ROY B. DALTON, Jr., District Judge.
In this action, Plaintiffs Cordell Allen, Alia Clark, Patricia Dearth, Chris DePierro, Jessica Leighton, Jessica Perez, Jamie Rivera, Layfon Rosu, Marissa Shimko, and Carol Somers ("
In the present motion, The Hartford moves to dismiss the claims of four Named Plaintiffs and ten opt-in plaintiffs for lack of subject matter jurisdiction. (Doc. 96 ("
The Hartford's arbitration policy covers all employees: (1) who received a written offer of employment on or before March 7, 2017; and (2) whose first day of work was on or after April 1, 2012. ("
To support their MTD, The Hartford has produced copies of Certificates of Completion certifying that Scott Agnew, Cordell Allen, Antonia Britt, Bretton Scott Brown, Alia Clark, Melissa Cooper, Chris DePierro, Yanique Dixon, Jessica Leighton, Michael Milton, Monica Tinsley, and Jordan Watkins ("
Additionally, on August 19, 2015, The Hartford offered other employees the option of agreeing to the Arbitration Policy in exchange for one additional day of paid time off ("
In her affidavit, Ms. Fazzino avers that the process by which employees selected whether to agree to the PTO Offer was electronic. (Doc. 96-1, ¶ 7.) "After accepting or declining participation in the Arbitration Policy, each employee who responded to the offer received an Arbitration Policy Certification stating whether they chose to agree to the Arbitration Policy and the date on which they made their choice." (Id. ¶ 8.) Baronda Staten ("
Based on the foregoing, The Hartford requests that the Court dismiss the claims of the Arbitration New Hires, Ms. Staten, and Mr. Wright for lack of jurisdiction. (Doc. 96.) In their response, Plaintiffs argue that the arbitration agreements are unenforceable because The Hartford knowingly misclassified employees as exempt and engaged in misconduct during the pendency of Monserrate. (Docs. 123, 133.) Notwithstanding Plaintiffs' claims of misconduct, the Court finds that MTD is due to be granted.
Under the Federal Arbitration Act ("
Arbitration agreements are presumptively valid and enforceable. See 9 U.S.C. § 2. However, arbitration under the FAA is ultimately "a matter of consent, not coercion," Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Jr. Univ., 489 U.S. 468, 479 (1989), and parties opposing arbitration can challenge the formation and validity of a contract containing an arbitration clause. Specifically, the Eleventh Circuit recognizes "three distinct types of challenges to a contract containing an arbitration clause": (1) challenges to the formation, or "the very existence," of the contract; (2) challenges "to the validity of the arbitration clause standing alone"; and (3) challenges "to the validity of the contract as a whole." Wiand v. Schneiderman, 778 F.3d 917, 924 (11th Cir. 2015).
Nonetheless, under a delegation provision "parties may agree to commit even threshold determinations to an arbitrator, such as whether an arbitration agreement is enforceable." Parnell, 804 F.3d at 1146.
"When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally . . . should apply ordinary state-law principles that govern the formation of contracts." First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995). The U.S. Supreme Court, however, has added an important qualification: "[c]ourts should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so." Id. (quoting AT&T Techs., Inc. v. Comm'cns Workers of Am., 475 U.S. 463, 649 (1986)).
"Under Florida's choice-of-law rules, lex loci contractus applies in contract matters[.]" Prime Ins. Syndicate, Inc. v. B.J. Handley Trucking, Inc., 363 F.3d 1089, 1092 (11th Cir. 2004). "Lex loci contractus provides that the law of the jurisdiction where the contract was executed governs interpretation of the substantive issues regarding the contract." Id. n.1 (quoting Lumbermens Mut. Cas. Co. v. August, 530 So.2d 293, 295 (Fla. 1988). However, "under Florida law, courts will enforce choice-of-law provisions unless the law of the chosen forum contravenes strong public policy." Maxcess, Inc. v. Lucent Techs., Inc., 433 F.3d 1337, 1347 (11th Cir. 2005) (quoting Mazzoni Farms, Inc. v. E.I. DuPont de Nemours & Co., 761 So.2d 306, 311 (Fla. 2000)).
In light of these principles, The New Hire Agreement, which incorporates the Arbitration Policy, is governed by Connecticut law, as it contains a choice-of-law provision selecting Connecticut law. (Doc. 96-5, p. 3.) Because Ms. Staten and Mr. Wright live—and presumably accepted the PTO Offer—in New York (Doc. 96, p. 9), New York governs their agreements.
"Among other things, the parties may agree to arbitrate gateway questions of arbitrability[,] including the enforceability, scope, applicability, and interpretation of the arbitration agreement." Jones v. Waffle House, Inc., No. 16-15574, 2017 WL 338110, at *3 (11th Cir. 2017) (publication pending). "An antecedent agreement of this kind is typically referred to as a `delegation provision.'" Id.
"Where an arbitration agreement contains a delegation provision—committing to the arbitrator the threshold determination of whether the agreement is enforceable—the courts only retain jurisdiction to review a challenge to that specific provision. Parnell, 804 F.3d at 1144. If the plaintiff raises a challenge to the contract as a whole, the federal courts may not review his claim because it has been committed to the power of the arbitrator. Id. at 1146. "[A]bsent a challenge to the delegation provision itself, the federal courts must treat the delegation provision as valid . . . and must enforce it . . ., leaving any challenge to the validity of the [a]greement as a whole for the arbitrator." Id. at 1146-47.
To determine whether the parties have manifested a clear and unmistakable intent to arbitrate gateway issues, courts look to the wording of the delegation provision itself. Waffle House, 2017 WL 338110, at *6. Here, the Arbitration Policy explicitly incorporates the provisions of The Hartford's arbitration process. (Doc. 96-3, p. 5; see Doc. 96-4 ("
The AAA Employment Rules state that "the arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope[,] or validity of the arbitration agreement." Employment Arbitration Rules and Mediation Procedures, AM. ARB. ASS'N 17 (Nov. 1, 2009), https://www.adr.org/sites/default/files/Employment%20Rules.pdf. The U.S. Court of Appeals for the Eleventh Circuit has definitively held that, by incorporating AAA rules into an agreement to arbitrate, the parties have "clearly and unmistakably agreed that the arbitrator should decide whether the arbitration clause is valid." Terminex Int'l v. Palmer Ranch Ltd. P'ship, 432 F.3d 1327, 1332 (11th Cir. 2005). Under both Connecticut and New York law, this interpretation is consistent with the plain meaning of the delegation provision in the AAA Employment Rules.
Here, The Hartford has produced evidence that four Named Plaintiffs and ten Opt-In Plaintiffs agreed to arbitrate their FLSA claims and, in doing so, delegated to the arbitrator the decision as to whether their arbitration agreements are valid. The Arbitration New Hires agreed to these terms as part of the onboarding process when they were hired. Ms. Staten and Mr. Wright also agreed to such terms by accepting the PTO Offer. As Plaintiffs have only challenged the validity of the Arbitration Policy as a whole, the Court must enforce the delegation provision. And because the Arbitration Policy gives the arbitrator the power to rule on his or her jurisdiction—inclusive of any objections concerning the validity of the arbitration agreement—this Court is without jurisdiction to make that determination.
In compelling arbitration, the FAA requires courts to either stay or dismiss a law suit. See Lambert v. Austin Ind., 544 F.3d 1192, 1195 (11th Cir. 2008). Given the number of individuals in this action who must now arbitrate their claims, the Court finds that administratively staying such claims and requiring these individuals to produce periodic status reports would become unmanageable. Thus, under the circumstances, the Court finds that dismissal without prejudice is warranted.
Accordingly, it is