Johns, Jr. v. Pluckers, Inc et al

Filing 22

ORDER GRANTING IN PART AND DENYING IN PART 9 Motion to Compel. This case is STAYED pending a decision by the arbitrator. Signed by Judge Sam Sparks. (ml)

Case 1:17-cv-00553-SS Document 22 Filed 09/29/17 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION

JERROLD D. JOHNS, JR., individually and on
behalf of all other similarly situated,
Plaintiff,

1?SEP 29

9:23

Wg.TRlCT
OF

CQU,?

'

Case No. A-17-CA-553-SS

-vs-

PLUCKERS, INC., et al.,

Defendants.

ORDER
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause,' and

specifically Defendants'2 Motion to Compel Individual Arbitration [#9], Plaintiff Jerrold D. Johns, Jr.

(Plaintiff)'s Response [#17] in opposition, and Defendants' Reply [#20] in support. Having reviewed
the documents, the governing law, and the file as a whole, the Court enters the following opinion and
orders.

Background
Defendants operate a chain of sports bars and restaurants predominately located in Texas. In
January 2011, Plaintiff was hired to work in the Coach-In-Training (CIT) program3 at Pluckers-San

Plaintiff filed an amended complaint adding additional defendants to this case. See Am. Compi. [#9]. IT IS
THEREFORE ORDERED that the Clerk of the Court and the parties are instructed to use the style reflected in this order
in all future filings.
1

2

Plaintiff has named the following as defendants in this suit: Pluckers, Inc.; Pluckers Wing Factoiy, L.P.
Hook'Em Wings, LLC; Hook'Em Wings No.2, LLC; M.D. Pluckers Franchising, L.P.; MDS Wings, L.P.; MDS Holdings,
L.P.; MD Pluckers, Inc.; Pluckers-Addison, L.P.; Pluckers-Allen, L.P.; Pluckers-Alliance, LLC; Pluckers-Arlington
Highlands, L.P.; Pluckers-Attingham, LLC; Pluckers-Austin No. 2, L.P.; Pluckers-Austin No. 2 Management, LLC;
Pluckers-Austin No. 3, L.P.; Pluckers-Austin No. 4, L.P.; Pluckers-Austin No. 5, L.P.; Pluckers-Dallas No. 1, L.P.;
Pluckers-Dallas No. 1 Management, LLC; Pluckers-Expansion Management, LLC; Pluckers-Expansion 2, LLC;
Pluckers-Expansion, L.P.; Pluckers-Grapevine, L.P.; Pluckers-Group 1, L.P.; Pluckers-Group 2, L.P.; Pluckers-Group 2
Management, LLC; Pluckers-Killeen, L.P.; Pluckers-Linc, LLC; Pluckers-Preston RD, L.P.; Pluckers-San Marcos AS, L.P.;
and Pluckers-Shepherd, L.P. For simplicity, the Court collectively refers to the Pluckers entities named in this suit as
"Defendants."
In keeping with Defendants' sports bar theme, managers are referred to as "coaches" and participants in the
management training program are called "coaches in training." Am. Compl. [#8] at 8.

V

Case 1:17-cv-00553-SS Document 22 Filed 09/29/17 Page 2 of 9

Marcos, AS, L.P. (Pluckers San Marcos). Plaintiff worked for Pluckers San Marcos and an

unidentified Pluckers location in Austin, Texas for a total of six years. Resp. [#17] at 3. According to
Plaintiff, his hours and pay while working at the two locations "were dictated by MDS Wings, LLP"
(MDS Wings), which was "created to contract with and handle human resource functions for

Pluckers[-]branded restaurants." Resp. [#17] at 3-4.
On June 8, 2017, Plaintiff filed this lawsuit, alleging Defendants violated the Fair Labor
Standards Act (FLSA) and seeking to assert claims on behalf of himself and all other CIT participants.
See Am. Compl. [#8]. Specifically, Plaintiff contends Defendants violated the FLSA by placing non-

exempt employees in salaried positions through the CIT program to avoid paying overtime. Id.

When hired, Plaintiff signed an employment agreement and initialed each page of the
agreement. See Mot. Compel [#9-2] Ex. A. 1 (Employment Agreement). The first paragraph of the
Employment Agreement states "[t]his Employment Agreement ('Agreement') is entered into between

Jerrold Johns ('Johns' or 'Employee') and Pluckers-Dallas No. 1, LP (Company) (collectively referred
to as 'the parties')." Id. at 1. On the final page of the Employment Agreement, the company name is

listed as "Hook'em Wings, L.L.C., a Texas limited liability company, as General Partner" and a

manager's signature is scrawled below. Id. at 13. It is undisputed that an entity affiliated with one of
the Defendants drafted the Employment Agreement. See Resp. [#17] at 7 (stating Defendants were the

drafters of the Employment Agreement).

Relevant here, the Employment Agreement contains an arbitration clause. Employment
Agreement at

1.

The arbitration clause explicitly states "Company and Johns agree that in the event

of any legal dispute between them or their representatives concerning this Agreement or legal rights
arising from or relating to the employment relationship between [them], the parties shall submit their

dispute to binding arbitration;

. . .

." Id. The arbitration clause recognizes three exceptions from the
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Case 1:17-cv-00553-SS Document 22 Filed 09/29/17 Page 3 of 9

obligation to arbitrate legal disputes: the Company may pursue preliminary injunctive relief in court;

Plaintiff may file a charge with a federal administrative agency; and the parties are not required to
arbitrate claims for unemployment insurance or insured workers compensation claims. Id. Among

other requirements, the arbitration clause mandates "[t]he duty to arbitrate

. . .

shall survive the

terminations [sic] of this Agreement" and that the parties "waive trial in a court of law or by jury." Id.
In light of the arbitration clause contained in the Employment Agreement, Defendants filed a

motion to compel arbitration, which has been fully briefed and is now ripe for a decision.

Analysis
I.

Legal Standard
Section 4 of the Federal Arbitration Act (FAA) states, in relevant part:

A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under
a written agreement for arbitration may petition any United States district court which,
save for such agreement, would have jurisdiction under Title 28, in a civil action or in
admiralty of the subject matter of a suit arising out of the controversy between the
parties, for an order directing that such arbitration proceed in the manner provided for
in such agreement.

9 U.S.C. § 4.

Courts conduct a two-step inquiry in determining whether parties should be compelled to
arbitrate a dispute. Wash. Mut. Fin. Grp., LLC v. Bailey, 364 F.3d 260, 264 (5th Cir. 2004). First, the
court determines whether the parties agreed to arbitrate the dispute. Am. Heritage Ljfe Ins. Co. v. Lang,
321 F.3d 533, 536 (5th Cir. 2003) (citation omitted). Second,

if the court finds that the parties agreed

to arbitrate, the court next determines whether any federal statute or policy renders the claims

nonarbitrable. Bailey, 364 F.3d at 264. There is a strong presumption that arbitration clauses cover
disputes between parties to such agreements and "any doubts concerning the scope of arbitrable issues

should be resolved in favor of arbitration." Moses H. Cone Mem '1 Hosp.
-3-

v.

Mercury Constr. Corp.,

Case 1:17-cv-00553-SS Document 22 Filed 09/29/17 Page 4 of 9

460 U.S. 1, 24-25 (1983). Such clauses may be overcome only if "it may be said with positive

assurance that the arbitration clause is not susceptible to an interpretation that covers the asserted

dispute." United Steelworkers ofAm.

II.

v.

Warrior & Gulf Nay. Co., 363 U.S. 574, 582 (1960).

Application
Defendants ask the Court to compel arbitration and argue Plaintiff should be required to pursue

his FLSA claims individually rather than as a collective action. By contrast, Plaintiff argues there is
no valid arbitration agreement between Plaintiff and any Pluckers entity against whom Plaintiff files

his FLSA claims. Alternatively, if arbitration is compelled, Plaintiffargues the arbitrator should decide

whether the dispute should proceed as an individual or collective action. The Court examines each of
these issues below.
A.

There is a valid arbitration agreement governing this dispute.
In determining whether the parties agreed to arbitrate the dispute, the Court is guided by two

questions: "(1) is there a valid agreement to arbitrate the claims and (2) does the dispute in question
fall within the scope of that arbitration agreement?" Klein v. Nabors Drilling USA L.P., 710 F.3d 234,

236 (5th Cir. 2013) (quoting Shererv. Green Tree ServicingLLC, 548 F.3d 378, 381 (5th Cir. 2008)).
As it is a "fundamental principle that arbitration is a matter of contract which cannot be forced

upon a party absent its consent[,]" the Court must decide at the outset whether an agreement was
reached, applying state law principles of contract. Will-Drill Res., Inc.

v.

Samson Res. Co., 352 F.3d

211, 218 (5th Cir. 2003). Here, it is undisputed Texas law applies. See Mot. Compel [#9] at 4 (arguing

the agreement to arbitrate is valid under Texas law); Resp. [#17] at 5-7 (applying Texas law in arguing
no valid arbitration agreement exists).

Under Texas law, the party seeking to compel arbitration bears the initial burden to establish
the existence of an agreement to arbitrate. Ffrench

El

v.

PricewaterhouseCoopers Corp. Fin., LLC,

Case 1:17-cv-00553-SS Document 22 Filed 09/29/17 Page 5 of 9

Civ. A. No. H-12-0291, 2012 WL 1900930, at *2 (S.D. Tex. May 24, 2012) (citing Henry v.

Gonzalez, 18 S.W.3d 684, 688 (Tex.

App.San

Antonio 2000, pet. dism'd by agr.)); Weiner

v.

Citigroup, Civ. A. No. 3:01CV2246M, 2002 WL 655531, at *2 (N.D. Tex. Apr. 19, 2002) (citing
Henry, 18 S.W.3d at 688-89). The party seeking to compel arbitration must prove by a preponderance
of the evidence such an agreement exists. See Ffrench, 2012 WL 1900930, at *2 (citing Banks v.

Mitsubishi Motors Credit ofAm., Inc., 435 F.3d 538, 540 (5th Cir. 2005)).

If the party seeking to compel arbitration establishes the existence of an arbitration agreement,
the burden shifts to the party resisting arbitration to present evidence showing why the arbitration
agreement should not be enforced. Kershaw

v. GB

Rests., Inc., No. 5:15-CA-462-OLG, 2015 WL

12743609, at *1 (W.D. Tex. Aug. 6,2015) (citing Wachovia Sec. LLCv. Emery, 186 S.W.3d 107, 113
(Tex.

App.Houston

[1st. Dist.] 2005, no pet.)). The party opposing arbitration may show, for

example, the arbitration agreement was procured in an unconscionable manner, or induced or procured

by fraud or duress. Id. (citing In re FirstMerit Bank, NA., 52 S.W.3d 749, 756 (Tex. 2001)).
Here, Defendants offer the Employment Agreementwhich contains the arbitration clause,

was initialed by Plaintiff on each page, and was signed by

Plaintiffas evidence there

is a valid

agreement to arbitrate Plaintiff's FLSA claims. On the other hand, Plaintiff argues there is no valid

agreement to arbitrate because the EmploymentAgreement defines "Company" as it is used throughout
the contract, including in the arbitration clause, to mean Pluckers-Dallas No. 1, LP (Pluckers Dallas).

Because Plaintiff was employed by Pluckers San Marcos and a Pluckers location in Austin, Texas,

Plaintiff contends he did not agree to arbitrate any claims against the entities for which he worked.
The Court finds Plaintiff's argument unpersuasive. When Plaintiff was hired, he understood

he was signing an agreement between himself and his employer governing his employment. See Resp.
[#17-1] Ex.

1

(P1.' s Decl.) ¶ 4 ("I remembered I had been required to sign a written agreement relating

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Case 1:17-cv-00553-SS Document 22 Filed 09/29/17 Page 6 of 9

to my employment with Pluckers-San Marco, AS

LP.

. .

."). Moreover, in addition to signing the

Employment Agreement, Plaintiff initialed each page, including the pages setting out the arbitration
clause. See Employment Agreement. Therefore, Plaintiff had notice his Employment Agreement

contained an arbitration clause, and Plaintiff nevertheless accepted employment with Pluckers San
Marcos. See In re Dillard Dep 't Stores, Inc., 198 S.W.3d 778, 780 (Tex. 2006) ("An employer may

enforce an arbitration agreement entered into during an at-will employment relationship if the
employer establishes that the employee received notice of its arbitration policy and accepted it.")
(citation omitted). Consequently, Plaintiff agreed to arbitrate "any legal dispute" concerning rights
arising from or relating to his employment unless specifically listed as an exception in the Employment

Agreement.
Furthermore, Defendants contend the failure to correctly identify the Company as Pluckers San
Marcos was a clerical error. Instead, Defendants point to the fact the Employment Agreement was
signed by a manager on behalf of "Hook'em Wings, LLC, a Texas limited liability company, as

General Partner." See Employment Agreement at 13. Defendants provide evidence Hook'em Wings,
LLC is the general partner of MDS Wings. Mot. Compel. [#9-1] Ex. A (Darling Deci.) ¶ 3. Thus,

Defendants claim MDS Wings was a party to the Employment Agreement and can enforce the

arbitration clause against Plaintiff as both a party to the agreement and as a representative of the
Company. See Employment Agreement (stating the Company and Johns agree to arbitrate "any legal
dispute between them or their representatives"); see also Resp. [#17] (conceding "Johns' hours and

pay while working at the San Marcos and Austin locations were dictated by MDS Wings")
As a result, the Court agrees with Defendants: A valid agreement to arbitrate Plaintiff's FLSA
claims exists and Defendants can enforce that agreement. Plaintiff has identified no evidence showing

why the arbitration agreement should not be enforced. As neither party argues a federal statute or

Case 1:17-cv-00553-SS Document 22 Filed 09/29/17 Page 7 of 9

policy renders Plaintiff's claims nonarbitrable, the Court finds the parties should be compelled to
arbitrate their dispute.
B.

The arbitrator must determine whether arbitration can proceed as a collective action.
It is undisputed the arbitration clause in the Employment Agreement does not explicitly address

whether Plaintiff can bring a collective action in arbitration. See Mot. Compel [#9] at 3; Resp. [#171
at 10-12. Thus, the Court must first determine who decides, the Court or the arbitrator, if the dispute

may be arbitrated as a collective action. Defendants argue the Court should find collective arbitration
is unavailable because the Employment Agreement's arbitration clause does not include language

deferring arbitrability issues. Plaintiff argues the broad language of arbitration clause indicates the

parties agreed the question of a collective arbitration should be decided by an arbitrator. For reasons
described below, the Court finds the availability of a collective action in arbitration is an issue for the
arbitrator.
The question of arbitrabilitythe determination of whether an agreement to arbitrate applies
to the parties'

claimsis generally "an issue for judicial determination [u]nless the parties clearly and

unmistakably provide otherwise." Howsam

v.

Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002)

(internal citations and quotation marks omitted). "The same is true for the threshold question of

whether class or collective arbitration is available under an arbitration agreement." Robinson v. J & K
Admin. Mgmt. Servs., Inc., 817 F.3d 193, 195-96 (5th Cir. 2016), cert. denied, 137 S. Ct. 373 (2016).

Defendants cite cases from the Third and Sixth Circuits holding the availability of class
arbitration is a question for the Court to decide unless the parties explicitly provide otherwise. Mot.
Compel [#9] at 7-8 (citing Reed Elsevier, Inc.

v.

Crockett, 734 F.3d 594, 599 (6th Cir. 2013) and

Opalinski v. Robert HalfInt'l Inc., 761 F.3d 326, 335-36 (3rd Cir. 2014)). However, under binding

Fifth Circuit precedent, "when an agreement includes broad coverage language, such as a contract
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Case 1:17-cv-00553-SS Document 22 Filed 09/29/17 Page 8 of 9

clause submitting 'all disputes, claims, or controversies arising from or relating to' the agreement to

arbitration, then the availability of class or collective action is an issue arising out of the agreement that

should be determined by the arbitrator." Id. (quoting and applying Pedcor Mgmt. Co. Inc. Welfare
Benefit Plan v. Nations Pers.

of Tex., Inc., 343 F.3d 355, 359 (5th Cir. 2003) (emphasis in original)).

Here, the language of the arbitration clause is similar to the language held to authorize deferral

of arbitrability issues. Compare Employment Agreement at 1-2 (agreeing to arbitrate "any legal
dispute.

. .

concerning this Agreement or the legal rights arising from the employment relationship")

with Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 448, 453 (2003)

lurality opinion) (holding

language submitting "[a]1l disputes, claims or controversies arising from or relating to this contract"
to arbitration deferred questions of arbitrability) and Pedcor Mgmt. Co. Inc. WelfareBenefitPlan, 343

F.3d at 359 (finding a clause submitting to arbitration "any dispute

. .

.

in connection with the

[a]greement" delegated the determination of whether the arbitration could proceed as a class or
collective action to the arbitrator). Thus, the Court finds the arbitration clause demonstrates the parties
intended to submit arbitrability disputes to arbitration.
Defendants make much of how the arbitration clause uses the words "any legal dispute" rather
than a phrase like "all disputes." See Mot. Compel [#9] at 9-10. But this argument ignores the fact that

whether Plaintiff can proceed with a collective action in arbitration is itself a legal dispute concerning
the Employment Agreement. Moreover, if Defendants had wanted to except the collective action

determination from referral to an arbitrator, they knew how to do so. See Employment Agreement at
1

(excluding the pursuit of preliminary injunctive relief by the Company, federal administrative

charges filed by Plaintiff, and unemployment insurance or insured workers compensation claims from
the obligation to arbitrate). Consequently, the arbitrator must decide if the arbitration can proceed as
a collective action.

Case 1:17-cv-00553-SS Document 22 Filed 09/29/17 Page 9 of 9

Conclusion
In sum, the Court grants Defendants' motion in part and denies it in part: The parties shall

proceed to arbitration, but the question of collective arbitration is for the arbitrator to decide.
Additionally, the Court will stay the case pending a final decision by the arbitrator. In the meantime,

the parties are instructed to file status reports regarding the arbitration proceedings with this Court
every ninety days.
Accordingly:
IT IS ORDERED that Defendants' Motion to Compel Individual Arbitration [#9] is

GRANTED IN PART and DENIED N PART as described in this opinion;
IT IS FURTHER ORDERED that this case is STAYED pending a decision by the

arbitrator; and
IT IS FINALLY ORDERED that the parties shall file status reports regarding the

arbitration proceedings with the Court every NINETY (90) DAYS.
SIGNED this the

ayofSeptember2O17.

5A6dAv
UNITED STATES

STRICT JUDGE