Pyle v. Vxi Global Solutions, Inc.

JARROD PYLE,on behalf of himself and all others similarly situated, PLAINTIFF, v. VXI GLOBAL SOLUTIONS, INC., et al., DEFENDANTS.

CASE NO. 5:17-cv-220

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

November 6, 2017

JUDGE SARA LIOI

MEMORANDUM OPINION AND ORDER

Before the Court is the motion of defendants, VXI Global Solutions, Inc. and VXI Global Solutions, LLC, to compel arbitration and dismiss the complaint. (Doc. No. 16 ["Mot."].) Defendants argue that, in the course of his employment, plaintiff, Jarrod Pyle, signed an arbitration agreement, in which he agreed to submit any employment-related claim he might have against defendants to arbitration, and he is, therefore, precluded from bringing this collective action. Plaintiff opposes the motion, arguing that the Sixth Circuit's recent decision in N.L.R.B. v. Alt. Entm't, Inc., 858 F.3d 393 (6th Cir. 2017) renders the parties' arbitration agreement unenforceable. (Doc. No. 18 ["Opp'n"].) Defendant has filed a reply (Doc. No. 20 ["Reply"]), and the Court permitted the parties to file supplemental briefs specifically addressing the applicability of the decision in Alternative Entertainment. (Doc. No. 26 (Plaintiff's Surreply); Doc. No. 28 (Defendants' Response to Plaintiff's Surreply).) For the reasons set forth below, defendants' motion to compel arbitration is granted.

I. BACKGROUND

On February 2, 2017, plaintiff filed this collective action for relief under the Fair Labor Standards Act ("the FLSA"), 29 U.S.C. §§ 201 et seq. (Doc. No. 1 (Complaint ["Compl."]).) In his complaint, plaintiff avers that between September 2013 and approximately October 2014 he was employed by defendants at a call center located in Canton, Ohio. (Id. ¶ 18.) During this time, and before he was eventually promoted to a salaried position, he held the position of Phone Operator. (Id. ¶ 18.) He maintains that he and other Phone Operators were required to work more than forty (40) hours in any given week without receiving overtime compensation as required by federal law. (Id. ¶¶ 23-24.) By this action, plaintiff seeks to recover unpaid overtime allegedly owed to him, and he also seeks to represent a collective of all Phone Operators employed by defendants during any week within three years of the filing of the complaint. (Id. ¶ 25, Prayer for Relief.) To date, approximately 23 plaintiffs have filed opt-in forms giving their consent to join in the collective action.

In their motion to compel, defendants argue that the Court should enforce an arbitration agreement signed by plaintiff. According to defendants, plaintiff and defendants mutually agreed to submit any claim related to plaintiff's employment with defendants to binding arbitration. Specifically, the agreement, which is appended to the complaint, requires arbitration of all disputes, including any "claims for wages, bonuses, commissions or any other form of compensation[.]" (Compl., Ex. A (Arbitration Agreement ["Arb. Agr."]), § 1.) It also mandates binding arbitration for "all claims for violation of any federal, state or other governmental law, statute, [or] ordinance." (Id.) It is defendants' position that, given this broad contractuallanguage, plaintiff's single FLSA cause of action clearly falls within the purview of the arbitration agreement. Defendants further stress that this controlling arbitration agreement is silent as to the availability of collective arbitration, so this Court cannot find that the parties' agreed to classwide arbitration. (Mot. at 67.) Accordingly, defendants insist that plaintiff is required to submit his claim to arbitration and resolve it on an individual basis.

Plaintiff does not dispute that his FLSA claim is covered by the arbitration agreement, nor does he disagree that the arbitration agreement is silent as to class-wide arbitration. In fact, he admits both facts in his complaint. (Compl. ¶ 9.) Noting that Sixth Circuit law now provides that collective/class waivers in employment arbitration agreements violate the National Labor Relations Act ("NLRA"), he maintains that requiring him to proceed to arbitration on an individual basis would be illegal. (Opp'n at 100¹.) While he opposes defendants' motion to compel, he indicates that he would be willing to participate in collective arbitration proceedings, if defendants are amenable. (Id. at 101.) Defendants decline plaintiff's offer and maintain that classwide arbitration is not provided for in the agreement.

II. LAW AND ANALYSIS

A. Federal Law Favors Arbitration

The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq., manifests "a liberal federal policy favoring arbitration agreements[.]" Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983); see Seawright v. Am. Gen. Fin. Servs., Inc., 507 F.3d 967, 972 (6th Cir. 2007) (Section 2 of the FAA "'embodies the nationalpolicy favoring arbitration and places arbitration agreements on equal footing with all other contracts.'") (quoting Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443, 126 S. Ct. 1204, 163 L. Ed. 2d 1038 (2006)). "To enforce this dictate, [the FAA] provides for a stay of proceedings when an issue is referable to arbitration and for orders compelling arbitration when one party has failed or refused to comply with an arbitration agreement." Javitch v. First Union Sec., Inc., 315 F.3d 619, 624 (6th Cir. 2003). All "doubts regarding arbitrability should be resolved in favor of arbitration." Fazio v. Lehman Bros., Inc., 340 F.3d 386, 392 (citing Moses H. Cone Mem'l Hosp., 460 U.S. at 24-25.) Further, "the FAA preempts state laws and policies regarding arbitration." Id. at 393 (citing Southland Corp. v. Keating, 465 U.S. 1, 10-11, 104 S. Ct. 852, 79 L. Ed. 2d 1 (1984)); see also Great Earth Cos., Inc. v. Simons, 288 F.3d 878, 889 (6th Cir. 2002) ("the FAA preempts state laws applicable only to arbitration provisions") (quotation marks and citation omitted) (emphasis in original). Balanced against the clear policy favoring arbitration is the well settled principle that "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." A T & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648, 106 S. Ct. 1415, 89 L. Ed. 2d 648 (1986) (quotation marks and citations omitted).

The Sixth Circuit applies a four-pronged test to determine whether an unwilling party can be compelled to arbitrate: (1) the Court must determine whether the parties agreed to arbitrate; (2) the Court must determine the scope of that agreement; (3) if federal statutory claims are asserted, the Court must consider whether Congress intended those claims to be non-arbitrable; and (4) if the Court concludes that some, but not all, of the claims in the action are subject to arbitration, it must determine whether to stay the remainder of the proceedings pendingarbitration. Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000) (citation omitted); see Javitch, 315 F.3d at 624 (court must engage in a "limited review" to determine whether the dispute is arbitrable) (citation omitted).

B. The Sixth Circuit's Test for Compelling Arbitration is Satisfied

There is no question that the record facts satisfy the four-prong test. First, as set forth above, it is undisputed that the parties entered into an agreement to bring all employment-related claims, including all wage and hour claims and claims to enforce federal laws, to binding arbitration. Second, plaintiff concedes that his claim, which seeks to recover additional compensation for allegedly unpaid wages, falls within the scope of the arbitration agreement, which provides for arbitration of all claims involving "wages, bonuses, commissions or any other form of compensation." See Rupert v. Macy's, Inc., No. 1:09CV2763, 2010 WL 2232305, at *5 (N.D. Ohio June 2, 2010) ("Given this clear language, there can be no doubt that all of Plaintiff's federal and state law 'employment-related claims' are covered by the arbitration agreement.") Third, it is well settled that FLSA claims, such as the one presented in plaintiff's complaint, may be subject to arbitration. Floss v. Ryan's Family Steak Houses, Inc., 211 F.3d 306, 313 (6th Cir. 2000); Smith v. BT Conferencing, Inc., No. 3:13-cv-160, 2013 WL 5937313, at *9 (S.D. Ohio Nov. 5, 2013) ("many courts have found that FLSA rights may be effectively vindicated in an arbitral, rather than legal, setting"); Aracri v. Dilliard's Inc., No. 1:10CV253, 2011 WL 1388613, at *4 (S.D. Ohio Mar. 29, 2011) ("statutory claims may be the subject of an arbitration agreement, including claims under the FLSA") (collecting cases). As to the fourth prong, "[i]n cases where all claims are referred to arbitration . . . the litigation may be dismissed rather than merely stayed." Rupert, 2010 WL 2232305, at *4 (citations omitted). Here, the one and onlyclaim in plaintiff's complaint is undeniably subject to arbitration, making dismissal the appropriate disposition of the present litigation. See, e.g., Wallace v. Red Bull Distrib. Co., 958 F. Supp. 2d 811, 827 (N.D. Ohio 2013) (dismissing federal litigation where all claims were subject to arbitration). All four prongs, therefore, are met, and plaintiff offers no argument to the contrary.

Relying exclusively on the recent decision in Alternative Entertainment, plaintiff argues that the ruling "brings an end to Defendants' request that the Court order Mr. Pyle to proceed to individual—rather than collective—arbitration. Such an order would be illegal." (Opp'n at 100.) But plaintiff fails to recognize an important distinction between the facts surrounding that decision and the manner in which plaintiff's FLSA claim has presented itself.

C. The Sixth Circuit's Decision in Alternative Entertainment

In Alternative Entertainment, the National Labor Relations Board ("NLRB") sought enforcement of its administrative decision that Alternative...