United States District Court, E.D. Arkansas, Western Division
KRISTINE G. BAKER, UNITED STATES DISTRICT JUDGE
the Court is defendant Bitesquad.com 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).
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).
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).
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.).
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).
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
(Id., at 10, 20, 30, 40, 50).
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).
conclusion of the Arbitration Agreements, immediately
preceding the signature and typed applicant name, appears
this language in capital letters and bold type:
EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES CAREFULLY
READING THIS AGREEMENT, UNDERSTANDING ITS TERMS, AND ENTERING
INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY
PROMISES OR REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS AGREEMENT ITSELF.
(Id., at 13, 23, 33, 43, 53).
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
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
bitesquad.com.'" (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).
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., ¶¶ 23, 24). According to
Mr. Holley, "[t]he only explanation for the ...