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Mitchell v. Craftworks Restaurants & Breweries, Inc.

United States District Court, District of Columbia

October 25, 2018

VASILIKI MITCHELL, Individually and on Behalf of All Other Persons Similarly Situated, Plaintiff,
v.
CRAFTWORKS RESTAURANTS & BREWERIES, INC., d/b/a GORDON BIERSCH BREWERY RESTAURANT, Defendant.

          MEMORANDUM OPINION GRANTING IN PART DEFENDANT'S MOTION TO COMPEL ARBITRATION AND DISMISS COMPLAINT

          RUDOLPH CONTRERAS UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         Plaintiff Vasiliki Mitchell has filed a collective action complaint against her former employer, Defendant Craftworks Restaurants & Breweries Group, Inc., alleging that Craftworks violated the overtime provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201- 19, and District of Columbia Minimum Wage Revision Act (“D.C. Minimum Wage Act”), D.C. Code §§ 32-1001 to 32-1015. But Craftworks contends that Ms. Mitchell signed an agreement to arbitrate claims of this nature, and it has therefore responded to her complaint by filing a motion under the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16, to compel arbitration and dismiss the complaint. Ms. Mitchell opposes the motion, raising a number of challenges to the validity and enforceability of the purported Arbitration Agreement.

         For the reasons provided below, the Court finds that Craftworks has met its burden of proving formation of the Arbitration Agreement and that Ms. Mitchell has failed to establish a genuine dispute as to the validity or enforceability of the Agreement. The Court therefore grants Craftworks's motion in part and stays all proceedings pursuant to § 3 of FAA, 9 U.S.C. § 3. At this juncture, the Court does not, however, enter an order compelling arbitration or dismissing the complaint. As explained below, the Arbitration Agreement includes a forum selection clause that contemplates arbitration taking place outside the District of Columbia, unless the parties “otherwise mutually agree.” And under the FAA, the Court does not have the authority to compel arbitration outside the district in which it is located. See 9 U.S.C. § 4. Accordingly, the Court orders that Craftworks and Ms. Mitchell confer and advise the Court whether they “mutually agree” to arbitration within the District of Columbia. If they do not so agree, the Court will transfer the case to a court that possesses the authority to compel arbitration in accordance with the forum selection clause in the Arbitration Agreement.

         II. BACKGROUND

         From November 2016 to June 2017, Ms. Mitchell was an Assistant Manager at Craftworks's Gordon Biersch Brewery Restaurant in the Navy Yard neighborhood of Southeast Washington, D.C. Compl. ¶ 9, ECF No. 1. She alleges that during that time period, she and other assistant managers regularly worked more than forty hours per workweek but were never paid overtime wages. Id. ¶ 20. Seeking an award of those unpaid overtime wages, as well as liquidated and punitive damages, Ms. Mitchell filed a collective action complaint on behalf of herself and all others similarly situated, raising claims under the FLSA and D.C. Minimum Wage Act. Id. ¶¶ 40-57.

         Instead of filing an answer, Craftworks moved to compel arbitration and dismiss the complaint. Def.'s Mot. to Compel Arbitration and Dismiss Compl. (“Mot. to Compel”), ECF No. 12. In support of this motion, Craftworks submitted a sworn declaration by its Director of Human Resources, Lori Fulmer, in which Ms. Fulmer says that every new Craftworks employee is provided an arbitration agreement at the beginning of their employment, along with other onboarding documents. Decl. of Lori Fulmer in Support of Mot. to Compel (“Fulmer Decl.”) ¶ 4, ECF No. 12-2. In the declaration, Ms. Fulmer further states that, “based on [her] personal review of business records . . . Plaintiff Vasiliki Mitchell entered into a written Mutual Arbitration Agreement with CraftWorks.” Id. ¶¶ 2, 5.

         Attached to the declaration is, according to Ms. Fulmer, “[a] true and correct copy of Ms. Mitchell's Arbitration Agreement.” Id. ¶ 5. The purported Agreement provides that arbitration “shall be the exclusive and binding remedy, ” to “be used instead of any court action (including jury trial), ” for “any disputes that the Company may have against [the signing employee], and any disputes that [the employee] may have against the Company or any of its employees, supervisors, managers or agents, arising out of or relating to [the employee's] employment.” Id., Ex. A. Such covered disputes, the Agreement explicitly states, include claims alleging the “violation of any federal, state or local law, ” and “claims relating to . . . wages, compensation, training, or terms and conditions of employment.” Id.

         The Agreement also contains a delegation provision stating that the arbitrator has “exclusive authority to resolve any dispute relating to the interpretation” or “applicability” of the Agreement. Id. There is a class action waiver as well, which provides that “[a]ll claims and disputes subject to this agreement must be brought in each party's individual capacity, and not as a plaintiff, class representative, or class member in any purported class, collective or representative proceeding.” Id. And the Agreement includes a forum selection clause, which provides that arbitration of the covered disputes “will be conducted in Denver County, Colorado or Hamilton County, Tennessee, unless otherwise mutually agreed.” Id. Below all of these provisions, at the bottom of the submitted copy of the Agreement, the “Employee Name” line is filled with “Vasiliki Mitchell.” Id. The “Employee Signature” line indicates that Ms. Mitchell digitally signed on October 20, 2016 at 10:29 am. Id.

         In opposing Craftworks's motion, Ms. Mitchell claims to “recall signing certain . . . onboarding documents electronically” but says that she does not remember “signing an authorization to sign documents electronically” and has “no recollection of signing, reading, or negotiating the purported [Arbitration] Agreement.” Decl. of Vasiliki Mitchell in Support of Pl's Opp'n to Mot. to Compel (“Mitchell Decl.”) ¶¶ 4, 6, ECF No. 15-2. Ms. Mitchell does, however, recall that a “Team Member Handbook” was “in place at all times during [her] employment.” Id. ¶ 7. This Handbook, a copy of which Ms. Mitchell obtained online and submitted with her memorandum in opposition to Craftworks's motion, provides that Craftworks “retains the sole right to modify, suspend, interpret, or cancel in whole, or in part, any of the published or unpublished company guidelines or practices . . . without advance notice and without having to give justification.” Decl. of C. Andrew Head in Support of Pl.'s Opp'n to Mot. to Compel (“Head Decl.”), Ex. 2 at 59, ECF No. 15-1. Among the company practices published in the Handbook is Craftworks's “Arbitration Policy, ” which “reiterates the terms of the Arbitration Agreement” in its entirety. Reply to Pl.'s Opp'n to Mot. to Compel (“Craftworks Reply”) at 15, ECF No. 17; see also Head Decl., Ex. 2 at 57-58. Viewing these Handbook provisions together, Ms. Mitchell argues, makes Craftworks's promise to arbitrate illusory and renders the Arbitration Agreement as a whole unenforceable. Pl.'s Mem. in Opp'n to Mot. to Compel (“Mem. in Opp'n”) at 17-24, ECF No. 15.

         In its reply to Ms. Mitchell's opposition, Craftworks acknowledges the authenticity of the submitted Handbook, but it contends that the Handbook is irrelevant because the Arbitration Agreement is a “standalone document” that contains no language under which Craftworks retains the right to go back on its promise to arbitrate. Craftworks Reply at 16. With its reply, Craftworks also submitted a second declaration from Ms. Fulmer and several online screenshots, which together describe and depict Craftworks's electronic signing procedures and the security measures it uses to protect the integrity of those procedures. See Del. of Lori Fulmer in Support of Reply to Pl.'s Opp'n to Mot. to Compel (“Reply Fulmer Decl.”) ¶¶ 3-8, Ex. A, ECF No. 17-1.

         In her second declaration, Ms. Fulmer states that all of Craftworks's new hires review and digitally sign their onboarding documents through accounts that they create on Craftworks's careers website-accounts that can be accessed only by entering the specific employee's unique personal password. Id. ¶¶ 4-5. To sign a particular document, a new employee signs into their account, opens the document, and clicks on a white “Digitally Sign” button. Id. ¶ 6. The employee is then prompted to again enter his or her account's unique password. Id. After the employee has entered the password, a message appears, stating that:

Under penalties of perjury, I certify that the information which I have provided is true and correct. I understand and accept that this electronic consent process shall be treated the same as my written signature on paper. I also understand that I have been provided with the opportunity to print these forms as an alternative or in addition to this electronic consent process.

Id. ¶ 7, Ex. A at 10-11. Below the message is a red “Digitally Sign” button; when the employee clicks that button, the employee's electronic signature and a date and time stamp are recorded on the document. Id. ¶¶ 6-7.

         According to Ms. Fulmer, Ms. Mitchell's personnel records indicate that, on October 20, 2016 between 10 am and 12:05 pm, she digitally signed six different documents using this procedure, including the Arbitration Agreement. Id. ¶ 9. “[T]rue and correct” copies of these documents are attached to Ms. Fulmer's second declaration. Id. ¶ 9, Exs. B-F. Craftworks argues that the digitally signed Arbitration Agreement and these other personnel documents, when viewed in light of the online security procedures employed, prove that Ms. Mitchell agreed to sign the onboarding documents electronically and assented to the terms of the Arbitration Agreement. Craftworks thus asks this Court to enforce the Agreement's terms and dismiss the complaint so arbitration can take place, or at least stay all proceedings until arbitration has occurred. Def.'s Mem. in Support of Mot. to Compel at 12-13, ECF No. 12-1.

         III. ANALYSIS

         The FAA reflects “a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary.” Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). By providing that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon any grounds as exist at law or in equity, ” 9 U.S.C. § 2, the Act “places arbitration agreements on an equal footing with other contracts and requires courts to enforce them according to their terms, ” Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67 (2010) (citation omitted). In furtherance of this policy favoring arbitration agreements, § 3 of the FAA provides that “a party may apply to a federal court for a stay of the trial of an action ‘upon any issue referable to arbitration'” under a written arbitration agreement. Rent -A Center, 561 U.S. at 68 (quoting 9 U.S.C. § 3). “[U]pon being satisfied that the issue[s] involved in [the] suit” are indeed covered by such an agreement, the court is statutorily required to issue the requested stay. See 9 U.S.C. § 3. FAA § 4 then goes one step further: it states that “a party ‘aggrieved' by the failure of another party ‘to arbitrate under a written agreement for arbitration' may petition a federal court ‘for an order directing that such arbitration proceed in the manner provided for in such agreement.'” Rent-A-Center, 561 U.S. at 68 (quoting 9 U.S.C. § 4). Similar to § 3, § 4 requires the court to issue such an order “upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not an issue.” 9 U.S.C. § 4.

         Because arbitration is a matter of contract, however, “parties cannot be compelled to arbitrate their disputes unless they have agreed to do so.” Fox v. Computer World Servs. Corp., 920 F.Supp.2d 90, 97 (D.D.C. 2013) (citing First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 943-44 (1985)). The Supreme Court has thus recognized an “exception” to the liberal federal policy favoring arbitration: courts, not arbitrators, decide “gateway . . . question[s] of arbitrability” unless “the parties clearly and unmistakably provide otherwise.” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002). A prime example of such a gateway question is the issue that Ms. Mitchell and Craftworks ...


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