Bufford v. VXI Global Solutions LLC ( 2021 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Ayana Bufford, No. CV-20-00253-TUC-RCC 10 Plaintiff, ORDER 11 v. 12 VXI Global Solutions LLC, 13 Defendant. 14 15 Pending before the Court is Defendant VXI Global Solutions, LLC’s (“VXI”) 16 Motion to Dismiss and Compel Arbitration (Doc. 10) and Plaintiff Ayana Bufford’s Motion 17 for Conditional FLSA Class Certification and to Authorize Notice to Similarly Situated 18 Persons Under 29 U.S.C. § 216(b) and for Expedited Discovery (Doc. 11). After briefing 19 was complete, opt-in Plaintiff Kristan Grayson joined this suit. (Doc. 34.) The Court then 20 ordered supplementary briefing as to Grayson’s claims. (Docs. 35–37.) Because Plaintiff 21 Ayana Bufford and opt-in Plaintiffs Caroline Dugan and Kristan Grayson’s claims must be 22 decided through arbitration, the Court will grant Defendant’s motion. In addition, because 23 all claims are subject to arbitration and there is no indication any putative opt-in Plaintiff 24 could raise collective claims, the Court denies Bufford’s request for collective certification 25 and dismisses this case. 26 I. SUMMARY 27 a. Current Suit and Motion to Dismiss and Compel Arbitration 28 Plaintiff Bufford filed this lawsuit against VXI for failure to pay overtime and 1 incentive pay, in violation of the Fair Labor Standards Act (“FLSA”) and the Arizona Wage 2 Statute. (Doc. 1.) The suit was filed individually and as a collective action. (Id.) Plaintiff 3 Bufford and opt-in Plaintiff Caroline Dugan (collectively “Plaintiffs”)1 are former call 4 center employees at VXI. (Doc. 10-4 at 2, ¶2; Doc. 11-5 at 2, ¶2.) VXI asserts that 5 Plaintiffs’ claims are subject to arbitration (Doc. 10), but Plaintiffs believe VXI cannot 6 compel arbitration because their arbitration agreements were unconscionable (Doc. 22). 7 b. Arbitration Agreement 8 After a verbal offer of employment, Plaintiffs attended a new-hire orientation. 9 (Docs. 11-4 & 11-5 at ¶¶ 16–17.) There, Plaintiffs were provided numerous electronic 10 documents to sign, including a Mutual Agreement to Arbitrate Individual Claims 11 (“Arbitration Agreement” or “Agreement”). (Id.) Plaintiffs assert that prior to signing, they 12 “were not given the opportunity to ask questions” or “to speak to an attorney,” and were 13 not “told anything about the employment documents . . . other than to review and 14 electronically sign them if they wanted to start working.” (Doc. 22 at 4.) However, they 15 did not have time to thoroughly review the documents. (Id.) Plaintiffs also allege the 16 documents were incomplete, including approximately forty-five pages of paperwork that 17 were mere “snippets” of the Employee Handbook.” (Id.) 18 Plaintiffs attached the electronic orientation documents to their response, including 19 their signed Agreements. (Bufford’s Agreement, Doc. 22-1 at 16–18; Dugan’s Agreement, 20 Doc. 22-2 at 16–18.) Plaintiffs do not recall reviewing or signing these Agreements. (Doc. 21 22 at 4.) However, Plaintiffs do not challenge the validity of their signature on the 22 Agreement, nor do they assert the full Agreement was not provided to them. 23 The Agreement states the signor agrees “to resolve, by arbitration, all individual 24 claims or controversies,” including “claims for wages, bonuses, commissions or any other 25 form of compensation.” (Docs. 22-1 & 22-2 at 16.) The Agreement also delegates disputes 26 1 Dugan filed a Notice of Consent to Opt-in to Lawsuit on July 9, 2020, stating she is 27 similarly situated to Plaintiff Bufford. (Doc. 6.) Dugan is therefore treated as a party. See Campbell v. City of Los Angeles, 903 F.3d 1090, 1104 (9th Cir. 2018). However, because 28 the motions do not address Plaintiff Grayson, her claim is addressed separately and is not included in the collective “Plaintiffs.” 1 about the validity of the Agreement to an arbitrator (“Delegation Provision”). (Id.) The 2 Delegation Provision provides, “The Arbitrator, and not any federal . . . court . . . , shall 3 have exclusive authority to resolve any dispute relating to the interpretation, applicability, 4 enforceability, or formation of this agreement, including but not limited to any claim that 5 all or any part of this Agreement is void or potentially void.” (Id.) Below this, in bold, the 6 Agreement notes, “Except as otherwise provided in this Agreement, [VXI] and I agree 7 that neither of us shall initiate nor prosecute any lawsuit in any way related to this 8 claim.” (Id. at 16–17.) On the third page — in a standalone paragraph in a larger font size 9 and directly above Plaintiffs’ signatures — the Agreement indicates: (1) the signor has 10 carefully read the Agreement; (2) the Agreement is the complete understanding about 11 arbitration; (3) the signor is giving up a right to “a trial in a court of law”; (4) the signor is 12 not relying “on any premises or representations other than those contained in this 13 Agreement”; and (5) the signor has “had an opportunity to discuss this Agreement with 14 attorneys of [her] choice prior to signing it,” and has “used that opportunity to the extent 15 [she] wish[es] to do so.” (Id. at 18.) 16 c. Plaintiffs’ Position 17 Plaintiffs argue that the Agreement was unconscionable, therefore, no enforceable 18 contract was formed, and they cannot be forced to arbitrate. (Doc. 22 at 2–3.) Specifically, 19 Plaintiffs contend the Agreement was unconscionable because the Employee Handbook 20 was incomplete. (Id. at 6.) Second, Plaintiffs were not given the chance “to bargain for or 21 ask questions about” the Agreement – they were simply told they must sign to start work. 22 (Id. at 2). Finally, under the Agreement Plaintiffs are forced to pay for the transcription of 23 arbitration proceedings. (Id.) 24 Regardless of unconscionability, Plaintiffs assert they may proceed in federal court 25 because the Agreement applies only to individual claims, not collective actions. (Doc. 16 26 at 14–15.) Therefore, the collective FLSA and Arizona Wage claims are beyond the scope 27 of the Agreement. (Id.) 28 Finally, even if Plaintiffs Bufford and Dugan are subject to arbitration, Plaintiffs ask 1 the Court to retain jurisdiction over this matter because public policy encourages putative 2 opt-in Plaintiffs to receive notice. (Id. at 3.) 3 II. STANDARD OF REVIEW 4 A defendant may compel arbitration by filing a motion to dismiss pursuant to 5 Federal Rule of Civil Procedure 12(b)(1). ROI Properties Inc. v. Burford Capital Ltd., No. 6 CV-18-03300-PHX-DJH, 2019 WL 1359254, at *2 (D. Ariz. Jan. 14, 2019) (citing Cancer 7 Ctr. Assocs. for Research and Excellence, Inc. v. Phila. Ins. Cos., No. 1:15-CV-00084 LJO 8 MJS, 2015 WL 1766938, at *3 (E.D. Cal. Apr. 17, 2015)). When deciding whether to 9 compel arbitration, the district court’s review is limited. The inquiry focuses on two 10 questions: (1) “whether a valid agreement to arbitrate exists,” and (2) “whether the 11 agreement to arbitrate encompasses the dispute at issue.” Chiron Corp. v. Ortho Diagnostic 12 Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000); see also 9 U.S.C. § 4. If the answer is “yes” 13 to both inquiries, arbitration must be enforced. Chiron Corp., 207 F.3d at 1130. 14 The Federal Arbitration Act (“FAA”) “provides that written agreements to arbitrate 15 controversies arising out of an existing contract ‘shall be valid, irrevocable, and 16 enforceable, save upon such grounds as exist at law or in equity for the revocation of any 17 contract.’” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (quoting 9 U.S.C. 18 § 2); see also Broemmer v. Abortion Servs. of Phx., Ltd., 840 P.2d 1013, 1015 (Ariz. 1992). 19 The courts “cannot expand the [p]arties agreement to arbitrate,” Bonner v. Michigan 20 Logistics Inc., 250 F. Supp. 3d 388, 394 (D. Ariz. 2017), but “[a]ny doubts concerning the 21 scope of arbitrable issues should be resolved in favor of arbitration . . . .” Simula, Inc. v. 22 Autoliv, Inc., 175 F.3d 716, 719 (9th Cir. 1999). This analysis requires that a court view 23 the pleadings and supporting documents in the light most favorable to the non-moving 24 party. Coup v. Scottsdale Plaza Resort, LLC, 823 F. Supp. 2d 931, 939 (D. Ariz. 2011) 25 (applying summary judgment standard to arbitration disputes). 26 /// 27 /// 28 /// 1 III. DISCUSSION 2 a. Valid Arbitration Agreement 3 State law determines whether the parties entered into a valid agreement to arbitrate 4 disputes. Chalk v. T-Mobile USA, Inc., 560 F.3d 1087, 1092 (9th Cir. 2009). In Arizona, 5 “[f]or an enforceable contract to exist, there must be an offer, an acceptance, consideration, 6 and sufficient specification of terms so that the obligations involved can be ascertained.” 7 Pakter v. Dunne, No. CV-18-04559-PHX-JZB, 2020 WL 3050573, at *3 (D. Ariz. June 8, 8 2020). 9 Defendant’s offer of employment was accepted by Plaintiffs when they signed both 10 the Employee Handbook and Arbitration Agreement. The parties’ consideration consisted 11 of the mutual obligation to arbitrate any employment disputes. 12 Plaintiffs argue they were only provided portions of the Employee Handbook, and 13 the “failure to provide all material information inhibited their ability to review, understand, 14 and assent to the terms.” (Doc. 22 at 6.) This argument fails. Plaintiffs were given the 15 complete terms of the Arbitration Agreement, even though some of the Employee 16 Handbook was missing. Plaintiffs do not claim that the Agreement was incomplete, nor do 17 they point to any missing portions of the Employee Handbook that would have changed 18 the terms of arbitration. The Agreement clearly states “that all understandings . . . relating 19 to the subject matter of arbitration are contained” within the Agreement. (Docs. 22-1 & 22- 20 2 at 18.) In fact, an excerpt of the Employee Handbook included in the new hire orientation 21 demonstrates the contractual nature of the Arbitration Agreement, in contrast to the more 22 flexible guidelines contained in the rest of the Employee Handbook. (See Docs. 22-1 & 22- 23 2 at 13 (“I understand that from time to time it may be necessary to change the policies . . 24 . described in this handbook. Accordingly, [VXI] reserves the right to modify . . . any 25 provisions of this handbook, other than . . . the commitment to arbitrate disputes.” 26 (emphasis added)). Thus, the missing portions of the Handbook have no bearing on the 27 terms of the Agreement, and Plaintiffs had all the information they needed to assent. 28 In sum, the Court finds the Agreement, signed by Plaintiffs and made with 1 consideration of the mutual obligations of both parties to arbitrate, formed a contract to 2 arbitrate the FLSA and Arizona wage disputes raised in this suit. The express terms of the 3 Agreement unambiguously show the intent to arbitrate any “claims for wages, bonuses, 4 commissions or any other form of compensation.” (See Doc. 22-1 & 22-2 at 16.) Plaintiffs’ 5 individual FLSA and Arizona Wage Statute claims are wage disputes. The Agreement also 6 encompasses Plaintiffs’ unconscionability defenses, assigning disputes related to the 7 enforceability of the Agreement to an arbitrator. 8 However, this does not resolve (1) whether the scope of the agreement extends to 9 the collective action, or (2) whether the delegation of the enforceability of the Agreement 10 to an arbitrator is unconscionable. The Court addresses these questions in turn. 11 b. Scope of Agreement 12 i. Individual v. Collective Action 13 Next, the Court considers whether the Arbitration Agreement encompasses the 14 collective claims. Plaintiffs’ believe they should be permitted litigate in the collective 15 because the Agreement is limited to individual grievances. (Doc. 16 at 14-15.) They may 16 not. 17 Although a court “interprets the contract by applying general state-law principles of 18 contract interpretation,” it must also give “due regard to the federal policy in favor of 19 arbitration by resolving ambiguities as to the scope of arbitration in favor of arbitration.’” 20 Shivkov v. Artex Risk Sols. Inc., No. CV-18-04514-PHX-SMM, 2019 WL 8806260, at *3 21 (D. Ariz. Aug. 5, 2019), aff’d, 974 F.3d 1051 (9th Cir. 2020) (quoting Wagner v. Stratton 22 Oakmont, Inc., 83 F.3d 1046, 1049 (9th Cir. 1996)). An arbitration agreement “should not 23 be denied unless it may be said with positive assurance that the arbitration clause is not 24 susceptible to an interpretation that covers the asserted dispute.” Comedy Club, Inc. v. 25 Improv W. Assocs., 553 F.3d 1277, 1284 (9th Cir. 2009) (quoting AT & T Techs., Inc. v. 26 Commc’ns Workers of Am., 475 U.S. 643, 650 (1986). Moreover, in Arizona the courts 27 “adopt a construction of a contract which will harmonize all of its parts, and apparently 28 conflicting parts must be reconciled, if possible, by any reasonable interpretation.” Roe v. 1 Austin, 433 P.3d 569, 577 (Ariz. Ct. App. 2018), review denied (May 28, 2019). 2 The Agreement’s mandated arbitration limits Plaintiffs’ ability to litigate as class 3 representatives. Not only does the Agreement explicitly limit individual disputes to 4 arbitration, it prohibits litigation of claims “in any way related to this claim.” (Docs. 22- 5 1 & 22-2 at 16–17.) “When parties intend to include a broad arbitration provision, they 6 provide for arbitration ‘arising out of or relating to’ the agreement.” Cape Flattery Ltd. v. 7 Titan Mar., LLC, 647 F.3d 914, 922 (9th Cir. 2011). “Where an arbitration agreement is 8 broadly worded, the factual allegations underlying the claim need only ‘touch matters’ 9 covered by the arbitration agreement for the claim to be sent to arbitration.” Shivkov, 2019 10 WL 8806260, at *12 (quoting Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 11 473 U.S. 614 624, n.13 (1985). Here, the factual allegations in the collective touch the 12 issues raised in Plaintiffs’ individual disputes because they both arise from VXI’s unfair 13 wage practices. 14 In addition, Plaintiffs cite no case law – and the Court cannot find any – supporting 15 the conclusion that a plaintiff may litigate in the collective when she is bound to arbitrate 16 her individual claims. The Court finds the lack of supporting case law significant: it is 17 nonexistent because class litigation is impermissible when arbitration of individual claims 18 is mandated. Allowing a Plaintiff to represent a collective when she cannot litigate 19 individually is like allowing someone without standing to nevertheless proceed in federal 20 court. Although Plaintiffs raise a federal FLSA claim, because issues related to their 21 allegations must be arbitrated, they cannot continue litigating in federal court beyond this 22 Court’s determination of the Arbitration Agreement’s validity. Therefore, it is impossible 23 for Plaintiff Bufford or opt-in Plaintiff Dugan to represent “all others similarly situated” 24 here. See O’Shea v. Littleton, 414 U.S. 488, 494 (1974) (“[I]f none of the named plaintiffs 25 purporting to represent a class establishes the requisite of a case or controversy with the 26 defendants, none may seek relief on behalf of himself or any other member of the class.”). 27 Thus, the Agreement reasonably prohibits litigating collective claims. Because it is 28 susceptible to an interpretation that precludes class litigation, the Court resolves this matter 1 in favor of arbitration of the collective claims. 2 The Court finds Plaintiffs were provided the full Arbitration Agreement and 3 assented to its terms in consideration of the mutual obligations to arbitrate. In addition, the 4 terms of the Agreement embrace both the individual and collective claims. The Court now 5 turns to Plaintiffs’ unconscionability arguments. 6 IV. UNCONSCIONABILITY 7 Plaintiffs’ unconscionability arguments challenge both the Arbitration Agreement 8 as a whole and the Delegation Provision, which agrees to refer disputes concerning the 9 validity of the Agreement to an arbitrator. The Court is not at liberty to decide the 10 unconscionability of the Agreement as a whole; this is for an arbitrator to decide. See Rent- 11 A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 72–73 (2010) (finding no matter the validity of the 12 contract, it is only the validity of the arbitration provision that is necessary for enforcement). 13 For the reasons stated below, the Court finds the Delegation Provision is not 14 unconscionable. 15 a. Delegation Provision 16 Plaintiffs claim the Delegation Provision was both procedurally and substantively 17 unconscionable. Plaintiffs state the Delegation provision was procedurally invalid because: 18 (1) Plaintiffs do not recall receiving or reviewing the Arbitration Agreement; (2) they 19 “mindlessly” signed the documents; (3) they had no opportunity to consult a lawyer or ask 20 questions; and (4) they were forced to accept the terms of the Delegation Provision to work 21 at VXI. (Doc. 22 at 2, 6.) Moreover, the Provision was substantively unconscionable 22 because (5) Plaintiffs must bear the costs of transcribing arbitration proceedings. (Id.) 23 “Unconscionability is a generally applicable contract defense that may render an 24 arbitration agreement unenforceable under the FAA and it is determined according to the 25 laws of the state of contract formation.” Edwards v. Nutrition, No. CV-17-02133-PHX- 26 DGC, 2018 WL 637382, at *4 (D. Ariz. Jan. 31, 2018) (citing Doctor’s Assocs., Inc. v. 27 Casarotto, 517 U.S. 681, 687 (1996)). Specifically, “[p]rocedural unconscionability 28 concerns the manner in which the contract was negotiated and the respective circumstances 1 of the parties at that time, focusing on the level of oppression and surprise involved in the 2 agreement.” Loewen v. Lyft, Inc., 129 F. Supp. 3d 945, 955 (N.D. Cal. 2015) (quoting 3 Chavarria v. Ralphs Grocery Co., 733 F.3d 916, 922 (9th Cir. 2013)). Various factors play 4 into whether a contract is procedurally unconscionable, including the maturity and 5 “business acumen” of the plaintiff, as well as the ability of the weaker party to negotiate 6 and understand the terms of the agreement. Dueñas v. Life Care Ctrs. of Am., 336 P.3d 763, 7 768 (Az. Ct. App. 2014). In addition, the courts may consider “whether the contract was 8 separate from other paperwork, whether the contract used conspicuous typeface, and 9 whether the contract was signed hurriedly and without explanation in emergency 10 circumstances.” Id. Unconscionability is a plaintiff’s burden to prove; it is “a high bar to 11 meet.” Coup, 823 F. Supp. 2d at 947. 12 i. No Recollection of Delegation 13 Plaintiffs’ forgetfulness does not negate the fact they signed the Arbitration 14 Agreements. A mere three pages long, Plaintiffs do not dispute that they scrolled through 15 the Agreement, including the Delegation Provision, and that they electronically signed their 16 names to it. Plaintiffs’ failure to remember viewing or signing the document does not make 17 the Delegation Provision unconscionable. See Scott-Ortiz v. CBRE Inc., No. CV-20-00238- 18 PHX-DWL, 2020 WL 6781272 (D. Ariz. Nov. 18, 2020) (finding a four-page, clearly 19 marked arbitration clause valid even though plaintiff did not recall signing). 20 ii. Mindless Consent 21 Likewise, Plaintiffs’ failure to pay attention to what they were signing does not 22 make the terms unfair. See Rizzio v. Surpass Senior Living LLC, 459 P.3d 1201, 1206 (Ariz. 23 App. 2020) (failing to read the terms of arbitration does not constitute unconscionability, 24 even if the terms were not explained to plaintiff); see Coup, 823 F. Supp. 2d at 949 (“[A] 25 party to a contract . . . is bound by all the terms of the contract even those terms that were 26 not bargained for, understood, or even read by the party at the time of contracting”) 27 (citations omitted); Loewen, 129 F. Supp. 3d at 957 (finding plaintiffs had not demonstrated 28 a high degree of oppression when they could not recall signing a delegation clause hidden 1 within a 32-page agreement on a website, when terms were explicit and plaintiff clicked “I 2 agree”). Nor do Plaintiffs claim they could not understand the terms of the Agreement 3 because of a lack of business savvy. See Maxwell v. Fid. Fin. Svcs. Inc., 907 P.2d 51, 58 4 (Ariz. 1995). 5 iii. Consultation with Attorney and Inquiries 6 Moreover, Plaintiffs do not demonstrate unconscionability by claiming they were 7 rushed and were not provided time to ask questions. Plaintiffs do not indicate any 8 emergency that would have prevented them from asking questions or consulting with an 9 attorney. The only time limitation was due to their desire to commence work immediately; 10 this is insufficient. See Shivkov, 2019 WL 8806260, at *6 (rejecting unconscionability 11 argument despite plaintiffs’ claim they were rushed, because there was no indication how 12 much time was permitted to view agreement); see also Underwood v. Chapman Bell Rd. 13 Imports, LLC, No. CV-12-1835-PHX-DGC, 2013 WL 1289528, at *1 (D. Ariz. Mar. 15, 14 2013) (signing during a busy workday not unconscionable). Plaintiffs have not indicated 15 they tried to ask questions or requested additional time to review the documents and were 16 denied. See Coup, 823 F. Supp. 2d at 947–49 (concluding contract not unconscionable 17 when plaintiffs provided a copy of the arbitration agreement and no evidence that if given 18 more time they would not have signed); Adams v. Conn Appliances Inc., No. CV-17- 19 00362-PHX-DLR, 2017 WL 3315204, at *4 (D. Ariz. Aug. 3, 2017) (finding no procedural 20 unconscionability where plaintiff did not ask for more time or refuse to sign agreement). 21 Moreover, “the fact that Defendants did not identify or explain the Arbitration 22 Clause to Plaintiffs also does not render the provision unenforceable.” Shivkov, 2019 WL 23 8806260, at *6. Directly above Plaintiffs’ signatures, Plaintiffs indicated each had 24 exercised their opportunity to ask questions of an attorney “to the extent [she] wish[es] to 25 do so.” (Docs. 22-1 & 22-2 at 18.) To contend otherwise is unpersuasive and unsupported. 26 iv. Costs of Transcription 27 Plaintiffs argue that it is substantively unconscionable to require them to pay for 28 transcription of arbitration proceedings. (Doc. 22 at 2.) This argument challenges the 1 Agreement as a whole, rather than the Delegation Provision specifically. Nevertheless, the 2 Court will consider whether the Delegation Provision creates an undue burden on Plaintiffs 3 because it forces them to arbitrate and – as a result – bear transcription costs. 4 Under state law, “[a]n arbitration agreement may be substantively unconscionable 5 if the fees and costs to arbitrate are so excessive as to deny a potential litigant the 6 opportunity to vindicate his or her rights. . . . The party seeking to invalidate an arbitration 7 agreement . . . has the burden of proving that arbitration would be prohibitively expensive.” 8 Clark v. Renaissance W., LLC, 307 P.3d 77, 79 (Ariz. Ct. App. 2013). 9 Transcript costs are not significantly prohibitive. They are comparable to the costs 10 associated with transcribing the matter in district court. Moreover, Plaintiff has not shown 11 why transcription is essential to vindicate Plaintiffs’ rights or presented any evidence as to 12 what the costs would be. In addition, the AAA guidelines, under which the parties agreed 13 to arbitrate, requires payment for transcripts from “the requesting party.” See Employment 14 Arbitration Rules and Mediation Procedures, Am. Arbitration Assoc. p. 18, 15 https://adr.org/sites/default/files/EmploymentRules_Web_2.pdf. Therefore, the 16 Agreement’s provision is not inconsistent with the costs of typical AAA arbitration. 17 Finally, even if the cost-bearing provision was unconscionable, the remedy would be to 18 sever the violative section from the Agreement, not to find the Delegation Provision 19 unconscionable. See Edwards, 2018 WL 637382, at *5 (concluding when a single provision 20 is unconscionable, the remedy is to sever the provision) (citing Cooper v. QC Fin. Servs., 21 Inc., 503 F. Supp. 2d 1266, 1290 (D. Ariz. 2007). 22 The Court cannot find that the speculative costs would deter an employee from 23 arbitrating his or her claim or cost significantly more than raising the same claim in federal 24 court. As a result, the Court will not conclude the Agreement forecloses the vindication of 25 Plaintiffs’ rights. See Harrington v. Pulte Home Corp., 119 P.3d 1044, 1056 (Ariz. Ct. 26 App. 2005) (refusing to find fees substantively unconscionable when litigant failed to 27 “show arbitration will put them in any worse position than litigation.”) 28 v. Adhesion Contract 1 “An adhesion contract is offered on essentially a take it or leave it basis without 2 affording the consumer a realistic opportunity to bargain and under such conditions that 3 the consumer cannot obtain the desired . . . services except by acquiescing in the form 4 contract.” Rizzio, 459 P.3d at 1206 (citing Duenas v. Life Care Centers of Am., Inc., 336 5 P.3d 763, 771 (Ct. App. 2014) (quotation marks omitted)). In Arizona, adhesion contracts 6 are generally enforceable, but must meet the “reasonable expectations of the weaker party” 7 and may not be “unduly oppressive or unconscionable.” Broemmer v. Abortion Servs., 840 8 P.3d 1013, 1016 (Ariz. 1992) (citation and quotation marks omitted). Mere existence of an 9 adhesion contract does not signify unconscionability. See Longnecker v. Am. Exp. Co., 23 10 F. Supp. 3d 1099, 1108–09 (D. Ariz. 2014). Similarly, waiving a jury trial is insufficient 11 to show an arbitration agreement failed to meet reasonable expectations. Shivkov, 2019 WL 12 8806260, at *8. 13 Here, the Agreement constituted an adhesion contract because Plaintiffs had to sign 14 to start working for VXI and the Agreement gave Plaintiffs no bargaining power. This is 15 not per se unconscionable. 16 To decide unconscionability, the question is whether it was beyond Plaintiffs’ 17 reasonable expectations to arbitrate a challenge to the enforceability of the Agreement. 18 “Terms of an agreement are beyond the range of reasonable expectation if one party to the 19 contract has reason to believe that the other party would not have accepted the agreement 20 if [she] had known that the agreement contained the particular term.” Underwood, 2013 21 WL 1289528, at *2 (internal quotation marks omitted) (quoting Harrington, 211 Ariz. 22 241). Plaintiffs make no argument that the terms of the Delegation Provision failed to meet 23 reasonable expectations. Nor do they argue that but for the Delegation Provision they 24 would not have signed the Agreement. Furthermore, the Agreement’s terms were 25 uncomplicated and included an explicit delegation of the determination of enforceability 26 to an arbitrator. Moreover, the statement that Plaintiffs were waiving a jury trial was in 27 large typeface directly above the Plaintiffs’ signatures. The Court finds the Delegation 28 Provision was not beyond Plaintiffs’ reasonable expectations. But see Broemmer, 840 P.3d 1 at 1016 (finding arbitrability was beyond reasonable expectations where there was no 2 explicit waiver of trial and terms of delegation agreement were not explained). 3 Moreover, for the reasons stated previously, the terms of the Delegation Provision 4 were not unconscionable. The Provision does not contradict any avowal by VXI; it 5 explicitly gives the question of enforceability to an arbitrator. Furthermore, the terms are 6 not unfair. Plaintiffs may still seek redress through arbitration, the costs are borne by VXI, 7 and the financial burden is not prohibitively oppressive. 8 And so, the Court finds Plaintiffs entered into a valid Arbitration Agreement 9 delegating both their class and individual claims as well as the enforceability of their 10 Arbitration Agreements to an arbitrator. 11 V. CLASS CERTIFICATION AND NOTICE 12 Plaintiffs Bufford and Dugan are compelled to arbitrate their claims. In addition, 13 they may not litigate the collective action. However, two questions remain: whether (1) 14 Plaintiff Grayson may represent the collective, and (2) putative opt-in Plaintiffs should be 15 given notice of this action. The answer to both is no. 16 a. Opt-in Plaintiff Kathleen Grayson 17 After the motions were fully briefed, counsel for Plaintiffs filed a Notice of Consent 18 to Opt-in to Lawsuit for Kristan Grayson, stating Grayson is “similarly situated” to 19 Plaintiffs.2 (Doc. 34.) Counsel’s eleventh-hour addition of an opt-in Plaintiff Grayson 20 appeared to be a Hail Mary attempt to avoid the denial of class certification and dismissal 21 of this action in full. Therefore, the Court requested further briefing. (Doc. 35.) 22 Defendant’s supplementary brief stated Grayson’s Agreement was identical to 23 Plaintiffs’, and that she participated in the same standard orientation. (Doc. 36; Grayson’s 24 Agreement, Doc. 36-1.) Grayson did not challenge Defendant’s contention in her reply. 25 (See Doc. 37.) Nor did she raise any additional defenses to contract formation. Therefore, 26 she too is subject to arbitration and may not represent the class. 27 b. Notice to Putative Opt-In Plaintiffs and Collective Certification 28 2 Grayson is represented by the same attorney as Bufford and Dugan. (See Docs. 1, 6, 34.) 1 Defendant also attached an affidavit from VXI’s Head of Human Resources, Philip 2 Jackson, stating, “[a]ll customer service representatives at the VXI Arizona call center have 3 participated in the same new hire orientation process as [Plaintiffs Bufford, Dugan, and 4 Grayson]” for the period alleged in the Complaint’s collective allegations. (Doc. 36-2.) 5 Jackson added he was “not aware of any customer service representative at the Arizona 6 call center who has not signed the Mutual Agreement to Arbitrate Individual Claims.” (Id.) 7 In response, Grayson argues Jackson’s affidavit is insufficient to show “all 8 Customer Service Representatives at a VXI call center in Arizona . . . actually signed 9 arbitration agreements.” (Doc. 37 at 2.) Grayson claims there is a possibility that some 10 putative opt-in Plaintiffs attended separate orientations and may not have signed the 11 Agreement. (Id.) Moreover, Plaintiffs claim that it is in the public’s interest to send notice 12 to putative opt-in Plaintiffs. (Doc. 22 at 3.) Therefore, they ask the Court to send notice to 13 putative opt-in Plaintiffs despite Bufford, Dugan, and Grayson’s dismissal. (Id.) 14 Plaintiffs also cite one case to demonstrate that the Court should send notice despite 15 their dismissal, Judd v. Keypoint Gov’t Sols., Inc., No. 18-CV-00327-RM-STV, 2018 WL 16 7142193 (D. Colo. Dec. 4, 2018). (Doc. 22 at 15.) That case, however, is nonprecedential 17 and distinguishable. There, Orson Judd was the named plaintiff along with five opt-in 18 plaintiffs. Judd v. Keypoint Gov’t Sol., Inc., No. 1:18-cv-00327-RM-STV, (Compl., Doc. 19 1; Consent to Sue Forms, Docs. 8, 15, 19, 20, 21) (D. Colo. July 23, 2018). However, Judd 20 was not subject to an arbitration agreement and was permitted to proceed with litigation. 21 See id, Doc. 92 at 25 (“[Defendant] maintains that [opt-in plaintiffs] are not similarly 22 situated to Judd and other contract investigators who are not obliged to individually 23 arbitrate.”) (quotation marks omitted). Here, Plaintiff Bufford and opt-in Plaintiffs Dugan 24 and Grayson are bound to arbitrate, leaving no litigants. 25 In addition, unlike Judd, in this case there is no evidence that the circumstances 26 differ between Plaintiffs and putative opt-in Plaintiffs; the routine, mandatory employee 27 orientation, and the signing of the Arbitration Agreement were applicable to all sales 28 representatives. Based on the statements of both parties, it appears that the employee 1 orientation is a standard process, with identical documents provided that are reviewed 2 under similar circumstances. (See Mtn. for Class Certification, Doc. 11 at 6-8; Philip 3 Jackson Decl., Doc. 10-1 at 11-13; Bufford Decl., Doc. 11-4 at 5-6, ¶¶16-17; Dugan Decl., 4 Doc. 11-4 at 5, ¶¶14–15; Grayson Supp’l Brief, Doc. 37.) There is no indication that any 5 putative opt-in Plaintiff engaged in an alternative process or failed to sign the Agreement. 6 Next, Plaintiffs Bufford, Grayson, and Dugan also suggest that preventing notice 7 will “take away an employee’s right to join an FLSA collective action.” (Doc. 22 at 15; see 8 Doc. 37 at 1 (stating failure to provide notice would “extinguish the FLSA rights of the 9 putative opt-in plaintiffs”).) The Court disagrees. Nothing about this Order prevents 10 potential plaintiffs from filing their own FLSA claims. Only current opt-in plaintiffs are 11 bound by this Court’s determinations. McElmurry v. U.S. Bank Nat. Ass’n, 495 F.3d 1136, 12 1139 (9th Cir. 2007); 29 U.S.C. § 256 (stating commencement of FLSA is effective upon 13 filing of consent to sue). 14 The Court will not permit collective certification or notification and will dismiss 15 this action because the Plaintiff and opt-in Plaintiffs are not capable of representing the 16 class because the claims are wholly subject to arbitration. See Johnmohammadi v. 17 Bloomingdale’s, Inc., 755 F.3d 1072, 1074 (9th Cir. 2014) (finding dismissal appropriate 18 where all claims arbitrable); Jones v. United Gas Improvement Corp., 383 F. Supp. 420, 19 435 (E.D. Pa. 1974) (“plaintiffs, who lack standing in their own right to litigate claims 20 against the defendant unions, may not acquire standing on the ground that some member 21 of the class they purport to represent may possess the requisite standing”); see Green v. 22 Fishbone Safety Sols., Ltd., 303 F. Supp. 3d 1086, 1100 (D. Colo. 2018) (denying 23 conditional certification as moot because claims wholly subject to arbitration). Plaintiffs 24 have no interest in the outcome of a collective lawsuit because their individual claims 25 cannot be litigated. See Hollingsworth v. Perry, 570 U.S. 693, 705–06 (2013) (standing 26 requires a plaintiff to have a “direct stake in the outcome” of the case). 27 So, despite the lenient first-stage standard for certification, based on the facts before 28 the Court, the undersigned cannot conclude that there is any evidence that any putative opt- 1 in Plaintiff would not be subject to the same Delegation Provision as Plaintiffs Bufford, 2 Dugan, and Grayson. To provide notice to potential opt-in litigants at this time would put 3 the proverbial cart in front of the horse and allow Bufford, Dugan, and Grayson — who 4 cannot litigate their claims in this Court represent the collective — to notice individuals 5 who, based on the practices of VXI and the allegations contained in the affidavits in this 6 case, will also be subject to arbitration. Allowing this would not serve the interests of 7 judicial economy. Longnecker v. Am. Exp. Co., No. 2:14-CV-0069-HRH, 2014 WL 8 4071662, at *4 (D. Ariz. Aug. 18, 2014) (“[N]either the remedial purposes of the FLSA, 9 nor the interests of judicial economy, would be advanced if [the court] were to overlook 10 facts which generally suggest that a collective action is improper.”). The Court has broad 11 discretion when deciding whether to notify putative Plaintiffs. Hoffmann-La Roche Inc. v. 12 Sperling, 493 U.S. 165, 169 (1989). On balance, the Court will deny Bufford’s motion to 13 certify and provide notice. 14 This dispenses of this suit as the Court sees no reason to stay this matter pending 15 arbitration and Plaintiffs have not requested the Court stay proceedings. See Shivkov, 2019 16 WL 8806260, at *13–14 (“[W]here all claims in a suit are barred by an arbitration clause, 17 the court may grant dismissal.”); see also 9 U.S.C. § 3. (“If any suit or proceeding be . . . 18 referable to arbitration under an agreement in writing . . . the court in which such suit is 19 pending . . . shall on application of one of the parties stay the trial of the action until such 20 arbitration has been had . . .”) (emphasis added). 21 /// 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 1 Accordingly, IT IS ORDERED: 2 1) Defendant VXI Global Solutions, LLC’s (“VXI”) Motion to Dismiss and 3 Compel Arbitration is GRANTED. (Doc. 10.) 4 2) Plaintiff Ayana Bufford’s Motion for Conditional FLSA Class Certification 5 and to Authorize Notice to Similarly Situated Persons Under 29 U.S.C. § 6 216(b) and for Expedited Discovery is DENIED. (Doc. 11.) 7 3) The Clerk of Court shall docket accordingly and close the case file in this 8 matter. 9 Dated this 22nd day of January, 2021. 10 11 , 4 12 fy p Th- 13 Honorable Raner ©. Collins 14 senior United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -17-