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Holley v. Bitesquad.Com LLC

United States District Court, E.D. Arkansas, Western Division

September 19, 2019




         Before the Court is defendant LLC d/b/a Bite Squad's ("Bite Squad") motion to compel individual arbitration (Dkt. No. 8). Plaintiffs responded in opposition, and Bite Squad replied (Dkt. Nos. 10, 14). Further, plaintiffs submitted a notice of supplemental authority to the Court to which Bite Squad responded (Dkt. Nos. 18, 19). Plaintiffs allege that Bite Squad violated the minimum wage provisions of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and the Arkansas Minimum Wage Act ("AMWA"), Arkansas Code Annotated §§11-4-201 et seq. Plaintiffs base their allegations upon Bite Squad's use of a "tip credit," a method of compensation in which an employer pays its employees a base wage below the minimum wage, which may be permissible so long as the employees' tips ultimately bring their wages up to the minimum wage. Plaintiffs claim that Bite Squad violated the law by using a tip-credit system because it required its drivers to share tips with employees who did not "customarily and regularly receive tips." 29 U.S.C. § 203(m)(2)(A). Bite Squad now moves to compel arbitration pursuant to Arbitration Agreements allegedly signed by plaintiffs. Plaintiff Russell Holley challenges the Arbitration Agreement by claiming that the essential element of mutual asset is lacking and that the Arbitration Agreement therefore is unenforceable. For the following reasons, the Court grants Bite Squad's motion to compel individual arbitration and dismisses with prejudice plaintiffs' class action and collective claims (Dkt. No. 8).

         I. Background

         In support of its motion to compel arbitration, Bite Squad presents the affidavit of David Schramm, the "Chief Legal and Administrative Officer" of Bite Squad and its wholly-owned subsidiary, KASA Delivery, LLC ("KASA") (Dkt. No. 9-1, ¶ 2). Mr. Schramm avers that, after a potential employee applies for employment, the employee is "emailed an electronic copy of a hiring packet containing (among other documents) an Employment Application, Employment Agreement, and an Arbitration Agreement, which the employee may complete at a BiteSquad location or on [his or her] own computer." (Id., ¶ 5). Mr. Schramm further states that "[t]he entire hiring packet is emailed to and accessed by the employee at the same time, and the applicant must review each document in the hiring packet before completing and submitting it." (Id., ¶ 6).

         Mr. Schramm states that "[t]he first time an applicant reaches a signature field, they choose to create their signature, which may be made by signing a field with the mouse or pointer; signing the field with their finger; signing the field with a typed signature in the font of their choosing; or uploading a picture of their signature." (Id., ¶ 7). He also states that applicants "had the option to choose whether they wanted to automatically affix their signature wherever it was required or use the process" just described (Id., ¶ 8). Furthermore, he states that each applicant "was required to type their name into the Name Fields within the Arbitration Agreement, along with the signature, thereby ensuring the Applicant would be required to review, and enter the applicable information on, the Arbitration Agreement." (Id., ¶ 9).

         Mr. Schramm further notes that "[t]he applicant cannot complete and submit the hiring packet without filling out every required field including affixing their name and signature on the Employment Application, Employment Agreement[,] and Arbitration Agreement." (Id., ¶ 11). Once the packet is completed, "the employee must click a button submitting their packet to BiteSquad/KASA." (Id., ¶ 10). At that point, "[a] BiteSquad/KASA representative would then review the employee's submission and sign the documents on behalf of BiteSquad/KASA." (Id., ¶ 12). According to Mr. Schramm, "[a]n Audit Trail records the email address to which the employment packet is sent and the times at which it is sent, viewed[,] and signed by the employee . . . ." (Id.).

         Mr. Schramm avers that it is Bite Squad's regular practice "to maintain the Employment Application, Employment Agreement, Arbitration Agreement, and Audit Trail as part of every employee's file." (Id, ¶ 13). Attached to Mr. Schramm's affidavits are copies of the Employment Application, Employment Agreement, Arbitration Agreement, and Audit Trail for each of the individual plaintiffs (Dkt. No. 9-1, at 6-55).

         The Arbitration Agreements each contain one line for the date, two lines for the typed name of the applicant, and one line for the signature of the applicant (Id., at 10, 14, 20, 24, 30, 34, 40, 44, 50, 54). The individual plaintiffs' names and signatures are filled in on each of these lines (Id.). Each Arbitration Agreement contains the following relevant language:

Except as this Agreement otherwise provides, claims covered by this Agreement (sometimes referred to jointly and separately as "Claims") include, but are not limited to, legal disputes with any individual or entity regarding . . . wages or other compensation due, minimum wage, . . . and . . . claims arising under . . . [the] Fair Labor Standards Act, . . . [and] state statutes or regulations addressing the same or similar subject matters."

(Id., at 10, 20, 30, 40, 50).

         The Arbitration Agreements also state that:

Both the Company and you agree to bring any dispute in arbitration on an individual bases only, and not on a class or collective basis on behalf of others.
Notwithstanding any other provision of this Agreement or the AAA Rules . . ., disputes regarding the validity, enforceability or breach of the Class Action Waiver may be resolved only by a civil court of competent jurisdiction and not by an arbitrator.

(Id., at 11, 21, 31, 41, 51). Each Arbitration Agreement also states that arbitrations pursuant to the Arbitration Agreements "shall be conducted in accordance with the procedures set forth in the American Arbitration Associations' Employment Arbitration Rules ("AAA Rules") . . . ." (Id., at 12, 22, 32, 42, 52). The Arbitration Agreements also allow applicants "to opt out and not be subject to" the Arbitration Agreements (Id., at 13, 23, 33, 43, 53).

         At the conclusion of the Arbitration Agreements, immediately preceding the signature and typed applicant name, appears this language in capital letters and bold type:


(Id., at 13, 23, 33, 43, 53).

         Also attached to Mr. Schramm's affidavit are "Audit Trails" for each of the individual plaintiffs (Id., at 15, 25, 35, 45, 55). Each of the Audit Trails indicates when the "Hiring Packet" was sent to the individual plaintiffs, when the individual plaintiffs "viewed" and "signed" the document, and when a Bite Squad representative "viewed" and "signed" the document (Id). Each of the Audit Trails indicates that the individual plaintiffs viewed and signed the documents that were sent to them (Id.).

         In response, plaintiffs submit the declaration of individual plaintiff Russell Holley (Dkt. No. 10-1). In his declaration, although he admits to having been presented with and having seen the Employment Application and the Employment Agreement, Mr. Holley states that Bite Squad "did not present [him] with the 'Arbitration Agreement'" that is attached to Mr. Schramm's affidavit (Id., ¶¶ 4-10). He also states that he did not sign the Arbitration Agreement and that "the printed cursive name appearing on [the Arbitration Agreement] is clearly a computer reproduction in cursive of [his] name that was typed on the 'Employment Application' labeled Exhibit A-l." (Id., ¶ 12). Mr. Holley also states that the Audit Trail "only shows that [he] typed [his] name on the 'application (5).pdf document, meaning the Employment Application in Exhibit A-l." (Id., ¶ 13). Mr. Holley further states that "the Audit Trail further proves that there was only one document presented to [him] as the Audit Trail itself reads that 'this document was signed on'" (Id., ¶ 14). Mr. Holley asserts that the Audit Trail "does not show that there were multiple documents presented to [him]." (Id). Instead, according to Mr. Holley, "there was only one form document presented to [him], the Employment Application/Employment Agreement." (Id., ¶ 15). He states that the Audit Trail "confirm[s] that the Arbitration Agreement was not sent to [him]." (Id., ¶ 16).

         Mr. Holley asserts that his "name was clearly electronically reproduced to an arbitration agreement [he] did not see nor could be bound to." (Id., ¶ 17). He further states that he did "not agree to arbitrate claims, nor was there any other time in [his] employment where [his] continued employment hinged on [him] agreeing to some arbitration agreement." (Id., ¶ 22). He also argues that Bite Squad "has no proof that he "signed the field with a typed signature," and he asserts that he "did not use any automatic feature for affixing [his] signature on these documents or at any other time." (Id., ΒΆΒΆ 23, 24). According to Mr. Holley, "[t]he only explanation for the ...

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