Kingsbury et al v. Clark et al

Filing 42

MEMORANDUM Opinion: For the reasons stated in the accompanying Memorandum Opinion, Lyft's motion to compel arbitration and dismiss is granted. Individual Defendants' motion to dismiss is denied. Status hearing set for 3/22/18 is stricken and no appearance is necessary. See Memorandum Opinion for further details. Civil case terminated. Signed by the Honorable Samuel Der-Yeghiayan on 2/15/2018. Mailed notice(ep, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BETH KINGSBURY, et al.,

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Plaintiffs,
v.
LYFT, INC., et al.,
Defendants.

No. 17 C 2272

MEMORANDUM OPINION
SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Defendant Lyft Inc.’s (Lyft) motion to
dismiss and compel arbitration and on Individual Defendants’ motion to dismiss. For
the reasons stated below, Lyft’s motion to dismiss and compel arbitration is granted,
and Individual Defendants’ motion to dismiss is denied.

BACKGROUND
Plaintiffs were allegedly employed as drivers by Lyft. According to Plaintiffs,
they were top-rated drivers and were allowed to participate in Lyft’s Ambassador
Program. Plaintiffs contend that at some point in 2016 a certain group of other Lyft
drivers (Individual Defendants) entered into a conspiracy to harass and intimidate
Plaintiffs. Individual Defendants allegedly sought to interfere with Plaintiffs’ work

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and ability to earn a living. Plaintiffs contend that they began to encounter more and
more Lyft drivers on the street. Individual Defendants then allegedly began
engaging in overt threatening conduct. The Individual Defendants allegedly would
approach Plaintiffs’ vehicles on foot in an intimidating and threatening manner and
verbally harass Plaintiffs. At other times, Individual Defendants allegedly would
find out where Plaintiffs were located and would attempt to intercept Plaintiffs’
customers and dissuade them from getting a ride from Plaintiffs. At times Individual
Defendants would allegedly show up at Plaintiffs’ location and surround Plaintiffs’
vehicles. Plaintiffs contend that Individual Defendants also allegedly spread false
rumors about Plaintiffs in an attempt to discredit them.
Plaintiffs contend that they reported the conduct of Individual Defendants to
the police and that they complained to Lyft, but Lyft failed to prevent further
harassment. Lyft allegedly retaliated against Plaintiffs for filing a police report by
causing Plaintiffs’ electronic Lyft equipment to malfunction and by logging into
Plaintiffs’ Lyft accounts and manipulating data to reduce Plaintiffs’ earnings. Lyft
also finally deactivated all of Plaintiffs’ Lyft accounts.
Plaintiffs have included in their complaint breach of contract claims brought
against Lyft (Count I), Illinois Whistleblower Act, 740 ILCS 174/1 et seq. claims
brought against Lyft (Count II), accounting claims brought against Lyft (Count III),
tortious interference with prospective economic advantage claims brought against
Lyft (Count IV), wrongful suspension/discharge claims brought against Lyft (Count
V), defamation per se claims brought against all Defendants (Count VI), assault
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claims brought against all Defendants (Count VII), conspiracy claims brought against
all Defendants (Count VIII), claims brought against Individual Defendants under the
Illinois Stalking Act, 740 ILCS 21/80 (Count IX), claims brought against Lyft under
the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (Count X), and claims alleging
violations of the Illinois Wage Payment Collection Act, (820 ILCS 115/1 et seq.
(Count XI). Lyft now moves to dismiss and compel arbitration and Individual
Defendants now move to dismiss this action.

LEGAL STANDARD
The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., provides “that a
written provision in any contract evidencing an intent to settle by arbitration any
future controversy arising out of such contract shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity for the revocation of
any contract.” French v. Wachovia Bank, 574 F.3d 830, 834 (7th Cir. 2009)(internal
quotations omitted)(quoting Livingston v. Assocs. Fin., Inc., 339 F.3d 553, 556 (7th
Cir. 2003) and 9 U.S.C. § 2). A court “will compel arbitration unless it may be said

with positive assurance that the arbitration clause is not susceptible of an
interpretation that covers the asserted dispute.” United Steel, Paper and Forestry,
Rubber, Mfg., Energy, Allied Indus. and Service Workers Intern. Union v. TriMas
Corp., 531 F.3d 531, 536 (7th Cir. 2008)(internal quotations omitted)(quoting
United Steelworkers of America v. Warrior & Gulf, 363 U.S. 574, 582-83 (1960)).

When an arbitration agreement contains a broad arbitration provision, “there is a
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presumption in favor of arbitrability,” and “[a]ny ambiguities as to the scope of the
arbitration clause are resolved in favor of arbitration.” Id. (internal quotations
omitted)(quoting AT& T Techs., Inc. v. Communc’ns Workers of America, 475 U.S.
643, 650 (1986) and Volt Info. Sci., Inc. v. Board of Trs. of Leland Stanford, Jr.
Univ., 489 U.S. 468, 475-76 (1989)); see also Sweet Dreams Unlimited, Inc. v. DialA-Mattress Intern., Ltd., 1 F.3d 639, 642 (7th Cir. 1993)(stating that the Court should
“[b]ear[] in mind the Supreme Court’s instruction that ‘any doubt concerning the
scope of arbitrable issues should be resolved in favor of arbitration’”)(quoting in part
Moses H. Cone Mem. Hosp. v. Mercury Construction Corp., 460 U.S. 1, 24-25
(1985)).
DISCUSSION

I. Agreement to Arbitrate
Lyft argues that Plaintiffs agreed to arbitrate disputes such as those presented
in the instant action. According to Lyft, Plaintiffs first consented to the Lyft User
Terms (User Terms) by downloading and using the Lyft App. In addition, Lyft
contends that when Plaintiffs became Lyft Ambassadors they agreed to the
Ambassador Terms. Plaintiffs do not dispute that they agreed to the User Terms or
the Ambassador Terms. Lyft has produced evidence showing that Plaintiff Beth
Kingsbury and Plaintiff Jill Koenig most recently accepted a version of the User
Terms in 2014. Those User Terms specified in part the following: “You and We
agree that any legal disputes or claims arising out of or related to the Agreement. . .
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that cannot be resolved informally shall be submitted to binding arbitration. . . .”
(2014 User Terms). Plaintiff Savannah Williams agreed to a later version which
provided in part the following: “ALL DISPUTES AND CLAIMS BETWEEN US . .
. SHALL BE EXCLUSIVELY RESOLVED BY BINDING ARBITRATION
SOLELY BETWEEN YOU AND LYFT. . . .” (2016 User Terms). The record also
shows that Plaintiffs agreed to the Ambassador Terms, which provided in part the
following: “You and we agree that any legal disputes or claims arising out of or
related to the Agreement . . . that cannot be resolved informally shall be submitted to
binding arbitration . . . .” (Amb Terms). Thus, it is undisputed that on multiple
occasions Plaintiffs agreed to broad arbitration clauses. The claims brought by
Plaintiffs in the instant action fall squarely within the scope of those arbitration
clauses.

II. Independent Contractors
Plaintiffs argue that although they may have agreed to the arbitration clauses,
such clauses are unenforceable. Plaintiffs contend that they were employees of Lyft
and that such clauses cannot be enforced. In support of their position, Plaintiffs cite
Lewis v. Epic Sys. Corp., 823 F.3d 1147 (7th Cir. 2016). In Lewis, the Seventh
Circuit held that an arbitration clause that required individual employees to waive
their rights to pursue class and collective claims relating to employment matters
violated the National Labor Relations Act (NLRA). Id. at 1154-55. Lyft in moving
to compel arbitration contends that Plaintiffs were independent contractors and thus
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do not fall within the holding of Lewis. Ali v. Vehi-Ship, LLC, 2017 WL 5890876, at
*5 (N.D. Ill. 2017). Although Plaintiffs contend that they were employees of Lyft,
that is an argument that can be made in the arbitration proceedings that Plaintiffs
agreed to pursue. Ali, 2017 WL 5890876, at *5 (indicating that if the dispute falls
within the scope of the arbitration clause the independent contractor determination
could be made by the arbitrator); Olivares v. Uber Techs., Inc., 2017 WL 3008278, at
*3 (N.D. Ill. 2017)(finding that independent contractor determination and whether
waiver violated the NLRA should be determined by the arbitrator). Lewis does not
prevent Lyft from enforcing the arbitration provisions in this action. Plaintiffs thus
must proceed in arbitration to pursue their claims.

III. Dismissal or Stay
Plaintiffs argue that even if arbitration is warranted there is no reason to
dismiss the instant action. Although a court has discretion to stay an action pending
the resolution of the arbitration proceedings, a court is not prohibited from
dismissing an action. In order to prevent this case from stagnating on the court
docket, the instant action is dismissed with leave to reinstate after the conclusion of
the arbitration proceedings. Therefore, Lyft’s motion to compel arbitration and
dismiss is granted. Individual Defendants’ motion to dismiss is denied.

CONCLUSION
Based on the foregoing analysis, Lyft’s motion to compel arbitration and
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dismiss is granted. Individual Defendant’s motion to dismiss is denied.

Samuel Der-Yeghiayan
United States District Court Judge
Dated: February 15, 2018

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