Gautier et al v Sharecare Health Data Services, LLC et al

Filing 51

ORDER AND REASONS: ORDERED that the Bactes' and Paulus' 16 , 19 Motions to Compel Arbitration are GRANTED in part, to the extent it seeks to compel arbitration, and DENIED in part, to the extent Bactes and Paulus seek dismissal rather than a stay. The case is stayed pending the completion of arbitration and this case is closed pending completion of arbitration. Signed by Judge Martin L.C. Feldman on 8/28/2018.(clc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

KATHERINE GAUTIER AND
DON BARCELONA

CIVIL ACTION

V.

NO. 18-1435

BACTES IMAGING SOLUTIONS, LLC

SECTION "F"

ORDER AND REASONS
Before the Court are the defendants’ motions to dismiss the
complaint and compel arbitration, or in the alternative, dismiss
the case pursuant to Rule 12(b)(6). For the following reasons, the
motions are GRANTED in part, to the extent it seeks to compel
arbitration, and DENIED in part, to the extent it seeks dismissal
rather than a stay.
Background
This lawsuit arises out of an employee’s claim that she was
sexually harassed by her employer. This litigation followed.
On February 1, 2016, Katherine Gautier was hired as a sale
representative at Bactes Imaging Solutions, Inc., a company owned
and operated by Sharecare Company. Joseph Paulus, the regional
sale manager for Bactes, was Gautier’s immediate supervisor. On
February 12, 2018, Gautier and her husband Don Barcelona sued
Bactes 1 and Paulus alleging violations of Title VII and the Family

1

Initially, the plaintiffs incorrectly named Sharecare as the
defendant instead of Bactes. Bactes has been substituted as the
correct defendant.
1

and

Medical

Leave

Act.

Gautier

alleges

that

Paulus

sexually

harassed her by making sexual comments to her in person and sending
her inappropriate texts and emails. She further alleges Paulus
retaliated against her for refusing his sexual advances. Gautier
also alleges that Bactes ratified Paulus’ conduct and itself
engaged in discriminatory conduct. She claims that this workplace
abuse caused depression, and at the time of the complaint’s filing,
she

had

been

on

leave

for

fourteen

weeks

for

her

emotional

condition. Gautier adds claims that the defendants violated her
rights under the Family and Medical Leave Act by asking her workrelated questions while she was on leave. Don Barcelona alleges
that as a result of the defendants’ abusive and discriminatory
treatment of his wife, he has lost the “society, services, and
companionship of his wife,” and is entitled to recover damages.
On May 31, 2018, Bactes moved to compel arbitration, or in
the alternative, to dismiss the complaint under Federal Rule of
Civil Procedure 12(b)(6). And on June 1, 2018, Paulus moved to
compel

arbitration,

or

in

the

alternative,

to

dismiss

the

complaint. Gautier opposed the motions on August 14, 2018, but
Barcelona did not separately submit an opposition. 2

2

Gautier and Barcelona were initially represented by the same
attorneys. On June 12, 2018, the plaintiffs’ moved to withdraw
their counsel from representation, and also moved to continue the
submission date for the pending motions to compel arbitration until
August 22, 2018 so the plaintiffs could obtain new counsel. The
2

I.
There is a “strong federal policy in favor of enforcing
arbitration agreements.” Dean Witter Reynolds, Inc. v. Byrd, 470
U.S. 213, 217 (1985). The Federal Arbitration Act states that: “If
any suit or proceeding be brought in any of the courts of the
United States upon any issue referable to arbitration. . . the
court. . . shall on application of one of the parties stay the
trial

of

the

action

until

such

arbitration

has

been

had

in

accordance with the terms of the agreement. . . .” 9 U.S.C. § 3.
The

FAA

requires

district

courts

to

“compel

arbitration

of

otherwise arbitrable claims, when a motion to compel arbitration
is made.” Sedco, Inc. v. Petroleos Mexicanos Mexican Nat'l Oil
Co., 767 F.2d 1140, 1147 (5th Cir. 1985).
Courts undertake a two-step inquiry when considering motions
to compel arbitration. Washington Mut. Finance Group v. Bailey,
364 F.3d 260, 263 (5th Cir. 2004). The first step requires a
finding that the parties agreed to arbitrate the dispute at issue.
Id. Second, upon such a finding, the Court must consider whether
any federal statute or policy renders the claims nonarbitrable.
Id.
The first determination requires two considerations: “(1)
whether

there

is

a

Court granted both
Barcelona has not.

valid

agreement

motions.

to

Gautier
3

arbitrate

obtained

between

the

counsel,

but

parties; and (2) whether the dispute in question falls within the
scope of that arbitration agreement.” Webb v. Investacorp, Inc.,
89 F.3d 252, 257-58 (5th Cir. 1996). While state law governs the
first consideration, “due regard must be given to the federal
policy favoring arbitration, and ambiguities as to the scope of
the

arbitration

clause

itself

must

be

resolved

in

favor

of

arbitration.” Id. at 258.

II.
Gautier signed an arbitration agreement on January 24, 2016,
shortly

before

she

began

working

for

Bactes.

A

company

representative also signed the agreement. The agreement provides,
in part:
In the event of any dispute arising under or involving any
provision of this agreement or any dispute regarding the
undersigned
employee
(hereinafter
referred
to
as
an
Employee), employement with BACTES Imaging Solution, Inc.
(hereinafter referred to as BACTES), or the termination of
employment . . . . Employee and BACTES agree to submit any
such dispute to binding arbitration pursuant to the
provisions of the Federal Arbitration Act, U.S.C. section 1,
et seq., if applicable.
. . .
Arbitration proceedings shall be held in California at a
location mutually convenient to the Employee and BACTES.
. . .
Employee and BACTES agree that arbitration shall be the
exclusive forum for resolving all disputes arising out of or
involving
Employee’s
employment
with
BACTES
or
the
termination of that employment (with the exception of claims
4

for workers’ compensation, unemployment insurance and any
matter within the jurisdiction of the California Labor
Commissioner) . . . .

(Emphasis added). Bactes seeks to enforce the agreement against
both Gautier and Barcelona. (Barcelona is not a signatory to the
agreement.) Paulus, Gautier’s supervisor, also seeks to compel
arbitration, although he too is not a signatory to the agreement.
The enforceability of the arbitration agreement against Gautier
and Barcelona, and Paulus’s right to compel arbitration, are
addressed in turn.
A.
Gautier opposes the motion, but Barcelona has not submitted
an

opposition.

addressed

first.

Accordingly,
Gautier

Gautier’s

asserts

that

contentions
the

first

will

step

of

be
the

inquiry, that the parties agreed to arbitrate the dispute at issue,
cannot be met because there is not a valid agreement. She alleges
that the agreement is invalid because the choice of forum provision
violates Louisiana law and because it is unconscionable. Both
reasons are without merit, and fail.
Gautier contends that the agreement is invalid because it
contains a choice of forum clause, which is prohibited by Louisiana
law. The arbitration agreement does state that “[a]rbitration
proceedings shall be held in California . . . .” However, Louisiana
law prohibits an employment agreement from containing a choice of

5

forum clause unless the clause is “agreed to and ratified by the
employee after the occurrence of the incident which is the subject
of the civil or administrative action.” La. R.S. 23:921(A)(2).
The defendants contend that the FAA directly contradicts the
Louisiana statute, and therefore preempts it. The Court agrees. In
Southland Corp. v. Keating, the Supreme Court held that the FAA
preempted a California law that precluded the enforceability of
arbitration laws that were enforceable under the FAA. Southland
Corp. v. Keating, 465 U.S. 1 (1984). The Court recognized that the
FAA applies to states, and does not permit “state legislative
attempts to undercut the enforceability of arbitration agreement.”
Id. Similarly, the Fifth Circuit has held that the FAA preempted
a Louisiana statute declaring certain contractual forum selection
clauses “null and void.” OPE Int’l LP v. Chet Morrison Contractors,
Inc.,

258

determined

F.3d

443,

that

the

447

(5th

Cir.

Louisiana

2001).

statute

The

Fifth

“directly

Circuit

conflicts

with § 2 of the FAA because the Louisiana statute conditions the
enforceability

of

arbitration

agreements

on

selection

of

a

Louisiana forum . . . .” Id. Likewise, the FAA also preempts the
Louisiana statute at issue here, La. Rev. Stat. 23:921(A)(2), which
similarly

conditions

the

enforceability

of

an

arbitration

agreement on the omission of a forum selection clause. Because La.
Rev. Stat. 23:921(A)(2) improperly imposes conditions upon the
enforceability of an enforcement agreement, it is preempted by the
6

FAA. Sherman v. RK Restaurant Holdings, Inc., 2014 WL 4540023, at
*7

(“Therefore, LA.REV.STAT. §

23:921 directly

conflicts

with

Section 2 of the FAA . . . . Thus, the FAA preempts LA.REV.STAT. §
23:921 . . . .”). The forum selection clause does not render
Bactes’ arbitration agreement unenforceable.
Gautier also contends that the agreement is invalid because
it

is

unconscionable.

She

asserts

that

she

had

no

power

to

negotiate the contract because she did not have the opportunity to
rewrite the handbook. She also alleges it is unconscionable because
she could not have given consent to the agreement because the
adverse party was her prospective employer and she had to sign it
to be employed. Essentially, she alleges that the power dynamic
was

too

skewed

in

favor

of

Bactes

that

she

could

not

have

consented. The Louisiana Supreme Court has established a framework
for

determining

whether

adhesion

contracts—printed

contracts

“prepared by a party of superior bargaining power for adherence or
rejection of the weaker party”—were actually consented to by the
weaker

party

and

therefore

enforceable.

Aguillard

v.

Auction

Management Corp., 2004-2804 (La. 6/29/05); 908 So.2d 1, 8-9. In
Aguillard,

the

plaintiff

challenged

whether

he

could

have

consented to the arbitration agreement with the defendant, an
auctioneer, which was signed at an auction for property. The
plaintiff asserted that the plaintiff could not have consented to
the agreement because of the agreement’s standard form and small
7

print, and the potentially unequal bargaining positions of the
parties. Id. at 4, 10. Once a party to an agreement questions
consent, as Gautier does here, “the party seeking to invalidate
the contract as adhesionary must then demonstrate the non-drafting
party either did not consent to the terms in dispute or his consent
was vitiated by error,” rendering the contract unenforceable. Id.
at 10.
In

reviewing

whether

an

arbitration

agreement

is

unenforceably adhesionary, the Louisiana Supreme Court considers
four factors: “(1) the physical characteristics of the arbitration
clause, (2) the distinguishing features of the arbitration clause,
(3) the mutuality of the arbitration clause, in terms of the
relative burdens and advantages conferred by the clause upon each
party, and (4) the relative bargaining strength of the parties.”
Sutton Steel & Supply, Inc. v. BellSouth Mobility, Inc., 2007-146
(La. App. 3 Cir. 12/12/07); 971 So.2d 1257, 1266 (citing Aguillard,
908 So.2d at 16-17). In considering the physical characteristics
of

the

agreement,

courts

consider

whether

the

print

is

“unreasonably small,” the length of the document, and whether the
text was organized into paragraphs under headings. Aguillard, 908
So.2d at 16; Sutton Steel, 971 So.2d at 1266. When considering the
distinguishing

features

of

the

arbitration

agreement,

the

Aguillard court considered whether the arbitration provisions were
concealed in any way. Id. The arbitration agreement between Bactes
8

and Gautier was presented as an exhibit to the employee handbook,
but is a stand-alone document. It is entitled “1004 Arbitration
Agreement.” The title is bold at the top of the page, and is in
larger print than the text. Gautier wrote her name and her social
security number at the top of the page, right next to the title.
The document is two pages long, and the second page is also
entitled “1004 Arbitration Agreement.” Gautier signed and dated
the agreement on the second page below the text. The last paragraph
is in all capital letters, states that the employee executes the
agreement by signing it, and that the agreement will be controlling
throughout employment. The agreement is understandable and clearly
delineates its terms. It is not concealed in any way; the title
clearly indicates the subject of the agreement.
The mutuality requirement considers whether the both parties
are bound to arbitration. Id. Bactes and Gautier are both required
to arbitrate any disputes. And lastly, courts consider whether the
agreement was so critical that the plaintiff was compelled to sign
it, and could not have refused employment. See id. at 17. There
are no facts presented to suggest that Bactes abused its position
as Gautier’s employer, or that Gautier was somehow vulnerable to
Bactes for any reason. Simply because one party employs another
does

not

make

such

an

agreement

unconscionable

on

its

face.

Accordingly, the plaintiff has failed to show that the agreement
between Bactes and Gautier is invalid.
9

The plaintiff does not dispute that the second consideration
in the first inquiry, which asks whether the dispute in questions
falls within the scope of the arbitration agreement, is satisfied.
The agreement states, “Employee and BACTES agree that arbitration
shall be the exclusive forum for resolving all disputes arising
out of or involving Employee’s employment with BACTES or the
termination of that employment,” with a few exceptions listed,
none of which are at issue here. Because Bactes has demonstrated
that there was a valid agreement in place and that the dispute
falls within the scope of the agreement, Bactes has satisfied the
first inquiry, showing that they agreed to arbitrate the dispute
at issue.
As to the second inquiry, the parties have pointed to no
statute or policy, and this Court is aware of none, that would
render the claims nonarbitrable. Gautier does not claim that the
dispute

is

nonarbitrable,

or

address

this

inquiry

at

all.

Consequently, the FAA requires this Court to compel arbitration
between Bactes and Gautier.

C.
The

arbitration

agreement

was

only

between

Bactes

and

Gautier; Paulus is a non-signatory. However, he still seeks to
compel arbitration because the claims against him are intertwined

10

with those against Bactes. Gautier does not oppose arbitration on
the basis that Paulus is a non-signatory. 3
While arbitration typically binds the signatories to the
agreement,

the

Fifth

Circuit

has

held

that “a

party

to

an

arbitration agreement may be equitably estopped from litigating
its claims against non-parties in court and may be ordered to
arbitration.” Brown v. Pacific Life Ins. Co., 462 F.3d 384, 398
(5th Cir. 2006). “[A] non-signatory to an arbitration agreement
can

compel

arbitration:

(1)

when

the

signatory

to a

written

agreement containing an arbitration clause must rely on the terms
of the written agreement in asserting its claims against a nonsignatory;

or

(2)

when

the

signatory

raises

allegations

substantially interdependent and concerted misconduct by both the
non-signatory and one or more signatories to the contract.” Id.
(citing Grigson v. Creative Artists Agency, LLC, 210 F.3d 524, 528
(5th Cir. 2000)). This rule “makes sense because the parties
resisting arbitration had expressly agreed to arbitrate claims of
the very type that they asserted against the nonsignatory.” Bridas
S.A.P.I.C. v. Gov't of Turkm., 345 F.3d 347, 361 (5th Cir.2003);

3

In fact, Gautier objects to Paulus’ statement that he is a nonsignatory because Paulus “was the one who recruited Ms. Gautier,
hired her, and later defrauded her out of her owed commissions.”
Paulus is a non-signatory to the agreement because he was not a
party to it. The only parties that participated in the arbitration
agreement are Bactes and Gautier. Paulus was not listed or
referenced in any manner, and he did not sign the agreement.
11

see Ryan v. Thunder Restorations, Inc., No. 09-3261, 2011 WL
2680482, at *8 (E.D. La. July 8, 2011).
Paulus can compel arbitration under the second prong because
Gautier

alleges

misconduct”

“substantially

between

Bactes,

a

interdependent
signatory,

and

and

concerted

Paulus,

a

non-

signatory. The allegations include substantially interdependent
and concerted misconduct when the claims “against the nonsignatory
defendant

depends

in

some

way

on

the

acts

of

the

signatory

defendant.” Ryan, 2011 WL 2680482, at *8. Here, the claims against
Bactes and Paulus are inextricably tied. Gautier claims that Paulus
sexually harassed and discriminated against her, and that Bactes
knew of his conduct and ratified it. The claims against Bactes are
predicated

on

the

claims

against

Paulus.

Had

Paulus

been

a

signatory, the claims against him would fall within the scope of
the

arbitration

agreement.

Paulus

is

entitled

to

compel

arbitration under the doctrine of equitable estoppel.

D.
Local Rule 7.5 of the Eastern District of Louisiana requires
that memoranda in opposition to a motion be filed no later than
eight days before the noticed submission date. No memoranda in
opposition to the defendants’ motions to compel arbitration, set
for submission on August 22, 2018, has been filed. Accordingly,
the motion is deemed to be unopposed, and further, it appearing to
12

the Court that the motion has merit, 4 the defendants are also
entitled to compel arbitration for Barcelona’s claims.
E.
Lastly, Bactes moves to dismiss the case while it is subject
to arbitration, where Paulus seeks a stay or dismissal. Gautier
does not weigh in on whether the case should be stayed or dismissed
if the Court compels arbitration. Whether to stay or dismiss a
case in which the claims are subject to arbitration is generally
within the district court’s discretion. Apache Bohai Corp., LDC v.
Texaco China, B.V., 330 F.3d 307, 311 n.9 (5th Cir. 2003). However,
9 U.S.C. § 3 provides that when a suit is brought “upon any issue
referable to arbitration under an agreement in writing for such
arbitration,” the Court, upon being satisfied that the issue

4

Barcelona was not a signatory to the arbitration agreement. But
again, the Fifth Circuit has held that the doctrine of equitable
estoppel allows non-signatories to be compelled to arbitration
when their claims are “intertwined” with claims brought by
signatories. See Grigson, 201 F.3d at 527. The case literature
contemplates non-signatories compelling arbitration, and in this
situation, a signatory, Bactes, is compelling arbitration against
a non-signatory, Barcelona. But Barcelona’s claims that he lost
society and companionship of his wife due to the harassment and
discrimination she faced are wholly dependent on Gautier’s claims,
which are within the scope of the arbitration agreement. The
doctrine still applies because Barcelona’s claims are dependent on
the claims brought by a signatory that are within the scope of the
arbitration agreement. If Barcelona was a signatory, his claims
would be within the scope of the agreement. Allowing Barcelona to
proceed with his claims in this Court, while Gautier’s claims were
arbitrated in California, would be inefficient, confusing, and
undermine the purpose of the arbitration agreement.
13

involved is indeed referable to arbitration under the agreement,
“shall on application of one of the parties stay the trial of the
action until such arbitration has been had in accordance with the
terms of the agreement, providing the applicant for the stay is
not in default in proceeding with such arbitration.” 9 U.S.C. § 3;
see Waste Mgmt., Inc. v. Residuos Industriales Multiquim, S.A. de
C.V., 372 F.3d 339, 341-42 (5th Cir. 2004). A stay is warranted
here.
Accordingly, IT IS ORDERED: that the Bactes’ and Paulus’
motions to compel arbitration are GRANTED in part, to the extent
it seeks to compel arbitration, and DENIED in part, to the extent
Bactes and Paulus seek dismissal rather than a stay. 5 The case is
stayed pending the completion of arbitration and this case is
closed pending completion of arbitration.

New Orleans, Louisiana, August 28, 2018

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

5

Because the Court has granted the motions to compel, it need not
reach the alternative Rule 12(b)(6) motions to dismiss.
14