672 F.Supp.3d 626
S.D. Ill.2023Background
- Plaintiff Kimberly Coons (Illinois resident) worked as a manager at a Taco Bell franchise in Caseyville, IL and from ~2014–2017 was required to clock in/out using fingerprint scans; she alleges she never received written notice or provided a written release as required by BIPA.
- Coons sued Yum! Brands, Taco Bell Franchisor, LLC (TBF), Yum Restaurant Services Group (YRSG), and Taco Bell Corp. (TBC) under the Illinois Biometric Information Privacy Act (BIPA), alleging a vertically integrated corporate/agency relationship and joint-employer/alter-ego theories tying the parent and affiliates to the franchise’s biometric practices.
- Coons previously signed a “Receipt of Dispute Resolution Program and Agreement to Abide by Dispute Resolution Program” with her employer (Bell American Group) in 2013; that DRP contains a broad arbitration clause, a class-action waiver, and an explicit delegation clause (arbitrator has exclusive authority on arbitrability).
- Defendants (non-signatories to the DRP) moved to compel arbitration and stay the litigation; they argue non-signatories may enforce the DRP under agency/alter-ego/estoppel theories because plaintiff’s complaint pleads control, access, and delegated franchise management.
- The district court found that the DRP contains a valid delegation clause (so arbitrability is for the arbitrator), that Coons’ pleading alleges agency/alter-ego sufficient to permit non-signatories to seek enforcement, and therefore granted the motion to compel arbitration and stayed the case pending arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence/scope of arbitration agreement covering BIPA claims | Coons: she didn’t agree to arbitrate with defendants; DRP was with Bell only | Defendants: Coons executed a DRP that broadly arbitrates all legal claims and incorporates AAA rules | Court: DRP is an enforceable arbitration agreement covering the dispute; delegation clause present |
| Non-signatory enforcement of the arbitration agreement | Coons: Non-signatories (Yum!, TBC, YRSG, TBF) cannot enforce an agreement they didn’t sign | Defendants: Complaint alleges agency/alter-ego/joint-employer relationships; traditional contract/principal–agent/estoppel doctrines permit enforcement by non-signatories | Court: Allegations of control/agency/alter-ego suffice to permit non-signatories to invoke the DRP; arbitrability issues deferred to arbitrator |
| Who decides arbitrability (court or arbitrator) | Coons: court should decide arbitrability issues including enforceability against non-signatories | Defendants: DRP contains an unmistakable delegation clause and incorporates AAA rules, so arbitrator decides arbitrability | Court: Delegation clause is valid; under Henry Schein the arbitrator, not the court, decides arbitrability |
| Relief/administrative effect (stay; motions pending) | Coons: opposed to arbitration enforcement | Defendants: Move to compel arbitration and stay proceedings | Court: Granted motion to compel arbitration; stayed the case and held pending motions in abeyance; parties to report arbitration status by specified date |
Key Cases Cited
- Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019) (courts must enforce clear delegation clauses; arbitrator decides arbitrability)
- GE Power Conversion France SAS v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637 (2020) (non‑signatories may enforce arbitration agreements under traditional contract principles)
- Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (strong federal policy favoring arbitration; doubts resolved in favor of arbitration)
- Scheurer v. Fromm Family Foods LLC, 863 F.3d 748 (7th Cir. 2017) (elements for compelling arbitration; scope interpreted in favor of arbitration)
- Sosa v. Onfido, Inc., 8 F.4th 631 (7th Cir. 2021) (state‑law doctrines govern a nonparty’s right to enforce arbitration agreements; traditional exceptions apply)
- In re Oil Spill by Amoco Cadiz Off Coast of France, 659 F.2d 759 (7th Cir. 1981) (allegations of agency allow a non‑signatory to invoke an arbitration clause)