IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

ADAM BERGER and MARK PA TRICK, 

Plaintiffs, 

v. 

DIRECTV, INC. and DIRECTV, LLC, 

Defendant. 

PAPAK, Magistrate Judge: 

3:14-CV-01661-PK 

FINDINGS AND 

RECOMMENDATION 

On October 10, 2014, Plaintiffs Adam Berger and Mark Patrick filed an action for damages 

against Defendant DIRECTV alleging that DIRECTV failed to pay Plaintiffs minimum and 

overtime wages, failed to properly calculate Plaintiffs' regular rate of pay, and issued deductions 

from Plaintiffs' pay in violation of the Fair Labor Standards Act ("FLSA"). This court has 

jurisdiction over this claim pursuant to 29 U.S.C. § 216(b) and 28 U.S.C. § 1331. 

Now before the court is DIRECTV's motion to stay proceedings and compel arbitration 

(#42) with respect to Plaintiff Patrick's claims, consistent with the arbitration agreement entered 

into by Patrick at the time of his employment with DIRECTV's predecessor, 180 Connect, Inc. 

(" 180 Connect"). For the reasons set f01ih below, DIRECTV's motion should be granted and 

these proceedings should be stayed pending arbitration. 

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PROCEDURAL BACKGROUND 

Plaintiffs filed thefr amended complaint (#4) on November 12, 2014, alleging violations of 

the FLSA and Oregon law. Specifically, Plaintiffs allege that DIRECTV's FLSA violations 

included: (1) "failing to pay all minimum wage and ove1time wages due to Plaintiffs"; (2) "failing 

to properly calculate Plaintiffs' regular rate of pay for determining the ove11ime premium owed"; 

and (3) improperly deducting money from Plaintiff's pay. Amended Complaint, #4, ii 75. 

Plaintiffs alleged that those failures violate ORS 652.010 and 652.261, and that DIRECTV's 

willful failure to pay Plaintiffs all sums due to them upon termination violates ORS 652.105. Id. at 

ii 81, 83. 

On February 5, 2015, the patties stipulated to stay proceedings pending a decision from the 

Judicial Panel on Multidistrict Litigation ("MDL Panel") based on Plaintiff's Motion for 

Consolidation and Transfer of Related Action. The MDL Panel issued an order (#30-1) on 

February 6, 2015, denying transfer of this action and this court lifted the stay on February 10, 2015 

(#28). 

On January 5, 2015, DIRECTV filed its motion to dismiss (#15). On February 12, 2015, 

Plaintiffs filed their response in opposition to DIRECTV's motion (#29). On February 26, 2015, 

DIRECTV filed a reply in support of its motion (#31). On April 16, 2015, Judge Hemandez 

issued an order (#35) adopting my Findings & Recommendations. The motion was denied in part 

as it applies to Plaintiffs' overtime and minimum wage claims and granted it in part as it applies to 

Plaintiffs' claim alleging violation of ORS 652.150, and the latter claims were dismissed from this 

action. 

On May 27, 2015, DIRECTV filed its motion to compel arbitration (#42) with respect to 

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Patrick's remaining claims. On June 19,2015, Patrick filed his response (#48) in opposition to 

DIRECTV's motion. On July 6, 2015, DIRECTV filed its reply (#49) in support of its motion to 

dismiss. 

FACTUAL BACKGROUND 

Patrick is a technician who fo1merly installed DIRECTV satellite television equipment in 

Oregon. Patrick worked for 180 Connect, a "subordinate entit[y] that [was] ultimately acquired 

by DIRECTV" and operated as an independent contractor for DIRECTV. Amended Complaint, 

#4, 'if 12. DIRECTV oversees and operates a "Provider Network" comprised ofinte1mediary 

entities known as "Home Service Providers" and secondary intermediaries called "Secondary 

Providers." Amended Complaint, #4, 'if 14. DIRECTV has merged with many of the Home 

Service Providers, including, as relevant here, 180 Connect. Amended Complaint, #4, 'if 16. As 

part of his employment with 180 Connect, Patrick signed an agreement to arbitrate disputes. The 

arbitration agreement provides as follows: 

1. This Arbitration Agreement ("Agreement") made this 29 day of 

October 2007, is between 180 Connect, Inc., including all of its affiliates 

(the term "affiliates" means companies controlling, controlled by, or 

under common control with 180 Connect, Inc. 180 Connect, Inc., and 

its affiliates are individually and collectively referred to herein as "180 

Connect") and Mark L. Patrick ("Employee"). In consideration of the 

Employee's employment with 180 Connect (and/or its affiliates) as good 

and valuable consideration, the receipt and sufficiency of which are hereby 

acknowledged, the Employee and 180 Connect agree that, except as 

otherwise provided in this Agreement, any claim, controversy and/or 

dispute between them, arising out of and/or in any way related to 

Employee's application for employment, employment, and/or 

termination of employment, whenever and wherever brought, shall be 

resolved by arbitration. 

Def. Ex. A., #43, 1 (emphasis added). Patrick filed his Complaint (#4) against DIRECTV 

following the acquisition of 180 Connect. After the claim survived DIRECTV's motion to 

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dismiss (#15), DIRECTV filed the instant motion to enforce the arbitration agreement Patrick 

signed with 180 Connect. 

LEGAL STANDARD 

Arbitration agreements are governed by the Federal Arbitration Act ("FAA"). As the 

Ninth Circuit explained in Johnson v. Grnma Corp., 614 F.3d 1062 (9th Cir. 2010): 

The FAA, while it does not itself create independent federal jui'isdiction, 

creates a body of federal substantive law establishing and regulating 

arbitration agreements that come within the F AA's purview. When an 

agreement falls within the purview of the FAA, there is a strong default 

presumption that the FAA, not state law, supplies the rules for arbitration. 

To overcome that presumption, parties to an arbitration agreement must 

evidence a "clear intent" to incorporate state law rules for arbitration. 

Johnson, 614 F.3d at 1066 (citations, internal quotation marks, and internal modifications 

omitted). 

The FAA generally governs arbitration provisions of employment contracts. Circuit City 

Stores, Inc. v. Adams, 532 U.S. 105, 114 (2001 ). Where the FAA governs, "state law may be 

applied ifthat law arose to govern issues concerning the validity, revocability, and enforceability 

of contracts generally," but courts cannot "invalidate arbitration agreements under state laws 

applicable only to arbitration provisions." Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 

686-87 (1996). 

ANALYSIS 

Patrick makes five arguments in opposition to DIRECTV's motion (#49): (1) DIRECTV 

lacks standing to enforce the arbitration agreement; (2) Patrick is not estopped from arguing that 

DIRECTV was never his joint employer; (3) the agreement is unconscionable; ( 4) DIRECTV has 

waived its right to arbitration; (5) if DIRECTV prevails on the motion, these proceedings should 

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be stayed pending arbitration and Patrick's claims should not be dismissed outright. I will address 

each of these arguments in turn. 

I. DIRECTV's Standing to Compel Arbitration 

Patrick argues that DIRECTV lacks standing to compel arbitration because it was not a 

party to the agreement at the time of its formation and the unlawful acts alleged against DIRECTV 

do not relate to its acts as an agent of 180 Connect. Under the FAA, arbitration contracts "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. This requires comis to apply substantive state contract 

law. Doctor's Associates, Inc, 517 U.S. at 681. Additionally, "questions of arbitrability must be 

addressed with a healthy regard for the federal policy favoring arbitration," and "any doubts 

concerning the scope of arbitrable issues should be resolved in favor of arbitration." 1\Ioses H 

Cone 1\Iem'l Hosp. v. 1\!fercwy Const. Corp., 460 U.S. 1, 24-25 (1983). Patrick cites Ninth 

Circuit authority to support his contention that only signatories and their agents can enforce 

arbitration agreements. Britton v. Co-Op Banking Group, 4 F.3d 742, 744 (9th Cir. 1993); Letizia 

v. Prudential Bache Secs., Inc., 802 F.2d 1185, 1186 (9th Cir. 1986); Amsil Holdings, Ltd. v. 

Clarium Capital 1\Igmt., LLC, 2006 WL 3949332, at 8* (N.D. Cal. Dec. 21, 2006). These cases 

originated from California and Arizona, however, and therefore do not address the Oregon 

contract law that is controlling in this case. See AT&T i\!fobility LLC v. Concepcion, 131 S. Ct. 

1740, 1748 (2011) (federal law preempts state contract law only insofar as it frustrates F AA's 

purpose); Peny v. Thomas, 482 U.S. 483, 492 n.9 (1987) ("state law, whether of legislative or 

judicial origin, is applicable if that law arose to govern issues concerning the validity, revocability, 

and enforceability of contracts generally") (emphasis in original). 

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Oregon law recognizes "a number of rationales for pe1mitting nonsignatory defendants to 

invoke arbitration clauses in claims against them by signatories to the contract." Livingston v. 

}vietro. Pediatrics, LLC, 234 Or. App. 137, 149-50 (2010). Rather than focusing on the identity 

of the patty seeking to enforce the agreement, Oregon comts place the language of the agreement 

at the "center of the inquiry" and resolve any ambiguities in line with the public policy in favor of 

arbitration. Id. at 149. Broad language in arbitration agreements evidences the patties' intent to 

allow nonsignatories to enforce its terms. See Livingston, 234 Or. App. at 150 (concluding 

arbitration agreement that applied to any dispute "arising out of or relating to" employment 

relationship was broad enough to permit enforcement by nonsignatories). 

Here, the applicable arbitration agreement is even broader than the agreement in Livingston 

and covers "any claim, controversy and/or dispute between [the patties], arising out of and/or in 

any way related to Employee's application for employment, employment, and/or termination of 

employment, whenever and wherever brought." Def. Ex. A., #43, 1. Additionally, the 

agreement expressly defines the employer as not only 180 Coilllect itself, but also "all ... 

companies controlling, controlled by, or under common control with 180 Coilllect, Inc." Id. 

These expansive terms do not rely on a theory of agency and plainly include DIRECTV, which 

assumed all of 180 Coilllect's "assets, debts, rights, responsibilities, liabilities and. obligations," 

including "all the rights and obligations arising from 180 Coilllect's employee relationships."' 

Def. Ex. A., #49, 2. Accordingly, DIRECTV has standing to compel arbitration because the 

te1ms of the agreement are broad enough to permit enforcement by nonsignatories and DIRECTV 

is a "controlling patty" as defined in the agreement. 

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II. Judicial Estoppel 

Patrick relies in part on DIRECTV's claim in its motion to dismiss (#15) that it "was not the 

joint employer of Plaintiff Patrick at any time" to now prove DIRECTV lacks standing. Pl. 's Opp. 

to Mot. to Compel Arb., #48, 6. DIRECTV argues Plaintiffs are estopped from making this 

argument because they earlier asserted that: (I) DIRECTV controlled "the essential tenns of 

Plaintiffs' employment"; (2) "[a]lthough hiring is generally done at the Providers' level, 

DIRECTV controls the details of Plaintiffs' day-to-day work"; (3) "[t]hrough the Providers, 

DIRECTV exercises significant control over ... what work Plaintiffs performed, where that work 

was perfo1med, when that work was performed, and how that work was perfonned." See 

Complaint ifif 11-26, 31. Plaintiffs also successfully defeated DIRECTV's motion to dismiss 

( # 15) in part by alleging sufficient facts to support the existence of an employee-employer 

relationship with DIRECTV. Pl.'s Resp. in Opp. to Def. Mot. to Dismiss, #29, 8-14. 

The doctrine of judicial estoppel prevents a pmiy who has successfully asse1ied a position 

in one action from changing that position in an attempt to prevail in a second action. Day v. 

Advanced lvl & D Sales, Inc., 336 Or. 511, 524 (2004). Under Oregon law, application of judicial 

estoppel depends on the existence of three predicates: (1) a benefit; (2) obtained in a different 

judicial proceeding; (3) by means of asserting a position inconsistent with a position asserted in a 

later judicial proceeding. Sugar and Sugar, 212 Or. App. 465, 470 (2007). "Because judicial 

estoppel is primarily concerned with the integrity of the judicial process ... it does not depend for 

its application on a showing that the party ... detrimentally relied on the other party's prior 

inconsistent position." Hampton Tree Farms, Inc. v. Jewett, 320 Or. 599, 612 (1995) (emphasis 

in original)~ 

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Here, I find that Plaintiffs are estopped from adopting DIRECTV's earlier position that it 

was not at any time their joint employer. As DIRECTV rightly points out, Plaintiffs must prove 

that DIRECTV was their joint employer to prevail on their Complaint, meaning that-if Plaintiffs 

are successful at trial-DIRECTV will have been wrongly denied its right to arbitration. Def.'s 

Reply in Supp. of Mot. to Compel Arb., #49, 10. This is precisely the kind of manipulation of the 

judicial system that Oregon courts have recognized as triggering judicial estoppel. See Hallberg 

v. City of Portland, 230 Or. App. 355, 359, 215 P.3d 866, 868 (2009) (party was estopped from 

claiming indemnity against his employer for prior proceeding where he successfully argued the 

claims did not arise in the course of performing his employment). Consequently, I find that 

Plaintiffs are estopped from now adopting DIRECTV's earlier position as their own. 

III. Unconscionability 

Patrick argues that his arbitration agreement with DIRECTV is unconscionable and 

therefore unenforceable. Under Oregon law, unconscionability may be procedural or substantive. 

Bagley v. i'vlt. Bachelor, Inc., 356 Or. 543, 555 (2014). Substantive unconscionability focuses on 

whether the terms of the contract conflict with public policy. Id. at 556. Procedural 

unconscionability determines whether the circumstances of the contract's foimation evidence 

oppression or surprise. Id. at 555. "Unconscionability is assessed as of the time of contract 

fmmation, and the doctrine applies to contract terms rather than to contract performance." Id. at 

543, citing Bestv. US. National Bank, 303 Or. 557, 560 (1987) and Tolbert v. First National Bank, 

312 Or. 485, 492 n.4 (1991 ). Bad faith on the part of one of the parties does not automatically or 

necessarily render an agreement unconscionable. See Best, 303 Or. at 557 (distinguishing 

doctrines of bad faith and unconscionability). Oregon courts are also very reluctant to disturb 

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arbitration agreements "unless it may be said with positive assurance that the arbitration clause is 

not susceptible of an interpretation that covers the asserted dispute." Livingston v. 1\!fetropolitan 

Pediatrics, LLC, 234 Or. App. 137, 152 (2010) (internal quotation marks omitted). 

Here, Patrick merely asse1is that DIRECTV's "demonstrated abuse of the arbitral process" 

in umelated cases proves that this arbitration agreement is unconscionable. Patrick's novel theory 

ofunconscionability is wholly unfounded in Oregon law. Beyond that, he cites no persuasive 

precedent from other jurisdictions to bolster his position. Patrick does not articulate any 

substantive issues with the terms of the contract, nor does he discuss any procedural aspects of the 

contract's formation that indicate oppression or surprise. Therefore, I reject Patrick's 

unconscionability argument. 

IV. DIRECTV's Waiver of Arbitration 

Next, Patrick contends that DIRECTV waived its right to arbitration. Under Oregon and 

federal law, however, this is a procedural matter for the arbitrator-not the court-to decide. See, 

e.g., Livingston v. Metro. Pediatrics, LLC, 234 Or. App. 127, 145 ("waiver ... is a procedural 

rather than substantive defense to arbitrability ... we conclude for that reason that ... waiver of 

arbitrability involves a condition precedent to be decided by the arbitrator, rather than the court"); 

Industra/1\!fatrix Joint Venture v. Pope & Talbot, 200 Or. App. 248, 260-61, 113 P.3d 961 (2005), 

afj'd, 341 Or. 321, 142 P.3d 1044 (2006); BG Grp., PLC v. Republic of Argentina, 134 S. Ct. 1198, 

1207 (2014) ("courts presume that the pmiies intend arbitrators, not comis, to decide disputes 

about the meaning and application of pmiicular procedural preconditions for the use of arbitration 

... These procedural matters include claims of waiver."); Howsam v. Dean Witter Reynolds, Inc., 

537 U.S. 79, 83-85 (2002). Federal policy also favors submitting the issue of waiver to 

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arbitration. See 1Vfoses H Cone, 460 U.S. at 24-25 ("as matter of federal law, any doubts 

concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the 

problem at hand is ... the contract language itself or an allegation of waiver, delay, or a like 

defense to arbitrability."). Accordingly, I do not reach this issue. 

V. Proceedings with Respect to Patrick's Claims Should Be Stayed Pending Arbitration 

Under the FAA, "a district court may either stay the action or dismiss it outright when ... 

the court determines that all of the claims raised in the action are subject to arbitration." 

Johnmohammadi v. Bloombingdale's, Inc., 755 F.3d 1072, 1074 (9th Cir. 2014). "In some cases . 

. . it may be advisable to stay litigation among the non-arbitrating paiiies pending the outcome of 

the arbitration. That decision is one left to the district court ... as a matter of its discretion to 

control its docket." }.!foses H Cone 1\!fem'l Hosp., 460 U.S. at 21, n.24. Here, DIRECTV argues 

that outright dismissal of Patrick's claims is the most appropriate and efficient course because all 

of his claims are within the scope of the arbitration agreement. Def.'s Mot. to Compel Arb., #47, 

8. Patrick argues for a stay of proceedings because of DIRECTV's alleged failure to arbitrate in 

good faith. Pl.'s Opp. to Def.'s Mot. to Compel Arb., #48, 8. As explained above, I find Patrick's 

position to be without legal foundation. Nonetheless, I conclude that Patrick's claims should not 

be dismissed at this juncture because-while I do not reach the merits of the waiver issue 

here-there appears to be a material dispute as to whether DIRECTV has waived its right to 

arbitration. Should Patrick prevail on that issue in arbitration, his joint claim with Berger can 

proceed in this court. Consequently, at this early stage, I find that the cou11 should stay 

proceedings with respect to both Patrick and Berger pending resolution of this question in 

arbitration. The stay should be lifted with respect to Berger's claims should the arbitrator 

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conclude that DIRECTV has not waived its right to arbitrate Patrick's claims. 

CONCLUSION 

For the reasons set fo1th above, DIRECTV's Motion to Compel Arbitration (#42) should be 

granted and further court proceedings should be stayed pending resolution of that arbitration. 

SCHEDULING ORDER 

The Findings and Recommendation will be referred to a district judge. Objections, if any, 

are due fomteen (14) days from service of the Findings and Recommendation. Ifno objections 

are filed, then the Findings and Recommendation will go under advisement on that date. 

If objections are filed, then a response is due fourteen (14) days after being served with a 

copy of the objections. When the response is due or filed, whichever date is earlier, the Findings 

and Recommendation will go under advisement. 

Dated this 21st day of August, 2015. 

Honorable Paul Papak 

United States Magistrate Judge 

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