Alissa Moon v. Breathless Inc
868 F.3d 209
| 3rd Cir. | 2017Background
- Alissa Moon performed at Breathless Men’s Club and signed an Independent Dancer Rental Agreement containing an employment-status clause (labels dancer an independent contractor) and an arbitration clause limited to “a dispute between Dancer and Club under this Agreement.”
- Moon sued the Club in federal court under the FLSA and New Jersey wage statutes asserting wage-and-hour claims (August 2015).
- The Club moved to compel arbitration; the District Court granted summary judgment in favor of arbitration, concluding Moon’s claims fell within the arbitration clause, and Moon appealed.
- The Third Circuit reviewed de novo whether the arbitration clause (under New Jersey law) delegates arbitrability to an arbitrator and whether it covers Moon’s statutory claims.
- The panel held (1) the clause does not clearly and unmistakably delegate arbitrability to an arbitrator, so the court decides arbitrability; and (2) the clause does not clearly waive Moon’s statutory wage-and-hour rights and thus does not cover her FLSA and New Jersey claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who decides arbitrability? | Court should decide; clause doesn’t clearly delegate arbitrability. | Arbitrator should decide; clause permits arbitration of disputes. | Court decides; clause lacks clear-and-unmistakable delegation. |
| Does the arbitration clause cover statutory wage-and-hour claims (FLSA/NJ law)? | Clause is limited to disputes “under this Agreement,” so it does not waive statutory rights. | Clause covers disputes arising from dancer–club relationship, so statutory claims fall within it; court mustn’t decide merits. | Clause does not cover statutory wage claims; Moon may litigate them in court. |
| Is the clause sufficiently broad/clear to waive judicial forum and jury trial for statutory claims? | No; under NJ precedent waiver must identify substantive area, types of claims, and contrast arbitration vs litigation. | Yes; the clause references binding arbitration and limits on discovery/jury, so it’s adequate. | No; clause fails to meet NJ specificity requirements (resembles Garfinkel/Atalese). |
| Does labeling Moon an independent contractor make her statutory claims arise under the Agreement? | Moon’s claims arise under statutes regardless of contract label and can be litigated. | The employment/status provision ties the issue to the Agreement, so arbitration applies. | Labeling in the Agreement doesn’t convert statutory claims into contractual ones; statutory claims remain outside clause. |
Key Cases Cited
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (state contract law governs whether parties agreed to arbitrate arbitrability)
- Morgan v. Sanford Brown Inst., 137 A.3d 1168 (N.J. 2016) (presumes courts decide arbitrability absent clear-and-unmistakable evidence delegating it)
- Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 773 A.2d 665 (N.J. 2001) (arbitration clause limited to agreement disputes does not waive statutory rights)
- Atalese v. U.S. Legal Servs. Grp., 99 A.3d 306 (N.J. 2014) (consumer arbitration clause must clearly and unambiguously signal waiver of statutory rights)
- Martindale v. Sandvik, Inc., 800 A.2d 872 (N.J. 2002) (broad, unqualified arbitration waiver can encompass statutory employment claims)
- AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643 (1986) (courts determine arbitrability threshold; courts should not decide merits of underlying claims)
- Rutherford Food Corp. v. McComb, 331 U.S. 722 (1947) (substance of work controls FLSA coverage despite contractual label)
- Bell v. Southeastern Pa. Transp. Auth., 733 F.3d 490 (3d Cir. 2013) (FLSA claims based on statutory rights, not a CBA, need not be arbitrated)