R. DAVID PROCTOR, District Judge.
This case is before the court on Defendants' Motion to Compel Arbitration and to Strike Plaintiff's Class Action Claims. (Doc. # 3). The Motion has been fully briefed (Docs. # 6-7, 10, 13) and is ripe for review. After careful review, and for the reasons explained below, Defendants' Motion is due to be denied.
Plaintiff Keven Robinson was employed by Virginia College. But before that, he was a student at its Birmingham, Alabama campus from 2000-2011. (Doc. # 1-1 at ¶¶ 14-15). He obtained an Associate's Degree in Therapeutic Massage, a Bachelor's Degree in Health Services Management, and a Masters of Business Administration. (Id. at ¶ 15).
In 2015, Plaintiff accepted employment with Defendants. (Doc. # 6 at 2). Defendants assert that, as part of this employment relationship, Robinson signed an arbitration agreement consenting to arbitration of all potential claims between the parties. (Doc. # 3 at 2). The arbitration agreement contains the following relevant language:
(Doc. # 3-1 at 2, 3) (emphasis in original). Additionally, the agreement mandates that arbitration "will be administered pursuant to the American Arbitration Association Employment Arbitration Rules," and any decision "rendered by the arbitrator shall be written [in] accordance with the American Arbitration Association Employment Arbitration Rules." (Id. at 3). The agreement also advises the parties that they may obtain a copy of the Rules from their local HR representative. (Id.). Finally, the entire agreement (including the signature block) refers to Plaintiff as the "Employee." (Id. at 4).
The backdrop of Plaintiff's class claims relates to the suspension of Defendants' academic accreditation on December 4, 2018. (Doc. # 1 at ¶ 2). The following morning, Defendants closed all campuses nationwide. (Id.). That afternoon, Plaintiff filed his Class Action Complaint, in which he alleges the following claims: negligent and wanton operation, management, and marketing of Defendants' degree programs (Counts One and Two); a violation of the Alabama Deceptive Trade Practices Act (Count Three); breach of implied warranty (Count Four); breach of contract (Count Five); unjust enrichment (Count Six); and injunctive relief requiring Defendants to provide either education at accredited institutions free of charge or alternative tuition at accredited institutions free of charge (Count Seven). (Id. at 7-14).
Relying on the arbitration agreement quoted above, Defendants filed its Motion to Compel Arbitration and to Strike Plaintiff's Class Action Claims on January 11, 2019. (Doc. # 3). Plaintiff argues that the arbitration agreement, which governs disputes relating to or arising out of his employment relationship with Defendants, does not cover the subject class action claims dealing with his previous enrollment as a student. (See generally Doc. # 6).
The Federal Arbitration Act (FAA) provides that a written agreement 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. "This provision `reflect[s] both a liberal federal policy favoring arbitration, and the fundamental principle that arbitration is a matter of contract.'" Inetianbor v. CashCall, Inc., 768 F.3d 1346, 1349 (11th Cir. 2014) (quoting AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1745 (2011)). In fact, the policy favoring arbitration is so strong that any doubts surrounding the arbitrability of the dispute must be resolved in favor of arbitration. See Moses H. Cone Mem'l Hosp. v. Mercury Costr. Corp., 460 U.S. 1, 25 (1983). That being said, the FAA "does not require parties to arbitrate when they have not agreed to do so." Wheat, First Sec., Inc. v. Green, 993 F.2d 814, 817 (11th Cir. 1993) (quoting Volt Info. Sciences, Inc. v. Bd. of Trustees of Stanford Univ., 489 U.S. 468, 478 (1989)).
Unless the parties "clearly and unmistakably provide otherwise," whether they have entered into an agreement to arbitrate is a question reserved for the district court, not the arbitrator. AT&T Technologies, Inc. v. Comm. Workers of Am., 475 U.S. 643, 649 (1986). Often referred to as "gateway matters," it is usually for the district court to consider "(1) whether there is a valid agreement to arbitrate, and (2) whether the dispute in question falls within the scope of that agreement." King v. Cintas Corp., 920 F.Supp.2d 1263, 1267 (N.D. Ala. 2013); see also Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452 (2003).
Plaintiff focuses his opposition on the second gateway question. He argues that even if he agreed to arbitration as an employee, the agreement does not apply to the dispute in question, which is based on his enrollment as a student, not his employment. For the reasons explained below, the court agrees and finds that the dispute is not within the scope of the arbitration agreement and the class action waiver is inapplicable. Accordingly, Defendants' Motion is due to be denied.
Plaintiff argues that his claims arising out of his enrollment as a student at Defendants' institution are beyond the scope of the arbitration agreement because the agreement relates only to Plaintiff's employment with Defendants. To support this assertion, Plaintiff presents an argument based on the plain text of the agreement. For example, he notes that in the introductory paragraph and in the signature block, he is referred to as the "Employee." (Docs. # 6 at 3; 3-1 at 1, 4). He also cites the following employment-centric language in the arbitration agreement:
(Doc. # 6 at 3; Doc. # 3-1 at ¶ 1) (emphasis added).
(Doc. # 6 at 3; Doc. # 3-1 at ¶ 6).
(Doc. # 6 at 4; Doc. # 3-1 at ¶ 7).
(Doc. # 6 at 4; Doc. # 3-1 at ¶ 2).
(Doc. # 6 at 4; Doc. # 3-1 at ¶ 1).
(Doc. # 6 at 4; Doc. # 3-1 at ¶ 9).
Plaintiff contends that these excerpts, read together, limit "the claims subject to arbitration to those between an employee and an employer concerning that employment relationship." (Doc. # 6 at 8).
Defendants' primary argument is that the use of the phrase, "any claims that . . . the Employee may have against the Company," means that the arbitration agreement covers all disputes between Plaintiff and Defendants, not just employment-related disputes. (Doc. # 7 at 2-5) (citing Jones v. Waffle House, Inc., 866 F.3d 1257, 1267 (11th Cir. 2017) (delegation clause in arbitration agreement directing arbitrator to resolve "any dispute" relating to gateway issues means "all" disputes on gateway issues)). Defendants point to Haasbroek v. Princess Cruise Lines and Doe v. Princess Cruise Lines for the proposition that "an arbitration provision in an employment contract could cover claims that are not related to, or arising from, the plaintiff's employment." Haasbroek, 286 F.Supp.3d 1352, 1359 (S.D. Fla. 2017), appeal dismissed, 2018 WL 3545908 (11th Cir. May 10, 2018); Doe, 657 F.3d 1204, 1218 (11th Cir. 2011). But, such a conclusion hinges on the absence of limiting language in the arbitration agreement. Id.
Both Haasbroek and Doe considered the arbitrability of a cruise ship employee's tort claims arising from an alleged after-hours rape that occurred away from the employee's place of employment aboard the ship. Haasbroek, 286 F. Supp. 3d at 1355-56; Doe, 657 F.3d at 1211-13. However, the cases resulted in different outcomes due to the presence of limiting language in the Doe arbitration agreement, language which was noticeably absent from the Haasbroek arbitration agreement. The arbitration agreement in Doe provided that the parties agreed to arbitrate "any and all disputes, claims, or controversies whatsoever . . . relating to or in any way arising out of or connected with the Crew Agreement, these terms, or services performed for the Company." Doe, 657 F.3d at 1214-15 (emphasis added). The Eleventh Circuit concluded that "the plain language of the arbitration provision imposes the limitation that, to be arbitrable, the dispute between Doe and the cruise line must relate to, arise from, or be connected with her crew agreement or the employment services that she performed for the cruise line." Id. at 1217-18. By contrast, the arbitration agreement at issue in Haasbroek did not contain any such limiting language:
Haasbroek, 286 F. Supp. 3d at 1359 (S.D. Fla. 2017). The court found that in the absence of limiting language which so narrowed the agreement's scope, this broad provision — "any and all disputes, claims or controversies whatsoever" — was "sufficient to compel arbitration of claims premised on after-hours, off-duty, rape." Id. at 1360.
After careful review, the court determines that the arbitration agreement here more closely resembles the agreement in Doe because it contains the following limiting language.
(Doc. # 3-1 at ¶ 1) (emphasis added). While the second sentence certainly refers to "any claims that the Company may have against the Employee," it must be read in context with the limiting language that immediately precedes it. That language indicates that the agreement to arbitrate relates to disputes arising out of the "[a]greement, the employment relationship between the parties, or the termination of the employment relationship." (Id.). Thus, contrary to Defendants' assertion, the language in the subject arbitration agreement relates to any and all employment-based or employment-related claims. It simply is not broad enough to govern all claims between the parties, regardless of the context. Any other reading would render the first sentence meaningless.
Additionally, Defendants argue that the first and second sentences of the arbitration agreement describe two different types of claims. (Doc. # 13 at 2). They assert that the first sentence, expressing the parties agreement that "any dispute, controversy or claim[] arising out of or related to this Agreement, the employment relationship between the parties, or the termination of the employment relationship," was drafted to "capture claims against nonsignatories,"
The cases cited by Defendants — Escobal and Grandville — lend no support to their argument because both cases involved an entirely different factual scenario than the case at bar. In those cases, the court applied the principle of equitable estoppel to prevent the plaintiff from contesting a non-signatory defendant's standing to invoke the agreement where (1) the language of the agreement was broad enough to encompass claims against non-parties and (2) the claims against the non-parties were inextricably intertwined with the claims made against signatories to the contract. See Escobal, 482 Fed. Appx. at 476; see also Grandville, 2011 WL 13232127, at *3. True, both cases determined that the language, "any dispute arising out of or related to this Agreement," captured the plaintiff's disputes against non-parties. Id. However, the mere presence of such language in the subject arbitration agreement does not automatically limit the first sentence's applicability to only claims between Plaintiff and non-party defendants. In fact, as previously discussed, this language serves to narrow the scope of the arbitration agreement to claims "arising out of or related to this Agreement, the employment relationship between the parties, or the termination of the employment relationship." (Doc. # 3-1). Simply put, the court disagrees with Defendants' interpretation that the first and second sentences of the arbitration agreement describe two different types of claims.
Finally, Defendants maintain that the survival clause of the arbitration agreement renders Plaintiff's class claims arbitrable because the claims accrued when Defendants lost accreditation—after Plaintiff signed the agreement. (Doc. # 7 at 7). The survival clause provides that the arbitration agreement "shall survive after the employment relationship terminates." (Doc. # 3-1 at 2). But Defendants misapprehend the scope of the arbitration agreement. Plaintiff (quite correctly) does not dispute that the arbitration agreement remained enforceable after the termination of the employment relationship between the parties. (Doc. # 10 at 4). That is, Plaintiff does not attack the duration of the arbitration agreement. Rather, Plaintiff's argument is that the scope of the arbitration agreement (as drafted by Defendants) does not extend to his claims arising out of his prior role as a student. (Id.). Plaintiff is (again) correct: the survival clause has no bearing on this dispute.
For the reasons explained above, the court finds that Defendants' Motion is due to be denied because the arbitration agreement does not govern Plaintiff's class action claims arising from his role as a student at Defendants' institution.
Defendants aver that even if the arbitration agreement does not cover Plaintiff's class action claims (and, to be clear, it does not), Plaintiff still agreed to the class action waiver for all claims against Defendants. (Doc. # 7 at 8). As noted above, the class action waiver in the agreement reads as follows:
(Doc. # 3-1 at 3).
Although Defendants correctly note that the Eleventh Circuit has upheld class action waivers contained in arbitration agreements,
Thus, these cases are distinguishable from this one because the courts deciding Palmer, Tab Lankford, Deluca, and Ulit4LESS were not called upon to consider the threshold question of whether the plaintiff's claims fell within the scope of the underlying agreement. Here, Plaintiff's claims do not fall within the scope of the parties' arbitration agreement, i.e., disputes related to the parties' employment relationship. Because Plaintiff's class claims arising from his role as a student (a role that predates the parties' arbitration agreement) are beyond the scope of the employment arbitration agreement, the class action waiver cannot obligate him to pursue his claims individually.
For the reasons explained above, Defendants' Motion to Compel Arbitration and to Strike Plaintiff's Class Action Claims (Doc. # 3) is due to be denied. An Order consistent with this Memorandum Opinion will be entered.
Defendants argue that the arbitration agreement's reference to the Rules should not be interpreted to suggest that only employment-related claims are arbitrable under the agreement. (Doc. # 7 at 5-6). Instead, Defendants highlight the court's power to sever these provisions from the arbitration agreement under the severance clause, which allows "overbroad, invalid, or unenforceable" provisions to be severed from the agreement. (Doc. # 3-1 at 3-4). Defendants also express their willingness to waive this portion of the arbitration agreement so that arbitration may be conducted pursuant to the AAA Consumer Arbitration Rules, rather than the Employment Arbitration Rules. (Doc. # 7 at 6) (citing Ex parte Celtic Life Ins. Co., 834 So.2d 766, 768-69 (Ala. 2002)). The court declines to exercise its severance power because requiring that arbitration proceed pursuant to the Rules is not an overbroad, invalid, or unenforceable provision triggering the application of the severance clause. But, even without the arbitration agreement's reference to the Rules, the court finds that the agreement contains limiting language narrowing the scope of arbitration to claims "arising out of or related to this Agreement, the employment relationship between the parties, or the termination of the employment relationship." (Doc. # 3-1).
