Garcia v. Harmony Healthcare, LLC

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

DAMIAN GARCIA, CHRISTOPHER

ANGELO, and NATHAN BEAUCHAMP,

individually and on behalf of all others

similarly situated,

Plaintiffs,

v. Case No. 8: 20-cv-1065-WFJ-AAS

HARMONY HEALTHCARE, LLC, and

CHRISTIAN HG BROWN,

Defendants.

___________________________________/

ORDER GRANTING MOTION TO COMPEL ARBITRATION

Plaintiffs filed this lawsuit against their former employer Harmony

Healthcare, LLC and CEO Christian HG Brown (collectively “Defendants”) for

alleged violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et

seq. Plaintiffs are suing individually and on behalf of those similarly situated.

Defendants now move to compel arbitration based on arbitration agreements

Plaintiffs signed at the beginning of their employment. Dkt. 21. The Court has

reviewed the parties’ briefs and held a hearing on the relevant issues. For the

reasons stated below, the Motion is granted.

I. BACKGROUND

Plaintiffs Damian Garcia, Christopher Angelo, Nathan Beauchamp, and opt-

in Plaintiff Aren Nilsson worked for Harmony Healthcare as account executives in

the company’s offices in Tampa, Florida. Dkt. 1 at 2. Before beginning their

employment, Plaintiffs completed the onboarding process required for new

employees. Dkt. 34-1 at 4–5.

Oasis Outsourcing, Inc., Harmony’s professional employer organization

(PEO), manages the onboarding process.1 Dkt. 21-1 at 2. The process is completed

virtually through Oasis’s secure online portal. Id.; Dkt. 34-1 at 2. New employees

receive a secure electronic link and access the portal by inputting their name, social

security number, and Harmony’s client identification number. Dkt. 34-1 at 2. Once

logged in, employees are required to read, acknowledge, and electronically sign

several forms. Id. at 3. One of these forms is the “Employee Acknowledgements”

form (“Oasis Agreement”). Id. The form includes the following provision in which

the employee agrees to resolve any legal dispute with Oasis or the “Worksite

Employer” (Harmony) through binding arbitration:

I and Oasis agree that any legal dispute with my Worksite Employer

[Harmony], Oasis, or any other party that may have an employment

relationship with me arising out of or in connection with my

employment, application for employment, or separation from

1 As a PEO, Oasis provides human resource and administrative support to various corporations.

For Harmony specifically, Oasis processes employee pay, runs the onboarding process for new

employees, and maintains personnel information for Harmony employees. Dkt. 34-1 at 1.

employment for which I am, was, or would be paid through Oasis will

be resolved exclusively through binding arbitration by a neutral

arbitrator as provided in this agreement and, to the extent not

inconsistent with this agreement, under the rules of a neutral arbitration

service. The arbitrator will have the authority to grant the same

remedies as a federal court (but no more), will apply the Federal Rules

of Evidence and any applicable statutes of limitation, will render a

reasoned, written decision based only on the evidence adduced and the

law, and can grant attorney fees and costs to the prevailing party subject

to applicable law. If for any reason a matter is not arbitrated, I AGREE

THAT THE MATTER WILL BE HEARD BY A JUDGE AND

WAIVE TRIAL BY JURY, and Oasis also agrees to waive trial by jury.

No matter how a case is heard, I agree that I will participate only in my

individual capacity and not as a member or representative of a class . .

. . My agreement to these terms controls any conflicting dispute

resolution agreement, including one entered into after I sign this

document, if the conflicting agreement would prevent a matter in which

Oasis or an insurance policy issued to Oasis is involved from being

arbitrated, does not provide a jury waiver (if the matter is not

arbitrated), or does not include a class action waiver (if the matter is a

class action or potential class action).

Dkt. 21-1 at 4; Dkt. 34-1 at 8. Plaintiffs completed the onboarding process. Dkt.

34-1 at 4–5. And they all purportedly signed the Employee Acknowledgments

form containing the above arbitration provision. Dkt. 21-1 at 4–6; Dkt. 34-1 at 8–

10.

After completing the onboarding process, days later for Angelo and several

months later for Beauchamp and Garcia, Plaintiffs each entered a written

“Employment Agreement” with Harmony.2 Dkt. 27 at 26–29, 37–40, 48–51. The

Agreement laid out the terms of Plaintiffs’ employment: their job duties, their

2 There is no Employment Agreement in the record for opt-in Plaintiff Aren Nilsson.

compensation, and Harmony’s policies. Id. The Agreement also included a

noncompete and no-poach provision through which Plaintiffs agreed not to start a

competing business or solicit Harmony’s clients or employees for 12 months after

the end of their employment. Id. at 27–28, 38–39, 49–50. Paragraph 15 of the

Agreement also included the following merger clause:

Entire Agreement: This instrument contains the entire agreement of

the parties and supersedes any prior agreement, discussions,

commitments, or understandings of any kind, whether oral or written;

it may not be changed except by an agreement in writing signed by the

party against whom enforcement of any waiver, change, modification,

extension, or discharge is sought. The Employee acknowledges that he

or she has received a copy of this agreement.

Id. at 28, 39, 50.

After their employment ended, Plaintiffs filed this action alleging that

Defendants violated the FLSA by denying them overtime pay they were entitled to

receive under the Act. See 29 U.S.C. § 216(b). Defendants answered the

Complaint, Dkt. 17, and now move to compel arbitration as third-party

beneficiaries of the Oasis Agreements Plaintiffs signed during the onboarding

process, Dkt. 21. Plaintiffs respond that the Oasis Agreements are invalid and

unenforceable for a lack of consideration and because there is insufficient evidence

that Plaintiffs received or signed them. Alternatively, Plaintiffs argue that even if

valid, the Oasis Agreements are still unenforceable because they were superseded

by the subsequent Employment Agreements Plaintiffs entered directly with

Harmony. These later Employment Agreements, Plaintiffs assert, represented the

“entire agreement” between the parties and include no requirement to arbitrate.3

II. LEGAL STANDARD

The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., establishes “a

liberal federal policy favoring arbitration.” Epic Sys. Corp. v. Lewis, 138 S. Ct.

1612, 1621 (2018) (citation omitted). Section 2 of the FAA provides that

arbitration agreements in contracts “involving commerce” are “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 that a district court—

upon motion by a party to an action pending before the court—stay the action if it

involves an “issue referable to arbitration under an agreement in writing.” 9 U.S.C.

§ 3. And if the court finds that the parties are subject to a valid arbitration

agreement, the court “shall make an order directing the parties to proceed to

arbitration.” 9 U.S.C. § 4. Accordingly, a district court must stay a lawsuit and

compel arbitration upon finding that: (1) a plaintiff entered into a valid “written

arbitration agreement that is enforceable ‘under ordinary state-law’ contract

3 Plaintiffs do not dispute that Defendants are intended third-party beneficiaries to the Oasis

Agreement and do not argue that Defendants cannot enforce the agreement based on their third-

party beneficiary status. See Koechli v. BIP Int’l., Inc., 870 So. 2d 940, 944 (Fla. 1st DCA 2004)

(collecting cases holding that intended third-party beneficiaries of an arbitration agreement may

compel arbitration by a signatory of the agreement); Ross v. Vacation Rental Pros Prop. Mgmt.,

LLC, No. 17-cv-16-26JSS, 2017 WL 10276731, at *1–3 (M.D. Fla. Mar. 17, 2017) (compelling

arbitration under same Oasis Agreement presented here upon motion of third-party worksite

employer).

principles,” and (2) “the claims before the court fall within the scope of that

agreement.” Lambert v. Austin Ind., 544 F.3d 1192, 1195 (11th Cir. 2008) (citing 9

U.S.C. §§ 2–4).

III. DISCUSSION

The dispute here involves only the first step of the analysis. The issue is two-

fold: whether the Oasis Agreement itself was a valid agreement between the parties

to submit their potential claims to arbitration, and if so, whether it remained

enforceable after the parties signed the Employment Agreements. The Court finds

that the Oasis Agreement was a valid agreement to arbitrate and remained

enforceable even after the Employment Agreements were signed.

A. The Oasis Agreement was a valid agreement to arbitrate.

Whether parties have entered an agreement to arbitrate is decided according

to state contract law. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944

(1995). Under Florida law, a valid contract requires an “offer, acceptance,

consideration,” St. Joe Corp. v. McIver, 875 So. 2d 375, 381 (Fla. 2004), and

mutual assent to the essential terms of the agreement, Gibson v. Courtois, 539 So.

2d 459, 460 (Fla. 1989). The party seeking to enforce the contract bears the burden

of proving these elements. See Knowles v. C.I.T. Corp., 346 So. 2d 1042, 1043

(Fla. 1st DCA 1977).

The existence of a contract is a question of fact. See Consolo v. A.M.K.

Corp., 344 So. 2d 1285, 1286 (Fla. 3d DCA 1977) (per curiam). In the arbitration

context, if the formation of an agreement is “in issue” a court must hold a trial to

resolve any questions over whether an agreement was formed. 9 U.S.C. § 4.

However, a court may conclude as a matter of law that the parties executed an

agreement to arbitrate upon finding that there is no genuine dispute as to a material

fact about the agreement’s formation. Bazemore v. Jefferson Cap. Sys., LLC, 827

F.3d 1325, 1333 (11th Cir. 2016). A dispute is not “genuine” if it is not supported

by evidence or if it is supported by evidence that is “merely colorable” or “not

significantly probative.” Id. (quoting Baloco v. Drummond Co., 767 F.3d 1229,

1246 (11th Cir. 2014)).

Defendants have submitted copies of the Oasis Agreement that each Plaintiff

signed electronically. Dkt. 21-1 at 4–6. Arbitration agreements that are

electronically signed are valid and enforceable. See, e.g., Day v. Persels & Assocs.,

No. 10-cv-2463-T-33TGW, 2011 WL 1770300, at *3 (M.D. Fla. May 9, 2011);

Ross v. Vacation Rental Pros Prop. Mgmt., LLC, No. 17-cv-16-26JSS, 2017 WL

10276731, at *2 (M.D. Fla. Mar. 17, 2017) (finding that the same Oasis Agreement

presented here was valid and enforceable). Plaintiffs do not deny this general

principle. They contend, rather, that the Oasis Agreement is invalid because it

lacks consideration and Defendants have failed to prove that Plaintiffs’ electronic

signatures on the Agreements comply with applicable federal and state law.

Plaintiffs are wrong on both counts.

First, the Oasis Agreement was supported by two forms of consideration.

Plaintiffs’ continued employment depended on signing the Agreement. They could

not complete the onboarding process without signing the Agreement and would not

have received a paycheck if they failed to complete the onboarding process. See

Cintas Corp. No. 2 v. Schwalier, 901 So. 2d 307, 309 (Fla. 1st DCA 2005) (finding

continued employment was sufficient consideration to support an agreement to

arbitrate). The Agreement’s arbitration provision also charged Oasis with a mutual

obligation to arbitrate. Dkt. 21 at 9 n.10. See Bhim v. Rent-A-Ctr., Inc., 655 F.

Supp. 2d 1307, 1312 (S.D. Fla. 2009) (finding defendant’s mutual promise to

arbitrate was sufficient consideration to render arbitration agreement enforceable).

Either of these was sufficient consideration to support the Agreement.

To validate Plaintiffs’ e-signatures, Defendants provided the affidavit of

Luis Torres, an Oasis employee who maintains records for the electronic

onboarding system. Dkt. 34-1. Torres explained that new hires complete the

onboarding process through Oasis’s secure website. Id. at 2–3. The new employees

access the secure site using their social security numbers and Harmony’s unique

client identification number. Id. at 3. To complete the onboarding process, they

must review and sign an arbitration agreement. Id. The employees sign the

agreement by clicking a button marked “Sign and Continue.” Id. Clicking this

button generates an electronic signature and a date-stamp. Id. at 5. Once signed, the

forms are uploaded to the secure server and cannot be altered. Id. Torres confirmed

that Plaintiffs all completed onboarding and electronically signed the arbitration

agreements, which were then uploaded to Oasis’s electronic servers. Id.

Plaintiffs do not offer any actual evidence to refute the validity of their

signatures, despite having deposed both Torres and Harmony’s administrative

director. Dkt. 58, Ex. A & B. Nor do they explain how their electronic signatures

do not comply with the law. Rather, they have provided affidavits claiming they do

not recall reading or signing an arbitration agreement. Dkt. 27 at 21, 31, 42, 53.

But general denials based on a lack of memory will not rebut a signed written

agreement. See, e.g., Larsen v. Citibank FSB, 871 F.3d 1295, 1307 (11th Cir.

2017); Plazas Rocha v. Telemundo Network Grp. LLC, No. 20-cv-23020, 2020 WL

6679190, at *4 (S.D. Fla. Nov. 12, 2020). Based on the copies of the electronically

signed agreements Defendants have provided and the supporting affidavit, there is

no genuine dispute that Plaintiffs signed the Oasis Agreement and consented to the

arbitration provision.

B. The Oasis Agreement was not superseded by the Employment

Agreement.

Plaintiffs also argue that even if the Oasis Agreement is valid, it was

superseded by the Employment Agreement, as evidenced by the Employment

Agreement’s merger clause. As the merger clause states, the Employment

Agreement represented the “entire agreement of the parties and supersedes any

prior agreement, discussions, commitments, or understandings of any kind.”

Plaintiffs contend that this plain language provides that the Employment

Agreement superseded any prior agreement, including the Oasis Agreement.

Because the Employment Agreement negated the Oasis Agreement and does not

itself mention arbitration, Plaintiffs contend that there is no enforceable arbitration

agreement between the parties. See Dkt. 27 at 14. Plaintiffs’ argument fails,

however, because it fundamentally misunderstands the purpose and effect of a

merger clause in a contract.

A merger clause is “[a] contractual provision stating that the contract

represents the parties’ complete and final agreement and supersedes all informal

understandings and oral agreements relating to the subject matter of the contract.”

Jenkins v. Eckerd Corp., 913 So. 2d 43, 53 n.1 (Fla. 1st DCA 2005) (quoting

Black’s Law Dictionary, 813 (7th ed. 1999)). A final integrated agreement

discharges prior agreements that are within the scope of the final agreement’s

subject matter or are inconsistent with the final agreement’s terms. Restatement

(Second) of Contracts § 213 (1981). The primary purpose of a merger clause is

thus to prevent a party from introducing parol evidence—evidence of preliminary

negotiations or prior contemporaneous agreements between the parties—to vary or

contradict the written terms of the final agreement. Jenkins, 913 So. 2d at 53; see

also Sugar v. Estate of Stern, 201 So. 3d 103, 108 n.6 (Fla. 3d DCA 2015).

A merger clause, however, does not conclusively establish that the parties to

the final agreement intended to discharge a separate and distinct written contract.

Audiology Distrib., LLC v. Simmons, No. 12-cv-02427-JDW, 2014 WL 7672536,

at *14 (M.D. Fla. May 27, 2014) (collecting cases); see Multimedia Pat. Tr. v.

DirecTV, Inc., No. 09-cv-00278-H(CAB), 2011 WL 3610098, at *3 (S.D. Cal.

Aug. 16, 2011) (“A boilerplate merger clause does not evidence a clear expression

of intent to extinguish a separate and distinct written contract.”) (cleaned up).

Indeed, a merger clause in an integrated contract will not supersede a prior

agreement that embraces a subject matter different from that addressed in the

integrated contract. E.g., Yellowpages Photos, Inc. v. YP, LLC, 418 F. Supp. 3d

1030, 1043 (M.D. Fla. 2019); see also Franz Tractor Co. v. J.I. Case Co., 566 So.

2d 524, 525 (Fla. 2d DCA 1990).

So for the Oasis Agreement to be rendered unenforceable through the

operation of the Employment Agreement’s merger clause, Plaintiffs must show

that the Oasis Agreement merged into the Employment Agreement. In effect, they

must show that the Oasis Agreement was a prior understanding between the parties

and covered the same subject matter addressed in the Employment Agreement. See

Franz Tractor Co., 566 So. 2d at 525; Aly Handbags, Inc. v. Rosenfeld, 334 So. 2d

124, 126 (Fla. 3d DCA 1976). They cannot do this.

First, the Oasis Agreement was not a prior understanding or agreement

between the parties. Defendants were not a party to the agreement, but a third-party

beneficiary to it, and did not even know the Oasis Agreement existed until shortly

before moving to compel arbitration. Dkt. 21 at 4 n.4. And for their part, Plaintiffs

do not recall signing an arbitration agreement.

Second, the two agreements do not pertain to the same subject matter. The

Employment Agreement concerns, as its title would suggest, the terms and

conditions of Plaintiffs’ employment and represents the “entire agreement” on this

subject. It addresses Plaintiffs’ compensation and sets out Harmony’s policies that

the Plaintiffs agreed to abide by, including the noncompete and no-poach

provisions. The Agreement does provide that Harmony may seek any available

remedies for the breach of the noncompete and no-poach provisions, including

damages and injunctive relief. Dkt. 27 at 38–39. But the Employment Agreement

is otherwise silent as to remedies or forum for deciding any other potential dispute

between the parties. Moreover, it does not discuss arbitration or forbid it. The

Oasis Agreement, on the other hand, expressly states that it is not an employment

contract. See Dkt. 21-1 at 4; Dkt. 34-1 at 8. Its sole purpose, at least with respect to

Defendants, is to establish arbitration as the default mechanism for resolving legal

disputes arising from Plaintiffs’ employment. Id.

In short, the two agreements are independent and separate agreements that

can be compartmentalized. One addresses the substantive terms of the employment

relationship between Plaintiffs and Defendants. The other designates the default

forum for resolving the disputes arising from that employment relationship. The

two agreements do not overlap in any significant way. Plaintiffs validly entered

both agreements. The parties have an enforceable arbitration agreement.

This result aligns with holdings of other courts that have recognized “a

contractual clause selecting either a judicial or an arbitral forum for the resolution

of disputes establishes a legal right which is analytically distinct from the rights

being asserted in the dispute to which it is addressed.” Pelletier v. Yellow Transp.,

Inc., 549 F.3d 578, 581 (1st Cir. 2008); Ryan v. BuckleySandler, LLP, 69 F. Supp.

3d 140, 146 (D.D.C. 2014). Recognizing this distinction, courts have routinely

enforced pre-existing arbitration agreements when a later agreement did not

address arbitration. See, e.g., Ryan, 69 F. Supp. 3d at 146; Ramirez–Baker v.

Beazer Homes, Inc., 636 F. Supp. 2d 1008, 1016 (E.D. Cal. 2008); Youssefzadeh v.

Glob.-IP Cayman, No. 18-cv-02522, 2018 WL 6118436, at *4 (C.D. Cal. July 30,

2018) (holding that integrated employment agreement did not supersede prior

arbitration agreement because it was a separate agreement that established the

distinct legal right of the parties to arbitrate their disputes). Accordingly, Plaintiffs

must arbitrate their claims.4

C. Defendants did not waive the right to arbitrate.

Finally, as a fall back argument, Plaintiffs contend that Defendants waived

their right to arbitration by suing Plaintiff Garcia in state court to enforce the

noncompete provision of the Employment Agreement. Dkt. 27 at 16. But as

Defendants point out, this lawsuit is not relevant to the waiver analysis. “[O]nly

prior litigation of the same legal and factual issues as those the party now wants to

arbitrate results in waiver of the right to arbitrate.” Envision Ins. Co. v. Khan, No.

13-cv-114-EAK-EAJ, 2014 WL 12868890, at *2 (M.D. Fla. Feb. 25, 2014)

(quoting Doctor’s Assocs., Inc. v. Distajo, 107 F.3d 126, 133 (2d Cir. 1997)); see

also Subway Equip. Leasing Corp. v. Forte, 169 F.3d 324, 328 (5th Cir. 1999);

Gingiss Int’l, Inc. v. Bormet, 58 F.3d 328, 332 (7th Cir. 1995). The factual and

legal issues in the suit for Garcia’s alleged violation of the noncompete clause do

4 Plaintiffs cite Dasher v. RBC Bank (USA), 745 F.3d 1111 (11th Cir. 2014) and Trinchitella v.

D.R.F., Inc., 584 So. 2d 35 (Fla. 4th DCA 1991) as supporting their position. But both cases are

distinguishable because they involved what amounted to a novation—a mutual agreement to

substitute a new contract for an existing one. In both cases the parties entered a later agreement

that replaced an earlier version of the same agreement. There was contractual privity between the

parties for both agreements and a clear intent that the later agreement was to be the final version

of the agreement. See Dasher, 745 F.3d at 1117–18; Trinchitella, 584 So. 2d at 35–36.

Conversely, here, the Defendants were not a party to the earlier agreement, and the Employment

Agreement was not a later version of the Oasis Agreement. The two agreements were individual

and distinct.

not overlap with Plaintiffs’ present FLSA claims. As a result, Plaintiffs must

arbitrate their present claims.

IV. CONCLUSION

For the reasons discussed, Defendants’ Motion to Compel Arbitration (Dkt.

21) is granted. This action is stayed pending arbitration. See 9 U.S.C. § 3; Bender

v. A.G. Edwards & Sons, Inc., 971 F.2d 698, 699 (11th Cir. 1992). The parties are

directed to notify the Court upon resolution of the arbitration proceedings. The

Clerk is directed to administratively close the case.

DONE AND ORDERED at Tampa, Florida on April 26, 2021.

/s/ William F. Jung

WILLIAM F. JUNG

UNITED STATES DISTRICT JUDGE

COPIES FURNISHED TO:

Counsel of Record