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Bey v. XPO Logistics, Inc.

United States District Court, M.D. Florida, Orlando Division

September 7, 2017

REINA ORTIZ BEY; RICARDO PACHECO; ASHLEE ALLARD; and SHANNON SUGGS, Plaintiffs,
v.
XPO LOGISTICS, INC., Defendant.

          ORDER

          ROY B DALTON United States District Judge

         Before the Court is Defendant's Motion to Dismiss Complaint and Compel Arbitration, and Memorandum of Law (Doc. 31), to which Plaintiffs responded (Doc. 32). For the reasons set forth below, the motion is due to be granted and the action is due to be stayed.

         I. Background

         On December 22, 2016, Plaintiffs initiated this putative collective action alleging that Defendant failed to pay them overtime wages in violation of the Fair Labor Standards Act (“FLSA”). (Doc. 1.) After successfully moving for two extensions, Defendant answered the Complaint and asserted several affirmative defenses on March 3, 2017. (Doc. 20.) Now-six months after Plaintiffs filed their Complaint-Defendant moves to compel arbitration and dismiss this action or, alternatively, stay it pending the outcome of the forthcoming arbitration proceedings. (Doc. 31 (“Motion to Compel”).)[1] Plaintiffs oppose the Motion to Compel. (Doc. 32.)

         According to the Complaint, Plaintiffs are former employees of Defendant. (Doc. 1, ¶¶ 12, 19, 26, 33.) As a condition of their employment, each Plaintiff signed an employment agreement (collectively “Agreements”).[2] (See Doc. 31-1.) Among others, the Agreements include the following provisions:

         17. Governing Law; Arbitration; Consent to Jurisdiction; and Waiver of Jury Trial.

(a) Governing Law: This Agreement shall be governed by and construed in accordance with its express terms, and otherwise in accordance with the laws of the State of North Carolina without reference to its principles of conflicts of law.
(b) Arbitration of Claims Initiated by You: Any claim you [employee] wish to initiate arising out of or relating to this Agreement, the breach thereof, your employment with us, or the termination of that employment will be resolved by binding arbitration before a single arbitrator in the City of Charlotte, North Carolina administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof
(“Arbitration Provision”).

(See, e.g., Doc. 31-1 pp. 8-9) (emphasis added).

         The Arbitration Provision incorporates by reference the American Arbitration Association's Commercial Arbitration Rules (“AAA Commercial Arbitration Rules”). (Doc. 31-1 p. 9.) In pertinent part, the AAA Commercial Arbitration Rules provide that the arbitrator shall have the power to: (1) “rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or the arbitrability of any claim or counterclaim”; and (2) “determine the existence or validity of a contract of which an arbitration clause forms a part” (collectively, “Delegation Provision”). Commercial Arbitration Rules and Mediation Procedure, Am. Arb. Ass'n Rule 7(a), (b) (Oct. 13, 2013), https://www.adr.org/sites/default/files/Commercial%20Rules.pdf.

         Defendant requests that the Court compel arbitration under the Arbitration Provision because: (1) it is enforceable; and (2) Plaintiffs' FLSA claims fall within its scope. (Doc. 31, pp. 4-5.) Anticipating Plaintiffs' position, Defendant also asserts that it has not waived its right to compel arbitration. (Id. at 6-9.) In their response, Plaintiffs counter that: (1) Defendant waived its right to arbitrate; and (2) notwithstanding waiver, the Arbitration Provision is unenforceable because it is unconscionable under North Carolina law. (Doc. 32, pp. 6-12.)

         II. Legal Standards

         A. Federal Arbitration Act

         Under the Federal Arbitration Act (“FAA”), “courts must rigorously enforce arbitration agreements according to their terms.” Am. Express Co. v. Italian Colors Rest., 133 S.Ct. 2304, 2309 (2013). Upon the motion of any party to a valid arbitration agreement, courts must stay or dismiss litigation of all claims that fall within the agreement's scope and compel arbitration according to the agreement's ...


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