay. FAC
¶ 1.
CMS
seeks to compel arbitration pursuant to a “System
Resource Subscription” agreement entered into between
CMS and each of the Plaintiffs (the “CMS
Agreement”). CMS Ex. B (ECF No. 70-4); CMS Ex.
C (ECF No. 70-5). CMS asserts that both Plaintiffs accessed
CMS's online platform, ICMPower, opened the CMS
Agreement, clicked through each page of it, and
electronically signed the agreement. Stultz Decl.
¶¶ 5-8. (ECF No. 20-1).
The 3PL
Defendants have moved to compel arbitration under an
“Independent Contractor Owner/Operator Agreement”
purportedly signed by Defendant Williams on behalf of 3PL and
by each of the Plaintiffs (the “3PL
Agreement”). 3PL Ex. A (ECF No. 71-2); 3PL Ex.
B (ECF No. 71-3). The Plaintiffs assert that they do not
recall signing the 3PL Agreement. Opp'n to 3PL Mot. 4
(ECF No. 73). The 3PL Defendants assert that the Plaintiffs
accessed, reviewed, and signed the 3PL Agreement using
CMS's ICM Power online platform. Stultz Decl.
¶¶ 13-14 (ECF No. 75-1).
The CMS
Agreement and the 3PL Agreement contain nearly-identical
arbitration provisions (the “Arbitration
Provisions”) in which the parties agree to
resolve certain disputes through arbitration, including
“disputes arising out of or related to [the
Plaintiffs'] relationship with” CMS or 3PL and,
more specifically:
without limitation, . . . claims regarding any city, county,
state or federal wage-hour law, . . . compensation, meal or
rest periods, expense reimbursement, uniform maintenance,
training, termination . . . and claims arising under the . .
. Fair Labor Standards Act . . . and state statutes, if any,
addressing the same or similar subject matters, and all other
similar federal and state statutory and common law claims
(excluding workers' compensation, state disability
insurance and unemployment insurance claims).
CMS Agreement 4 ¶ i; 3PL Agreement 13 ¶ A(i).
The
Arbitration Provisions set out the procedures for
arbitration, including a requirement that “[e]xcept as
may be permitted or required by law, as determined by the
Arbitrator, neither a party nor an Arbitrator may disclose
the existence, content, or results of any arbitration
hereunder without the prior written consent of the parties,
” CMS Agreement 6 ¶ E; 3PL Agreement 15 ¶ F,
and the following fee and cost provision:
ATTORNEYS' FEES AND ARBITRATION COSTS:
Each party will pay the fees for its own attorneys, subject
to any remedies to which that party may later be entitled
under applicable law. Costs incidental to the arbitration,
including the cost of the Arbitrator and the meeting site
(“Arbitration Costs”) will be borne by [the
parties] equally, unless otherwise required by applicable
law, as determined by the Arbitrator, and any dispute
regarding a party's obligation to pay Arbitration Costs
will be determined by the Arbitrator. In the event I contend
that, as a matter of law, I am not responsible for payment of
any arbitration Costs, I will have no obligation to pay any
portion of the contested Arbitration Costs until, and only
if, the Arbitrator determines that I am responsible for such
costs. If necessary for arbitration of the dispute, [CMS/3PL]
agrees to cover the amount of the Arbitration Costs contested
by me until such time as the Arbitrator determines payment
responsibility. If the Arbitrator determines that I am
responsible for any amount of the Arbitration Costs already
paid by [CMS/3PL], then I will remit payment of that amount
to [CMS/3PL] within 30 days of the Arbitrator's
determination.
CMS Agreement 5-6 ¶ D; see 3PL Agreement 14
¶ E.
The
Arbitration Provisions each include a paragraph headed
“THIRTY-DAY OPT-OUT
PERIOD” that states:
If I do not want to be subject to this Arbitration Provision,
I may opt out of this Arbitration Provision by notifying
[CMS/3PL] in writing of my desire to opt out of this
Arbitration Provision, which writing must be dated, signed
and submitted by U.S. Mail or hand delivery to [CMS/3PL's
address]. In order to be effective, the writing must clearly
indicate my intent to opt out of this Arbitration Provision
and the envelope containing the signed writing must
be post-marked within 30 days of the date I sign
this [agreement]. . . . Should I not opt out of this
Arbitration Provision within the 30-day period, [CMS/3PL] and
I will be bound by the terms of this Arbitration Provision.
CMS Agreement 6 ¶ G; see 3PL Agreement 15
¶ H. The Arbitration Provisions also contain
severability clauses, which state that “[i]n the event
that any portion of this Arbitration Provision is deemed
unenforceable, the remainder of this arbitration provision
will be enforceable.” CMS Agreement 6 ¶ H; 3PL
Agreement 15 ¶ I.
The
only relevant difference between the arbitration provisions
in the CMS Agreement and in the 3PL Agreement is their choice
of forum. The CMS Agreement states that the “location
of the arbitration proceeding must be in Maricopa County,
Arizona, unless the parties to the arbitration agree in
writing otherwise.” CMS Agreement 5 ¶ A. In
contrast, the 3PL Agreement provides that the “location
of the arbitration proceeding may be no more than 45 miles
from the geographic area where [Curtis and/or Lowell]
performed delivery services arranged by [3PL], unless each
party to the arbitration agrees in writing otherwise.”
3PL Agreement 14 ¶ B.
LEGAL
STANDARD
The FAA
provides that “[a] party aggrieved by the alleged
failure, neglect, or refusal of another to arbitrate under a
written agreement for arbitration may petition any United
States district court . . . for an order directing that such
arbitration proceed in the manner provided for in such
agreement.” 9 U.S.C. § 4. It also provides for the
stay of suits already in federal court pending arbitration.
Id. § 3.
Federal
courts will grant a motion to dismiss or stay a case and
compel arbitration pursuant to the FAA when “(i) there
exists a written agreement to arbitrate, (ii) the dispute
falls within the scope of that arbitration agreement, and
(iii) the party seeking an arbitral forum has not waived its
right to arbitration.” Combined Energies v. CCI,
Inc., 514 F.3d 168, 171 (1st Cir. ...