Samuel Muriithi v. Shuttle Express, Inc.
712 F.3d 173
| 4th Cir. | 2013Background
- Muriithi, a Shuttle Express driver, signed a 2007 Unit Franchise Agreement with Shuttle Express.
- Muriithi alleges misclassification as an independent contractor/franchisee, seeking FLSA overtime and minimum wage remedies.
- Muriithi also asserts Maryland wage-hour and licensing claims arising from the franchise relationship.
- The district court refused to compel arbitration, finding three provisions unconscionable: class-action waiver, fee-splitting, and a one-year statute of limitations.
- The court concluded the arbitration clause was unenforceable and denied enforcement; the Fourth Circuit vacated and remanded for arbitration, after considering Concepcion.
- Shuttle Express later agreed to pay all arbitration costs if referred to arbitration; the case still requires a ruling on arbitration unless remanded otherwise.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the class-action waiver is unconscionable post-Concepcion | Muriithi argues Concepcion renders Discover Bank-like waivers unenforceable. | Shuttle Express contends Concepcion permits class waivers, so they are enforceable. | Not unconscionable; Concepcion controls, class waiver enforceable. |
| Whether the fee-splitting provision renders arbitration costs prohibitive | Muriithi argues costs would deter arbitrations, making arbitration inaccessible. | Shuttle Express argues fees are not shown as prohibitive and costs can be borne by both sides. | Not shown to be prohibitive; Green Tree standards applied, no firm proof of prohibitive costs. |
| Whether the one-year limitation provision is unconscionable or should be decided by arbitrator | Muriithi challenges broad one-year limit as restricting statutory claims. | Limitations issue is a general contract defense, not within the arbitration clause scope. | Limitations issue reserved for arbitrator; not an arbitration-clause defect. |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (class-action waiver not unconscionable under FAA preemption of state rules)
- Green Tree Financial Corp.–Ala. v. Randolph, 531 U.S. 79 (2000) (prohibitive arbitration costs must be shown with firm evidence, not mere possibility)
- Adkins v. Labor Ready, Inc., 303 F.3d 496 (4th Cir. 2002) (FLSA rights may be arbitral; class-waiver analysis governed by FAA principles)
- Bradford v. Rockwell Semiconductor Sys., Inc., 238 F.3d 549 (4th Cir. 2001) (prohibitive costs analysis requires substantial burden of proof)
- In re Cotton Yarn Antitrust Litig., 505 F.3d 274 (4th Cir. 2007) (substantial-burden standard for prohibitive arbitration costs)