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Hogan v. Spar Group, Inc.

United States District Court, D. Massachusetts

March 12, 2018

PARADISE HOGAN, on behalf of himself and all other similarly situated, Plaintiff,
v.
SPAR GROUP, INC. and SPAR BUSINESS SERVICES, INC., Defendants.

          ORDER ON MOTION TO COMPEL ARBITRATION

          Leo T. Sorokin United States District Judge

         Plaintiff Paradise Hogan filed a First Amended Class Action Complaint (the “Complaint”) in May 2017 alleging violations of the Massachusetts Wage Act, G.L. c. 149 §§ 148, 150, and the Massachusetts Independent Contractor Law, G.L. c. 149 § 148B, against Defendants SPAR Group, Inc. (“SPAR”) and SPAR Business Services, Inc. (“SBS”). Doc. No. 30. Defendants, citing the Independent Contractor Master Agreement (the “Agreement”) between Hogan and SBS, move to dismiss or stay this action and to compel Hogan to submit his claims to arbitration on an individual basis pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16. In the alternative, Defendants move to dismiss the Complaint under Fed.R.Civ.P. 12(b)(6). For the reasons that follow, the Court DENIES the motion to compel arbitration, ALLOWS in part and DENIES in part the motion to stay this action, and DENIES the motion to dismiss pursuant to Rule 12(b)(6).

         I. BACKGROUND

         The Court recites facts alleged in the Complaint, Doc. No. 30, which the Court accepts as true for purposes of considering Defendants' motion to dismiss.

         Starting in or about May 2015, Hogan served as a “Field Specialist” for SBS, a retailer services staffing company that provides personnel to various companies-including SBS's affiliate, SPAR-which in turn provide various services for retailer clients. Id. ¶¶ 9, 33. SBS provides substantially all of its Field Specialists to perform services to SPAR and classifies these Field Specialists as independent contractors. Id. ¶¶ 12-13. Field Specialists work on merchandising and assembly projects for SPAR's retailer clients on an as-needed basis. Id. ¶ 15. Neither SBS nor SPAR reimburses Hogan or other Field Specialists for costs or expenses incurred in their performance of assignments for SPAR. Id. ¶¶ 27-32.

         Prior to commencing work as a Field Specialist, Hogan signed the Agreement.[1] SBS drafted the Agreement and required all Field Specialists to sign it. Id. ¶¶ 36-39. The Agreement contains no reference to the entity SPAR. Paragraph 20 of the Agreement requires parties to the Agreement to resolve disputes in arbitration:

Any dispute between the Parties relating to this Master Agreement or otherwise arising out of their relationship under its terms, including but not limited to any disputes over rights provided by federal, state, or local statutes, regulations, ordinances, and/or common law, shall be determined by arbitration. That arbitration shall proceed before one arbitrator form [sic] the American Arbitration Association (“AAA”) under the AAA Commercial Arbitration Rules then in effect for a domestic commercial dispute, accessible at: http://www.adr.org. The Parties acknowledge the Master Agreement evidences a transaction involving interstate commerce, and the arbitration shall be governed by the United States Federal Arbitration Act (9 U.S.C., Sections 1-16) (“FAA”).

Doc. No. 33-1 § 20. The arbitration clause also prohibits a party from bringing claims in a class action:

The Parties agree that any claim shall be brought solely in the individual capacity of SBS or the Independent Contractor, and not as a representative of any other persons or any class.

Id.

         Hogan alleges that SBS and SPAR misclassify him and other Field Specialists as independent contractors rather than employees, such that SBS and SPAR avoid paying Wage Act-mandated expenses in relation to Hogan and other Field Specialists and compensate Hogan and other Field Specialists in an amount below the hourly minimum wage.

         II. DISCUSSION

         The FAA provides that contracts that include written provision to resolve disputes by arbitration “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. Under the FAA, a court, upon determining that an action is subject to an enforceable arbitration agreement, “shall […] stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, ” id. § 3, and “shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement” if a party has failed to comply with the agreement, id. § 4.

         A. Motion to Compel ...


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