Torgerson v. LCC Int'l

1

RICHARD TORGERSON, et al., Plaintiffs, v. LCC INTERNATIONAL, INC., et al., Defendants.

No. 16-2495-DDC-TJJ

United States District Court, D. Kansas

January 31, 2023

MEMORANDUM AND ORDER

Daniel D. Crabtree United States District Judge

More than six years ago, plaintiffs filed this Fair Labor Standards Act (“FLSA”) collective action on behalf of themselves and all others similarly situated against defendant LCC International, Inc. (“LCC”) and four individuals.^[1] The court compelled the parties to arbitrate the dispute, and the arbitrator since has issued three awards: (1) an Interim Award that (a) held defendant LCC improperly classified plaintiffs as exempt under the FLSA, (b) concluded that plaintiffs are entitled to actual and liquidated damages, and (c) ordered the parties to calculate the damages each plaintiff is entitled to recover (Doc. 136-1); (2) a Second Interim Award that awarded to each individual plaintiff a specific damage award for unpaid overtime compensation and liquated damages (Doc. 136-2); and (3) a Final Award that awarded plaintiffs $788,410 in attorneys' fees and $13,208.50 in expenses (Doc. 136-3).

Now, in our court, plaintiffs have filed an Application for Order Confirming Arbitration Award (Doc. 136). Defendant LCC opposes that motion (Doc. 146), and has filed a Cross Motion to Vacate Arbitration Award (Doc. 144). Both motions are fully briefed, and the court has considered the parties' arguments. For reasons explained, the court grants plaintiffs' Application for Order Confirming the Arbitration Award (Doc. 136) and denies defendant LCC's Cross-Motion to Vacate Arbitration Award (Doc. 144).

I. Factual Background

Plaintiffs Richard Torgerson, Robert Hall, Shelley Gordon, Bryon Hughes and Moses Boye-Doe worked for LCC as Migration Analysts. Doc 1 at 1-2 (Compl. ¶¶ 2-6). On February 3, 2016, plaintiffs filed this lawsuit, on behalf of themselves and others similarly situated, alleging that LCC had violated the FLSA by improperly classifying all LCC employees working in a Migration Analyst position as employees exempt from the FLSA's overtime requirements. See generally id. Plaintiffs' Complaint seeks to recover unpaid overtime compensation under the FLSA on behalf of themselves and other, similarly situated Migration Analysts. Id. at 1 (Compl. ¶ 1).

As a condition of their employment with LCC, each plaintiff signed an Employee Agreement (“Agreement”). See, e.g., Doc. 106-2. Among other things, the Agreement contains the following arbitration provision:

5.4 Arbitration: Any controversy or claim arising ou[t] of or relating to this Agreement, the breach or interpretation thereof or Employee's employment with LCC shall be settled by arbitration in Arlington, Virginia in accordance with the then prevailing rules of the American Arbitration Association, and judgment upon the award shall be final, conclusive and binding. All costs of arbitration shall be borne by the losing party, unless the arbitrators decide such costs should be allocated between the parties in particular proportions. Notwithstanding the foregoing, LCC shall be entitled to seek injunctive or other equitable relief pursuant to the provisions of Section 5.1 hereof in any federal or state court having jurisdiction.

Id. at 5.

Based on this Agreement, LCC filed a Motion to Dismiss or, in the Alternative, to Stay Proceedings and Compel Arbitration. Doc. 28. On August 10, 2016, the court granted in part and denied in part LCC's Motion to Dismiss or, in the Alternative, to Stay Proceedings and Compel Arbitration. Doc. 62. The court concluded that plaintiffs had signed an employment agreement requiring them to arbitrate their FLSA claims. Id. at 5. The court thus granted LCC's request to stay the case and compelled the parties to proceed to arbitration. Id. at 6. Also, the court denied the portion of LCC's motion asking the court to decide whether the Agreement permits collective arbitration because, the court ruled, the arbitrator must decide that issue. Id. at 8. And, for the same reasons, the court declined to decide plaintiffs' Motion for Conditional Certification of Class Claims Under § 216(b) of the FLSA without prejudice to their right to present this request to an arbitrator. Id.

On January 17, 2017, Mr. Torgerson submitted a Demand for Arbitration to the American Arbitration Association (“AAA”). Doc. 106-4 at 2. Mr. Torgerson's demand sought to assert a collective action on behalf of himself and others similarly situated against LCC. Id.

Twice during the arbitration proceedings, LCC came back to this court seeking relief from the arbitrator's decisions. First, in 2017, LCC filed a Petition to Vacate the Arbitrator's Final Clause Construction Award. Petition to Vacate, LCC Int'l, Inc. v. Richard Torgerson, No. 17-2508-DDC-TJJ (D. Kan. July 28, 2017), ECF 1.^[2] Specifically, LCC's Petition asked the court to vacate the arbitrator's Order denying LCC's Motion to Dismiss plaintiffs' collective action claims. Id. at 1. Also, it asked the court to order that plaintiff Richard Torgerson must pursue his FLSA claim in arbitration on an individual basis. Id.

On January 25, 2018, the court denied LCC's Petition to Vacate. LCC Int'l, Inc. v. Torgerson, No. 17-2508-DDC-TJJ, 2018 WL 558141 (D. Kan. Jan. 25, 2018), ECF No. 16. Among other things, the court held that the arbitrator had not exceeded his authority when he concluded that the parties' Agreement authorizes plaintiffs to assert FLSA claims on a collective basis. Id. at *10-11. The court thus denied LCC's Petition to Vacate. Id. at *11.

Second, in 2019, LCC filed in this court a Motion to Vacate the arbitrator's Order denying LCC's Motion to Decertify FLSA Collective Arbitration. Doc. 105. Again, LCC asked the court to vacate the arbitrator's decision allowing plaintiffs to proceed with their FLSA claims on a collective basis. Id. at 1. And, once again, LCC asked the court to issue an order requiring plaintiffs to arbitrate their FLSA claims individually. Id. Specifically, LCC argued that the Supreme Court's recent decision in Lamps Plus, Inc. v. Varela, 139 S.Ct. 1407 (2019), required the arbitrator to decertify the collective arbitration. Doc. 105 at 3-4. The court disagreed with LCC. On January 9, 2020, this court denied LCC's Motion to Vacate. Doc. 110. The court's Order held that Lamps Plus didn't require the court to vacate the arbitrator's decision. Id. at 11-15. Instead, the court held, LCC had failed to shoulder its “heavy burden” of establishing that the arbitrator exceeded his authority by ruling that the parties' Agreement authorizes plaintiffs to arbitrate their FLSA claims on a collective basis. Id. at 15. As a consequence, the court denied LCC's request for an order vacating the arbitrator's Order. Id.

LCC appealed the court's Order denying their Motion to Vacate. Doc. 112. But the Tenth Circuit dismissed LCC's appeal because it lacked a basis to exercise jurisdiction over that kind of interlocutory appeal. Doc. 117.

Finally, on June 22-24, 2021, the parties arbitrated their dispute at an arbitration hearing held in Kansas City, Kansas. Doc. 136-1 at 1. Afterwards, the arbitrator issued an Interim Award. See generally id. The Interim Award: (1) denied LCC's post-hearing motion to decertify the arbitration as a collective, opt-in arbitration, Id. at 7-9, (2) held that plaintiffs are not employees exempt from the FLSA overtime requirements, Id. at 9-12, (3) held that the FLSA's three-year statute of limitations applies to plaintiffs' claims because plaintiffs had shown that LCC's violations were willful, Id. at 12-13, (4) held that plaintiffs are entitled to liquated damages and post-judgment interest, Id. at 13-16, and (5) ordered the parties to calculate and submit to the arbitrator the damages that each individual plaintiff is entitled to recover, Id. at 17.

On March 7, 2022, the arbitrator issued a Second Interim Award that awarded damages to the individual plaintiffs in the following amounts:

Name

Damage Award

Abdulmohsin, Saif

Agee, Darrell

Al Badrawi, Mohammad

Baker, Scott

Boye-Doe, Moses

Collins, Terri

Gordon, Shelly

Hadeed, Saud

Hall, Robert

Hughes, Byron

Molt, Russ

Navejar, Mary

Oliphant, Mary

Oliver, Scott

Sang, Mark

Snow, Gordon

Doc. 136-2 at 2, 6.^[3]

And then, on July 18, 2022, the arbitrator issued a Final Award that awarded plaintiffs $788,410 in attorneys' fees and $13,208.50 in expenses. Doc. 136-3 at 3.

Plaintiffs now have applied to the court for an order confirming the arbitrator's Interim Award, Second Interim Award, and Final Award. Doc. 136. LCC opposes that motion (Doc. 145). And LCC has filed a Cross-Motion to Vacate Arbitration Award (Doc. 144). The court addresses those motions, below. But first, the court recites the legal standard governing motions to confirm and motions to vacate arbitration awards.

II. Legal Standard

Plaintiffs move to confirm the arbitration awards under Section 9 of the Federal Arbitration Act (FAA). Doc. 136 at 1 (citing 9 U.S.C. § 9). Section 9 of the FAA provides in pertinent part:

If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title.

9 U.S.C. § 9 (emphasis added).

The Tenth Circuit has instructed that “‘judicial review of an arbitration award is very narrowly limited.'” ARW Expl. Corp. v. Aguirre, 45 F.3d 1455, 1463 (10th Cir. 1995) (quoting Foster v Turley,...