Jones v. Waffle House, Inc. et al

Filing 122

ORDER denying 81 motion to dismiss. On or before Thursday, September 1, 2016, Defendants shall submit their responses to Plaintiff's Motion for Class Certification (Doc. 108). On or before Monday, August 8, 2016, Plaintiff is DIRECTED to submit Plaintiff's deposition transcript in its entirety to the Court. Signed by Judge Roy B. Dalton, Jr. on 7/26/2016. (VMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
WILLIAM JONES,
Plaintiff,
v.

Case No. 6:15-cv-1637-Orl-37DAB

WAFFLE HOUSE, INC.; WH CAPITAL,
LLC; THE SOURCE FOR PUBLIC
DATA, L.P.; SHADOWSOFT, INC.;
HARLINGTON-STRAKER-STUDIO,
INC.; and DALE BRUCE
STRINGFELLOW,
Defendants.
ORDER
This cause is before the Court on the following:
1.

Waffle House, Inc. and WH Capital, LLC’s Motion to Dismiss or in the
Alternative to Stay Proceeding, and to Compel Arbitration (Doc. 81), filed
April 1, 2016.

2.

Plaintiff’s Opposition to the Motion of Waffle House, Inc. and WH Capital,
LLC to Dismiss or in the Alternative to Stay Proceedings and to Compel
Arbitration (Doc. 83), filed April 15, 2016.

Plaintiff initiated the present suit in October 2015, alleging that Defendants’
practices in procuring background checks on job applicants were non-compliant with the
Fair Credit Reporting Act. (See Doc. 1.) Importantly, Plaintiff is a putative class member
who was purportedly denied employment at a Waffle House restaurant in December of
2014 due to the results of a background check. (Id.) Nevertheless, in February 2016—
four months after initiating the present lawsuit—Plaintiff applied and was hired for

employment with another Waffle House location. (Doc. 81-1, p. 1.) As a condition of
employment, Plaintiff signed an arbitration agreement whereby he agreed to arbitrate all
past, present, and future claims related to his employment (“Arbitration Agreement”).
(See Doc. 81-2, p. 14.) The Arbitration Agreement—which contained a provision
delegating all disputes regarding the “interpretation, applicability, enforceability, or
formation” of the Agreement to the arbitrator (Doc. 81-2, p. 14)—was also signed by
Waffle House’s general counsel. (See id.; see also Doc. 83, p. 14.)
On April 1, 2015, Waffle House, Inc. and WH Capital, LLC (collectively, “Waffle
House”) moved to compel arbitration pursuant to the Arbitration Agreement. (Doc. 81.)
Plaintiff opposed. (Doc. 83.) On July 22, 2016, the Court held a hearing to address:
(1) Plaintiff’s specific challenges to the delegation provision; and (2) Plaintiff’s contention
that the countersigning of the Arbitration Agreement by Waffle House’s general counsel
constituted an improper ex parte communication with a represented party, thereby
implicating the Court’s managerial authority to “prevent abuse and enter appropriate
orders governing the conduct of counsel and the parties” in collective and class actions,
see Billingsley v. Citi Trends, Inc., 560 F. App’x 914, 922 (11th Cir. 2014) (“Hearing”).
(See Doc. 111, p. 17 (providing scope of the Hearing); see also Doc. 119 (same).)
At the Hearing, Waffle House argued that its general counsel pre-signs all
arbitration agreements before they are submitted for mass printing. Thus, every new
employee receives a pre-printed arbitration agreement that has formerly been cosigned
by Waffle House’s general counsel. As such, Waffle House avers that its general counsel
was unaware that the pre-signed Arbitration Agreement was given to Plaintiff for his
signature.

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The U.S. Court of Appeals for the Eleventh Circuit has previously condemned
unilateral, unsupervised communications with prospective class members in class and
collective actions. See Kleiner v. First Nat’l Bank of Atlanta, 751 F.2d 1193, 1202–03
(11th Cir. 1985); see also Billingsley, 560 F. App’x 914. These decisions have
emphasized the potential for coercion, unfairness, and abuse inherent in such one-sided
communications. See Billinglsey, 506 F. App’x at 921–22; Kleiner, 751 F.2d at 1202–03.
Though Waffle House attempts to distinguish Billinglsey and Kleiner from the instant
matter, the probative inquiry is the same—that is, whether Waffle House’s conduct
prevented Plaintiff from making an informed decision in giving up his right to proceed in
the present litigation. See Billingsley, 506 F. App’x at 922, 924; Kleiner, 751 F.2d at 1203.
Upon consideration, the Court finds that it did.
Importantly, under Florida’s Rules of Professional Conduct, it would have been
inappropriate for Waffle House to seek enforcement of the Arbitration Agreement if its
general counsel had countersigned the agreement after Plaintiff had signed it. That being
so, the order of signatories is immaterial. Notwithstanding the unusual circumstances, the
business practice of pre-signing arbitration agreements effectively allows Waffle House
to bury its head in the sand as to the cosigner and disclaim any responsibility for ex parte
communications with adverse litigants. Such ignorance does not change the practical
effect on the instant litigation. Plaintiff—an hourly laborer—was simply not afforded the
opportunity to make an informed decision to give up his rights and remedies in the
pending lawsuit. The entire transaction was highly suspect. Without the aid of counsel,
Waffle House’s procurement of a binding adhesion contract from a represented party,
who was actively engaged in litigation against it, is plainly wrong. Indeed, the whole

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process by which the waiver was obtained and then sought to be applied to this
proceeding has an unsavory aroma. Consequently, the Court finds that the Arbitration
Agreement is unenforceable and that the motion to compel arbitration (Doc. 81) is due to
be denied.
Pending the Hearing, the Court temporarily suspended the briefing deadlines as
to Plaintiff’s motion for class certification (Doc. 111). Such suspension is now lifted.
Nevertheless, the Court has serious concerns as to whether Plaintiff would be an
adequate representative of the putative class. In light of the various remarks raised at the
Hearing with respect to Plaintiff’s deposition, the Court will require Plaintiff to submit his
deposition transcript, in its entirety, to the Court for consideration.
CONCLUSION
Accordingly, it is hereby ORDERED AND ADJUDGED:
1.

Defendants Waffle House, Inc. and WH, Capital LLC’s Motion to Dismiss,
or in the Alternative to Stay Proceeding, and to Compel Arbitration and
Incorporated Supporting Memorandum of Law (Doc. 81) is DENIED.

2.

On or before Thursday, September 1, 2016, Defendants shall submit their
responses to Plaintiff’s Motion for Class Certification (Doc. 108).

3.

On or before Monday, August 8, 2016, Plaintiff is DIRECTED to submit
Plaintiff’s deposition transcript in its entirety to the Court.

DONE AND ORDERED in Chambers in Orlando, Florida, on July 26, 2016.

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Copies:
Counsel of Record

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