Collins v. Macy's Incorporated

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Tracee Monique Collins, No. CV-19-02572-PHX-GMS 10 Plaintiff, ORDER 11 v. 12 Macy’s Incorporated, 13 Defendant. [15] 16 Pending before the Court is Defendant Macy’s Credit and Customer Services, Inc.’s 17 (“Macy’s’” or “Defendant’s”) Motion to Dismiss and Compel Arbitration. The Motion is 18 granted. Also pending before the Court are Plaintiff Tracee Monique Collins’ 19 (“Plaintiff’s”) Motion to Submit Supplemental Evidence and Motion to Consider 20 Plaintiff’s Rebuttal. The Motion to Supplement is granted and the Motion to Consider 21 Rebuttal is denied. 22 BACKGROUND 23 Plaintiff was employed as a Macy’s Customer Service West Frontline Loyalty 24 Phones Agent from October 2017 to August 2018. In August 2018, Plaintiff’s employment 25 was terminated for allegedly violating Macy’s attendance policy. On April 19, 2019, 26 Plaintiff filed the underlying complaint alleging that Macy’s’ attendance system did not 27 accurately and timely update her attendance.1 (Doc. 1.) Macy’s responded with this Motion 28 1 Plaintiff alleges claims for negligence, tortious interference, and infliction of emotional distress. 1 to Dismiss and Compel Arbitration on July 11, 2019. (Doc. 12.) Macy’s argues that 2 Plaintiff agreed to arbitrate all employment-related disputes she might have with Macy’s 3 through Macy’s’ Solutions InSTORE Program because she did not opt out of step four of 4 the Program within 30 days of her hire date. 5 Macy’s employees are covered by Macy’s employment dispute resolution program, 6 Solutions InSTORE, but are given a chance to opt out of step four (arbitration) by 7 completing an election form and mailing it to the appropriate office within 30 days of their 8 hire date. Employees are informed—through a variety of means—that they agree to 9 arbitrate disputes if they do not complete the election form. Macy’s alleges that it informed 10 Plaintiff of the Solutions InSTORE program and her ability to opt out in several ways: (1) 11 the Solutions InSTORE New Hire Acknowledgement form (New Hire Acknowledgement 12 Form); (2) the Solutions InSTORE New Hire Brochure (New Hire Brochure); (3) the 13 Solutions InSTORE Step 4-Arbitration opt-out Election Form (Election Form); and (4) the 14 Solutions InSTORE Plan Document (Plan Document). 15 Macy’s alleges that on October 19, 2017, at the outset of her employment, Plaintiff 16 viewed and electronically signed the New Hire Acknowledgement form, which stated in 17 part: “I understand that if I do not wish to be covered by . . . Arbitration, the only way to 18 notify the Company about my choice is by postmarking my election form within 30 days 19 of hire and mailing it to the Office of Solutions InSTORE.” (Doc. 12 at 7.) Macy’s also 20 alleges that Plaintiff was given a copy of the New Hire Brochure at the time she was 21 completing her new hire paperwork. This includes the Election Form and the Plan 22 Document and reiterates that employees must fill out the Election Form to opt-out of 23 arbitration. The Election Form itself then again states that employees will be bound to 24 arbitration if they do not act within 30 days of their hiring date. 25 Plaintiff states that she never received the Plan Document and that she did not 26 receive the New Hire Brochure until after she “completed the electronically signed forms 27 as instructed by the HR rep.” (Doc. 15-3 at 1.) Finally, Plaintiff makes conflicting 28 statements about whether she signed the New Hire Acknowledgement Form. In her 1 Objection to Motion to Dismiss and Compel Arbitration, Plaintiff “asserts that she clicked 2 the button with the computer mouse with the intention and good faith acknowledging only 3 that she received the information [contained in the New Hire Acknowledgement],” and that 4 because Macy’s “misrepresented the material elements of the alleged contract” and 5 “Plaintiff did not wish to ‘exclude’ herself from ‘coverage’ of this ‘benefit,’” Macy’s 6 obtained “an alleged electronic signature” without Plaintiff’s genuine consent. (Doc. 15 at 7 2.) She further acknowledges that she “completed the required forms as instructed.” (Doc 8 15-1 at 2.) Macy’s claims (and Plaintiff does not dispute) that these forms included the 9 New Hire Acknowledgement. However, at other points in her Objection, Plaintiff argues 10 that her electronic signature was altered, and that her documents were “manipulated, edited 11 by Macy’s” such that they are not legally enforceable. (Doc. 15-3 at 1, 2.) 12 DISCUSSION 13 I. Legal Standard 14 In a motion to dismiss for improper venue pursuant to Federal Rule of Civil 15 Procedure 12(b)(3), courts must draw all reasonable inferences in favor of the non-moving 16 party and resolve all factual conflicts in favor of the non-moving party. Murphy v. 17 Schneider Nat’l, Inc., 362 F.3d 1133, 1138 (9th Cir. 2004). 18 II. Analysis 19 On a motion to compel arbitration pursuant to the Federal Arbitration Act (FAA), a 20 district court decides only (1) whether the parties formed a valid agreement to arbitrate, 21 and, if so, (2) whether the agreement to arbitrate encompasses the underlying dispute. 22 Equal Employment Opportunity Comm’n v. Cheesecake Factory, Inc., No. CV08–1207– 23 PHX–NVW, 2009 WL 1259359 , at *2 (D. Ariz. May 6, 2009). If the court decides both 24 issues affirmatively, the court must enforce the arbitration agreement in accordance with 25 its terms. Id. The FAA requires courts to construe arbitration agreements under general 26 state law contract principles. Id. 27 A. Validity of the Agreement 28 Plaintiff’s argument against the validity of the arbitration agreement is two-fold. 1 First, Plaintiff argues that her signature on the New Hire Acknowledgement was altered, 2 and thus that she did not enter into a legally binding agreement to arbitrate. Plaintiff then 3 argues that she is not contractually obligated to arbitrate because Macy’s misrepresented 4 material information in the agreement and because the agreement lacks consideration. 5 (Doc. 15 at 2.) 6 1. Alteration of Signature 7 While the Court must resolve all factual conflicts in favor of Plaintiff, Murphy, 362 8 F.3d at 1138, Plaintiff herself states that Macy’s obtained Plaintiff’s “alleged electronic 9 signature” on her New Hire Acknowledgement because she “did not wish to ‘exclude’ 10 herself from ‘coverage’ of th[e] ‘benefit’” of arbitration. (Doc. 15 at 2.) Even assuming 11 Plaintiff’s signature was not valid, however, the FAA requires only a writing, not a 12 signature, to create a binding arbitration agreement. Nghiem v. NEC Elec., Inc., 25 F.3d 13 1437, 1439 (9th Cir. 1994). Like the plaintiff in Nghiem who acknowledged receipt of the 14 employee handbook explaining the defendant employer’s arbitration process, Plaintiff has 15 acknowledged receiving Macy’s’ New Hire Brochure, which lays out the Solutions 16 InSTORE Program in detail.2 As in Circuit City Stores, Inc. v. Najd, Macy’s 17 “communicated in detail and in writing the effect of [Plaintiff’s] acceptance on [her] right 18 to bring claims against [her] employer. Also, [Macy’s] made clear that opting out of the 19 agreement would have no effect on the employment relationship. Finally, [Plaintiff] had 20 thirty days to review the agreement and mull over whether to opt out of it. When, as here, 21 inaction is indistinguishable from overt acceptance, we may conclude that the parties have 22 come to agreement.” 294 F.3d 1104, 1108 (9th Cir. 2002). 23 2. Misrepresentation 24 Plaintiff alleges that Macy’s made material misrepresentations in the information 25 provided to Plaintiff detailing the arbitration agreement. First, Plaintiff argues that Macy’s [26] 2 Plaintiff states in her declaration that she received the Brochure after she “completed and 27 electronically signed the required forms as instructed by the HR rep” at her preemployment paperwork appointment on October 19, 2017. (Doc. 15-3 at 1.) Plaintiff has 28 not disputed the contents of this Brochure as provided in Macy’s’ Declaration of Cynthia Ripak, Exhibit B (Doc. 12.) 1 misled her by labeling the New Hire Acknowledgement as an “acknowledgment” rather 2 than a contract. Plaintiff confuses the Acknowledgement for the contract itself, which 3 Macy’s has never suggested. The New Hire Acknowledgement was intended to be an 4 acknowledgment only, not a contract. The contract was formed through the offer and 5 acceptance of Plaintiff receiving Macy’s’ informational materials and failing to opt out of 6 arbitration. Next, Plaintiff argues that Macy’s misrepresented material information by 7 using the term “benefit” in connection with the Solutions InSTORE Program. While the 8 Court is sympathetic to Plaintiff’s view that Macy’s arbitration procedure is not beneficial 9 for her, arbitration has several features that could plausibly constitute benefits. See, e.g., 10 Allied-Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265, 280 (1995) (arbitration is 11 “usually cheaper and faster than litigation; it can have simpler procedural and evidentiary 12 rules; it normally minimizes hostility and is less disruptive of ongoing and future business 13 dealings among the parties; it is more flexible in regard to scheduling of times and places 14 of hearings and discovery devices”). Plaintiff also argues that she was not given notice that 15 participating in arbitration entailed waiving her right to a jury trial and spending up to $125. 16 But the New Hire Brochure, which Plaintiff admits she received, states this explicitly. 17 (Doc. 12-1 at 46, 47) (“You’ll pay a portion of the arbitration costs . . . up to a maximum 18 of $125. . . . when covered by Step 4 final and binding arbitration you and the Company 19 . . . both waive the right to civil action and a jury trial.”). And while the Election Form does 20 not include this information, it encourages employees to look at the Brochure. (Doc. 12-1 21 at 72) (“It is important to review the entire Solutions InSTORE program brochure . . . . [It] 22 describes the features of the program, including its benefits and tradeoffs.”). 23 3. Consideration 24 Finally, Plaintiff asserts that the arbitration agreement is not valid because it was 25 offered without consideration. Plaintiff argues that at-will employment cannot constitute 26 consideration, particularly where, as here, the employer has promised that the employee’s 27 job will not be affected by the decision to opt out of arbitration. The consideration in this 28 case is not Plaintiff’s continued employment, however, but rather the fact that Macy’s is 1 also bound to arbitrate disputes if the employee does not opt out. (Doc. 12-1 at 46, 47) 2 (“[W]hen covered by Step 4 final and binding arbitration you and the Company . . . both 3 waive the right to civil action and a jury trial.”) (emphasis added). An employer’s promise 4 to “submit to arbitration and to forego the option of a judicial forum for a specified class 5 of claims constitutes sufficient consideration.” Circuit City, 294 F.3d at 1108 . 6 B. Applicability of the Agreement to the Dispute 7 As the parties formed a valid agreement to arbitrate, the Court must next determine 8 whether that agreement encompasses the underlying dispute—Plaintiff’s claims for 9 negligence, tortious interference, and infliction of emotional distress stemming from her 10 termination. Macy’s states, and Plaintiff does not dispute, that the arbitration agreement 11 covers “all employment-related legal disputes, controversies or claims arising out of, or 12 relating to, employment or cessation of employment” “arising under federal, state or local 13 decisional or statutory law.” (Doc. 12 at 14.) As Plaintiff’s claims are all related to her 14 employment and cessation of her employment, the arbitration agreement encompasses the 15 underlying dispute. Macy’s’ motion is granted. 16 CONCLUSION 17 Because the parties formed a valid agreement to arbitrate and the agreement 18 encompasses the underlying dispute, Plaintiff’s complaint must be dismissed to compel 19 arbitration. This order shall not prevent the parties from filing in federal court in the future 20 to enforce an arbitration award if one is granted and necessary. 21 IT IS THEREFORE ORDERED that Macy’s’ Motion to Dismiss and Compel 22 Arbitration (Doc. 12) is GRANTED. 23 IT IS FURTHER ORDERED this Order shall not prevent the parties from filing 24 in federal court in the future to enforce an arbitration award, if one is granted. 25 /// 26 /// 27 /// [28] 1 IT IS FURTHER ORDERED that the Clerk of Court is directed to terminate this case. 3 Dated this 15th day of October, 2019. Wars ) ; A Whacrsay Fotos 6 Chief United States District Judge [28] -7-