WILLIAM H. STEELE, Chief District Judge.
This matter comes before the Court on defendants' filing styled "Motion to Dismiss as to Frangelica Turner and Motion to Compel Arbitration" (doc 29). The Motion has been briefed and is now ripe for disposition.
This case is an opt-in collective action brought pursuant to the Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq. ("FLSA"). In the Complaint (doc. 1), named plaintiff, Andrea Thomas, alleges that Mikee's Seafood (a restaurant alleged to be owned and/or operated by defendants, Port II Seafood & Oyster Bar, Inc., and Edwin Spence, Jr.) in Baldwin County, Alabama requires its servers to participate in an invalid tip pool, to perform uncompensated pre-shift work, to wait without compensation during their scheduled shifts until they have customers to serve, to perform uncompensated post-shift work, and to spend in excess of 20% of their working time performing non-tip producing activities. The Complaint further alleges that defendants altered servers' time records to avoid having to pay minimum wage and overtime, that they instructed on-duty servers to clock out during slow times and wait until customers arrived before clocking in again, and that they "rolled back" employees' recorded hours worked to avoid exposure to overtime. Based on these and other allegations, Thomas brings FLSA claims for herself, as well as on behalf of other similarly situated servers who elect to opt in, to recover misappropriated tip moneys, unpaid wages and overtime compensation.
Just two days after the Complaint was filed, Thomas submitted her First Notice of Filing Consents by Opt-In Plaintiffs (doc. 4). One putative opt-in plaintiff identified in that Notice was Frangelica Turner, who executed a form reflecting her consent to become a party plaintiff in this action. It appears undisputed, however, that Turner had previously affixed her electronic signature to an arbitration agreement (the "Agreement") on April 25, 2015, when she started working at Mikee's Seafood. (Brier Aff. (doc. 30, Exh. A), ¶ 3.) In relevant part, that Agreement provides that "Company and Individual agree to resolve any and all disputes or claims each may have against the other which relate in any manner whatsoever as to Individual's employment ... by binding arbitration pursuant to the Employment Rules and Procedures of National Arbitration and Mediation (`NAM')." (Brier Aff., Binding Arbitration Agreement, at 1.) The Agreement elaborates that "[d]isputes related to employment include, but are not limited to, claims or charges based upon federal or state statutes, including, but not limited to, ... the Fair Labor Standards Act or other wage statutes." (Id.) By its terms, the Agreement "mutually binds Individual and Company to arbitrate any and all disputes between them," including "any related claims he/she individually may have arising out of or in the context of his/her employment relationship against any manager or owner of the Company." (Id.)
The gravamen of defendants' Motion to Dismiss and to Compel Arbitration is that opt-in plaintiff Frangelica Turner is obligated by the Agreement to resolve her FLSA dispute with defendants via the arbitration mechanism, rather than through these court proceedings. Defendants now seek to enforce the plain terms of that Agreement to stymie Turner's efforts to join this lawsuit as an opt-in plaintiff. On that basis, Port II Seafood and Spence move the Court to dismiss Turner's claims and to compel arbitration of same. Plaintiff opposes the Motion.
The Federal Arbitration Act ("FAA") provides that written agreements to arbitrate, such as that signed by Turner, "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. In conformity with the FAA, "courts must place arbitration agreements on an equal footing with other contracts, and enforce them according to their terms." Inetianbor v. CashCall, Inc., 768 F.3d 1346, 1349 (11
Significantly, the FAA creates a strong federal policy favoring enforcement of arbitration agreements. Indeed, "federal courts interpret arbitration clauses broadly where possible," such that "any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration." Solymar Investments, Ltd. v. Banco Santander S.A., 672 F.3d 981, 988 (11
In support of their Motion to Dismiss, defendants identify specific language in the Agreement wherein Turner agreed to resolve any employment-related disputes with Port II or its managers or owners via binding arbitration. Defendants also cite the above-cited strands of authority emphasizing the broad judicial construction and rigorous enforcement of agreements to arbitrate pursuant to the FAA, as well as the national policy in favor of arbitration. Turner's claims against Port II and Spence appear to lie firmly within the ambit of the arbitration agreement she executed at the outset of her employment at Mikee's Seafood.
Nonetheless, plaintiff opposes defendants' request to dismiss or to compel arbitration of Turner's claims. Plaintiff's sole argument in opposition to the Motion is that a particular term of the Agreement "violates the National Labor Relations Act." (Doc. 33, at 2.) In support of her position, plaintiff seizes on language in the Agreement specifying that Turner waived her "right to commence, be a party to, or act as a class member in, any class or collective action in any court action against the other party relating to employment issues," and that Turner further waived her "right to commence or be a party to any group, class or collective action claim in arbitration or any other forum." (Brier Aff., Binding Arbitration Agreement, at 2.) Citing Seventh Circuit authority of very recent vintage, plaintiff maintains that participation in collective or class legal proceedings constitutes "concerted activity" under Section 7 of the National Labor Relations Act ("NLRA"), and that the Agreement's restrictions on Turner's ability to engage in such Section 7 concerted activities are unenforceable as a matter of law.
As defendants point out, the Seventh Circuit's treatment of this issue appears to be anomalous, or at least firmly in the minority, among appellate courts that have considered it. See, e.g., D.R. Horton, Inc. v. N.L.R.B., 737 F.3d 344, 362 (5
But plaintiff's broadside attack on the collective action waiver in the Agreement would falter even if the Seventh Circuit's position were adopted here. Ultimately, the collective action waiver is superfluous to the defendants' Motion to Dismiss, which is animated by the Agreement's terms providing that all disputes between Turner and defendants relating to her employment (including specifically her individual FLSA claims) will be resolved by binding arbitration. Even if the collective action waiver were struck down for violating the NLRA, as plaintiff advocates, Turner's claims would remain subject to arbitration because the clear terms of the Agreement oblige her to submit all employment-related disputes with Port II and Spence to arbitration.
Stated differently, suppose plaintiff were correct that the collective action waiver in the Agreement is illegal and unenforceable. The offending clause would then be severable under the terms of the Agreement. It is well settled that if portions of an arbitration agreement "are not enforceable, then the court must determine whether the unenforceable provisions are severable. Severability is decided as a matter of state law." Terminix Int'l Co., LP v. Palmer Ranch Ltd. Partnership, 432 F.3d 1327, 1331 (11
The point is straightforward: Even if plaintiff were correct (which is far from clear and, indeed, appears unlikely) that the collective action waiver in the arbitration agreement signed by Turner is unenforceable as violative of the NLRA, the severability clause in that agreement would be applied to excise that waiver, leaving the remainder of the agreement intact. See Anders, 346 F.3d at 1032 ("In view of the clear and settled Alabama law favoring severability, as well as the FAA's requirement that arbitration agreements be treated no less favorably than other contracts under state law, the severability clause in this case should be applied to prevent any invalid provisions from destroying the entire agreement to arbitrate."). After severing the collective action waiver, Turner's Agreement would still retain her assent to submit her employment-related claims under the FLSA to binding arbitration. Plaintiff comes forward with neither argument nor authority under which an employee's agreement to submit her individual FLSA claims to arbitration would violate the NLRA's protections for concerted activities. Accordingly, the Court will enforce those provisions of the Agreement and compel the arbitration of opt-in plaintiff Turner's individual claims.
The Court will not, however, grant defendants' request for dismissal of Turner's claims. The FAA provides that when a court determines an issue is referable to arbitration under an arbitration agreement, it "shall on application of one of the parties stay the trial of the action until such arbitration has been had ...." 9 U.S.C. § 3. Furthermore, as the undersigned has noted previously, "[w]here a plaintiff initiates litigation without satisfying arbitration requirements, courts routinely stay rather than dismiss the proceedings to allow for implementation of the agreed-upon dispute resolution mechanism." Campbell v. Pilot Catastrophe Services, Inc., 2010 WL 3306935, *7 (S.D. Ala. Aug. 19, 2010) (collecting cases). Defendants have not articulated any reason why dismissal might be more appropriate than a stay here. As such, Turner's putative opt-in claims will be stayed, not dismissed, pending the outcome of arbitration.
For the foregoing reasons, it is