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Snipes v. Dollar Tree Distribution, Inc.

United States District Court, E.D. California

November 6, 2019

TERRY T. SNIPES, SR., an individual, Plaintiff,
DOLLAR TREE DISTRIBUTION, INC., a Virginia corporation, and DOES 1 through 50, inclusive, Defendant.



         Through the present class action, Terry T. Snipes, Sr., on behalf of himself and those similarly situated (collectively “Plaintiffs”), challenges various wage and hour practices utilized by his employer, Dollar Tree Distribution, Inc. (“Defendant” or “Dollar Tree”). Pending before the Court is Defendant's Motion to Compel Arbitration and Amend Operative Class Definition. For the reasons stated below, Defendant's Motion (ECF No. 92) is GRANTED.[1]


         Dollar Tree initiated an arbitration program for prospective employees approximately five years ago. Def.'s MPA ISO Mot. to Compel Arbitration, ECF No. 92-1 at 1:13. In May of 2015, the program was expanded to include current employees. At that time, current employees were given an opportunity to either opt out or enter into an arbitration agreement with Defendant. Id. at 13-15. As to any new individuals hired on or after October 6, 2014, however, Dollar Tree required an agreement to arbitrate as a condition of employment (hereafter referred to as the “Arbitration Associates”). Id. at 16- 18.

         In the meantime, on April 1, 2015, Plaintiff Terry T. Snipes, Sr, an existing Dollar Tree employee who had chosen to opt out of the arbitration program, brought the first eight causes of action against Defendant on a class-wide basis pursuant to Federal Rule of Civil Procedure 23. Pls.' SAC, ECF No. 39 at 1-2. In the Ninth through Sixteenth causes of action, Snipes also sought civil penalties against Dollar Tree pursuant to the provisions of California's Private Attorney General Act (“PAGA”), California Labor Code § 2699 et seq. Id.

         The following month, on May 11, 2015, Plaintiff filed an Ex Parte Application for a Temporary Restraining Order (“TRO”) seeking to compel Dollar Tree to distribute an informational notice of the present lawsuit to all its employees. At the May 21, 2015, hearing on the TRO, Defendant differentiated between those employees hired before October 6, 2014, who were given an opportunity to opt out of the arbitration agreements, and the Arbitration Associates. TRO Hr'g Tr., ECF No. 75-1, Ex. B at 3:5-4:8, May 21, 2015. Plaintiffs were concerned with whether arbitration agreements would be enforced against those employees hired before October 6, 2014. Id. at 5:3-8. In order to eliminate concern, Defendant agreed not to enforce any arbitration agreement entered into by employees hired prior to that time. Id. at 3:19-4:8. Plaintiffs acknowledged Defendant's agreement and as such, this Court denied the TRO. Id. at 5:3-6:15. According to Dollar Tree, as discovery proceeded it believed both sides recognized that the Arbitration Associates were not included within the class of employees participating in the lawsuit.

         Plaintiffs eventually moved to certify the class and subclasses to be included as litigants. On November 28, 2017, this Court granted that Motion and certified Plaintiffs' classes. Order, ECF No. 63 at 11-14. Defendant then moved to reconsider the class certification on September 17, 2018, and that motion was denied. Order, ECF No. 84 at 2:4.

         Dollar Tree now moves to enforce the arbitration agreements as to the Arbitration Associates. Def.'s Mot. to Compel Arbitration, ECF No. 92 at 1-4. Defendant further moves to amend the operative class definitions to exclude the Arbitration Associates from the class and subclasses to account for enforcement of those agreements. Id.


         The Federal Arbitration Act (“FAA”) governs the enforcement of arbitration agreements involving interstate commerce. 9 U.S.C. § 2. The FAA allows “a party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration [to] petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in [the arbitration] agreement.” 9 U.S.C. § 4. Valid arbitration agreements must be “rigorously enforced” given the strong federal policy in favor of enforcing arbitration agreements. Perry v. Thomas, 482 U.S. 483, 489-90 (1987) (citation omitted). To that end, the FAA “leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in the original).

         The Supreme Court has repeatedly recognized the strong national policy favoring arbitration. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24-25 (1991) (FAA's “purpose was .... to place arbitration agreements upon the same footing as other contracts, ” and recognizing a “liberal federal policy favoring arbitration agreements”); Shearson/Am. Express Inc. v. McMahon, 482 U.S. 220, 226 (1987) (FAA “establishes a ‘federal policy favoring arbitration,' . . . requiring that we rigorously enforce agreements to arbitrate.” (citations omitted)); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625 (1985) (federal policy of FAA is one which guarantees the enforcement of private contractual arrangements).

         Given this policy, it is clear that a court is obligated to liberally interpret and enforce arbitration agreements and to do so “with a healthy regard for the federal policy favoring arbitration.” Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). Significantly, too, any doubts concerning arbitrability should be resolved in favor of arbitration. Mitsubishi Motors Corp., 473 U.S. at 624 n.13 (noting that the appellate court “properly resolved any doubts of arbitrability”); see also Hodsdon v. Bright House Networks, LLC, 2013 U.S. Dist. LEXIS 52494 at *6 (E.D. Cal. Apr. 11, 2013) (“Because there is a presumption in favor of arbitration, the Court is required to resolve any doubts concerning the scope of arbitrable issues in favor of arbitration.”).

         In determining whether to compel arbitration, the Court may not review the merits of the dispute. Rather, in deciding whether a dispute is subject to the arbitration agreement, a court must answer two questions: (1) “whether a valid agreement to arbitrate exists, ” and, if so, (2) “whether the agreement encompasses the dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). If a party seeking arbitration establishes these two factors, the court must compel arbitration. 9 U.S.C. § 4; Chiron, 207 F.3d at 1130. Accordingly, the Court's role “is limited to determining arbitrability and enforcing ...

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