AMS Staff Leasing, Inc. v. Robert F. Taylor and Diamond K Resources3

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
AMS STAFF LEASING, INC.,
Appellant,
v.
ROBERT F. TAYLOR and DIAMOND K RESOURCES, LLC, a foreign
limited liability company,
Appellees.
No. 4D14-1387
[January 7, 2015]
Appeal of non-final order from the Circuit Court for the Nineteenth
Judicial Circuit, St. Lucie County; Dwight L. Geiger, Judge; L.T. Case No.
562013CA001916 (DC).
Amy L. Baker and Henry W. Jewett II of Rissman, Barrett, Hurt,
Donahue & McLain, P.A., Orlando, for appellant.
No appearance for appellees.
TAYLOR, J.
AMS Staff Leasing, Inc., appeals a non-final order denying its motion
to abate the action and compel arbitration. Because we find that the
agreement to arbitrate was valid, we reverse.
On December 18, 2012, the plaintiff, Robert Taylor, started working as
a truck driver for Diamond K Resources, LLC. The plaintiff was hired by
a supervisor at Diamond K after providing his driver’s license and social
security card. The plaintiff testified that he did not fill out any paperwork
that day.
When the plaintiff arrived at a Florida job site on the morning of
December 21, 2012, a supervisor gave him a written application for
employment with AMS, an employee leasing company based in Dallas,
Texas. The supervisor told the plaintiff and the other drivers to fill out the
form, backdate it to December 19, 2012, and return it within five minutes
or else they could “go home” and would be fired. The plaintiff filled out the
paperwork on the hood of a truck under a parking lot light. The plaintiff
signed the agreement, but he did not read it because he did not have his
reading glasses with him.
The agreement contains an arbitration clause that requires any dispute
with AMS to be arbitrated in Texas:
I agree that my sole recourse for resolving any dispute with
AMS arising under my employment, including but not limited
to wage claims, shall be to arbitrate such dispute. Such
arbitration shall be pursuant to the arbitration laws of the
State of Texas and the rules, then obtaining, of the American
Arbitration Association. Venue of any action shall be in Dallas
County, Texas. AMS is based in Dallas, Texas, and Applicant
acknowledges that this Agreement is to be partially performed
in Dallas, Texas.
In January 2013, the plaintiff was injured in the course and scope of
his employment. The plaintiff’s employment was terminated shortly
thereafter.
The plaintiff then sued AMS and Diamond K for wrongful termination,
claiming that the reason he was terminated was because he made a valid
claim for workers’ compensation.
AMS made a special limited appearance in the action and filed a Motion
to Abate and Compel Arbitration. The court held a hearing on the motion
and allowed the plaintiff to give testimony concerning the circumstances
surrounding the execution of the arbitration agreement.
Counsel for the plaintiff argued that: (1) AMS waived enforcement of the
agreement by not seeking arbitration in the workers’ compensation case;
(2) the arbitration agreement violated public policy because it failed to
exempt workers’ compensation matters and because it required a Florida
hourly-wage worker to travel to Texas to arbitrate a claim that his
termination violated the workers’ compensation law, and (3) the arbitration
agreement was unconscionable and was procured under duress.
The trial court ultimately entered an order denying AMS’s motion to
compel arbitration. The trial court made factual findings consistent with
the plaintiff’s testimony. Further, the trial court ruled that the arbitration
provision was invalid because: (1) it did not exclude workers’ compensation
proceedings from its scope, and (2) it violated public policy by requiring an
hourly wage employee to arbitrate an employment dispute in a state other
than Florida. This appeal followed.
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“The standard of review for denial of a motion to compel arbitration is
de novo.” Shetty v. Palm Beach Radiation Oncology Assocs.-Sunderam K.
Shetty, M.D., P.A., 915 So. 2d 1233, 1234 (Fla. 4th DCA 2005).
“Under both federal statutory provisions and Florida’s arbitration code,
there are three elements for courts to consider in ruling on a motion to
compel arbitration of a given dispute: (1) whether a valid written agreement
to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether
the right to arbitration was waived.” Seifert v. U.S. Home Corp., 750 So. 2d
633, 636 (Fla. 1999). It is for the court, not the arbitrator, to determine
whether a valid written agreement to arbitrate exists. Shotts v. OP Winter
Haven, Inc., 86 So. 3d 456, 471 (Fla. 2011). Likewise, “it is incumbent on
the court, not the arbitrator, to determine whether an arbitration
agreement violates public policy.” Id.“[A]n agreement to arbitrate future disputes in another jurisdiction is
outside the authority of the Florida Arbitration Code . . . and . . . renders
the agreement to arbitrate voidable at the instance of either party.”
Damora v. Stresscon Int’l, Inc., 324 So. 2d 80, 82 (Fla. 1975). If, however,
the Federal Arbitration Act (“FAA”) applies to the agreement, a Florida
court must enforce a valid arbitration clause which provides for arbitration
in a foreign state. Default Proof Credit Card Sys., Inc. v. Friedland, 992 So.
2d 442, 444 (Fla. 3d DCA 2008).
The FAA applies to “a transaction that, in fact, involves interstate
commerce,” even if the parties did not intend the transaction to have an
interstate commerce connection. Mintz & Fraade, P.C. v. Beta Drywall
Acquisition, LLC, 59 So. 3d 1173, 1175 (Fla. 4th DCA 2011) (quoting
Default Proof, 992 So. 2d at 445). The phrase “interstate commerce” is to
be interpreted broadly. Id.Here, the employment transaction involved interstate commerce.
Although the plaintiff worked in Florida, he entered into an employment
agreement with a Texas employee leasing company. In light of the broad
interpretation of “interstate commerce” under the case law, the
employment agreement in this case involves interstate commerce and is
thus governed by the FAA.
The reasons the trial court gave for finding the arbitration agreement
invalid are not legally sound. First, it does not violate public policy for an
agreement to require arbitration of a workers’ compensation retaliation
claim, as arbitration of such a claim does not defeat the remedial purpose
of the statute. See Audio Visual Innovations, Inc. v. Spiessbach, 119 So.
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3d 522, 525 (Fla. 2d DCA 2013). A claim for workers’ compensation
benefits is distinct from a cause of action for retaliatory discharge under
section 440.205, Florida Statutes (2012).
The arbitration agreement is valid as applied to the retaliation claim in
this case. To be sure, the arbitration provision in this case did not
specifically exclude claims for workers’ compensation benefits from its
scope, whereas the arbitration provision in Audio Visual did expressly
exclude workers’ compensation claims. But the absence of such an
exclusion in this case does not render the arbitration provision invalid.
Here, AMS never sought to compel arbitration of the plaintiff’s claim for
workers’ compensation benefits. The only claim that AMS sought to
arbitrate is the plaintiff’s claim in the underlying lawsuit for retaliatory
discharge in violation of section 440.205, Florida Statutes. Arbitration of
such a claim is not inconsistent with public policy.
The trial court’s second reason for invalidating the arbitration
agreement also fails to withstand careful scrutiny. Here, the agreement is
governed by the FAA, not Florida’s arbitration code. Thus, because the
FAA governs the agreement, the fact that the agreement provides for
arbitration in another state is not a ground for invalidating it. See, e.g.,
Default Proof, 992 So. 2d at 444.
Further, AMS has not waived its right to arbitrate the plaintiff’s claim
for retaliatory discharge. Although the trial court did not rely on waiver
as a ground for denying the motion to compel arbitration, the plaintiff did
argue below that AMS waived the right to arbitrate the claim. “Waiver of
the right to arbitration results from active participation in a lawsuit or
from taking action inconsistent with that right.” O’Keefe Architects, Inc. v.
CED Constr. Partners, Ltd., 944 So. 2d 181, 185 n.4 (Fla. 2006). The
determination of whether there has been a waiver does not necessarily
depend on the timing of the motion to compel arbitration, but rather on
the prior taking of an inconsistent position by the moving party. Miller &
Solomon Gen. Contractors, Inc. v. Brennan’s Glass Co., Inc., 824 So. 2d 288,
290 (Fla. 4th DCA 2002).
Here, AMS has not taken any action that is inconsistent with its right
to arbitrate the plaintiff’s retaliatory discharge claim. The first action that
AMS took in the lawsuit was filing its motion to compel arbitration. AMS
has not actively participated in this lawsuit or otherwise taken any action
inconsistent with the right to arbitrate. Furthermore, the fact that AMS
did not attempt to arbitrate the plaintiff’s claim for workers’ compensation
benefits—a separate claim which AMS might not have been legally entitled
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to arbitrate in the first place—did not somehow operate as a waiver of its
right to arbitrate the retaliation claim in this case.
Finally, the plaintiff did not establish any defenses to arbitration, such
as duress or unconscionability. The party seeking to avoid arbitration
bears the burden of proving a contractual defense to enforcement of the
arbitration agreement. See Spring Lake NC, LLC v. Beloff, 110 So. 3d 52,
54-55 (Fla. 2d DCA 2013).
One possible defense to arbitration is duress. “[D]uress is a condition
of mind produced by an improper external pressure or influence that
practically destroys the free agency of a party and causes him to do an act
or make a contract not of his own volition.” Francavilla v. Francavilla, 969
So. 2d 522, 524–25 (Fla. 4th DCA 2007) (citations and internal quotation
marks omitted). To establish duress, two factors must be proven: (1) that
the act was effected involuntarily and was not an exercise of free choice or
will, and (2) that this condition of mind was caused by some improper and
coercive conduct by the other side. Id. at 525. “Duress involves a dual
concept of external pressure and internal surrender or loss of volition in
response to outside compulsion.” Id. (citation and internal quotation
marks omitted). Moreover, as a general rule, a contract “may not be set
aside on the basis of duress or coercion unless the improper influence
emanated from one of the contracting parties—the actions of a third party
will not suffice.” Vitakis-Valchine v. Valchine, 793 So. 2d 1094, 1096 (Fla.
4th DCA 2001).
Even without considering AMS’s argument that any alleged coercion
came from a third party,1 we find that there was insufficient evidence to
establish duress. The only evidence of a “threat” in this case was the threat
that the plaintiff’s services were not needed if he did not sign the
employment contract. This is insufficient to constitute duress. See
Restatement (Second) of Contracts § 176 cmt. a (1981) (“An ordinary offer
to make a contract commonly involves an implied threat by one party, the
offeror, not to make the contract unless his terms are accepted by the
other party, the offeree. Such threats are an accepted part of the
bargaining process.”). Moreover, the plaintiff never testified that the
allegedly coercive conduct induced his assent to the employment
agreement; nor did he testify that but for the allegedly coercive conduct,
1 For purposes of our analysis, we will simply assume for the sake of argument
that the Diamond K supervisor was acting as an agent on behalf of AMS when
the supervisor had the plaintiff sign the AMS employment agreement, and that
the supervisor’s conduct should be imputed to AMS.
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he would have demanded removal of the arbitration provision or otherwise
would have avoided signing the agreement.
Another possible contract defense is unconscionability. To support a
finding of unconscionability sufficient to invalidate an arbitration clause,
the party opposing arbitration must establish both procedural and
substantive unconscionability. Premier Real Estate Holdings, LLC v. Butch,
24 So. 3d 708, 711 (Fla. 4th DCA 2009). “Procedural unconscionability
relates to the manner in which the contract was made and involves issues
such as the parties’ relative bargaining power and their ability to know and
understand disputed contract terms.” FL-Carrollwood Care, LLC v.
Gordon, 72 So. 3d 162, 165 (Fla. 2d DCA 2011). Substantive
unconscionability, by contrast, “considers whether the contract terms
themselves are so outrageously unfair as to shock the judicial conscience.”
Id. Procedural and substantive unconscionability are assessed
independently. Id.We turn our attention first to substantive unconscionability. The
plaintiff presented no evidence that the arbitration agreement was
substantively unconscionable. A substantively unconscionable agreement
is one that “no man in his senses and not under delusion would make on
the one hand, and as no honest and fair man would accept on the other.”
Hume v. United States, 132 U.S. 406, 411 (1889). An example of a
substantively unconscionable agreement is one that deprives a claimant
of an effective way to vindicate a statutory cause of action in the arbitral
forum. See Romano ex rel. Romano v. Manor Care, Inc., 861 So. 2d 59, 61-
64 (Fla. 4th DCA 2003) (finding that arbitration agreement was
substantively unconscionable because it did not provide adequate
mechanisms for vindication of patient’s statutory rights under Nursing
Home Resident’s Rights Act).
Here, the arbitration agreement was not so outrageously unfair as to
shock the judicial conscience. The agreement did not deprive the plaintiff
of any statutory cause of action. As discussed above, arbitration of a
retaliatory discharge claim does not defeat the remedial purpose of section
440.205, Florida Statutes. Thus, we conclude that the arbitration
agreement was not substantively unconscionable. Because the arbitration
provision was not substantively unconscionable, the plaintiff’s
unconscionability defense fails irrespective of whether the provision was
procedurally unconscionable.
Based on the foregoing, we reverse and remand with instructions for
the trial court to grant the motion to compel arbitration.
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Reversed and Remanded.
GROSS and GERBER, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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