Iysheh v. Cellular Sales of Tennessee, LLC (TWP1)
Filing
20
MEMORANDUM AND OPINION as set forth in following order. Signed by District Judge Thomas W Phillips on 5/14/18. (ABF)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
ASSAM IYSHEH,
Plaintiff,
v.
CELLULAR SALES OF
TENNESSEE, LLC,
Defendant.
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No. 3:17-cv-542
Judge Phillips
MEMORANDUM OPINION
This civil action arises from plaintiff Assam Iysheh’s employment as a Dealer (a.k.a.
Sales Representative) with defendant Cellular Sales of Tennessee, LLC (“Cellular Sales”).
Plaintiff claims that he was subjected to religious discrimination, a hostile work
environment, and retaliation because of his race, color, religion, and national origin [Doc.
1 at ¶¶ 1, 42; Doc. 14-3 at ¶ 13]. Cellular Sales has filed a motion to dismiss pursuant to
Fed. R. Civ. P. 12(b) and to compel the arbitration of all claims. After carefully considering
the motion, supporting exhibits, and briefs [Docs. 10, 11, 19] and plaintiff’s response in
opposition [Doc. 14], the motion is ripe for determination.
For the reasons set forth herein, defendant’s motion to compel arbitration [Doc. 10]
will be GRANTED.
I.
Relevant Facts 1
Cellular Sales is an authorized Verizon Wireless dealer [Doc. 10-1 at ¶ 3]. Cellular
Sales operates a number of retail stores in Tennessee, offering wireless equipment,
accessories, and Verizon Wireless services to consumers [Id.]. All of these activities
involve the sale of goods or services through interstate commerce by Dealers employed by
the company [Id.].
Plaintiff obtained his GED in 2011 and attended Southwest Community College in
Memphis for one semester [Doc. 14-3 at ¶ 2]. He sold electronics at HH Gregg in
Knoxville for approximately three years until he was recruited to work for Cellular Sales
[Id.; Doc. 1 at ¶ 18]. Cellular Sales hired plaintiff as a Dealer in the Knoxville, Tennessee
area, on September 9, 2015 [Doc. 10-1 at ¶ 4]. 2
Plaintiff generally worked in the
company’s stores located at Deane Hill, Cedar Bluff, Farragut, and West Town Mall [Id.].
Although he “do[es] not recall signing” it [Doc. 14-3 at ¶ 3], defendant’s records
show that plaintiff received a Dealer Compensation Agreement (the “Agreement”) and
electronically signed it at 6:13 a.m. on September 9, 2015 [Doc. 10-1 at ¶ 5]. 3 Execution
1
For the purposes of a motion to dismiss, the Court takes the factual allegations in the complaint
[Doc. 1] as true. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (noting that, “when ruling on a
defendant’s motion to dismiss, a judge must accept as true all of the factual allegations contained
in the complaint”).
2
Although the discrepancy is not material for purposes of the instant motion, the complaint alleges
that Cellular Sales officially hired plaintiff on September 11, 2015 [Doc. 1 at ¶¶ 12, 20].
3
Plaintiff suggests, without explanation, that the Agreement was signed at 9:13 a.m., rather than at
6:13 a.m. “as the Defendant contends” [Doc. 14 at ¶ 3]. Cellular Sales insists that the time of 6:13
a.m. is “clearly shown on the signature line of the agreement” [Doc. 19 at p. 7]. The Agreement
contains the signature date of “09/09/2015” and the time of “6:13:28 AM PDT” [Doc. 10-1 at p.
13]. The Court assumes, for purposes of the instant motion, that “PDT” refers to Pacific Daylight
Time and further assumes that plaintiff intends to suggest that he signed the Agreement at 9:13
a.m. Eastern Daylight Time. This distinction, if any, is not material to the instant dispute.
2
of the Agreement was a term and condition of plaintiff’s employment with Cellular Sales
[Id.].
Relevant to the instant motion, the Agreement contains an arbitration clause. The
Agreement contains the following admonition prior to the arbitration provision: “READ
THIS NEXT SECTION CAREFULLY AS IT AFFECTS YOUR RIGHT TO
PURSUE CLAIMS AGAINST CELLULAR SALES” [Doc. 10-1 at p. 11].
The
pertinent terms of the arbitration clause, entitled “DISPUTE RESOLUTION,” are as
follows:
a.
Applicable Rules. Any controversy or dispute between Dealer and Cellular
Sales or any of its owners, employees, officers, agents, affiliates, or benefit plans,
arising from or in any way related to Dealer’s employment by Cellular Sales, or the
termination thereof, including but not limited to the construction or application of
this Agreement, shall be resolved exclusively by final and binding arbitration
administered by JAMS under its Employment Arbitration Rules & Procedures and
the JAMS Policy on Employment Arbitration Minimum Standards of Procedural
Fairness then applicable to the dispute. …The arbitrator shall have exclusive
authority to resolve any dispute relating to the interpretation, validity, applicability,
enforceability, or formation of this Agreement.
b.
All Disputes Must Be Arbitrated. It is the intent of the parties hereto that all
disputes between them must be arbitrated, expressly including, but not limited to,
(i) any dispute about the interpretation, validity or enforcement of this Agreement,
(ii) any claim of employment discrimination under federal or state law, such as, but
not limited to, discrimination based on age, disability, national origin, race, or sex,
… and (vii) any other claim of any nature, whether contractual, tortious, commonlaw, statutory, or regulatory, arising out of, or in any way related to, Dealer’s
employment with Cellular Sales, the termination thereof, or any other matter
incident thereto. The intent of this provision is that all disputes between the Parties,
of any nature, touching on or relating to this Agreement or any aspect of Dealer’s
employment with Cellular Sales, including the termination thereof, must be resolved
solely by arbitration… .
[Id. at pp. 11—12].
3
Cellular Sales utilizes an online software system called ExactHire to complete its
onboarding process for new employees [Doc. 19-1 at ¶ 3]. Through ExactHire, new
employees complete and agree to their onboarding forms and employment policies,
including the Agreement [Id.]. Employees are required to review each of these forms
online by scrolling to the bottom of each document, and then to electronically sign the
document by entering their name and password to ensure authentication and completion
[Id.]. At that time, an electronic timestamp is created for the document [Id.].
Cellular Sales’ records reveal that plaintiff received the email link to complete his
pre-employment forms from ExactHire on September 8, 2016 [Id. at ¶ 4]. On that date,
plaintiff and Shannon Twilla, Operations Manager of the Knoxville Market of Cellular
Sales, engaged in an email conversation in which he confirmed receiving the email link
[Id. at ¶ 4]. Ms. Twilla also informed plaintiff that he only needed to complete the forms
online, rather than print and bring them to her [Id.]. Plaintiff and Ms. Twilla had another
email conversation on September 9, 2015, shortly after he had completed most of his forms,
including the Agreement [Id.]. Plaintiff was required to complete these forms prior to his
final, on-site onboarding meeting on September 10, 2015, when he received his dealer code
and badge [Id. at ¶ 5]. Plaintiff had continued access to all of these forms, including the
Agreement, and the ability to print them at any time by logging into ExactHire [Id. at ¶ 8].
Plaintiff never requested additional time to review or confer with legal counsel regarding
the forms or the Agreement [Id. at ¶ 10]. He never protested or objected to the arbitration
provision in the Agreement, nor did he ask any questions regarding the arbitration
provision [Id.].
4
Plaintiff states “[i]f I did electronically sign the Dealer Compensation Agreement
on September 9, 2015, it would have been done under significant time pressure upon
presentment by Cellular Sales amidst on-site training while completing final on boarding
paperwork and immediately before getting my badge printed” [Doc. 14-3 at ¶ 4]. Plaintiff
says he had no time to consider the arbitration provision in the Agreement and he was not
told about it [Id. at ¶¶ 5—6]. Plaintiff never received a copy of the Agreement until after
this case was filed [Id. at ¶ 7]. Plaintiff never received a copy of any rules, procedures, or
forms to take home and read, or to keep for his records [Id. at ¶ 8]. Indeed, plaintiff did
not know he “may have signed an arbitration agreement until after this lawsuit was filed”
[Id. at ¶ 9]. Plaintiff further complains that the JAMS fee schedule is not available or
accessible to him and he believes that “arbitration would be prohibitively expensive” for
him [Id. at ¶ 12].
Plaintiff was very successful at Cellular Sales. He was “first on the leaderboard for
sales” in the Knoxville market from October 2015 through February 2016 [Doc. 1 at ¶ 21].
Plaintiff led training sessions for other employees, and he received awards and
commendations for his accomplishments [Id. at ¶¶ 22—23]. From his start date on
September 15, 2015 to December 21, 2015, plaintiff received gross compensation in the
amount of $22, 919.84 from Cellular Sales [Doc. 19-1 at ¶ 12]. From January 1, 2016
through the end of his employment on March 6, 2016, plaintiff received gross
5
compensation in the amount of $41,380.92 [Id.]. Plaintiff was terminated on or about
March 7, 2016 [Doc. 10-1 at ¶ 6]. 4
Plaintiff filed this case on December 22, 2017, asserting claims pursuant to Title VII
of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e, et seq.; 42 U.S.C. § 1981;
and the Tennessee Human Rights Act (the “THRA”), Tenn. Code Ann. § 4-21-101, et seq.
[Doc. 1 at ¶ 42].
II.
Analysis 5
The Federal Arbitration Act (“FAA”) represents a strong public policy in favor of
arbitration. Cooper v. MRM Inv. Co., 367 F.3d 493, 498 (6th Cir. 2004). An arbitration
agreement must satisfy two conditions for the FAA to apply: (1) it must be in writing; and
(2) it must be part of a “contract evidencing a transaction involving commerce.” 9 U.S.C.
§ 2. The parties do not dispute that the arbitration provision in the Agreement is in writing
and that it affects interstate commerce. See United States v. Weathers, 169 F.3d 336, 341
(6th Cir.), cert. denied, 528 U.S. 838 (1999) (cellular telephones are instrumentalities of
interstate commerce).
4
Although not material for purposes of the instant motion, the complaint alleges that plaintiff was
terminated on March 9, 2016 [Doc. 1 at ¶¶ 12, 21].
5
It is worth noting at the outset that both parties have submitted materials beyond the complaint
for consideration [see Docs. 10-1, 10-2, 14-1, 14-2, 14-3, 19-1, 19-2] and neither party has objected
to the consideration of these materials. It is also worth noting that defendant’s motion is filed
pursuant to an unspecified provision of Rule 12(b), although defendant implies that the motion
should be considered under Rule 12(b)(1) or 12(b)(6) [Doc. 11 at p. 1, n.1]. The Court need not
resolve this issue in light of the Sixth Circuit’s directive that a party challenging the validity of an
arbitration agreement must present a genuine issue of material fact, discussed infra. Great Earth
Cos. v. Simons, 288 F.3d 878, 889 (6th Cir. 2002).
6
The FAA provides that agreements to arbitrate “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. If a valid arbitration agreement governs a claim, courts must
compel arbitration. Id. §§ 3–4. “Before compelling an unwilling party to arbitrate, the
court must engage in a limited review to determine whether the dispute is arbitrable;
meaning that a valid agreement to arbitrate exists between the parties and that the specific
dispute falls within the substantive scope of that agreement.” NCR Corp. v. Korala Assocs.,
Ltd., 512 F.3d 807, 812 (6th Cir. 2008) (quoting Javitch v. First Union Sec., Inc., 315 F.3d
619, 624 (6th Cir. 2003). See NCR Corp., 512 F.3d at 813 (“When faced with a broad
arbitration clause, such as one covering any dispute arising out of an agreement, a court
should follow the presumption of arbitration”) (quoting Solvay Pharms., Inc. v. Duramed
Pharms., Inc., 442 F.3d 471, 482 n.10 (6th Cir. 2006)).
When considering a motion to compel arbitration, a court has four tasks. Stout v.
J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000), cert. denied, 531 U.S. 1148 (2001). The
Court must determine: (1) “whether the parties agreed to arbitrate”; (2) “the scope of that
agreement”; (3) “if federal statutory claims are asserted, ... whether Congress intended
those claims to be nonarbitrable”; and (4) whether to dismiss the action or stay the
remainder of the proceedings pending arbitration. Id. 6
Plaintiff raises several arguments as to the enforceability of the arbitration
agreement. If the validity of the agreement to arbitrate is “in issue,” then the Court must
6
Plaintiff has raised no argument that claims for employment discrimination are nonarbitrable.
Stout, 228 F.3d at 714; see Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 123 (2001).
7
first resolve that question. Great Earth Cos. v. Simons, 288 F.3d 878, 889 (6th Cir. 2002).
The burden is on the party opposing arbitration to show that the agreement is not
enforceable. Green Tree Fin. Corp.–Ala. v. Randolph, 531 U.S. 79, 91–92 (2000). In order
to meet this burden, the party opposing arbitration must show a genuine issue of material
fact as to the validity of the agreement to arbitrate, a showing that mirrors the summary
judgment standard. Great Earth, 288 F.3d at 889. In other words, the plaintiff must present
evidence “such that a reasonable finder of fact could conclude that no valid agreement to
arbitrate exists.” Id. As plaintiff is opposing arbitration, he must offer “concrete evidence
from which a reasonable juror could” find that this matter should not be compelled to
arbitration. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). “[M]ere conclusory
and unsupported allegations, rooted in speculation, do not meet that burden.” Bell v. Ohio
State Univ., 351 F.3d 240, 253 (6th Cir. 2003) (citation omitted).
A.
Whether the Agreement is an Adhesion Contract or Lacking Mutual Assent
Plaintiff summarily argues that the Agreement “is an adhesion contract and lacks
mutual assent” [Doc. 14 at ¶ 21]. Under Tennessee law, an adhesion contract is “a
standardized form offered on what amounts to a ‘take it or leave it’ basis, without affording
the weaker party a realistic opportunity to bargain, and under conditions whereby the
weaker party can only obtain the desired product or service by submitting to the form of
the contract.” Seawright v. Am. Gen. Fin. Servs., Inc., 507 F.3d 967, 975–76 (6th Cir.
2007) (quoting Buraczynski v. Eyring, 919 S.W.2d 314, 320 (Tenn. 1996)). However, a
contract is not adhesive merely because it is a standardized form offered on a take-it-orleave-it basis. Plaintiff must also present evidence of “the absence of a meaningful choice
8
for the party occupying the weaker bargaining position.” Cooper, 367 F.3d at 501—02 (6th
Cir. 2004).
Cellular Sales does not really dispute that the Agreement is a standardized form
offered to employees on a ‘take it or leave it’ basis. Instead, Cellular Sales correctly notes
the absence of any evidence that plaintiff could not obtain other employment or that he
attempted to obtain other employment. See Cooper, 367 F.3d at 502. The record reflects
that plaintiff was employed by HH Gregg at the time he was recruited to work for Cellular
Sales and there is no indication that plaintiff could not have continued his employment at
HH Gregg if the terms of employment at Cellular Sales were unsatisfactory. Indeed,
plaintiff claims he was very successful at HH Gregg. See Doc. 1 at ¶ 18 (plaintiff “was
Top 10 in the Southern Market, and on pace for President’s Club in 2016”). Thus, plaintiff
has not presented evidence that he had “no realistic choice but to acquiesce” to the
arbitration provision in the Agreement. See Wofford v. M.J. Edwards & Sons Funeral
Home, Inc., 490 S.W.3d 800, 816 (Tenn. Ct. App. 2015).
On the issue of mutuality of assent, often referred to as a “meeting of the minds,”
courts must apply an objective standard based upon the parties’ manifestations. Staubach
Retail Servs.-Southeast, LLC v. H.G. Hill Realty Co., 160 S.W.3d 521, 524 (Tenn. 2005).
In other words, whether a reasonable onlooker, based upon the parties’ outward
manifestations, would conclude that the parties agreed to be bound by the terms of the
contract. Moody Realty Co. v. Huestis, 237 S.W.3d 666, 674 (Tenn. Ct. App. 2007).
Although he does not recall signing the Agreement, plaintiff does not dispute that he did
so. Thus, he “is presumed to have read the contract and is bound by its contents.” Wofford,
9
490 S.W.3d at 810 (quoting 84 Lumber Co. v. Smith, 356 S.W.3d 380, 383 (Tenn.2011)).
“To hold otherwise would make contracts not “‘worth the paper on which they are
written.’” Id. The Agreement contains a plain and bold warning that the arbitration
provision affects the employee’s rights to pursue claims against Cellular Sales. Further,
plaintiff accepted employment with Cellular Sales and continued employment there for
approximately six months. Beyond his cursory argument, he has presented no evidence,
much less concrete evidence, that the parties did not intend to be bound by the Agreement.
Accordingly, the Court finds that the Agreement does not lack mutual assent.
B.
Whether the Agreement is Unconscionable
Plaintiff argues that the arbitration clause is procedurally unconscionable because
of his “lack of bargaining power” [Doc. 14 at ¶ 20]. Plaintiff further contends that the
Agreement is substantively unconscionable because he “had virtually no time to consider
the arbitration provision contained in the Dealer Compensation Agreement and the option
afforded Plaintiff to contact lawyer [sic] if he chose was not a realistic opportunity under
the circumstances” [Id. at ¶ 20].
In Tennessee, “[u]nconscionability may arise from a lack of a meaningful choice on
the part of one party (procedural unconscionability) or from contract terms that are
unreasonably harsh (substantive unconscionability).” Trinity Industries, Inc. v. McKinnon
Bridge Co., 77 S.W.3d 159, 170 (Tenn. Ct. App. 2001). Courts “have tended to lump the
two together and speak of unconscionability resulting ‘when the inequality of the bargain
is so manifest as to shock the judgment of a person of common sense, and where the terms
are so oppressive that no reasonable person would make them on one hand, and no honest
10
and fair person would accept them on the other.’” Id. at 171 (quoting Haun v. King, 690
S.W.2d 869, 872 (Tenn. Ct. App. 1984)); see Skaan v. Fed. Exp. Corp., No. W2011-01807COA-R3-CV, 2012 WL 6212891, at *9 (Tenn. Ct. App. Dec. 13, 2012). “In determining
whether a contract is unconscionable, a court must consider all the facts and circumstances
of a particular case.” Haun, 690 S.W.2d at 872 (quoting Brenner v. Little Red Schoolhouse,
Ltd., 274 S.E.2d 206, 210 (N.C. 1981)); Dortch v. Quality Rest. Concepts, LLC, No. 1:12CV-198, 2013 WL 1789603, at *3 (E.D. Tenn. Apr. 26, 2013) (Collier, J.).
As noted previously, plaintiff cannot show an absence of meaningful choice; he
already had a successful sales job at the time he was recruited by Cellular Sales. There is
no indication that he could not have continued his employment with HH Gregg or sought
employment elsewhere if he was dissatisfied with the terms of employment offered by
Cellular Sales. Thus, he has not presented evidence the Agreement is procedurally
unconscionable.
Even if the Agreement was a contract of adhesion, it is enforceable unless plaintiff
can also show it is substantively unconscionable. Cooper, 367 F.3d at 503. Plaintiff has
presented no evidence that the Agreement is unreasonably harsh or oppressive. As Cellular
Sales notes and as discussed supra, plaintiff does not deny signing the Agreement nor does
he contest the validity of his electronic signature [see Doc. 19 at pp. 3—4]. Although
plaintiff points out that Cellular Sales did not sign the Agreement [Doc. 14 at ¶ 22], he does
not contend that Cellular Sales failed to perform its duties under the Agreement, including
as to his compensation, over the term of his employment. Plaintiff suggests that if he did
sign the Agreement, it “would have been done … under significant time pressure during
11
on-site training” [Doc. 14-3 at ¶ 4]. This testimony is vague at best and could easily be
characterized as speculative.
Plaintiff’s statement is contradicted by Ms. Twilla’s
testimony that plaintiff had nearly two days in which to consider the Agreement, along
with other pre-employment forms and policies. There is no evidence in the record that
plaintiff ever raised questions or concerns about the Agreement, nor did he request
additional time to discuss the Agreement with a lawyer. Further, although he complains
that he did not receive a copy of the Agreement, plaintiff could have printed his own copy
or reviewed it online at any time.
After considering all the facts and circumstances, the Court finds that the Agreement
is neither procedurally nor substantively unconscionable. The Agreement represents the
parties’ valid agreement to arbitrate their disputes.
C.
Whether Plaintiff’s Claims are Subject to the Agreement
Plaintiff summarily asserts that the Agreement “does not expressly cover claims of
discrimination based on religion and color” [Doc. 14 at ¶ 18]. As set forth in the complaint,
plaintiff has asserted discrimination claims pursuant to Title VII, 42 U.S.C. § 1981, and
the THRA [Doc. 1 at ¶ 2]. The Agreement covers “[a]ny controversy or dispute between
Dealer and Cellular Sales” and “any claim of employment discrimination under federal or
state law, such as, but not limited to, discrimination based on age, disability, national
origin, race, or sex” [Doc. 10-1 at pp. 11—12]. Thus, the Agreement specifically includes
claims of employment discrimination under federal and state law, precisely the claims
which plaintiff asserts. Cf. AT &T Tech., Inc. v. Comm. Workers of Am., 475 U.S. 643, 650
(1986) (only an “express provision excluding a particular grievance from arbitration” or
12
“the most forceful evidence of a purpose to exclude the claim from arbitration can
prevail”); see Watson Wyatt & Co. v. SBC Holdings, Inc., 513 F.3d 646, 650 (6th Cir. 2008)
(“broadly written arbitration clauses must be taken at their word and extend to situations
that fall within their purview”). Plaintiff has presented no evidence or developed argument
as to why his claims would not be encompassed by the arbitration provision of “any claim
of employment discrimination under federal or state law.” Accordingly, the Court finds
that plaintiff’s claims are within the scope of the Agreement’s arbitration clause.
D.
Jury Waiver
Next, plaintiff argues that the arbitration agreement is unenforceable because he did
not knowingly, intelligently, and voluntarily waive his right to a jury trial [Doc. 14 at ¶¶
15—17]. Plaintiff suggests that his “profile …, his experience, background, and level of
education” would make such a waiver unconscionable [Id. at ¶ 17].
Although the Sixth Circuit has held that “the loss of the right to a jury trial is a
necessary and fairly obvious consequence of an agreement to arbitrate,” Cooper, 367 F.3d
at 506 (quoting Burden v. Check Into Cash of Ky., LLC, 267 F.3d 483, 492 (6th Cir. 2001),
cert. denied, 535 U.S. 970 (2002)), the waiver of the right to a jury trial must be knowing
and voluntary. Hergenreder v. Bickford Senior Living Grp., LLC, 656 F.3d 411, 420 (6th
Cir. 2011) (citing K.M.C. Co. v. Irving Trust Co., 757 F.2d 752, 755 (6th Cir. 1985)). In
evaluating whether a plaintiff knowingly and voluntarily waived his right to pursue
employment claims in court, the Court considers: (1) plaintiff's experience, background
and education; (2) the amount of time the plaintiff had to consider whether to sign the
waiver, including whether the plaintiff had an opportunity to consult with a lawyer; (3) the
13
clarity of the waiver; (4) consideration for the waiver; and (5) the totality of the
circumstances. Id. at 420–21 (citing Morrison v. Circuit City Stores, Inc., 317 F.3d 646,
668 (6th Cir. 2003) (en banc)).
With respect to the first factor, Cellular Sales notes plaintiff’s own testimony that
he has a GED, some college attendance, and was “recruited” to leave his position with HH
Gregg to work for Cellular Sales [Doc. 19 at p. 10]. Cellular Sales also relies on public
records of plaintiff’s current licensure as a real estate agent in Tennessee, as well as the
social media pages from plaintiff’s real estate firm [Doc. 19-1 at pp. 11—20]. Cellular
Sales’ records reveal that plaintiff received gross compensation totaling $64,300.76 in only
six months of employment [Doc. 19-1 at ¶ 12]. Thus, Cellular Sales argues that plaintiff’s
education and higher compensation weigh in favor of enforcing the agreement.
The Court agrees. Plaintiff has not disputed the evidence submitted by Cellular
Sales, and the Court accepts it as true for purposes of the pending motion. Thus, the
evidence reveals a plaintiff who is literate with sophisticated work experience. There is no
indication that the plaintiff could not understand the Agreement or its ramifications.
Further, plaintiff was successfully employed at the time he was recruited to work for
Cellular Sales and thus was not in “dire financial circumstances” at time of his application.
See Walker v. Ryan’s Family Steak Houses, Inc., 400 F.3d 370, 381 (6th Cir.), cert. denied,
546 U.S. 1030 (2005). Accordingly, the Court finds that this factor weighs in favor of a
knowing and voluntary waiver.
As for the second factor, plaintiff speculates that “if” he signed the Agreement, “it
would have been done under significant time pressure” during training and completion of
14
paperwork [Doc. 14-3 at ¶ 4]. He further states that he “had no time to consider the
arbitration provision” in the Agreement [Id. at ¶ 5]. As noted, plaintiff’s testimony is vague
at best. In response, Cellular Sales contends that plaintiff reviewed the Agreement and
other pre-employment forms electronically at his home [see Doc. 19-1 at ¶¶ 3—5]. Thus,
Cellular Sales contends that plaintiff had from September 8, 2015, until the morning of
September 10, 2015, to review the Agreement [Id. at ¶ 6]. Plaintiff never requested
additional time to review or confer with legal counsel regarding the Agreement, a point
that appears to be undisputed [Id. at ¶ 10]. Thus, the Court is presented with plaintiff’s
testimony that he “had no time” to consider the Agreement “if” he signed it, and Cellular
Sales’ evidence that plaintiff had close to two days to consider it. Accordingly, in light of
the dispute as to the amount of time plaintiff had to review the Agreement, the Court finds
that this factor does not weigh in favor of nor against a knowing and voluntary waiver.
The third factor for consideration is the clarity of the waiver. Plaintiff correctly
notes that the Agreement does not contain an express waiver of his right to a jury trial [Doc.
14 at p. 5]. However, the Agreement warns the employee in plain language: “READ THIS
NEXT SECTION CAREFULLY AS IT AFFECTS YOUR RIGHT TO PURSUE
CLAIMS AGAINST CELLULAR SALES” [Doc. 10-1 at p. 11]. The Agreement also
plainly explains, “all disputes … must be arbitrated” [Id. at pp. 11—12]. Further, as
Cellular Sales points out, the Sixth Circuit “has flatly rejected the claim that an arbitration
agreement must contain a provision expressly waiving the employee’s right to a jury trial.”
Cooper, 367 F.3d at 506. Instead, such a waiver is considered “a necessary and fairly
obvious consequence of an agreement to arbitrate.” Id. (quoting Burden, 267 F.3d at 492).
15
In light of the Agreement’s bold warning and plain language covering “all disputes,” the
Court finds that plaintiff could easily understand the arbitration provision to be a waiver of
his right to a jury trial. The Court finds that this factor weighs in favor of a knowing and
voluntary waiver.
Regarding the fourth factor, plaintiff’s acceptance of the Agreement was a condition
of his employment and continued employment [Doc. 10-1 at ¶ 5]. Moreover, a mutual
promise is sufficient consideration to support an agreement to arbitrate under Tennessee
law. Sellers v. Macy’s Retail Holdings, Inc., No. 2:12-CV-02496-SHL, 2014 WL 2826119,
at *8 (W.D. Tenn. June 23, 2014) (quoting Seawright, 507 F.3d at 974). The arbitration
provision at issue is just such an agreement. The Court finds that this factor weighs in
favor of a knowing and voluntary waiver.
Finally, the totality of the circumstances convinces the Court that plaintiff
knowingly and voluntarily waived his right to a jury trial. “[O]ne who signs a contract
which he has had an opportunity to read and understand, is bound by its provisions” and
thus plaintiff “cannot be excused from complying with the arbitration provision if [he]
simply failed properly to read the contract.” See Inland Bulk Transfer Co. v. Cummins
Engine Co., 332 F.3d 1007, 1016 (6th Cir. 2003) (internal citations and quotation marks
omitted). Although plaintiff suggests he had “no time” to consider the Agreement, he has
presented no evidence that he was prevented from reviewing the terms of the Agreement
with Cellular Sales or that he was incapable of understanding its terms.
After considering all of the foregoing factors, the Court finds that the cumulative
weight of the factors support a waiver. Thus, the Court concludes that plaintiff has
16
knowingly and voluntarily waived his right to a jury trial. The Court finds that the parties
have entered into a valid and enforceable agreement to arbitrate any disputes between them,
including the claims raised in this case.
E.
Whether the JAMS Rules are Unconscionable
The Agreement provides that all disputes between the parties shall be resolved by
“final and binding arbitration administered by JAMS under its Employment Arbitration
Rules & Procedures and the JAMS Policy on Employment Arbitration Minimum Standards
of Procedural Fairness then applicable to the dispute” [Doc. 10-1 at p. 11]. Plaintiff
contends that the JAMS rules are unconscionable because of the “potential conflict
between JAMS financial interests and its ability to provide a neutral arbitration service”
[Doc. 14 at ¶¶ 25—26]. Plaintiff further argues, “JAMS interest in maintaining the
satisfaction of its corporate clients would engender a bias which would render arbitration
fundamentally unfair” [Id. at ¶ 26].
As Cellular Sales points out, plaintiff has presented no evidence of bias or
impartiality by JAMS [Doc. 19 at pp. 19—20]. The Court notes that the Agreement
imposes a mutual obligation on the parties to arbitrate any and all disputes. Moreover, the
JAMS Employment Arbitration Rules submitted by plaintiff indicate that both parties
participate in selecting the arbitrator. The Court cannot presume that arbitration through
JAMS would be biased without any particularized evidence showing a lack of impartiality.
See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 634 (1985)
Plaintiff also contends that arbitration “would be prohibitively expensive” for him
because the JAMS rules require each party to pay its “pro rata share” of the fees and
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expenses [Id. at ¶¶ 27, 30].
Plaintiff admittedly does not have the current JAMS
professional fee schedule, but he speculates the “professional fees for JAMS arbitrators
range between $500.00-$750.00 per hour” [Id. at 28—29]. Cellular Sales points out that
the JAMS rules specify that “[i]f an Arbitration is based on a clause or agreement that is
required as a condition of employment, the only fee that an employee may be required to
pay is the initial JAMS Case Management Fee” [Doc. 19 at p. 21; Doc. 14-2 at p. 26
(emphasis added)]. Similarly, the JAMS Demand for Arbitration Form, submitted by
Cellular Sales, states that, “[f]or matters based on a clause or agreement that is required as
a condition of employment, the employee is only required to pay $400.00” [Doc. 19-2 at
p. 3]. Counsel for Cellular Sales states that it has “always paid all of the arbitration fees
associated with such arbitrations, including the initial JAMS Case Management Fee” and
“intends on paying all of the JAMS arbitration fees associated with this matter, including
the initial JAMS Case Management Fee” [Doc. 19-2 at ¶¶ 6—7].
“The ‘risk’ that [a plaintiff] will be saddled with prohibitive costs is too speculative
to justify the invalidation of an arbitration agreement.” Green Tree Fin. Corp., 531 U.S.
at 91. Based on the present record, plaintiff’s speculation that arbitration will be costprohibitive is just that, speculation. It appears that the applicable JAMS rules would only
require plaintiff to pay an initial $400.00 case management fee 7 and that Cellular Sales
regularly covers this expense for its employees and intends to do so in this case. Moreover,
any additional costs that plaintiff might incur during arbitration – such as attorney fees or
7
The $400.00 JAMS case management fee is comparable to what plaintiff has already paid to
initiate this case [see Doc. 1].
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expert witness fees – are no different than plaintiff would incur during judicial proceedings.
Accordingly, the Court does not find that the JAMS rules are procedurally unconscionable
or that arbitration will be cost prohibitive to plaintiff.
F.
Remedy
In light of the Court’s conclusion that the parties have entered into an enforceable
arbitration agreement and the agreement covers the instant dispute, the Court next
considers the appropriate remedy. Cellular Sales argues that because all claims must be
arbitrated, dismissal of this action is appropriate [Doc. 11 at pp. 11—12]. Plaintiff has not
weighed in on the appropriate remedy beyond the denial of defendant’s motion.
The Sixth Circuit has stated that “‘[t]he weight of authority clearly supports
dismissal of the case when all of the issues raised in the district court must be submitted to
arbitration.’” Green v. Ameritech Corp., 200 F.3d 967, 973 (6th Cir. 2000) (quoting Alford
v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992)); Hensel v. Cargill,
Inc., No. 99–3199, 1999 WL 993775, at *4 (6th Cir. Oct. 19, 1999); see also Choice Hotels
Int'l, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 709–10 (4th Cir. 2001) (concluding
that “dismissal is a proper remedy when all of the issues presented in a lawsuit are
arbitrable”) (citation omitted); Gassner v. Jay Wolfe Toyota, No. 4:06–CV–1335 CAS,
2007 WL 1452240, at *4 (E.D. Mo. May 15, 2007) (“Where all issues in a case must be
submitted to arbitration, it serves no purpose to retain jurisdiction and stay an action.”).
Because all of plaintiff's claims are arbitrable, the Court can find no reason to stay this
matter pending arbitration.
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III.
Conclusion
For all of the foregoing reasons, the Court finds that the parties have entered into a
valid arbitration agreement and that all of plaintiff’s claims fall within its scope.
Accordingly, the Court is compelled to order the parties to proceed to arbitration. Dean
Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). Therefore, defendant’s motion to
compel arbitration [Doc. 10] will be GRANTED and plaintiff’s claims will be dismissed.
An appropriate order will be entered.
s/ Thomas W. Phillips
SENIOR UNITED STATES DISTRICT JUDGE
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