Garren v. CVS Health Corporation et al

Filing 28

MEMORANDUM: The Court will DENY Defendants motion (Doc. 15) WITHOUT PREJUDICE. This matter will proceed to a trial on the existence of an agreement to arbitrate. An appropriate Order will enter. Signed by District Judge Curtis L Collier on 7/11/2018. (DJH, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE

TOMMY D. GARREN,
Plaintiff,
v.
CVS HEALTH CORPORATION, et al.
Defendants.

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Case No. 3:17-cv-149
Judge Collier
Magistrate Judge Poplin

MEMORANDUM
Before the Court is a motion by Defendants (CVS Health Corporation; CVS Pharmacy,
Inc.; Tennessee CVS Pharmacy, LLC; and CVS Rx Services, Inc.) to dismiss the amended
complaint (Doc. 8) of Plaintiff, Tommy D. Garren, and compel arbitration of Plaintiff’s claims.
(Doc. 15.) Plaintiff responded in opposition (Doc. 22), and Defendants replied (Doc. 23). For the
following reasons, the Court will DENY Defendants’ motion.

I.

BACKGROUND
Plaintiff was employed by Defendants as a pharmacist in the state of Tennessee.1 In

October 2014, Defendants introduced an “Arbitration of Workplace Legal Disputes Policy” (the
“Policy”). The Policy stated, in part, as follows:
1. Mutual Obligation to Arbitrate. Under this Policy, CVS Health (including its
subsidiaries) and its Employees agree that any dispute between an Employee
and CVS Health that is covered by this Policy (“Covered Claims”) will be
decided by a single arbitrator through final and binding arbitration only and will
not be decided by a court or jury or any other forum, except as otherwise
provided in this Policy. This Policy is an agreement to arbitrate disputes covered
by the Federal Arbitration Act (9 U.S.C. §§ 1-16). Employees accept this Policy
by continuing their employment after becoming aware of the Policy.
1

The parties do not specify which Defendant entity was Plaintiff’s employer.

2. Claims Covered by This Policy. Except as otherwise stated in this Policy,
Covered Claims are any and all legal claims, disputes or controversies that CVS
Health may have, now or in the future, against an Employee or that an
Employee may have, now or in the future, against CVS Health, its parents,
subsidiaries, successors or affiliates, or one of its employees or agents, arising
out of or related to the Employee’s employment with CVS Health or the
termination of the Employee’s employment.
Covered Claims include but are not limited to disputes regarding . . . leaves of
absence, harassment, discrimination, retaliation and termination arising under
the Civil Rights Act of 1964, Americans With Disabilities Act, Age
Discrimination in Employment Act, Family Medical Leave Act, Fair Labor
Standards Act . . . and other federal, state and local statutes, regulations and
other legal authorities relating to employment.
Covered Claims also include disputes arising out of or relating to the validity,
enforceability or breach of this Policy, except as provided in the section below
regarding the Class Action Waiver.
(Doc. 16-1 at 9.)
Defendants required their employees, described as “colleagues,” to participate in a
computerized training course regarding the Policy (the “Course”). Each employee had to log into
Defendants’ training system using unique credentials that allowed Defendants to track and record
their respective participation in the Course.
The third slide of the Course required employees to open an Arbitration Policy Guide (the
“Guide”). (Doc. 16-1 at 16.) The Guide could be reviewed electronically within the training
system or printed in hard copy for the employee to read and keep. An employee could not proceed
past the third slide without opening the Guide. (Doc. 16-1 at 4, ¶ 10.) The Guide included the
following information:
Colleagues’ Rights
...
Arbitration is a matter of contract between the colleague and CVS Health.
Colleagues accept the policy by continuing their employment with CVS Health
after becoming aware of the policy. With that being said, we want colleagues’

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participation to be voluntary. Colleagues will be asked to acknowledge and agree
to the policy, but from the time that a colleague first views or receives the policy,
he or she has thirty days to opt out of the policy. If a colleague opts out, he or she
will not be obligated to go to arbitration and can continue to use the traditional court
system as before. Likewise, if a colleague opts out, CVS Health will not be required
to arbitrate any disputes it has with that colleague.
How to Opt Out
In order to opt out, a colleague must mail a written, signed and dated letter stating
clearly that he or she wishes to opt out of the CVS Health Arbitration of Workplace
Legal Disputes Policy. The letter must be mailed to CVS Health, P.O. Box 969,
Woonsocket, RI 02895. In order to be effective, the colleague’s opt out notice must
be postmarked no later than 30 days after the colleague first views or receives the
policy. Please note, sending in a timely notice is the only way to opt out. A
colleague cannot opt out by refusing to complete training or attend meetings about
the policy.
CVS Health will not tolerate retaliation against any colleague who decides to opt
out.
(Doc. 16-1 at 41 (emphasis in original).)
After opening the Guide, an employee could proceed to the remaining slides of the Course.
The fifth slide of the Course contained a list of acknowledgments and instructed the employee to
click a “Yes” button at the bottom of the slide to accept the acknowledgements and continue. (Doc.
16-1 at 31.) The acknowledgments included the following:
By clicking the “Yes” button below, I am acknowledging and agreeing:


that I have carefully read the CVS Health Policy, “Arbitration of Workplace
Legal Disputes” (the “Policy”) and understand that it applies to me;
...



that I have the opportunity, for a limited time only, to opt out of the Policy
and, by doing so, not be bound by its terms;



that, to opt out, I must mail a written, signed, and dated letter, stating clearly
that I wish to opt out of this Policy to CVS Health, P.O. Box 969,
Woonsocket, RI 02895, which must be postmarked no later than 30 days
after the date I first received or viewed a copy of this Policy;

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...


that my click of the “Yes” button creates an electronic signature that is
legally binding.

(Doc. 16-1 at 31.)
The parties agree Plaintiff completed the Course on or about October 11, 2014. (Doc. 161 at 6, ¶ 15; id. at 51; Doc. 22-1 ¶ 2.) They disagree, however, about whether Plaintiff opted out
of the Policy. Defendants have submitted declarations from two employees stating Plaintiff did
not opt out, in that Defendants have no record of ever having received an opt-out notice from
Plaintiff. (Doc. 16-1 at 6–7, ¶ 16; Doc. 16-2 at 2, ¶ 4.) Plaintiff has submitted his own declaration
stating he did opt out, by mailing Defendants a letter expressing his desire to opt out approximately
seven to ten days after he completed the Course. (Doc. 22-1 ¶ 3.)
Defendants terminated Plaintiff’s employment approximately one year later. (Doc. 8 ¶ 71.)
Plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission
and filed this action after receiving his Notice of Right to Sue from the Commission. (Id. ¶¶ 11–
12.) He asserts causes of action for discrimination, harassment, and retaliation based on age and
disability, as well as failure to accommodate based on disability. (Id. at 13–18.) Defendant now
moves to have Plaintiff’s complaint dismissed and his claims referred to arbitration under the
Policy.

II.

STANDARD OF REVIEW
In deciding a motion to compel arbitration under the Federal Arbitration Act (the “FAA”),

9 U.S.C. §§ 1 et seq., a district court must
hear the parties, and upon begin satisfied that the making of the agreement for
arbitration or the failure to comply therewith is not in issue, the court shall make an
order directing the parties to proceed to arbitration . . . . If the making of the

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arbitration agreement . . . be in issue, the court shall proceed summarily to the trial
thereof.
9 U.S.C. § 4. A district court’s first task is therefore to “determine whether the parties have agreed
to arbitrate the dispute at issue.” Great Earth Cos., Inc. v. Simmons, 288 F.3d 878, 889 (6th Cir.
2002) (quoting Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000)).
The party opposing arbitration has the burden to show a genuine issue of material fact as
to whether the agreement to arbitrate is valid. Green Tree Fin. Corp.–Alabama v. Randolph, 531
U.S. 79, 91 (2000). The necessary showing is similar to what is required to defeat a motion for
summary judgment. Great Earth, 288 F.3d at 889. The district court must view all facts and any
inferences in the light most favorable to the party opposing arbitration “and determine whether the
evidence presented is such that a reasonable finder of fact could conclude that no valid agreement
to arbitrate exists.” Id. (citing Aiken v. City of Memphis, 190 F.3d 753, 755 (6th Cir. 1999) (reciting
standard of review on summary judgment)).

III.

DISCUSSION
Under the FAA, arbitration clauses in commercial contracts “shall be valid, irrevocable,

and enforceable, save upon such grounds as exist at law or in equity for the revocation of any
contract.” 9 U.S.C. § 2; see also Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67 (2010).
Moreover, the provisions of the FAA are mandatory: “By its terms, the Act leaves no place for the
exercise of discretion by a district court, but instead mandates that district courts shall direct the
parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.”
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in original) (citing 9
U.S.C. §§ 3–4).

And federal courts have long recognized a “liberal federal policy favoring

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arbitration agreements.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24
(1983).
Before ordering arbitration, however, a district court must make the threshold
determination of whether a valid contract or a valid arbitration clause within a contract
encompasses the underlying claim. “[A]rbitration is a matter of contract and a party cannot be
required to submit to arbitration any dispute which he has not agreed so to submit.” Howsam v.
Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002) (internal quotation marks omitted) (citing
Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582 (1960)). And “[t]he question whether
the parties have submitted a particular dispute to arbitration, i.e., the ‘question of arbitrability,’ is
‘an issue for judicial determination [u]nless the parties clearly and unmistakably provide
otherwise.’” Id. (emphasis in original) (quoting AT&T Techs., Inc. v. Commc’ns Workers, 475
U.S. 643, 649 (1986)). The parties may, for example, clearly and unmistakably provide otherwise
by including a clause in their agreement delegating such gateway issues about the arbitrability of
a particular dispute to the arbitrator. See Rent-A-Center, 561 U.S. 63, 68–69 (2010).
A dispute is arbitrable if (1) “a valid agreement to arbitrate exists between the parties” and
(2) “the specific dispute falls within the substantive scope of that agreement.” Hergenreder v.
Bickford Senior Living Grp., LLC, 656 F.3d 411, 416 (6th Cir. 2011) (citing Javitch v. First Union
Sec., Inc., 315 F.3d 619, 624 (6th Cir. 2003)). A federal court sitting in diversity applies the
contract law of the state in which the arbitration agreement was allegedly formed to determine
whether the agreement exists and is legally enforceable. Hergenreder, 656 F.3d at 416 (citing
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943–44 (1995)).
Defendants argue that Plaintiff has failed to show a genuine issue of material fact as to
whether there is a valid agreement to arbitrate, and that the Court in fact should not even consider

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whether there is a valid agreement to arbitrate because the Policy commits gateway questions of
arbitrability to the arbitrator. The Court addresses the latter threshold issue first.
A.

Delegation of Gateway Issues of Arbitrability to the Arbitrator

Defendants argue the Court should not consider whether the dispute is arbitrable because
the Policy commits gateway determinations of arbitrability to the arbitrator. (Doc. 16 at 8.)
Defendants are correct that parties are free to delegate gateway determinations of arbitrability to
the arbitrator. See Granite Rock, 561 U.S. at 297; Rent-A-Center, 561 U.S. at 68–69. As
Defendants point out, when a party who opposes arbitration challenges the validity of the entire
agreement to arbitrate, but does not specifically challenge the validity of the delegation provision,
the Court should refer the dispute over arbitrability to the arbitrator. (Doc. 16 at 8 (citing Rent-ACenter, 561 U.S. at 72).)
But Defendants miss a critical distinction. The rule they invoke applies only to disputes
about the validity of an agreement to arbitrate, not disputes about the existence of an agreement in
the first place. The Supreme Court made this distinction in Rent-A-Center. There, the party
opposing arbitration admitted he had signed the arbitration agreement but argued it was
unenforceable because it was unconscionable. Rent-A-Center, 561 U.S. at 65–66. As the Court
stated, “[t]he issue of the agreement’s ‘validity’ is different from the issue whether any agreement
between the parties ‘was ever concluded,’ and . . . we address only the former.” Id. at 70 n.2. The
Court made the same distinction in another case which held it was for the arbitrator to consider the
contract’s validity unless the challenge was to the disputed arbitration clause itself. Buckeye Check
Cashing, Inc. v. Cardegna, 546 U.S. 440, 445–46 (2006).

There, the party opposing arbitration

also admitted signing a contract containing an arbitration clause, but argued the entire contract was
void for illegality. The Court clarified the limits of its holding as follows:

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The issue of the contract’s validity is different from the issue whether any
agreement between the alleged obligor and obligee was ever concluded. Our
opinion today addresses only the former, and does not speak to the issue decided in
the cases . . . which hold that it is for courts to decide whether the alleged obligor
ever signed the contract.
Id. at 444 n.1.
In each of the other cases Defendants cite, the same distinction holds: the challenge was to
the validity of the contract, not to whether a contract had been formed in the first place. See Dean
v. Draughons Junior College, Inc., No. 3:12-cv-0157, 2012 WL 3308370, at *7 (M.D. Tenn. Aug.
13, 2012)2 (plaintiffs argued contracts were unconscionable); Law Offices of Daniel C. Flint, P.C.
v. Bank of Am., N.A., No. 15-13006, 2016 WL 1444505, at *4 (E.D. Mich. April 13, 2016) (plaintiff
argued arbitration clause was invalid and unconscionable); May v. Nationstar Mortg. LLC, No.
3:12-CV-43, 2012 WL 3028467, at *9 (N.D.W.V. July 25, 2012) (plaintiff argued contract was
unconscionable). Defendants have cited no authority in which a party who denied ever entering
the relevant contract at all was forced to arbitrate the issue of arbitrability.
Here, Plaintiff does not argue that the alleged agreement to arbitrate is void, voidable, or
invalid; he argues it was never made. It is therefore for this Court to decide whether an agreement
to arbitrate exists between the parties.
B.

Existence of an Agreement to Arbitrate

Defendants suggest that the law of the state of Tennessee governs whether the parties
agreed to arbitrate (Doc. 16 at 9), and Plaintiff does not disagree. Under Tennessee law, a contract
“must result from a meeting of the minds of the parties in mutual assent to the terms, must be based
on sufficient consideration, free from fraud or undue influence, not against public policy and
2

Defendants’ attention is invited to the requirement that citations to unreported cases
available on a widely used electronic database should include, among other information, the case
docket number and the full date of the decision. The Bluebook: A Uniform System of Citation,
Rule 10.8.1 (Columbia Law Review Ass’n et al. eds., 20th ed. 2015).
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sufficiently definite to be enforced.” Staubach Retail Servs.-Se., LLC v. H.G. Hill Realty Co., 160
S.W.3d 521, 524 (Tenn. 2005) (quoting Doe v. HCA Health Servs. of Tenn., Inc., 46 S.W.3d 191,
196 (Tenn. 2001)). “The legal mechanism by which parties show their assent to be bound is
through offer and acceptance.” Moody Realty Co. v. Huestis, 237 S.W.3d 666 at 674 n.8 (Tenn.
Ct. App. 2007).
The only disputed element of contract formation in this matter is mutuality of assent.
Defendants argue they made an offer of arbitration to Plaintiff by notifying him of the Policy
through the Course on October 11, 2014, by informing him of how he could opt out, and by
informing him that continuing his employment with Defendants without opting out would be
acceptance of their offer. (Doc. 16 at 9.) Defendants argue Plaintiff accepted their offer in just
that way—by continuing his employment without opting out within thirty days of taking the
Course. (Id. at 9–10.)
Plaintiff does not dispute Defendants made him an offer to arbitrate. He does dispute that
he accepted it. (Doc. 22 at 1–2.) Plaintiff asserts he followed Defendants’ opt-out instructions by
mailing a letter expressing his desire to opt out to the address Defendants indicated approximately
seven to ten days after he took the Course. (Id.)
Plaintiff has met his burden of showing a genuine issue of material fact as to whether he
opted out, and therefore as to whether the parties entered an agreement to arbitrate. See Green
Tree Fin., 531 U.S. at 91. Plaintiff’s declaration states he “mailed a written, dated, and signed
letter expressing [his] desire to opt out of the arbitration program to CVS Health, P.O. Box 969,
Woonsocket, RI 02895,” between approximately seven and ten days of taking the Course. (Doc.
22-1 ¶ 3.) This is the opt-out address stated in the Course and the Guide, and it is within the time
limit Defendant required.

(See Doc. 16-1 at 41, 31.)

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Plaintiff further describes how he

accomplished the mailing: “I personally hand-delivered my opt-out letter to the Tellico Plains,
Tennessee post office to ensure that it was postmarked within 30 days in compliance with the
policy.” (Doc. 22-1 ¶ 3.)
Defendants argue Plaintiff has not met his burden because “he has not provided any proof
that he provided notice to CVS by sending in an opt-out letter.” (Doc. 23 at 8–9.) Defendants
refer to the fact that Plaintiff has not offered any documentary proof, such as a copy of a letter or
a mailing receipt. (See id. at 10.) Defendants rely on Grynko v. Sears Roebuck & Co., No. 1:13CV-2482, 2014 WL 66495 (N.D. Ohio Jan. 6, 2014), in which the district court held the plaintiff’s
affidavit, unsupported by other documentary evidence, was not enough to create a genuine issue
of material fact that the plaintiff had mailed an opt-out notice in the face of the defendant’s
evidence that no opt-out notice had been received. But a declaration, made on personal knowledge,
is sufficient to create an issue of fact under the current standard of review. See Fed. R. Civ. P.
56(c)(1) (“A party asserting that a fact . . . is genuinely disputed must support the assertion by:
(A) citing to particular parts of materials in the record, including . . . declarations . . . .”); see also
Great Earth, 288 F.3d at 889 (standard to defeat motion to compel arbitration similar to standard
to defeat motion for summary judgment). The Court therefore respectfully disagrees with the
Grynko court regarding whether it is appropriate to weigh one side’s evidence against another’s at
this stage and whether an affidavit or declaration can on its own to create a genuine issue of fact.
Defendants also argue Plaintiff’s declaration is insufficient because he “did not submit any
proof of proper postage or that the letter was appropriately addressed, or that he actually deposited
it in the mail.” (Doc. 23 at 10.) The Court sees no support for Defendants’ claim of a lack of proof
the letter was appropriately addressed; the address Plaintiff declares he used is the address stated
in the Course and Guide. (See Doc. 22-1 ¶ 3; Doc. 16-1 at 41, 31.) The Court also disagrees

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Plaintiff failed to provide proof of proper postage or an actual deposit of the letter in the mail.
Plaintiff declares he “mailed a . . . letter” to the appropriate address, and further declares that he
“personally hand-delivered” it to a specific post office “to ensure that it was postmarked within 30
days.” (Doc. 22-1 ¶ 3.) He has not expressly stated he placed a stamp of the appropriate value on
his letter or that he placed it in a mail receptacle. One might theorize that he “mailed” his letter
without a stamp or that he hand-delivered it to an unwatched corner of the post office. But the
Court must take all facts and reasonable inferences in Plaintiff’s favor at this juncture. See Great
Earth, 288 F.3d at 889. The Court therefore has no difficulty concluding Plaintiff has shown a
genuine issue of material fact as to whether he placed a properly addressed, properly stamped,
timely opt-out notice in the mail.3
In an additional attack on Plaintiff’s proof that he opted out, Defendants argue it was a
requirement of the Policy that an opt-out notice actually reach Defendants to be valid. (Doc. 10 at
8.) To be sure, Defendants would not have any way of knowing about an opt out if it did not reach
them. But that is not how they crafted their offer. Neither the Guide nor the Course states that an
opt-out notice must be received, and the Court at this stage is required to take all reasonable
inferences in Plaintiff’s favor, not Defendants’. See Great Earth, 288 F.3d at 889.

IV.

CONCLUSION
Plaintiff has shown a genuine issue of material fact about whether he opted out of the

Policy, and therefore he has shown a genuine issue of material fact as to the existence of an
enforceable agreement to arbitrate.

The Court will DENY Defendants’ motion (Doc. 15)

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Defendants make this argument in discussing the mailbox rule, the presumption that a
properly addressed letter that was deposited in the mail with sufficient postage was received by
the addressee. Plaintiff has not sought to rely on the mailbox rule here; he has stated he complied
with Defendants’ opt-out instructions.
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WITHOUT PREJUDICE. This matter will proceed to a trial on the existence of an agreement
to arbitrate.
An appropriate Order will enter.

/s/
CURTIS L. COLLIER
UNITED STATES DISTRICT JUDGE

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