United States District Court, S.D. Texas, Houston Division
MAJDI ABUGEITH and JIMMY BREWER, Individually and on Behalf of All Others Similarly Situated, Plaintiffs,
FLOWERS FOODS, INC. and FLOWERS BAKING CO. OF HOUSTON, LLC, Defendants.
MEMORANDUM OPINION AND ORDER
LAKE, UNITED STATES DISTRICT JUDGE.
Majdi Abugeith and Jimmy Brewer ("Plaintiffs"), on
behalf of themselves and other similarly situated
individuals, bring this action against defendants Flowers
Foods, Inc. and Flowers Baking Co. of Houston, LLC
(collectively "Flowers" or "Defendants")
under the Fair Labor Standards Act
("FLSA").Pending before the court is Defendants'
Motion to Dismiss or, in the Alternative, to Compel
Individual Arbitration ("Defendants' Motion to
Dismiss") (Docket Entry No. 5). For the reasons stated
below, the court will grant Defendants' Motion to
Foods, Inc. ("Flowers Foods") ships bakery and
snack products to warehouses. Flowers Baking Co. of Houston
is a subsidiary of Flowers Foods that operates one of Flowers
Foods' bakeries and several of its warehouses. Defendants
market their bakery and snack products to retailers such as
Wal-Mart, Target, Dollar General, and other grocery stores
and merchants. Plaintiffs and members of the proposed class
distribute Defendants' products to Defendants' retail
customers and place, remove, and organize Defendants'
products on the retailers' shelves. Plaintiffs allege
that "[b]ecause they were misclassified as
non-employees, Plaintiffs and members of the proposed Federal
Collective Group were denied the rights and benefits of
employment, including, but not limited to overtime premium
executed a distributor agreement and signed Flowers Baking
Co. of Houston, LLC ("Company") Amendment to
Distributor Agreement ("Amendment"). The Amendment
contains an arbitration provision that states:
Mandatory and Binding Arbitration:
All claims, disputes, and controversies arising out of or in
any manner relating to this Agreement or any other agreement
executed in connection with this Agreement, or to the
performance, interpretation, application or enforcement
hereof, including, but not limited to breach hereof and/or
termination hereof, which has not been resolved pursuant to
any negotiation and mediation provisions in the Agreement or
otherwise shall be submitted to individual binding
arbitration in accordance with the terms and conditions set
forth in the Arbitration such claims, disputes, and
controversies as specifically excluded therein.
each signed an Arbitration Agreement contained in Exhibit 2
of the Amendment.
filed this action on September 29, 2017, seeking overtime
wages under the FLSA, liquidated damages, attorney's
fees, and costs on behalf of themselves and a putative class
of distributors. Defendants-filed a motion pursuant to
Federal Rules of Civil Procedure 12(b)(1), 12(b)(3), and
12(b)(6) seeking an order dismissing the lawsuit and
requiring Plaintiffs to arbitrate their claims with
argue that because Plaintiffs signed the Amendment and the
Arbitration Agreement -- which require mandatory, individual
arbitration of the claims and delegate the power to decide
questions of arbitrability to the arbitrator -- the court
should dismiss Plaintiffs' claims and compel individual
arbitration. Plaintiffs respond that the arbitration
agreements are illusory and thus invalid, and that the
collective action procedure cannot be waived.
Enforceability of the Arbitration Agreement and the
the Federal Arbitration Act ("FAA") an arbitration
agreement in a contract evidencing a transaction involving
interstate commerce is "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. Underlying the FAA is "the fundamental
principle that arbitration is a matter of contract."
AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740,
1745 (2011) (internal quotation marks omitted); see
Washington Mutual Finance Group, LLC v. Bailey, 364 F.3d
260, 264 (5th Cir. 2004) ("The purpose of the FAA is to
give arbitration agreements the same force and effect as
other contracts --no more and no less.").
is a threshold question to be determined at the outset, prior
to deciding conditional certification. Edwards v.
Doordash, Inc., Civil Action No. 17-20082, 2018 WL
1954090, at *3 (5th Cir. April 25, 2018) (citing Reyna v.
International Bank of Commerce, 839 F.3d 373, 377-78
(5th Cir. 2016)). In determining whether to enforce an
arbitration agreement "[f]irst, the court asks whether
there is a valid agreement to arbitrate and, second, whether
the current dispute falls within the scope of a valid
agreement." Id. (citing Klein v. Nabors
Drilling USA L.P., 710 F.3d 234, 236 (5th Cir. 2013)).
If the party seeking arbitration argues that there is a
delegation clause, the court performs the first step of the
analysis to determine if an agreement to arbitrate was
formed, then determines if it contains a valid delegation
clause. Id. at *3-4.
If there is an agreement to arbitrate with a delegation
clause, and absent a challenge to the delegation clause
itself, we will consider that clause to be valid and compel
arbitration. Challenges to the arbitration agreement as a
whole are to be heard by the arbitrator. Arguments that an
agreement to arbitrate was never formed, though, are to be
heard by the court even where a delegation clause exists.
See Kubala v. Supreme Products Services, Inc., 830
F.3d 199, 202 ...