United States District Court, W.D. Arkansas, Fayetteville Division
MYA HILL-SMITH, individually and on behalf of all others similarly situated PLAINTIFF
SILVER DOLLAR CABARET, INC.; PLATINUM CABARET, LLC; ANTHONY F. CATROPPA; and ANTHONY K. CATROPPA DEFENDANTS
OPINION AND ORDER
HOLMES, III CHIEF U.S. DISTRICT JUDGE
the Court is Defendants' motion (Doc. 16) to compel
arbitration and dismiss. Defendants also filed a brief (Doc.
16-1) in support. Plaintiff filed a response (Doc. 17) in
opposition. Defendants' motion requests that the Court
compel arbitration as dictated by the terms of Mya
Hill-Smith's lease and independent contractor agreements
(“agreements”) with Silver Dollar Cabaret, Inc.
and Platinum Cabaret, LLC. For the following reasons,
Defendants' motion to compel arbitration and dismiss will
Hill-Smith filed the instant action on July 19, 2018 claiming
the Defendants violated the minimum wage and overtime
requirements of the Fair Labor Standards Act and the Arkansas
Minimum Wage Act. (Doc. 1, p. 1, ¶ 1). Ms. Smith was
hired by Silver Dollar Cabaret and Platinum Cabaret as an
exotic dancer on October 2, 2017. (Doc. 14-2, p. 13; Doc.
14-2, p. 37). Ms. Smith executed separate but substantially
similar agreements with each company on October 2, 2017.
(Doc. 14-2, p. 13; Doc. 14-2, p. 37). The term of the
agreements was a period of one year, with automatic renewal
unless one of the parties terminated the agreements. (Doc.
14-2, p. 15; Doc. 14-2, p. 39). The agreements contained an
arbitration provision at Section 17. Section 17, paragraph A
Except as otherwise provided in this Lease, Entertainer and
[the company] consent to the resolution of all claims or
controversies between Entertainer and [the company], by
binding arbitration, for which a federal or state court or
other dispute-resolving body otherwise would be authorized to
grant relief, whether arising out of, relating to, or
associated with Entertainer's relationship with [the
company], whether sounding in contract, statute, tort, fraud,
misrepresentation, or any other legal theory that Entertainer
may have against [the company] or that may have against the
Entertainer (“a Dispute”).
arbitration provision explicitly includes Fair Labor
Standards Act and Arkansas Minimum Wage Act claims as claims
intended to be covered by the arbitration provision. (Doc.
14-2, § 17, ¶ B). Additionally, the arbitration
provision makes clear that “arbitration is the
Parties' exclusive legal remedy.” (Doc. 14-2,
§ 17, ¶ C). The arbitration provision also
prohibits the parties from arbitrating claims “subject
to this lease as or on behalf of, a class.” (Doc. 14-2,
§ 17, ¶ D). The provision affirms that “the
Parties understand that they are waiving any right to
participate in as a member or representative of a class
action for any claims or controversies arising from, or
subject to this Lease.” (Id.). Defendants
argue that the arbitration provision requires this Court to
compel arbitration and dismiss this case. Plaintiff argues
that the arbitration provision is unconscionable and
therefore unenforceable because it imposes a statute of
limitations period inconsistent with the limitations period
articulated in the FLSA.
motion to compel arbitration is reviewed under the summary
judgment standard. See Nebraska Machinery Co. v. Cargotec
Solutions, 762 F.3d 737, 741-42 (8th Cir. 2014). The
Court views the evidence and resolves all factual disputes in
the nonmoving party's favor. Id. In determining
whether Plaintiff's claims fall within the terms of the
arbitration provision, the Court should not rule on the
potential merits of the underlying claims. AT&T
Techs. v. Commc'ns Workers, 475 U.S. 643, 649
(1986). The Court should determine first whether there is a
valid arbitration agreement and second, whether the claims
fall within the terms of the arbitration provision.
Robinson v. EOR-ARK LLC, 841 F.3d 781, 783-84 (8th Cir.
2016). Arbitration agreements are valid and enforceable
unless they are invalidated by “generally applicable
contract defenses, such as fraud, duress, or
unconscionability . . . .” AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 339 (2011). An arbitration
agreement is not considered unconscionable simply because its
remedial limitations appear facially inconsistent with the
FLSA statutory claims. Bailey v. Ameriquest Mortg.
Co., 346 F.3d 821, 823 (8th Cir. 2003). “When an
agreement to arbitrate encompasses statutory claims, the
arbitrator has the authority to enforce substantive statutory
rights, even if those rights are in conflict with contractual
limitations in the agreement that would otherwise apply.
Hill-Smith entered into separate but substantially similar
agreements with Silver Dollar Cabaret and Platinum Cabaret on
October 2, 2017. The agreements Hill-Smith signed included an
arbitration provision at Section 17. The Court's first
task is to determine if the arbitration provision is
enforceable. Hill-Smith does not argue that she entered into
the contract with these Defendants as a result of fraud or
duress. Hill-Smith's only argument is that enforcement of
the arbitration agreement with these Defendants would be
unconscionable because it imposes a six-month statute of
limitations that is inconsistent with the traditional
two-year statute of limitations period imposed by the FLSA.
However, the Eighth Circuit has made clear that this
inconsistency alone fails to render an arbitration clause
unenforceable. The arbitrator will ultimately determine the
appropriate statute of limitations in effecting the statutory
rights founding the basis of Plaintiff's claims.
the agreement is enforceable, the Court should next determine
whether the unpaid wage dispute falls within the terms of the
arbitration provision. Arbitration provisions are construed
liberally, resolving doubts in favor of arbitration.
Moses H. Cone Mem'l Hosp. v. Mercury Constr.,
460 U.S. 1, 24-25 (1983). The Court is to use ordinary
contract principles in analyzing and construing the
parties' lease agreement and its arbitration provision.
CNH Indus. N.V. v. Reese, 138 S.Ct. 761, 763 (2018).
Ordinary contract interpretation principles are defined by
state law in arbitration disputes. See Patterson v. Tenet
Healthcare, Inc., 113 F.3d 832, 834 (8th Cir. 1997)
(noting ordinary contract principles in arbitration dispute
are determined by Missouri contract law). Under Arkansas law,
the Court “should consider the sense and meaning of the
words used by the parties as they are taken and understood in
their plain and ordinary meaning, ” when construing
terms in a contract. Nunnenman v. Estate of Grubbs,
374 S.W.3d 75, 78 (Ark. Ct. App. 2010). Furthermore,
“the intention of the parties is to be gathered, not
from particular words and phrases, but from the whole context
of the agreement.” Id. A provision of a
contract should not be construed in a way that deprives
meaning from other provisions, if there is a reasonable
interpretation that gives effect to all provisions. North
v. Philiber, 602 S.W.2d 643, 645 (Ark. 1980).
Arbitration agreements containing class waivers are
enforceable in FLSA cases. Owen v. Bristol Care,
Inc., 702 F.3d 1050, 1055 (8th Cir. 2013). Thus, FLSA
plaintiffs may be required by a binding arbitration agreement
to proceed individually. Epic Sys. Corp. v. Lewis,
138 S.Ct. 1612, 1626 (2018).
agreements are clear that unpaid wage disputes under the FLSA
and the Arkansas Minimum Wage Act must be arbitrated. The
agreements state that claims to be arbitrated “include,
but are not limited to, claims for wages or other
compensation . . . including but not limited to the Fair
Labor Standards Act of 1938, as amended, or the Arkansas
Minimum Wage Act.” Thus, it is clear that the plain
language and the intent of the parties dictate that
Hill-Smith's FLSA and Arkansas Minimum Wage Act claims
are covered by the agreements' arbitration provision.
Therefore, arbitration is required. Furthermore, Hill-Smith
has waived her right to bring a collective action on behalf
of similarly situated parties. Consequently, Hill-Smith must
proceed individually in arbitration proceedings against these
Defendants and her motion (Doc. 8) to certify a collective
action is DENIED at this time.
Defendant asks that this Court dismiss the case, after
determining that arbitration is appropriate. Section 3 of the
Federal Arbitration Act requires that once a court is
“satisfied that the issue involved in such suit or
proceeding is referable to arbitration under such an
agreement, [it] shall on application of one of the parties
stay the trial of the action until such arbitration has been
had in accordance with the terms of the agreement.” 9
U.S.C. § 3. However, a court may, in its discretion,
dismiss an action in favor of arbitration where it is clear
that the entire controversy will be resolved through
arbitration. Green v. SuperShuttle Int'l, Inc.,
653 F.3d 766, 769-70 (8th Cir. 2011); see also Choice
Hotels Int'l, Inc. v. BSR Tropicana Resort, Inc.,
252 F.3d 707, 709-10 (4th Cir. 2001); Alford v. Dean
Witter Reynolds, Inc., 975 F.2d 1161, 1163 (5th Cir.
1992); Sparling v. Hoffman Constr. Co., 864 F.2d
635, 638 (9th Cir. 1988).
Plaintiff's claims against Silver Dollar and Platinum
fall squarely within the arbitration agreement and the entire
controversy before the Court will be resolved by the
arbitrator. Thus, the Court, in its discretion, will dismiss
THEREFORE ORDERED that Defendants' motion (Doc. 16) to
compel arbitration and dismiss is GRANTED and ...