Opinion
MICV201002017F.
05-12-2013
Michael OKEKE et al. v. DYNAMEX OPERATIONS EAST, INC. et al.[1]
MEMORANDUM OF DECISION AND ORDER
DENNIS J. CURRAN, Associate Justice.
The defendant Dynamex Operations East, Inc. (" Dynamex") has moved for partial judgment on the pleadings, that is, to remove the plaintiff Willy Carl Paquiot's claim to another forum (Texas), or to compel arbitration as to him. For the reasons detailed below, its motion must be DENIED.
BACKGROUND
This action was filed on May 26, 2010.
Messrs. Okeke, Paquiot and others charge that Dynamex misclassified its full-time delivery drivers as independent contractors instead of employees, and in doing so, violated G.L.c. 149, § 148B (the independent contractor law), G.L.c. 149, § 148 (refusal to pay wages), G.L.c. 151, sections 1 and 2 (the minimum wage laws), and G.L.c. 151, § 1A (the overtime wage law). In both the complaint (paper no. 1), and the first amended complaint (paper no. 2), the plaintiffs placed Dynamex on notice (as early as May 26, 2010 and on June 4, 2010, by the respective filings) that this court " ha[d] original jurisdiction over each of the parties in this action, pursuant to M.G.L.c. 212, section 4." (See the complaint, paragraph 6, and the first amended complaint, paragraph 9.) Dynamex was served with these complaints on June 24, 2010. (See Return of Service, paper no. 5.) In its 13-page answer and 28 affirmative defenses, at no time did Dynamex claim that a Texas forum controlled this case.
For almost two years, the parties have employed the Massachusetts courts by filing some 19 papers, " actively engaged in the discovery process" (see First Joint Motion to Extend Tracking Order— paper no. 17), and indeed, underwent mediation. (See defendant's memorandum in support of Emergency Motion to Stay, dated June 22, 2012 and Status Report Order, paper no. 15.) Indeed, Dynamex's discovery demands required that Mr. Paquiot produce 46 categories of documents. And so it has now come that after two years of employing the Massachusetts courts, Dynamex suddenly discovered and produced a document entitled an " Independent Contractor Agreement" signed by Mr. Paquiot that contained both forum selection and arbitration clauses.
Dynamex now insists that Mr. Paquiot is bound by these provisions; yet during the previous two years' life of this case, Dynamex has neither demanded arbitration nor requested a change of forum.
Dynamex now discloses that Mr. Paquiot signed this document on July 16, 2009, some six months after he began working for it. It is implied that Mr. Paquiot had to sign the proposed Agreement to continue working; he did so. He was neither extended an opportunity to consider the document more thoroughly before signing it, nor given a copy of it.
The Agreement included a number of sections relevant to the pending motion:
17. Governing Law. This agreement shall be governed by the Laws of the State of Texas, as principal place of business of DYNAMEX, ... both as to interpretation and performance.
18. Choice of Forum. The parties agree that any legal proceedings between the parties arising under, arising out of, or relating to the relationship created by this Agreement, including arbitration proceedings discussed below, shall be filed and/or maintained in Dallas, Texas or the nearest location in Texas where such proceedings can be maintained.
19. Dispute Resolution. All disputes and claims arising under, out of, or relating to this Agreement, including an allegation of breach thereof, and any disputes arising out of or relating to the relationship created by this Agreement ... shall be fully resolved by arbitration in accordance with Texas's Arbitration Act and/or the Federal Arbitration Act ... The parties specifically agree that no dispute may be joined with the dispute of another and agree that class actions under this arbitration provision are prohibited ... The place of the arbitration herein shall be Dallas, Texas ... The parties agree that the arbitration fees shall be split between the parties, unless CONTRACTOR shows that the arbitration fees will impose a substantial financial hardship on CONTRACTOR as determined by the arbitrator, in which event DYNAMEX will pay the arbitration fees. (Emphasis supplied.)
After producing the document, Dynamex filed this motion for partial judgment on the pleadings and/or to compel arbitration as to Mr. Paquiot.
DISCUSSION
I. Standard of Review
A motion to dismiss based on a forum selection clause is treated as a failure to state a claim for which relief can be granted under Mass.R.Civ.P. 12(b)(6). Casavant v. Norwegian Cruise Line, Ltd., 63 Mass.App.Ct. 785, 789-90 (2005). After answering the complaint, a defendant may raise the defense through a motion for judgment on the pleadings under Mass.R.Civ.P. 12(c). See Silva v. Encyclopedia Britannica, Inc., 239 F.3d 385, 387 (1st Cir.2001). In considering such a motion, a court may consider not only the complaint, but documents sufficiently referred to in the complaint. Rivera v. Centro Medico De Turabo, Inc., 575 F.3rd 10, 15 (1st Cir.2009).
II. Forum Selection
Dynamex asks this Court to dismiss Mr. Paquiot's claims because the Agreement names Texas as the proper forum for any dispute. Such forum selection clauses are prima facie valid and should be enforced unless shown to be unreasonable under the circumstances. The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). While this standard on forum selection has been adopted by Massachusetts, there are a number of factors that cut against its application to this case.
When considering whether enforcing the forum selection clause would be reasonable, we look to the circumstances under which the clause was agreed to because " Massachusetts courts will not enforce a forum selection clause that was obtained through duress, abuse of economic power, or other unconscionable means." Melia v. Zenhire, Inc., 462 Mass. 164, 173 (2012). In this case, Dynamex presented the proposed Agreement as a " take it or leave it" proposition.
In the Melia case the Supreme Judicial Court found these factors did not apply because the clause was part of an arm's length negotiation between sophisticated parties, not so here as to Mr. Paquiot.
The Supreme Judicial Court has recently found that Wage Act claims are meant to provide a strong statutory protection for employees and their right to wages. As such, the Court requires that an employee alert its workers with specific language in clear and unmistakable terms that he/she is releasing such rights. Crocker v. Townsend Oil Co, Inc., 464 Mass. 1, 13-14 (2012). The Agreement at issue is 9 pages, single-spaced, in 10-point font, and contains 31 numbered paragraphs. Despite such detail, it makes no mention of Wage Act claims or any statutory protections that Mr. Paquiot may be waiving by agreeing to litigate in a Texas forum under a Texas choice of law.
Mr. Paquiot asserts that Dynamex waived its right to enforce the forum selection clause by choosing to throw its litigation resources into Massachusetts for nearly two years before invoking that clause. Dynamex was in sole possession of the Agreement containing this clause for over three years, and yet blames its litigational failure to find its own document on Mr. Paquiot who, it claims, did not produce it in response to Dynamex's request for production of documents. Dynamex, however, neglects to mention that it never furnished a copy to Mr. Paquiot.
III. Arbitration
Dynamex also asks this Court to stay Mr. Paquiot's claims and compel the parties to engage in arbitration under a dispute resolution clause in the Agreement. This effort, too, must fail.
In determining whether a party has waived its arbitration right, the inquiry is whether under a totality of the circumstances, the defaulting party acted inconsistently with its arbitration right. Martin v. Norwood, 395 Mass. 159, 162 (1985). An arbitration clause must be invoked in a timely manner or the option is lost. Rankin v. Allstate Ins. Co., 336 F.3d 8, 12 (1st Cir.2003). This litigation has consumed almost two years of Massachusetts court resources before Dynamex decided to try to change both the rules of the game and the playing field.
An individual's right to be paid for his/her labor is not a trifling matter; it is fundamental. Depriving a worker of such a right is manifestly unfair, just as forcing him to travel over 2, 000 miles and cross the nation to get paid an arguably honest wage is repugnant.
Mr. Paquiot worked here; his co-workers (and potential class members) worked here; his counsel works here; the violations of the law are alleged to have occurred here; and Dynamex failed to complain about this jurisdiction for two years. These reasons compel the obvious and fair result: by sitting on its rights for two years, Dynamex has lost them.
ORDER
For these reasons, the defendant Dynamex Operations East, Inc.'s motion for judgment on the pleadings to remove this claim to Texas or to compel arbitration is DENIED.