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Duran v. Conn Appliances, Inc.

United States District Court, W.D. Texas, Austin Division

May 31, 2019

STEPHANIE DURAN and ROSA RESENDEZ, Individually and on behalf of other employees similarly situated
CONN APPLIANCES, INC. (d/b/a Conn's)




         Before the Court are Defendant's Motion to Compel Arbitration and Dismiss Proceedings pursuant to Federal Rule of Civil Procedure 12(b)(1), (3) or (6) (Dkt. No. 13); Defendant's First Supplement to its Motion (Dkt. No. 15); Plaintiffs' Response (Dkt. No. 17); and Defendant's Reply (Dkt. No. 19). Also before the Court are Plaintiffs' Motion for Conditional Certification (Dkt. No. 26); Defendant's Response (Dkt. No. 33); Plaintiffs' Reply (Dkt. No. 36). The District Court referred the motions to the undersigned Magistrate Judge for report and recommendation pursuant to 28 U.S.C. §636(b)(1)(B), Fed.R.Civ.P. 72, and Rule 1(d) of Appendix C of the Local Rules.


         Plaintiffs Stephanie Duran and Rosa Resendez, on behalf of themselves and all others similarly situated, filed this lawsuit against Defendant Conn Appliances, Inc., alleging minimum wage and overtime violations under the Fair Labor Standards Act, 29 U.S.C. §§ 201-219, and the federal Portal-to-Portal Pay Act, 29 U.S.C. §§ 251-262, (collectively “FLSA”). Plaintiffs are former Conn's sales associates, and allege that Conn's failed to pay them the overtime wages they were due by: (1) not paying overtime premium compensation for all overtime hours worked, (2) not including commissions and/or bonuses in calculating Plaintiffs' regular rates of pay (for hourly plus commission/bonus pay only), and (3) deducting expenses from Plaintiffs' paychecks which cut into the overtime premium compensation Plaintiffs were owed. Plaintiffs request that the Court conditionally certify this action under § 216(b) of the FLSA for classes of: (1) sales associates paid hourly and/or commission for overtime wage and minimum wage violations, and (2) sales associates paid commission only for overtime wage and minimum wage violations. Dkt. No. 26.

         Conn's motion argues that Duran and Resendez's claims are subject to binding arbitration. In their Supplemental Motion, Conn's adds that Louis Pena, who filed a Notice of Consent to Join the suit as a plaintiff two weeks after suit was filed (Dkt. No. 14), should also be compelled to arbitrate his claims against Conn's. Dkt. No. 15.[2] As supplemented, the motion thus requests that Duran, Resendez and Pena be ordered to arbitrate their dispute with Conn's. Plaintiffs respond that arbitration is not mandated because (1) Conn's has failed to prove that the Plaintiffs were provided with, and agreed to, the arbitration clause, (2) Conn's did not address whether the additional Opt-In Plaintiffs are parties to the arbitration clause, and (3) Conn's has not shown a basis for individual arbitrations. Given the potential jurisdictional implications of the arbitration issue, the Court addresses that issue first.[3] See Reyna v. Int'l Bank of Commerce, 839 F.3d 373, 377 (5th Cir. 2016).


         Congress enacted the FAA Act in response to widespread judicial hostility to arbitration. CompuCredit Corp. v. Greenwood, 565 U.S. 95, 97 (2012). As relevant here, the Act provides:

A written provision in any maritime transaction or contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . 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. The FAA requires courts to enforce arbitration agreements according to their terms. CompuCredit Corp., 565 U.S. at 98. The FAA establishes “a liberal federal policy favoring arbitration agreements.” Id. (quoting Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). “That is the case even when the claims at issue are federal statutory claims, unless the FAA's mandate has been ‘overridden by a contrary congressional command.'” Id. (quoting Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 226 (1987)).

[W]here the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that “[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.”

AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 650 (1986). Because of the strong presumption in favor of arbitration, the party opposing arbitration bears the burden of proving that the agreement is invalid or that the claims are outside the scope of the agreement. Carter v. Countrywide Credit Indus., Inc., 362 F.3d 294, 297 (5th Cir. 2004).

         III. ANALYSIS

         A. Motion to ...

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