United States District Court, W.D. Oklahoma
TOMMY WHITLOW, on behalf of himself and all other similarly situated individuals, Plaintiff,
CRESCENT CONSULTING, LLC. Defendant.
L. RUSSELL, UNITED STATES DISTRICT JUDGE.
the Court is Defendant's Motion to Stay and Compel
Arbitration (Doc. No. 101). Plaintiff Shaw, the subject of
the motion, responded in opposition thereto. Defendant filed
a reply in support of its position. (Doc. No. 103).
Accordingly, the motion is ripe for consideration. Having
considered the parties' submissions, the Court finds as
is part of a collective action against Defendant alleging
violations of the Fair Labor Standards Act. He performed
services to Defendant as a drilling consultant. He, and other
Plaintiffs, contend Defendant mischaracterized them as
independent contractors in an effort to avoid payment of
overtime wages. The Court certified this as a collective
action on August 14, 2017, and Plaintiff Shaw filed a consent
to join on September 22, 2017. On February 8. 2018, Defendant
filed the instant motion, asserting that a February 17, 2017,
Independent Contractor Master Services Agreement executed
between Mr. Shaw and Crescent Consulting mandates arbitration
of this dispute. Plaintiff contends that Defendant's
motion defies the Court's Order regarding Notice, and
further, that compelling arbitration is inappropriate under
the Court's precedent and the Federal Arbitration Act.
first contention is that the Notice sent to potential opt-in
plaintiffs did not include any information regarding
arbitration. Without citation, Plaintiff argues that to
permit arbitration of his claims is contrary to the language
of the Notice, which informed potential plaintiffs:
If you return a Consent to Join Wage Claim form, you will
join other drilling consultants who worked for Crescent and
have already made a claim for unpaid overtime wages.
Court finds no legal basis for embracing Plaintiff's
argument. Certain opt-in Plaintiffs were identified only
after the Court ordered Notice. Although Defendant may have
anticipated seeking to arbitrate the claims of certain
drilling consultants in light of existing arbitration
agreements, Plaintiff presents no legal support for his
conclusion that Defendant was required to identify this issue
when it objected to Plaintiff's motion for certification
as a collective action.
next contends that the validity of the arbitration agreement
is not presumed, and that it is not valid and enforceable,
because it will effectively deprive him of an accessible
forum to resolve his statutory claims. Doc. No. 103, p. 5.
“In determining whether statutory claims may be
arbitrated, we first ask whether the parties agreed to submit
their claims to arbitration, and then ask whether Congress
has evinced an intention to preclude a waiver of judicial
remedies for the statutory rights at issue.” 531 U.S.
at 90, 121 S.Ct. 513. The Court then separately addressed the
effective vindication exception, suggesting that this
exception stands apart from the issue of whether the parties
voluntarily agreed to submit their claims to arbitration. In
other words, we read Green Tree as implying that the
effective vindication exception can apply even in situations
where both parties voluntarily agreed, at the outset of their
relationship, to arbitrate any claims that might arise
between them. Under this framework, the availability of an
opt-out clause is thus relevant only to the threshold
question of “whether the parties agreed to submit their
claims to arbitration, ” id., and does not
impact the availability of the effective vindication
Nesbitt v. FCNH, Inc., 811 F.3d 371, 378 (10th Cir.
2016). Although Plaintiff argues there is no presumption of a
valid enforceable arbitration agreement, he does not dispute
that he executed the February 2017 contract containing the
arbitration provision. Rather, his second challenge is to the
cost and fee shifting provision of the arbitration
arbitration provisions of the Independent Contractor Master
Services Agreement include the following:
The Company and the Consultant agreed to share the expenses
and fees of the arbitrator and the AAA arbitration
administration fees. The Company will pay 75% of the fees and
in the Consultant (sic) shall pay 25% of the fees. However,
after limited and informal discovery and considering the
likely scope, length, and cost of the arbitration, if the
arbitrator decides that the arbitrator and the AAA's
arbitration and administrative fees will be prohibitively
expensive for the Consultant, then the Company will pay all
arbitrator and AAA arbitration administration fees. The
Company and the Consultant will be responsible for the
expenses of their own legal representation, subject to the
arbitrator awarding any attorney fees under applicable common
decisional, and statutory law and the relevant jurisdiction.
Doc. No. 101-1, ¶ 14.3. Plaintiff bluntly states this
provision “kills” the dispute resolution
arbitration clause. Doc. No. 103, p. 5. The death of the
provision is not instantaneous, as Plaintiff suggests,
although it would have been prior to 2000. In 2000, the
Supreme Court adopted a “case-by-case” approach
to determining whether a cost-splitting provision deprives a
litigant of an opportunity to vindicate statutory rights.
Green Tree Financial Corp.-Alabama v.
Randolph, 531 U.S. 79 (2000). Accordingly, the question
presented is whether requiring Mr. Shaw to pay 25% of any
arbitration fees will deprive him of his ability to vindicate
his rights under the FLSA.
[T]he Supreme Court has never elaborated on “[h]ow
detailed the showing of prohibitive expense must be before
the party seeking arbitration must come forward with contrary
evidence, ” it has explained that “the fact that
it is not worth the expense involved in proving a statutory
remedy does not constitute the elimination of the right to
pursue that remedy.” Am. Express Co. v. Italian
Colors Restaurant, 133 S.Ct. 2304, 2311 (2013).
“So long as the prospective litigant effectively may
vindicate its statutory cause of action in the arbitral
forum, the statute will continue to serve both its remedial
and deterrent function.” Id. at 637. Moreover,
the party “seek[ing] to invalidate an arbitration
agreement on the ground that arbitration would be
prohibitively expensive ... bears the burden of showing the
likelihood of incurring such costs.” Green Tree
Financial Corp. v. Randolph, 531 U.S. 79, 92 (2000).
Daniels v. Encana Oil & Gas (USA) Inc., No.
16-CV-01851-CBS, 2017 WL 3263228, at *4 (D. Colo. Aug. 1,
2017). Plaintiff addresses the cost of arbitration
proceedings, presenting a heavily-redacted Detail/Invoice
Statement from the American Arbitration Association. Doc. No.
103-4. However, even assuming the Court accepts
Plaintiff's representation that the arbitration in this
case could reach $40, 000.00, his exposure under such a
scenario would be limited to $10, 000 because the provision
mandates a 25/75 split with Defendant. Furthermore, Plaintiff
presents no evidence or argument that his personal financial
circumstances would prevent him from paying $10,
His day rate in 2017 while working for Crescent was $1348.00,
and according to an exhibit provided by Defendant, Crescent
paid him ...