Abdul-Rasheed v. Kablelink Communications, LLC et al

Filing 53

ORDER granting 34 Motion for Miscellaneous Relief and for Corrective Notice. Signed by Judge Susan C Bucklew on 11/25/2013. (Attachments: # 1 Revised Notice) (JD)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

SHAKEEL ABDUL-RASHEED, on behalf
of himself and others similarly situated,
Plaintiff,
v.

Case No. 8:13-cv-879-T-24 MAP

KABLELINK COMMUNICATIONS, LLC
and KABLELINK COMMUNICATIONS
OF NORTH CAROLINA, LLC,
Defendants.
_________________________________/
ORDER
This cause comes before the Court on Plaintiff’s Motion for Miscellaneous Relief
Pursuant to § 215(a)(3) and for Corrective Notice (Doc. No. 34), which Defendants oppose (Doc.
No. 35). The Court held an evidentiary hearing on this motion on November 21, 2013.
I. Background
On April 5, 2013, Plaintiff Shakeel Abdul-Rasheed filed suit against Defendants
KableLink Communications, LLC (“KC-FL”) and KableLink Communications of North
Carolina, LLC (“KC-NC”). In his complaint (Doc. No. 1), Plaintiff alleges that Defendants KCFL and KC-NC are joint employers, and that Defendants mis-classified him and other cable
installers as independent contractors. As a result, Plaintiff alleges that Defendants violated the
Fair Labor Standards Act’s (“FLSA”) minimum wage and overtime provisions.
On August 9, 2013, Plaintiff filed a motion for conditional certification and Court
authorized notice. (Doc. No. 21). The Court granted the motion and conditionally certified a
putative class of cable installers that: (1) performed work for Defendants in Florida within the

last three years, (2) were classified as independent contractors, and (3) were not paid proper
minimum wages and/or overtime wages. (Doc. No. 44).
II. Motion for Miscellaneous Relief
While the conditional certification motion was pending, Plaintiff filed a motion for
miscellaneous relief, in which he alleges that Defendants are improperly threatening and
intimidating potential opt-in plaintiffs to waive their right to join in this collective action.
Specifically, Plaintiff contends that on August 16, 2013 (a week after Plaintiff filed his motion
for conditional certification), Defendants held a meeting with their current cable installers and
explained that they were required to sign a new independent contractor agreement (“ICA”)
within 30 days or they could no longer perform work for Defendants. The new ICA (“2013
ICA”) contained a mandatory arbitration provision that specifically applied to FLSA claims and
a class/collective action waiver. The arbitration provision provides the following, in pertinent
part:
(a) The parties agree that any claim or dispute arising out of,
or related to, this Agreement . . . including any compensation claim,
such as, a claim under the Fair Labor Standards Act . . . shall be
settled by submitting such Claim(s) to . . . mandatory, binding
arbitration.
(b) The parties agree . . . each party . . . [will] bear their own
costs, and attorney’s fees . . . . [U]pon resolution of the arbitration,
the non-prevailing party to the dispute . . . shall be responsible for the
payment of 100% of the arbitrator’s . . . fees . . . .
(c) . . . [N]either party shall . . . participate as a member of a
class or collective action. . . .
(Doc. No. 35-1).
Plaintiff contends that Defendants’ conduct is calculated for the sole purpose of
intimidating potential class members and preventing them from pursuing their FLSA rights

2

collectively in this action, which amounts to unlawful retaliation under § 15(a)(3) of the FLSA.
Section 15(a)(3) provides:
[It is unlawful] to discharge or in any other manner discriminate
against any employee because such employee has filed any complaint
or instituted or caused to be instituted any proceeding under or
related to this chapter, or has testified or is about to testify in any
such proceeding . . . .
29 U.S.C. § 215(a)(3).
Defendants contest Plaintiff’s characterization of the events in this case, arguing that the
2013 ICA that cable installers were asked to sign had been in the works for eighteen months.
Furthermore, Defendants emphasize their right to enter into arbitration agreements.
The Court held an evidentiary hearing on Plaintiff’s motion in order to weigh the need to
limit Defendants’ communications against the potential interference with the rights of the
parties. Thus, the parties were given the opportunity to present evidence regarding the
following: (1) whether a particular form of communication had occurred or was threatened to
occur, and (2) whether the particular form of communication at issue is abusive in that it
threatens the proper functioning of the litigation.
Based on the evidence presented at the hearing, it is undisputed that on August 16, 2013,
Defendants presented its cable installers with the 2013 ICA that contained a mandatory
arbitration provision that specifically applied to FLSA claims and a collective action waiver.1
The evidence is also undisputed that if the cable installers did not sign the 2013 ICA within 30
days, Defendants told them that Defendants would no longer give them any work. Thus, based

1

None of Defendants’ employees were asked to sign an arbitration agreement or to waive
their right to proceed collectively.
3

on the evidence presented at the hearing, Plaintiff has established that the above described
communication occurred.
Defendants attempted to provide evidence, through Defendants’ Chief Operating Officer
Bryan Wilson’s testimony, that the 2013 ICA had been in the works for eighteen months, and as
such, it was not created in response to the instant litigation. However, the Court found the
testimony of Defendants’ CEO, Tim Geske, to be more credible on this issue. Geske testified
that the inclusion of the arbitration provision and collective action waiver was initiated in the
third or fourth week of July 2013, in response to the Supreme Court’s decision in American
Express Company v. Italian Colors Restaurant, 133 S. Ct. 2304 (June 20, 2013).
In the American Express case, the Supreme Court concluded that a court cannot
invalidate a class action waiver in an arbitration agreement on the ground that the cost to
individually arbitrate the federal statutory claim exceeds the potential recovery. See id. at 230912. While this Court accepts that the American Express case may have been one of the
triggering events that led to the creation of the 2013 ICA and the inclusion of the arbitration
provision and collective action waiver, the Court concludes that the main triggering event was
the fact that Defendants were currently facing a potential collective action at the time that the
American Express opinion was issued.
Defense counsel acknowledged at the end of the hearing that if one looked solely at the
timing of the presentation of the 2013 ICA to the cable installers in relation to the events in this
lawsuit, one might conclude that the 2013 ICA was created in response to this lawsuit. As such,
the Court expected that Defendants would provide some sort of documentary evidence to support
defense counsel’s argument that the 2013 ICA was in the works for eighteen months. The

4

testimony presented at the hearing on that issue was completely unconvincing. Instead, the
Court concludes that the 2013 ICA was revised to include the arbitration provision and collective
action waiver in response to this litigation; specifically, to discourage cable installers from
opting into this lawsuit by threatening their continued relationship with Defendants. Essentially,
cable installers were faced with the choice to: (1) sign the 2013 ICA and continue preforming
work for Defendants, or (2) opt into this lawsuit and no longer perform work for Defendants.
Based on the evidence presented at the hearing, the Court concludes that the 2013 ICA is
unconscionable and that the arbitration provision and collective action waiver in the 2013 ICA is
abusive in that it threatens the proper functioning of this litigation. See Billingsley v. Citi
Trends, Inc., 2013 WL 2350163 (N.D. Ala. May 29, 2013)(concluding, under Georgia law, that
mandatory arbitration agreements that store managers were required to execute during the
pendency of FLSA collective action were unconscionable and would not be enforced).
By its terms, Florida law governs the 2013 ICA, and Florida recognizes
unconscionability as a defense to the enforcement of a contract. See U.S. E.E.O.C. v. Taco Bell
of America, 2007 WL 809660, at *1 (M.D. Fla. Mar. 15, 2007). The burden is on Plaintiff to
show that the 2013 ICA is unconscionable. See id.; Sierra v. Isdell, 2009 WL 2179127, at *4
(M.D. Fla. July 21, 2009). Florida law requires “a showing of both procedural and substantive
unconscionability.” Pendergast v. Sprint Nextel Corp., 592 F.3d 1119, 1134 (11th Cir. 2010).
As explained by one court:
To determine whether a contract is procedurally unconscionable
under Florida law, courts must look to: (1) the manner in which the
contract was entered into; (2) the relative bargaining power of the
parties and whether the complaining party had a meaningful choice
at the time the contract was entered into; (3) whether the terms were
merely presented on a “take-it-or-leave-it” basis; and (4) the
5

complaining party's ability and opportunity to understand the
disputed terms of the contract. Under Florida law, a central question
in the procedural unconscionability analysis is whether the consumer
has an absence of meaningful choice in whether to accept the contract
terms.
*

*

*

Under Florida law, substantive unconscionability focuses on the
terms of the agreement itself and whether the terms of the contract
are unreasonable and unfair. Substantive unconscionability focuses
directly on those terms of the contract itself which amount to an
outrageous degree of unfairness to the same contracting party.
Florida generally defines substantive unconscionability in reference
to an agreement 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.
Id. at 1135, 1139 (internal citations and quotation marks omitted). Substantive unconscionability
can be found when the agreement at issue limits the available remedies. See Sierra, 2009 WL
2179127, at *4 (citation omitted).
As noted by the Eleventh Circuit, “there is some tension in Florida law regarding the
analytical framework courts should use in evaluating both procedural and substantive
unconscionability.” Pendergast, 592 F.3d at 1134. Some courts use a balancing or sliding scale
approach. See id. (citations omitted). Under the balancing framework, courts require a certain
amount of procedural unconscionability and a certain amount of substantive unconscionability,
but the amount of either can vary. See Romano v. Manor Care, Inc., 861 So. 2d 59, 62 (4th DCA
2004); Taco Bell, 2007 WL 809660, at *3. Thus, the more procedurally unconscionable the
contract is, the less evidence of substantive unconscionability is required, although some
substantive unconscionability must be present. See Romano, 861 So. 2d at 62 (citation omitted).
In this case, significant procedural unconscionability is present. The cable installers were
presented with the 2013 ICA on a take-it-or-leave-it basis, and they had no bargaining power. If

6

they failed to sign the 2013 ICA, they were told they would no longer get work from Defendants.
There was evidence that although the cable installers had 30 days to review the 2013 ICA, they
were asked on a daily basis whether they had signed it yet. Finally, this Court has considered the
context in which the 2013 ICA was presented—the cable installers were potential members of a
collective action that had been pending for over four months. The cable installers were faced
with the choice to: (1) sign the 2013 ICA and continue preforming work for Defendants, or (2)
opt into this lawsuit and no longer perform work for Defendants. Defendants’ employees, on the
other hand, were not asked to execute an arbitration agreement or collective action waiver.
Thus, the 2013 ICA was a device that targeted cable installers and was used to threaten them to
waive their right to opt into this case.
Likewise, substantive unconscionability is present. As previously stated, substantive
unconscionability can be found when the agreement at issue limits the available remedies. See
Sierra, 2009 WL 2179127, at *4 (citation omitted). The 2013 ICA requires that each party pay
their own attorney’s fees, even for FLSA claims, despite the fact that the FLSA provides an
award of attorney’s fees to a prevailing plaintiff. 29 U.S.C. § 216(b). Such a provision in the
2013 ICA defeats the remedial purpose of the FLSA by limiting the remedies available.
Given the significant procedural unconscionability, as well as the substantive
unconscionability, that is present in this case, the Court concludes that Plaintiff has met his
burden of showing that the 2013 ICA is unconscionable and should not be enforced. As such,
the arbitration provision and collective action waiver will not be enforceable with respect to
cable installers that want to opt into this lawsuit. The Court will include language in the revised
Notice (attached to this order) informing the cable installers of their right to opt into this case

7

even if they signed the 2013 ICA.
This Court is not implying that Defendants do not have the right to enter into arbitration
agreements with their cable installers. To the extent that Defendants attempt to again revise their
ICA (by addressing the attorney’s fee issue) and make such ICA applicable to all claims that any
cable installer has, or may have in the future, other than FLSA claims at issue in this case in
which they are potential opt-in plaintiffs, Defendants are free to do so. However, this Court
will not condone Defendants’ disguised attempt to force their cable installers to waive their right
to opt into this currently pending collective action by threatening their income.
III. Notice to the Prospective Class
In the Court’s prior order regarding conditional certification and at the evidentiary
hearing, the Court also addressed the form of the proposed notice to the prospective class. Upon
reflection, the Court realizes that it erroneously accepted Defendants’ argument that the Notice
should state that the opt-in plaintiffs could be liable for paying costs in this case, pursuant to
Federal Rule of Civil Procedure 54, as well as attorneys’ fees, pursuant to an indemnification
provision within their ICAs. (Doc. No. 44). The Court’s conclusion was based on the
indemnification provision that is present in both the 2013 ICA, as well as the 2009 version of the
ICA, which provides that the cable installers will indemnify Defendants “[t]o the fullest extent
permitted by law,” for attorneys’ fees arising out of any claim relating to work performed under
the ICA.2 The Court stated in its conditional certification order “that the Notice should include
language stating: ‘If an opt-in plaintiff has signed an independent contractor agreement that
contains an indemnity provision, and if such plaintiff is found to be an independent contractor,

2

The 2009 version of the ICA was admitted into evidence at the evidentiary hearing.
8

such opt-in plaintiff could be liable for Defendants’ attorneys’ fees and costs in this case.’” (Doc.
No. 44).
Upon reflection, the Court concludes that even if the cable installers are found to be
independent contractors, they cannot automatically be held liable for Defendants’ attorneys’ fees
incurred defending against their FLSA claims. As instruction 4.14 of the Eleventh Circuit
pattern jury instructions for FLSA claims makes clear, proof of an employment relationship is an
element of an FLSA claim. Therefore, if the cable installers fail to prove that they are
Defendants’ employees, then Defendants will be the prevailing party as to the FLSA claims. In
such a situation, Defendants’ entitlement to attorneys’ fees is conditioned on a finding that the
cable installers “conducted the litigation in ‘bad faith, vexatiously, wantonly or for oppressive
reasons.’” Murray v. Playmaker Services, LLC, 548 F. Supp.2d 1378, 1381 (S.D. Fla.
2008)(quoting Turlington v. Atlanta Gas Light Co., 135 F.3d 1428, 1437 (11th Cir. 1998)). To
hold otherwise would impose a chilling effect that would defeat the remedial purpose of the
FLSA. See Hernandez v. Colonial Grocers, Inc., 2013 WL 5762986, at *2 (Fla. 2d DCA Oct.
13, 2013)(concluding that an arbitration provision that provided for the prevailing party to be
awarded attorneys’ fees would allow a prevailing defendant to be awarded attorneys’ fees for an
unsuccessful FLSA claim, and the possibility of such an award created a chilling effect that
defeated the remedial purpose of the FLSA).
Whether a person is an employee or an independent contractor is a threshold issue in
many FLSA cases. If courts imposed an attorneys’ fees award against unsuccessful independent
contractors that have indemnity agreements, it would incentivize employers to mis-classify
employees as independent contractors in an independent contractor agreement that contains an
indemnity provision based on the hope that the possibility of an attorneys’ fee award would
9

dissuade litigation on the issue.
Accordingly, the Court concludes that the Notice should not include language that opt-in
plaintiffs could be liable for attorneys’ fees, and the Court will delete such language from the
revised Notice. Additionally, the Court will return the attorneys’ fees language in the Notice
back to its original form, which stated, “If there is no recovery or judgment in Plaintiffs’ favor,
you will not be responsible for any attorneys’ fees.” With respect to the cable installers’
potential liability for costs, the Court concludes that a warning would undermine the FLSA’s
goal of encouraging full enforcement of statutory rights because the warning might dissuade
people from joining the lawsuit. See Carrillo v. Schneider Logistics, Inc., 2012 WL 556309, at
*14 (C.D. Cal. Jan. 31, 2012); Austin v. CUNA Mutual Ins. Society, 232 F.R.D. 601, 608 (W.D.
Wis. 2006).
IV. Conclusion
Accordingly, it is ORDERED AND ADJUDGED that:
(1)

Plaintiff’s Motion for Miscellaneous Relief Pursuant to § 215(a)(3) and for
Corrective Notice (Doc. No. 34) is GRANTED.

(2)

The revised Notice attached to this order shall be used to provide notice to the
potential class members:
(a)

Plaintiff may send initial notice first-class mail.

(b)

Defendants are directed to post a copy of the Notice in all of its
cable installations business locations and/or dispatch offices in
Florida.

(c)

Plaintiff’s counsel may send a follow-up notice to all individuals
who, by the fourteenth day prior to the close of the Court-approved
notice period, have yet to opt in to the instant action.
10

DONE AND ORDERED at Tampa, Florida, this 25th day of November, 2013.

Copies to:
Counsel of Record

11