United States District Court, W.D. Washington, Tacoma
TIFFNEY HOOBER and DAVID MORDUE, individually, and on behalf of others similarly situated, Plaintiffs,
MOVEMENT MORTGAGE, LLC, a limited liability company, and DOES 1 through 50, Inclusive, Defendants.
ORDER GRANTING DEFENDANTS' MOTION TO COMPEL
ARBITRATION ON AN INDIVIDUAL BASIS AND STAY
BENJAMIN H. SETTLE, UNITED STATES DISTRICT JUDGE
matter comes before the Court on Defendant Movement Mortgage,
LLC's (“Movement”) motion to compel
arbitration on an individual basis, dismiss class claims, and
stay proceedings. Dkt. 7. The Court has considered the
pleadings filed in support of and in opposition to the motion
and the remainder of the file and hereby grants the motion
for the reasons stated herein.
PROCEDURAL AND FACTUAL BACKGROUND
is a mortgage lender headquartered in Indian Land, South
Carolina, which employs over 4, 000 people around the United
States. Dkt. 1, ¶ 4. Movement employed Plaintiffs
Tiffney Hoober (“Hoober”) in Tacoma, Washington
as a mortgage loan officer from November 2016 through
September 2017, and David Mordue (“Mordue”)
(collectively, “Plaintiffs”) in Kennewick,
Washington from March 2018 through September 2018.
Id. ¶¶ 2-3.Hoober and Mordue are putative
class representatives seeking unpaid wages for themselves and
on behalf of a putative class of all other Movement employees
paid on commission in Washington between 2015 and 2018
(“Class Members”). Id. ¶ 1. Hoober
and Mordue each signed a Movement Arbitration Agreement as
part of their hiring process.
filed their complaint on December 7, 2018, alleging Movement
violated Washington law by failing to pay Plaintiffs or Class
Members for time spent performing non-sales tasks or for rest
breaks, failing to pay overtime, failing to pay for missed
meal breaks, and failure to pay all wages due at pay periods
and at termination. Id. ¶¶ 8-16. On
January 28, 2019, Movement filed the instant motion to compel
arbitration, dismiss class claims, and stay the proceedings.
Dkt. 7. On March 4, 2019, Plaintiffs responded. Dkt. 14. On
March 8, 2019, Movement replied. Dkt. 22.
The Federal Arbitration Act
Federal Arbitration Act, 9 U.S.C. § 1 et seq.
(“FAA”) makes agreements to arbitrate
“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 supports a
liberal policy favoring arbitration and reinforces the
“fundamental principle that arbitration is a matter of
contract.” AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 336 (2011). The FAA requires
courts to “rigorously enforce” agreements to
arbitrate, Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985), to
ensure that private contractual provisions “are
enforced according to their terms.” Stolt-Nielsen
S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 684
(2010) (quoting Volt Info. Sciences, Inc. v. Bd. of Trs.
of Leland Stanford Junior Univ., 489 U.S. 468, 479
review of a motion to compel arbitration, the court's
role is limited to determining (1) whether the parties
entered into a valid agreement to arbitrate and if so (2)
whether the present claims fall within the scope of that
agreement. Chiron Corp. v. Ortho Diagnostic Sys.,
Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). The party
seeking to compel arbitration bears the burden of proof on
these questions. Ashbey v. Archstone Prop. Mgmt.,
Inc., 785 F.3d 1320, 1323 (9th Cir. 2015) (citing
Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119
(9th Cir. 2008)). The FAA requires courts to stay proceedings
when an issue before the court can be referred to
arbitration. 9 U.S.C. § 3.
Scope of the Arbitration Agreement
determining whether to compel arbitration, the Court must
determine whether the dispute “falls within the scope
of the parties' agreement to arbitrate.” Chiron
Corp., 207 F.3d at 1130. Movement argues that the
agreements “specifically provide that they cover
‘any claims or controversies during or following 
employment,' and specifically cover claims for wages,
other compensation due, penalties, and claims under state
wage and hour laws.” Dkt. 7 at 10. Section 4 of the
Hoober and Mordue Agreements, titled “Claims Subject to
Arbitration” refers to employment-based claims like
wrongful termination, breach of contract, breach of duty, and
disclosure of trade secrets. Dkts. 8-1, 8-2. Movement makes
specific reference only to Plaintiffs' Washington law
claims as being with the scope of the agreement. Dkt. 7 at 7.
Plaintiffs do not dispute whether their claims fall within
the scope of the agreements and rely on their argument that
the entirety of the agreements to arbitrate are invalid
because unconscionability permeates the agreements. Dkt. 14
at 21-22. Therefore, Plaintiffs appear to concede that the
merits of their claims fall within the scope of the
agreements to arbitrate.
Valid Agreement to Arbitrate
court establishes that a claim is within the scope of an
arbitration agreement, the agreement is “valid,
irrevocable, and enforceable, save upon such grounds as exist
in law or in equity for the revocation of any
contract.” 9 U.S.C. § 2.
determine whether the parties agreed to arbitrate, courts
apply ordinary state-law contract principles. First
Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944
(1995). In Washington, “[t]he role of the court is to
determine the mutual intentions of the contracting parties
according to the reasonable meaning of their words and
acts.” Fisher Props., Inc. v. Arden-Mayfair,
Inc., 106 Wn.2d 826, 837 (1986). Notwithstanding the
FAA's presumption in favor of arbitrability, a court may
consider generally applicable state law contract
defenses-e.g., fraud, unconscionability, and duress-in
determining whether an arbitration provision is valid.
See 9 U.S.C. § 2; Rent-a-Center, West, Inc.
v. Jackson, 561 U.S. 63, 68 (2010).
argue that the agreements to arbitrate are unenforceable
because they are both procedurally and substantively
unconscionable. This argument requires the Court to make a
preliminary decision whether Plaintiffs' challenges to
enforcing the agreements should be decided by the Court or by
the arbitrator. Cox, 533 F.3d at 1119. While the
Supreme Court has explained that “unless the challenge
is to the arbitration clause itself, the issue of the
contract's validity is considered by the arbitrator in
the first instance, ” Buckeye Check Cashing, Inc.
v. Cardegna, 546 U.S. 440, 446 (2006), in resisting the
motion to compel, Plaintiffs do challenge the arbitration
agreement itself. Dkt. 14. When the challenge is to the
arbitration clause itself, the court's duty to evaluate
it applies even when substantive state law requires the court
to consider “the circumstances surrounding the making
of the entire agreement.” Nagrampa v. MailCoups,
Inc., 469 F.3d 1257, 1264 (9th Cir. 2006). “In
sum, our case law makes clear that courts properly exercise
jurisdiction over claims raising (1) defenses existing at law
or in equity for the revocation of (2) the arbitration clause
itself.” Cox, 533 F.3d at 1120.
Washington, either substantive or procedural
unconscionability is sufficient to void a contract.”
Gandee v. LDL Freedom Enterprises, Inc., 176 Wn.2d
598, 603 (2013) (citing Alder v. Fred Lind Manor,
153 Wn.2d 331, 347 (2004) (en banc)). “Severance is the
usual remedy for substantively unconscionable terms, but
where such terms ‘pervade' an arbitration
agreement, [Washington courts] ‘refuse to sever those
provisions and declare the entire agreement void.'”
Gandee, 176 Wn.2d at 603 (quoting Alder,
153 Wn.2d at 358). When a court finds unconscionable
provisions within an arbitration provision, “[s]uch
unenforceable provisions may . . . be severed from any valid
and enforceable provisions, even those also contained within
the arbitration provision.” Nagrampa, 469 F.3d
at 1265. Therefore, if the Court finds unconscionable
provisions pervade the agreements to arbitrate, it will
declare the agreements to arbitrate void. Conversely, if the
Court finds unenforceable provisions may be severed from the
agreements to arbitrate, it will do so and uphold the
remainder of the agreements.
unconscionability refers to “impropriety during the
formation of the contract.” Nelson v.
McGoldrick, 127 Wn.2d 124, 131 (1995). Washington courts
evaluating the circumstances surrounding an agreement to
arbitrate to determine whether the signer lacked meaningful
choice consider (1) the way in which the contract was
entered, (2) whether the signer had a reasonable opportunity
to understand the terms of the contract, and (3) determine
whether the important terms were “‘hidden in a
maze of fine print.'” Alder, 153 Wn.2d at
347 (quoting Schroeder v. Fageol Motors, Inc., 86
Wn.2d 256, 260 (1975)). “The burden of demonstrating
that an arbitration agreement is not enforceable is on the
party opposing the arbitration.” Romney v.
Franciscan Med. Grp., 186 Wn.App. 728, 735 (2015),
review denied, 184 Wn.2d 1004.
At minimum, an employee who asserts an arbitration agreement
is procedurally unconscionable must show some evidence that
the employer refused to respond to her questions or concerns,
placed undue pressure on her to sign the agreement without
providing her with a reasonable opportunity to consider its
terms, and/or that the terms of the agreement ...