United States District Court, W.D. Washington, Seattle
LAURIE KRAUSE, on Behalf of Herself And on Behalf of All Others Similarly Situated, Plaintiff,
EXPEDIA GROUP, INC. and EGENCIA, LLC, Defendants.
ORDER DENYING DEFENDANTS' MOTION TO DISMISS AND
GRANTING DEFENDANTS' MOTION TO COMPEL
BARBARA J. ROTHSTEIN UNITED STATES DISTRICT JUDGE
Laurie Krause initiated this action against Defendants
Expedia Group, Inc. (“Expedia”) and Egencia, LLC
“Defendants”) claiming a violation of the Fair
Labor Standards Act (“FLSA”), 29 U.S.C. §
201 et seq. In her complaint, Plaintiff claims that
Defendants intentionally misclassified her, and others in her
position, as independent contractors in order to deny them
before the Court is Defendants' Motion to Dismiss and/or
to Compel Plaintiff to Participate in Arbitration pursuant to
the Federal Arbitration Act, 9 U.S.C. § 1 et
seq. (“FAA”). Dkt. No. 25. Having reviewed
the motion, the opposition thereto, the record for the case,
and the relevant legal authorities, the Court will deny the
motion to dismiss, but grant the motion to compel arbitration
and stay the current proceedings until the completion of
arbitration in the parties' chosen venue. The reasoning
for the Court's decision follows.
is a travel consultant, providing customer communications
services for Defendants who operate an online travel
management company. Dkt. No. 1 at ¶¶ 16, 19.
Plaintiff and Defendants, however, have never entered into an
employment or independent contractor agreement directly. Dkt.
No. 25 at 2. Instead, Defendant Egencia, contracts with WSOL,
LLC (“WSOL”), which provides telephone, email,
and other contact center and business processing support.
Id. at 3. WSOL, in turn, contracts with Plaintiff to
provide customer service assistance to travelers in the form
of chat, email, and phone. Id. at 3-6. WSOL and
Plaintiff have entered into several contracts for this work
since 2014. The latest of these agreements is entitled
“Independent Contractor Agreement” (“2019
Agreement”) and is accompanied by Schedule A, entitled
“Egencia Program: Duties, Terms, and
Compensation” (“2019 Schedule A”), both of
which were signed on February 26, 2019. Dkt. No. 26-5 (2019
Agreement); Dkt. No. 35-1 (2019 Schedule A).
analysis of these contracts is an essential step in resolving
the present dispute.
2012 Master Services Agreement Between Defendants and
mentioned previously, Defendants are engaged in the travel
management business and provide booking services for
businesses and individuals. Defendants Egencia and Expedia
are related companies; Egencia is wholly owned by Expedia,
Inc., which is wholly owned by Expedia Group, Inc. Dkt. No. 1
at ¶ 10.
October 2012, Defendant Egencia and WSOL entered a Master
Services Agreement (“MSA”) whereby WSOL agreed to
provide outsourced customer service support to Defendant.
Dkt. No. 25 at 3; Dkt. No. 26-1 (MSA). The MSA states that it
“is not intended to create any relationship other than
Vendor as an independent contractor performing Services
covered by this Agreement and Egencia as the Party
contracting with Vendor for those services.” Dkt. No.
26-1 at ¶ 20.4. The relationship between Defendant and
WSOL is not exclusive, and either company may agree to the
same relationship with other companies. Id. at
Plaintiff and WSOL Agreements and Schedules
began working as a travel consultant for Defendants in July
2014. Dkt. No. 1 at ¶ 28. According to Plaintiff, she
communicates with Defendants' customers and answers
questions regarding ticket, hotel, and vehicle reservations.
Id. at ¶¶ 17-19. But, as previously
stated, Plaintiff never directly contracted with Defendants.
from 2014 through 2019, Plaintiff signed several agreements
and schedules with WSOL. Both parties agree, however, that
the current controlling agreement is the 2019 Agreement, even
though it was formalized after Plaintiff filed the instant
action. See Dkt. No. 25 at 5-6; Dkt. No. 31 at
The 2019 Agreement was signed on February 26, 2019 and, at
the same time, Plaintiff signed the 2019 Schedule A.
Plaintiff, however, states that these documents arrived in
separate emails from WSOL's president, indicating that
she first received the 2019 Schedule A and then received the
2019 Agreement. See Dkt. No. 43 at ¶¶ 5-6.
the 2019 Agreement establishes the terms of engagement
between Plaintiff and WSOL and contains a number of
provisions germane to the current motion, including a broad
arbitration clause (Section VII “Mutual Arbitration
Provision”), see infra at 6 n.6, an
indemnification clause (Section VI “Indemnity
Provision”), see infra at 6 n.7, a delegation
clause(Section VII.2 “Delegation
Clause”), see infra at 7 n.9, a class action
waiver, a choice of law section (Section X “Governing
Law Section”), and an integration clause (Section XIV
“Entire Understanding Section”). Dkt.
No. 26-5. The 2019 Agreement does not specifically
reference Defendants. Instead, it outlines Plaintiff's
contracted services to WSOL, including that she will be
presented with opportunities to work on programs established
for the benefit of WSOL's clients. Id. at 2
(Section I.2). When engaged by a specific program, the 2019
Agreement establishes that Plaintiff “agrees to perform
the services defined in Schedule A” whose parameters
are “established by the client [in this case Egencia],
not WSOL.” Id. The 2019 Schedule A, in turn,
outlines the duties of a travel agent assisting Egencia
customers on the “Egencia Program, ” the term of
engagement, the compensation rate, and the provisions for
certifying a contractor on the Egencia's systems. Dkt.
foundation of Plaintiff's suit is her claim that
Defendants violated the FLSA by failing to pay travel
consultants overtime wages for work done in excess of 40
hours per week. Dkt. No. 1 at ¶¶ 67-70. She alleges
that travel consultants are entitled to overtime wages
because they are Defendants' employees. Id. at
¶ 31. Further, Plaintiff claims that the Defendants
intentionally misclassified her and other travel consultants
as independent contractors in order to avoid paying them
overtime wages. Id. at ¶¶ 47, 48, 51.
proffers two arguments in opposition to Defendants'
motion: (1) the 2019 Agreement, including the agreement to
arbitrate, is unenforceable as unconscionable because the
Indemnification Provision is an illegal fee-shifting
provision that deprives her of substantive and overtime
rights under the FLSA, Dkt. No. 31 at 4-10, and (2) even if a
valid arbitration clause exists, Defendants may not enforce
it as nonsignatories to the 2019 Agreement, id. at
Enforceability of the Mutual Arbitration Provision
response to Defendants' evocation of the Mutual
Arbitration Provision,  Plaintiff claims that the Provision is
invalid as unconscionable because, as Plaintiff interprets
the Indemnification Provision,  “[e]ven if Defendants lose
in arbitration, Defendants are still entitled to recover from
Plaintiff their attorneys' fees and costs.”
Id. at 5.
Plaintiff's attack on the Mutual Arbitration Provision,
Defendants reply that the parties have agreed to delegate
questions of arbitrability to the arbitrator to decide, not
the Court, through the Delegation Clause. See Dkt.
No. 34 at 3-4. Plaintiff counters Defendants' reliance on
the Delegation Clause by claiming that it too is invalid
based on the same fee-shifting objections to the Indemnity
Provision. Dkt. No. 42 at 2. As she explains, “the
illegal indemnity provision applies to all disputes between
the Parties, including to those subject to the delegation
clause.” Id. Thus, the question for the Court
is whether the Court or an arbitrator may determine the
validity of the Mutual Arbitration Provision given the
Delegation Clause assigning that question to the arbitrator.
The Court concludes that questions of arbitrability raised by
the Plaintiff go to the contract as a whole and are therefore
for the arbitrator to decide.
provides that any arbitration clause within its scope
“shall be valid, irrevocable, and enforceable, ”
9 U.S.C. § 2, and permits a party “aggrieved by
the alleged . . . refusal of another to arbitrate, ”
id. at § 4, to “petition any federal
district court for an order compelling arbitration in the
manner provided for in the agreement, ” Chiron
Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126,
1130 (9th Cir. 2000).
other contracts, ” however, arbitration clauses
“may be invalidated by ‘generally applicable
contract defenses, such as fraud, duress, or
unconscionability.'” Rent-A-Ctr., W., Inc. v.
Jackson, 561 U.S. 63, 68 (2010) (quoting
Doctor's Assocs., Inc. v. Casarotto, 517 U.S.
681, 687 (1996)). A plaintiff seeking to invalidate an
arbitration clause must be attacking the validity of ...