ALETA A. TRAUGER, District Judge.
On December 12, 2013, the plaintiffs filed a Complaint that asserts individual and class claims against the defendants. (Docket No. 1.) Pending before the court are several motions related to the disposition of those claims. The defendants have a filed a Motion to Compel Arbitration of all claims other than those asserted by plaintiff Lashika Wynn (Docket No. 8), to which the plaintiffs (other than Wynn) have filed a Response in opposition (Docket No. 18), Five Star filed a Reply (Docket No. 27), and the responding plaintiffs, with leave of court, filed a "Sur-Reply and, in the Alternative, Memorandum for this Court to Retain Plaintiffs' Class/Collective Action Claims" (Docket No. 31), to which the defendants filed a Response in Opposition (Docket No. 32). With respect to the claims by plaintiff Wynn, the defendants have filed a separate Partial Motion to Dismiss or, in the Alternative, for a More Definite Statement (Docket No. 10), to which Wynn filed a Response in opposition (Docket No. 17), and the defendants filed a Reply (Docket No. 23).
For the reasons explained herein, the Motion to Compel Arbitration will be granted and the court will order Wynn, whose claims are not subject to arbitration, to file a more definite statement.
The plaintiffs assert claims against their former employer, Five Star Quality Care Trust ("Five Star") and Morningside of Belmont ("Morningside"), the Nashville assisted living facility at which they formerly worked as staff members. Collectively, they claim that the defendants are liable for (1) race discrimination under 42 U.S.C. § 1981, (2) retaliation in violation of the Tennessee Adult Protection Act ("TAPA"), and (3) unspecified claims under "Tennessee common law." They purport to bring the §1981 claims on behalf of themselves and all others similarly situated. Broadly, the Complaint alleges that, under the stewardship of Morningside's Executive Director Lee Parker, Five Star systematically discriminated against black employees at Morningside in an effort to (allegedly in Parker's own words) "get rid of all the monkeys."
The defendants have moved (1) to compel arbitration of all claims other than those brought by Wynn and (2) to dismiss Wynn's claims or to have her file a more definite statement. The plaintiffs argue that, even if the court finds that plaintiffs other than Wynn must arbitrate their individual claims, the court should permit those plaintiffs' class claims to proceed in this court.
In April 2012, Five Star implemented a new dispute resolution policy nationwide. Under the new policy, disputes between Five Star and its employees (and prospective employees) would be resolved through a grievance process and mutually binding arbitration, as set forth in a "Mutual Agreement to Resolve Disputes and Arbitrate Claims."
In most relevant part, the Agreement obligates the parties to arbitrate all claims through a single-day hearing before a National Arbitration and Mediation ("NAM") arbitrator, whose decision (per the terms of the Agreement) is subject to an appeal to a three-arbitrator panel for abuse of discretion. Five Star pays all costs of the arbitration (including NAM's fees and the arbitrator's fees), Five Star contractually binds itself not to pursue costs from employee claimants who do not prevail in arbitration, and Five Star agrees that it will not hire an attorney to defend against claims brought by an employee unless the employee herself is represented by counsel. The Agreement also (1) contains a waiver of the right to pursue class or collective relief; (2) sets forth seemingly invariable limitations on pre-hearing discovery that are more limited than NAM's default procedures,
The Agreement states that "all disputes regarding the enforcement of this Agreement, any of the provisions of this Agreement or whether a party's claim is subject to this Agreement shall be determined in accordance with the law of the State of Maryland."
The version of the Agreement provided to existing employees states, in its preamble, that "the Company has adopted the following grievance and arbitration procedures." (emphasis added). In a section entitled "Consideration," it states that "your continued employment with the Company subsequent to the effective date of this Agreement . . . shall constitute consideration and acceptance by you of the terms and conditions set forth in this Agreement."
However, perhaps atypically, Five Star elected to provide its existing employees an option to opt out of the otherwise binding grievance process that it had adopted. In the first section of the Agreement (located on its first page and bearing Roman numeral "I"), the Agreement contains a paragraph that is worth quoting in full:
As to new employee applicants, the new dispute resolution policy was a condition of employment by Five Star and its affiliates — i.e., there was nothing for them to "opt out" of in the first place. Thus, understandably, the version of the Agreement presented to new employees did not include this paragraph explaining the opt-out options.
Existing employees who received the Agreement were required to sign a document entitled "
On May 14, 2012, Five Star provided an electronic copy of the Agreement to Ridley, along with an electronic acknowledgment form containing slightly different terms than the written Acknowledgment Form.
Five Star's company policy was to have facility directors and business managers distribute and explain the Agreement and Acknowledgment Form to staff at staff-wide meetings at each particular Five Star-affiliated facility. Consistent with that company-wide practice, Morningside Executive Director Parker and Business Manager Martha Forrester held a meeting with Morningside's staff, including plaintiffs Antwine, Booker, and Wurm. According to affidavits from Parker, Forrester, and non-plaintiff African-American Morningside employee Beverly Gardner, Parker presented the Agreement and Acknowledgment Forms at the meeting, explained the Agreement's terms thoroughly and accurately, explained that the Agreement would apply to existing employees unless they opted out through specific steps (which he explained), encouraged employees to speak with an attorney if they had questions, and told employees that they needed to sign the Acknowledgment Form but also told them that they could spend more time reviewing it at home before signing it.
Plaintiff Antwine disputes this account, stating that Parker told everyone present that the program was an "opt-in" program — i.e., that it would not apply unless an employee chose to participate in it. Antwine contends that, after hearing Parker explain the features of the dispute resolution process (the waiver of the right to bring claims in court, the class action waiver, and the like), she believed its terms were "one-sided, oppressive, and would not allow me to effectively pursue any lawsuits I had or would have in the future against Morningside." Antwine claims (in contrast to Gardner, Parker, and Forrester's accounts) that she, Booker, and Wurm "rejected, vehemently objected to, and verbally expressed our hostilities towards the Mutual Agreement and arbitration process as presented." According to Antwine, she "believes" that the copy of the Agreement she received had a signature page. She also claims that she understood the Acknowledgment Form to be a "cover sheet" for a "proposal" to enter into the Agreement. Antwine claims that she spoke with Booker and Wurm, who confirmed that they also "rejected" signing the Agreement.
Antwine and Wurm signed the Acknowledgement Form on June 1, 2012 (the date of the meeting). According to Forrester, plaintiff Booker did express concerns to her at the meeting about the Agreement. Forrester therefore advised Booker to take the form home with her and review it with an attorney, if she wanted to. Consistent with Forrester's account, Booker did not sign and return the Acknowledgement Form until June 21, 2012 — 20 days after the meeting. In fact, fifteen of the staff members present at the June 1 meeting did not return signed Acknowledgment Forms until 19 or more days after the meeting. Indeed, one employee returned the Acknowledgement Form on July 16, 2012, accompanied by a notation that she had "received the OPT-OUT form + am sending it cert/reg mail to the appropriate address."
After Five Star implemented the dispute resolution policy, Williams joined Five Star as a new employee. On February 4, 2013, she received a letter from Five Star containing a "contingent offer of employment," which was expressly contingent upon, inter alia, her "execution of the enclosed Mutual Agreement to Resolve Disputes and Arbitrate Claims." The letter stated that Williams would "indicate her acceptance of this offer by signing below [in the letter] and returning the original copy of this letter and the Mutual Agreement to Resolve Disputes to me on or before your first day of employment." The letter enclosed an acknowledgement form that was substantially similar to that provided to Five Star's existing employees in mid-2012, save for (1) the omission of the bullet point relating to the "opt-out" provisions (for obvious reasons), (2) the omission of a signature line, and (3) the inclusion of a statement that signing the Agreement itself was a "condition of your employment with Five Star." The attached Agreement, which naturally omitted language relating to an "opt-out" provision, contained a signature block, which Williams signed. Unlike plaintiffs Antwine, Wurm, Booker, and Ridley, Williams does not dispute that she assented to the Agreement.
For reasons not specified, the parties agree that Wynn's claims are not subject to Five Star's dispute resolution procedures and, therefore, are not subject to mandatory arbitration.
Under the Federal Arbitration Act ("FAA"), 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. "This text reflects the overarching principle that arbitration is a matter of contract" and, "consistent with that text, courts must `rigorously enforce' arbitration agreements according to their terms[.]" Am. Express Co. v. Italian Colors Restaurant, 133 S.Ct. 2304, 2309 (2013). The FAA embodies a "liberal federal policy favoring arbitration agreements." CompuCredit Corp. v. Greenwood, 132 S.Ct. 665, 669 (2012) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)).
Here, the plaintiffs assert challenges that can be grouped into two categories: (1) plaintiffs Antwine, Booker, Wurm, and Ridley argue that they did not agree to arbitrate their claims in the first place;
As an initial matter, with respect to whether the parties executed an Agreement, the parties dispute what law to apply: the defendants argue that Maryland law should apply because the Agreement specifies that Maryland law governs its interpretation. The plaintiffs argue that Tennessee law should apply because they deny having agreed to the Maryland choice of law provision in the first place. The parties have not provided the court any caselaw guiding how to resolve this "chicken or the egg" choice of law issue.
"When deciding whether the parties agreed to arbitrate a certain matter . . ., courts generally . . . should apply ordinary state-law principles that govern the formation of contracts." First Options v. Kaplan, 514 U.S. 938, 944 (1995). Given that the plaintiffs claim not to have assented to the terms of the Agreement in the first place, the court will apply Tennessee law concerning the formation of contracts, because the plaintiffs reside in Tennessee, they worked for the defendants in Tennessee, and they allegedly received and assented to the Agreement in Tennessee. Indeed, it seems that parties in most cases rarely dispute this issue in the first place. See, e.g., Winn v. Tenet Healthcare Corp., 2011 WL 294407, at *4 (W.D. Tenn. Jan. 27, 2011) (applying Tennessee law to validity of agreement, where plaintiff asserted federal claims); Smith v. Servicemaster, 2009 WL 1457143, at *5 (M.D. Tenn. May 22, 2009) (same); Allen v. Tenet Healthcare Corp., 370 F.Supp.2d 682, 683 (M.D. Tenn. 2005) (same); Snyder v. Myers Power Prods, Inc., 2010 WL 4940032, at *3 n.1 (E.D. Mich. Nov. 30, 2012) (applying Michigan law, where arbitration agreement otherwise specified that California law applied).
The Sixth Circuit has specifically held that "continued employment can constitute acceptance" of an arbitration agreement under Tennessee law. Seawright v. Am. Gen. Fin. Servs., Inc., 507 F.3d 967, 972-73 (6th Cir. 2007) (finding that, under Tennessee law, employee "expressed valid assent" of a unilateral arbitration agreement by continuing employment, where "written materials accompanying the arbitration agreement clearly stated that continued employment after the effective date of the [] Program would constitute the employee's acceptance of the agreement to arbitrate"); see also Fisher v. GE Med. Sys., 276 F.Supp.2d 891, (M.D. Tenn. 2003) (applying Tennessee law); Tillman v. Macy's, Inc., 735 F.3d 453 (6th Cir. 2013) (applying similar Michigan law principles). In Seawright, the Sixth Circuit also found that, under Tennessee law, mutual promises to arbitrate constitute sufficient consideration for an arbitration agreement. 507 F.3d at 974.
Here, the terms of the Agreement are unambiguous: they state clearly and unequivocally that Five Star had implemented a new arbitration policy, that an existing employee's continued employment would reflect assent to the Agreement's terms, and (as to existing employees) that the employees had the right to opt out of the policy through a simple mechanism, which the Agreement highlighted in capital letters and bold type. Antwine, Booker, Wurm, and Ridley do not dispute that they were made aware of the Agreement. Indeed, the Acknowledgement Forms (hard copy and written) confirm that they received the Agreement and had the opportunity to review it. In fact, Ridley waited eight days to sign the electronic Acknowledgement Form, Booker, who was present at the June 2012 meeting, waited 20 days to return the hard copy Acknowledgement Form, as did numerous other staff members.
The forms signed by Antwine, Booker, and Wurm also contained a provision explicitly (and gratuitously) reminding them of certain provisions of the Agreement, including their contractual right to opt out of it. As to Ridley, it makes no difference that Ridley's electronic Acknowledgement Form did not also contain a similar provision specifically reminding her about the opt out provision, which was explicitly set forth in the underlying Agreement in the first place. In other words, the Acknowledgment Forms were not necessary to form an arbitration agreement between the plaintiffs and Five Star, but they do show that the plaintiffs in fact received and had the opportunity to review the Agreement (including its terms concerning assent and their right to opt out of it).
Even Antwine acknowledges that, at the June 2012 meeting, Parker made her aware of the existence and basic features of the Agreement, which she claims she believed were unfair. The fact that Antwine or Ridley subjectively may have construed the documents differently does not change their plain meaning.
Accordingly, the court finds that, in addition to Williams (who does not challenge that she executed the Agreement), Antwine, Wurm, Booker and Ridley assented to the Agreement.
Once the court determines that the parties entered into the Agreement, the Delegation Provision in the Agreement directs the court to refer any further issues concerning the interpretation and enforceability of the Agreement to the arbitrator. The court regards the Delegation Provision as a "clear and unmistakable" delegation of those threshold issues, which include the plaintiffs' enforceability challenges, to the arbitrator. See Crossville Med. Oncology, P.C. v. Glenwood Sys., LLC, 485 F. App'x 821, 823 (6th Cir. 2012) ("[T]he question `who has the primary power to decide arbitrability' turns upon what the parties agreed about that matter. Did the parties agree to submit the arbitrability question itself to arbitration?"); see also Rai v. Ernst & Young, LLP, 2010 WL 3518056, at *4-*5 (E.D. Mich. Sept. 8, 2010); Muhammad v. Advanced Servs., Inc., 2010 WL 3853230, at *5 (W.D. Tenn. Aug. 24, 2010). The Supreme Court has expressly found that delegation clauses must be enforced, absent a valid challenge specific to the delegation clause — as opposed to a challenge to the enforceability of the Agreement as a whole. See Jackson, 130 S. Ct. at 2777; see also Madgrigal v. AT&T Wireless Servs. Inc., 2010 WL 5343299, at *2 (E.D. Cal. Dec. 20, 2010) ("Jackson [] confirmed that a provision delegating to the arbitrator authority to determine the validity of an arbitration agreement bars a court from adjudicating a party's claim of unconscionability unless that claim is based on alleged unconscionability of the delegation provision itself.")
Here, the plaintiffs do not assert any challenges specific to the Delegation Provision. Accordingly, having the found that the plaintiffs assented to the Agreement, it will be for the arbitrator to address the merits of the plaintiffs' remaining challenges in the first instance. Nevertheless, the court takes notice of the fact that the defendants have represented to this court that, in arbitration, they will not take the position that the Agreement will limit the arbitrator's discretion to award fees to the plaintiffs in this case under § 1988, should one or more plaintiffs prevail on their § 1981 claims.
In deciding a motion to dismiss for failure to state a claim under Rule 12(b)(6), the court will "construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff." Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007); Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002). The Federal Rules of Civil Procedure require only that a plaintiff provide "`a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47 (1957). The court must determine only whether "the claimant is entitled to offer evidence to support the claims," not whether the plaintiff can ultimately prove the facts alleged. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511 (2002) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
The complaint's allegations, however, "must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To establish the "facial plausibility" required to "unlock the doors of discovery," the plaintiff cannot rely on "legal conclusions" or "[t]hreadbare recitals of the elements of a cause of action," but, instead, the plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). "[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 1950.
Fed. R. Civ. P. 12(e) allows a party to request a more definite statement when the pleading "is so vague or ambiguous that the party cannot reasonably prepare a response." Thus, "[i]f a pleading fails to specify the allegations in a manner that provides sufficient notice, a defendant can move for a more definite statement." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002). A trial court has discretion to grant a Rule 12(e) motion. Smith v. Litton Loan Serv'g, 2011 WL 4696177, at *1 (N.D. Ohio Oct. 5, 2011); Sheet Metal Employers Indus. Promotion Fund v. Absolut Balancing Co., Inc., 2013 WL 2395073, at *2 (E.D. Mich. May 31, 2013).
The TAPA is designed to protect an "adult" who, "because of mental or physical dysfunctioning or advanced age is unable to manage such person's own resources, carry out the activities of daily living, or protect such person from neglect, hazardous or abusive situations without assistance from others and who has no available, willing, and responsibly able person for assistance and who may be in need of protective services." Tenn. Code. Ann. § 71-6-102(2). The Tennessee General Assembly passed the TAPA to protect these types of adults "from abuse, neglect or exploitation by requiring reporting of suspected cases by any person having cause to believe that such cases exist." Id. § 71-6-101(b)(1). TAPA specifically applies against "caretakers," who are defined to include "an individual or institution who has assumed the duty to provide for the care of the adult by contract or agreement." Id. § 71-6-120(5); see Estate of French of Stratford House, 333 S.W.3d 546, 564-65 (Tenn. 2011). If a person, including an "alternate care facility employee," has "reasonable cause to suspect that an adult has suffered abuse, neglect, or exploitation," that person must make a report "in accordance with this part." Tenn. Code. Ann. § 71-6-103(b)(1).
As a default rule, a facility employee who observes or suspects abuse of an adult must make a report to "the department" — meaning the Tennessee Department of Human Services ("TDHS") — that includes certain types of information. Tenn. Code Ann. § 71-6-103(c). However:
Id. § 71-6-103(b). In other words, if a facility such as Morningside has an approved procedure by which its staff members can report suspected abuse, then the staff member can fulfill its duty by reporting the matter internally to the person in charge of the organization or that person's designee. Under the TAPA, "[a]ny person making a report under this part shall have a civil cause of action for appropriate compensatory and punitive damages against any person who causes a detrimental change in the employment status of the reporting party by reason of the report." Id. § 71-6-105.
Here, the Complaint alleges that Wynn reported the suspected abuse of a Morningside resident to (1) the resident's son (Mr. Kessler), (2) one of her supervisors, who in turn promised to, and did, report the matter to Parker, and (3) unspecified "State representatives," with whom she has been in "communication regarding the incidents of abuse and their terminations." The question is whether any of these actions qualify as a "report" that discharged Wynn's responsibilities under the TAPA, for which TAPA would protect her. The report to Mr. Kessler plainly does not qualify. As to the latter two reports, it is unclear from the allegations whether they plausibly qualified for protection against retaliation under TAPA. With respect to the reports to "State representatives," the Complaint fails to specify (1) the nature of the communications, (2) whether the communications took place before the defendants allegedly took adverse actions against Wynn (the context of the allegation suggests afterwards); and (3) whether the identified "representatives" were members of the TDHS. With respect to Wynn's internal report to her supervisor, the Complaint does not specify whether the supervisor to whom Wynn reported the suspected abuse was a designee of the defendants under an approved procedure.
Because the court will be ordering Wynn to file a more definite statement concerning her § 1981 and Tennessee common law claims, the court will (rather than dismiss the TAPA claims without prejudice) permit Wynn to re-plead her TAPA claims, assuming that she believes she can maintain them in light of TAPA's requirements for protection against retaliation.
The defendants justifiably complain that Wynn's Complaint is somewhat vague concerning certain aspects of her race discrimination claim under § 1981. In her response, Wynn purports to clarify that she believes her termination was motivated by her race.
Wynn's Complaint does not specify the nature of the "Tennessee common law claims" that she asserts. In her response, Wynn contends that she is pursuing a Tennessee common law claim for retaliatory discharge. The court will grant Wynn leave to file a more definite statement confirming that she is pursuing only this one claim under Tennessee common law.
Under Local Rule 23.01, a plaintiff asserting a class action claim must comply with a number of special pleading requirements, including appropriate references to Fed. R. Civ. P. 23 and "[a]ppropriate allegations thought to justify such claim," such as the number of putative class members and the basis on which the plaintiff is an appropriate class representative. Here, the Complaint does not remotely comply with the requirements of L.R. 23.01. Because Wynn's class claim is procedurally deficient, it is subject to dismissal. Because the court is permitting Wynn to replead or clarify her other claims, the court will also permit Wynn to amend her Complaint in an effort to comply with L.R. 23.01.
On a related note, plaintiffs Antwine, Booker, Wurm, Ridley and Williams contend that the court should remand only their individual claims to arbitration and, therefore, should retain jurisdiction over their classwide claims. With respect to all plaintiffs other than Wynn, the court has already found that the plaintiffs must arbitrate their claims and that it will be for the arbitrator to determine whether, among other things, the class waiver to which they assented is unenforceable. As to Wynn, the court will permit Wynn to re-plead her claims for class relief as set forth in the previous paragraph. The court expresses no opinion as to whether the amended allegations will meet the Rule 12 or Rule 23 standards, nor does the court address how Wynn's amended claims for class relief may be affected by the mandatory arbitration Agreements to which many members of the putative class (if not all of them) are likely subject.
In sum, the court will permit Wynn to amend her Complaint as to all of her claims.
For the reasons set forth herein, the defendants' Motion to Compel Arbitration will be granted and the defendants' Motion to Dismiss or for a More Definite Statement will be granted in part and denied in part. All claims by plaintiffs Antwine, Booker, Wurm, Ridley, and Williams will be referred to individual arbitration, where an arbitrator (or arbitrators) will be obligated to address the plaintiffs' challenges that the Agreement is unenforceable in whole or in part. The court will order Wynn, whose claims are not subject to mandatory arbitration, to file an Amended Complaint in compliance with this opinion by June 30, 2014.
An appropriate order will enter.
