OPINION AND ORDER

BARBARA B. CRABB, District Judge.

In this proposed collective action, plaintiff Pamela Herrington contends that defendant Waterstone Mortgage Corporation failed to pay its loan officers for overtime work, in violation of the Fair Labor Standards Act and state law. November 2011, when plaintiff filed her complaint, the parties have filed several motions.

First, defendant moved to to dismiss or stay the case on the ground that plaintiff's claims are subject to an arbitration agreement. In addition, defendant asked for "the costs associated with enforcing the arbitration provision" in this court, including attorney fees. Dkt. #13. Plaintiff sought leave to file a sur-reply brief to discuss the implications of a recent decision from the National Labor Relations Board. Dkt. #35. In response, defendant filed a document it called an "opposition" to plaintiff's motion, but was actually a sur-sur-reply brief. Dkt. #36. I have considered both briefs.

While the parties were briefing defendant's motion to dismiss, each side filed an additional motion. Plaintiff filed a "motion to strike defendant's claim for attorneys' fees and costs," dkt. #15, which is simply the mirror image of defendant's request for costs. (Defendant does not have a "claim" for attorney fees or costs because it has not yet filed an answer or counterclaim.) Defendant filed a "motion to strike, for protective order and for sanctions," dkt. #18, in which it argues that counsel for plaintiff has engaged in inappropriate communication with potential class members.

With respect to defendant's motion to dismiss, plaintiff agrees with defendant that her claims fall within the scope of the parties' arbitration agreement. However, she says that the court should refuse to enforce the agreement because arbitration would be too costly for her and the agreement violates both the FLSA and the National Labor Relations Act.

Although plaintiff has failed to show that arbitration would be any more expensive than litigation in federal court, I agree with her that the arbitration agreement violates the NLRA because it includes a provision that requires her to give up her right under the statute to bring claims collectively. However, because the prohibition on collective actions is severable from the remainder of the arbitration agreement, I am granting defendant's motion to stay the case while pending arbitration. I am denying defendant's requests for costs and sanctions and plaintiff's motion to strike.

OPINION

On April 7, 2011, the parties signed an employment agreement that included the following language:

Defendant argues that all of plaintiff's claims in this case are subject to arbitration and must be dismissed or stayed.

As noted above, plaintiff does not deny that her claims fall within the scope of this provision, but she argues that the arbitration agreement is unenforceable for three reasons: (1) it places excessive costs on employees by requiring them to pay half the cost of arbitration; (2) it prohibits employees from bringing a collective action, in violation of the FLSA; and (3) it prohibits employees from engaging in "concerted activity" protected by the National Labor Relations Act. The parties agree that whether the agreement is enforceable is a question for the court. Lumbermens Mutual Casualty Co. v. Broadspire Management Services, Inc., 623 F.3d 476, 480 (7th Cir. 2010).

With respect to her first argument, plaintiff says that she cannot afford the cost of arbitration, which she estimates at $14,000. Although she acknowledges that the arbitration agreement allows her to recover these expenses if she prevails, she says she cannot take that risk. Even if I assume that a fee shifting provision might not provide adequate protection in some circumstances, plaintiff's argument founders because she failed to conduct any comparison of the costs of litigating in federal court. James v. McDonald's Corp., 417 F.3d 672, 680 (7th Cir. 2005) ("The cost differential between arbitration and litigation is evidence highly probative to [the plaintiff's] claim that requiring her to proceed through arbitration, rather than through the courts, will effectively deny her legal recourse."). Particularly because her counsel admits that discovery is likely to be more streamlined in arbitration, Getman Decl. ¶ 6, dkt. #22-5, her failure to compare the relative costs dooms her claim of hardship.

Plaintiff's second argument focuses specifically on the part of the arbitration agreement that prohibits multiple-plaintiff arbitration proceedings. She says that it conflicts with 29 U.S.C. § 216(b) of the FLSA, which allows employees to bring a collective action so long as each gives his or her consent. However, this argument is undermined by Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 32 (1991), in which the Court stated that an arbitration agreement that eliminates class-wide relief is not necessarily invalid in cases brought under the Age Discrimination in Employment Act, which also includes a collective action provision. Id. at 32 ("[E]ven if the arbitration could not go forward as a class action or class relief could not be granted by the arbitrator, the fact that the [ADEA] provides for the possibility of bringing a collective action does not mean that individual attempts at conciliation were intended to be barred.").

Numerous other courts have relied on Gilmer to conclude that a waiver of rights in § 216(b) is permissible because that provision does not confer a substantive right. E.g., Long John Silver's Restaurants, Inc. v. Cole, 514 F.3d 345, 351 (4th Cir. 2008) (rejecting argument that "Congress expressly intended that the `opt-in' procedure could not be waived by the parties' agreement to an alternate procedure"; "no court has explicitly ruled that the `opt-in' provision of the § [2]16(b) provision creates a substantive, nonwaivable right."); Carter v. Countrywide Credit Industries, Inc., 362 F.3d 294, 298 (5th Cir. 2004) ("[W]e reject the Carter Appellants' claim that their inability to proceed collectively deprives them of substantive rights available under the FLSA."); Horenstein v. Mortgage Market, Inc., 9 Fed. Appx. 618, 619 (9th Cir. 2001) ("Appellants' contention that the arbitration clause in the Employment Agreements may not be enforced because it eliminates their statutory right to a collective action, is insufficient to render an arbitration clause unenforceable."); Copello v. Boehringer Ingelheim Pharmaceuticals Inc., 812 F.Supp.2d 886, 894 (N.D. Ill. 2011) ("Courts routinely hold that FLSA does not grant employees the unwaivable right to proceed in court collectively under § 216(b) . . . [W]hile FLSA prohibits substantive wage and hour rights from being contractually waived, it does not prohibit contractually waiving the procedural right to join a collective action."). See also Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1378 (11th Cir. 2005) (concluding that collective action waiver was not unconscionable under state law, citing Gilmer).

Plaintiff's third argument, that the prohibition on collective actions in the arbitration agreement violates the National Labor Relations Act, is her strongest. Under 29 U.S.C. § 157, "[e]mployees shall have the right to . . . engage in . . . concerted activities for the purpose of . . . mutual aid or protection." Under 29 U.S.C. § 158(a)(1), employers may not "interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title." Plaintiff says that the collective action waiver interferes with her right to engage in a concerted activity protected by § 157.

A threshold question I asked the parties to brief is whether I have authority to enforce §§ 157 and 158 in light of statements by the Supreme Court that the National Labor Relations Board generally has exclusive jurisdiction over enforcement of those provisions. Amalgamated Utility Workers v. Consolidated Edison Co. of New York, 309 U.S. 261, 264 (1940) ("Congress declared that certain labor practices should be unfair, but it prescribed a particular method by which such practices should be ascertained and prevented. By the express terms of the Act, the Board was made the exclusive agency for that purpose."); San Diego Building Trades Council, Millmen's Union, Local 2020 v. Garmon, 359 U.S. 236, 244-45 (1959) ("It is essential to the administration of the Act that these determinations [under § 157 and § 158] be left in the first instance to the National Labor Relations Board.").

Having reviewed the parties' supplemental briefs, I agree with plaintiff that Kaiser Steel Corp. v. Mullins, 455 U.S. 72 (1982), gives a federal court authority to invalidate a contractual provision that violates the NLRA. In that case, the Court stated: "While only the Board may provide affirmative remedies for unfair labor practices, a court may not enforce a contract provision which violates § 8(e) [another provision in § 158]." Id. at 86.

Defendant says that Kaiser Steel is distinguishable because, in that case, it was "unmistakably clear" that the contract violated the NLRA and the plaintiff was attempting to enforce the contract "in order to maintain the action." However, defendant cites no language from Kaiser Steel showing that either of these facts was relevant to the Court's decision. The Court of Appeals for the Seventh Circuit has interpreted Kaiser Steel as standing for the broad proposition that "a court may not enforce a contract provision which violates federal law." Costello v. Grundon, 651 F.3d 614, 623-24 (7th Cir. 2011).

With respect to the merits of plaintiff's argument that the collective action waiver violates §§ 157 and 158(a)(1), various decisions from federal courts and the National Labor Relations Board hold that collective actions are a "concerted activity" and that lawsuits for unpaid wages under the FLSA are "for the purpose of . . . mutual aid or protection" within the meaning of § 157. Brady v. National Football League, 644 F.3d 661, 673 (8th Cir. 2011) ("[A] lawsuit filed in good faith by a group of employees to achieve more favorable terms or conditions of employment is `concerted activity' under § 7 of the National Labor Relations Act."); Leviton Manufacuring Co., Inc. v. NLRB, 486 F.2d 686, 689 (1st Cir. 1973) ("[T]he filing of a labor related civil action by a group of employees is ordinarily a concerted activity protected by § 7, unless the employees acted in bad faith."); Saigon Gourmet Restaurant, 353 NLRB No. 110 (2009) ("[A] wage and hour lawsuit [is] clearly protected concerted activity."); In re 127 Restaurant Corp., 331 NLRB 269, 269 (2000) (lawsuit filed on behalf of 17 employees regarding wages was protected activity); 52nd Street Hotel Associates, 321 NLRB 624, 624 (1996) (collective action brought under FLSA was protected activity), abrogated on other grounds by Stericycle, Inc., 357 NLRB No. 61 (2011); Host International, 290 NLRB 442, 443 (1988) (multiple-plaintiff lawsuit "concerning working conditions" was protected activity); United Parcel Service, Inc., 252 NLRB 1015, 1016 (1980) (class action lawsuit regarding lunch breaks is protected activity), enforced, 677 F.2d 421, 422 (6th Cir. 1982); Trinity Trucking & Materials Corp., 221 NLRB 364, 364 (1975) (filing of lawsuit by group of employees for failure to pay wages in accordance with contract was protected activity), enforced, 567 F.2d 391 (7th Cir. 1977).

In a recent opinion, the Board considered the precise question in this case and concluded that an employer violates the NLRA by entering into individual arbitration agreements that include a prohibition on collective actions by employees. In re D.R. Horton, Inc., 357 NLRB No. 184 (2012), available at 2012 WL 36274. The Board began by noting that it "has consistently held that concerted legal action addressing wages, hours or working conditions is protected by" § 157. Id. at *2. It then stated that the Supreme Court has held that "employers cannot enter into individual agreements with the employees in which employees cede their statutory rights to act collectively." Id. at *6 (citing J.I. Case Co. v. NLRB, 321 U.S. 332 (1944)). In addition, the Board cited a case from the Court of Appeals for the Seventh Circuit for the proposition that such a contract violates the NLRA "even if `entered into without coercion,' because it `obligated [the employee] to bargain individually' and was a `restraint upon collective action.'" Id. (quoting NLRB v. Stone, 125 F.2d 752, 756 (7th Cir. 1942)).

The Board rejected the argument that either the Federal Arbitration Act or Gilmer required it to enforce the agreement. It relied on the Supreme Court's statement in Gilmer, 500 U.S. at 26, than an arbitration agreement may not require a party to "forgo the substantive rights afforded by the statute." It then stated:

D.R. Horton, 2012 WL 36274, at *12 (internal citations omitted).

It is not clear whether defendant disputes any of this as a general matter. It acknowledges that "a prohibition against a collective action may, in some instances, violate an employee's NLRA rights to engage in concerted activity to improve the terms and conditions of employment," Dft.'s Br., dkt. #32, at 11, but then it cites two district courts that came to a contrary conclusion. Grabowski v. Robinson, 2011 WL 4353998 (S.D. Cal. 2011); Slawienski v. Nephron Pharmaceutical Corp., 2010 WL 5186622 (N.D. Ga. Dec. 9, 2010).

In Slawienski, 2010 WL 5186622, at *2, the court wrote:

In Grabowski, 2011 WL 4353998, at *7-8, the court adopted the analysis in Slawienski, adding:

Id. at *8.

If defendant means to rely on these decisions for the proposition that collective actions for unpaid wages are not protected activity under § 157, he is off base. The statement in Slawienski that the NLRA "deal[s] solely with an employee's right to participate in union organizing activities" is directly contrary to the statement by the Supreme Court in Eastex, Inc. v. NLRB, 437 U.S. 556, 565-66 (1978), that "the `mutual aid or protection' clause protects employees from retaliation by their employers when they seek to improve working conditions through resort to administrative and judicial forums." In Slawienski and Grabowski, both courts seem to conclude that actions for unpaid wages are not for "mutual aid or protection," but neither court explains its conclusion. The assumption seems to be that only claims for injunctive relief could qualify, but it is not clear why seeking compensation for legal violations is any less an act of "mutual aid."

Further, neither court acknowledged any of the NLRB decisions cited by plaintiff in this case, presumably because the parties did not cite them. However, the Supreme Court has stated on multiple occasions that courts must give considerable deference to the Board's interpretations of the NLRA. ABF Freight System, Inc. v. NLRB, 510 U.S. 317, 324 (1994) (Board's views are entitled to "the greatest deference"); Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 891 (1984) (interpretations of Board will be upheld if "reasonably defensible") (internal citation omitted). Particularly because defendant develops no argument that the Board has interpreted the NLRA incorrectly, I see no reason to question the Board's judgment in this instance.

Defendant's primary argument against applying D.R. Horton is that the NLRA protects rights of "employees," not "former employees" such as plaintiff. (Defendant does not cite anything the record that establishes plaintiff's employment status, but plaintiff alleges in her complaint that she "left employment with Defendant on or about October 7, 2011." Dkt. #3, ¶ 41.) Although defendant cites no case law in support of this view, in Woodlawn Hospital v. NLRB, 596 F.2d 1330, 1336 (7th Cir. 1979), the court stated that "a discharge for activity not protected by the Act terminates employee status" under the NLRA. See also Halstead Metal Products, a Division of Halstead Industries, Inc. v. NLRB, 940 F.2d 66, 70 (4th Cir. 1991) (employee who resigned not protected under NLRA from future discrimination, even if discrimination arises from participation in concerted activities with employees protected by Act).

This argument is a red herring. The question under § 158 is whether the employer has "interfere[d] with, restrain[ed], or coerce[ed] employees in the exercise of the rights guaranteed in section 157 of this title." Regardless whether plaintiff is an employee now, it is undisputed that she was an employee at the time defendant interfered with her right to pursue a collective action by requiring her to sign a waiver. Defendant seems to assume that the alleged interference is limited to its attempt to enforce the arbitration agreement in this case, but "[a]n employer's coercive action affects protected rights whenever it can have a deterrent effect on protected activity. This is true even if an employee has yet to exercise a right protected by the Act." Medeco Security Locks, Inc. v. NLRB, 142 F.3d 733, 745 (4th Cir. 1998). See also NLRB v. Vanguard Tours, Inc., 981 F.2d 62, 67 (2d Cir. 1992) (invalidating rule under § 158(a)(1) before rule was enforced); Jeannette Corp. v. NLRB, 532 F.2d 916, 918 (3d Cir.1976) (same). Thus, plaintiff need not show that she is still an "employee" with the meaning of the NLRA.

Also, defendant says that the Board was "illogical" to conclude that collective action waivers conflict with the "effort to vindicate work-place rights and the NLRA," D.R Horton, 2012 WL 36274, at *12, because an individual can bring about a change in workplace conditions without joining his claims with other employees. This is a non sequitur. Although the goal of § 157 may be to improve workplace conditions, the way Congress chose to achieve that goal in the statute was through the protection of "concerted activity" of employees. The court's task is to apply the language of the statute as written, not to apply a general policy. Mertens v. Hewitt Associates, 508 U.S. 248, 261 (1993) ("[V]ague notions of a statute's `basic purpose' are . . . inadequate to overcome the words of its text regarding the specific issue under consideration"). Thus, it is simply irrelevant whether an individual claim may be just as effective as a collective action.

Finally, defendant says that D.R. Horton conflicts with AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011), in which the Court declined to strike a class action waiver in an arbitration agreement. However, I agree with the Board that AT&T Mobility is not on point because the class action waiver in that case did not conflict with the substantive right of a federal statute. Rather, the question was whether the FAA preempted a ruling under state law by the California Supreme Court.

Accordingly, because the Board's interpretation of the NLRA in D.R. Horton, is "reasonably defensible," Sure-Tan, 467 U.S. at 891, I am applying it in this case to invalidate the collective action waiver in the arbitration agreement.

This does not end the matter, however. Although the NLRA guarantees plaintiff the right to pursue her claims collectively, it does not give her a right to pursue her claims in federal court rather than in arbitration. The employment agreement includes a severability clause stating that any portion of the agreement found to be unenforceable "shall be deemed to be modified or redacted to the extent necessary" to bring the agreement in line with the law. Dkt. #14-1, at ¶ 15. Because the bar on collective actions is the only aspect of the arbitration agreement that violates the NLRA, this raises the question whether that provision is severable from the rest of the arbitration agreement, so that the matter can be resolved in arbitration, but in the context of a collective action.

In her opposition brief, plaintiff acknowledges that courts may sever invalid clauses in an otherwise valid arbitration agreement under some circumstances. E.g., Kristian v. Comcast Corp., 446 F.3d 25, 62 (1st Cir. 2006) (severing class action waiver from arbitration agreement). Generally, courts focus on two factors in making this determination: whether the unlawful provision is essential to the agreement as a whole and whether multiple unlawful provisions support the conclusion that the drafter of the agreement was attempting to undermine the other party's rights. E.g., Nino v. Jewelry Exchange, Inc., 609 F.3d 191, 206 (6th Cir. 2010) (in determining whether provision is severable, court should consider whether "the unconscionable aspects of the employment arbitration agreement constitute an essential part of the agreed exchange of promises between the parties" and whether "a multitude of unconscionable provisions in an agreement to arbitrate . . . evidence a deliberate attempt by an employer to impose an arbitration scheme designed to discourage an employee's resort to arbitration or to produce results biased in the employer's favor"); Booker v. Robert Half International, Inc., 413 F.3d 77, 84-85 (D.C. Cir. 2005) ("A critical consideration in assessing severability is giving effect to the intent of the contracting parties. . . . If illegality pervades the arbitration agreement such that only a disintegrated fragment would remain after hacking away the unenforceable parts . . . the judicial effort begins to look more like rewriting the contract than fulfilling the intent of the parties.").

Neither party argues that the collective action waiver is integral to the arbitration agreement or that a collective action could not be pursued in an arbitration proceeding. In fact, plaintiff says that "collective action procedures are not inherently incompatible with arbitration and at least some AAA arbitrators have approved collective actions and those decisions have been affirmed by the Courts." Plt.'s Br., dkt. #22, at 20-21 (citing Veliz v. Clintas, 2009 WL 1766691 (N.D. Cal. June 22, 2009)). This is consistent with the practice of the American Arbitration Association, which has published rules for class arbitration. American Arbitration Association, Supplementary Rules for Class Arbitration (Oct. 8, 2003), available at http://www.adr.org/aaa. As for defendant, it requests explicitly that a collective action proceed in arbitration rather than federal court in the event the court invalidates the collective action waiver. Dft.'s Br., dkt. #45, at 6-7.

Plaintiff's only argument against severance is that "there are several clauses that together combine to `taint' the agreement as a whole." Plt.'s Br., dkt. #22, at 36. Plaintiff points to the cost-sharing provision as well as what she calls two "indemnity clauses" that require plaintiff to reimburse defendant for costs associated with violations of the employment agreement. However, none of these other provisions support plaintiff's argument. With respect to the cost-sharing provision, plaintiff fails to show that it was unlawful. The other two provisions are not related to the arbitration clause and plaintiff fails to explain how they might be relevant to a determination regarding severability. Accordingly, I am severing the collective action waiver and granting defendant's motion to stay the case pending arbitration.

The remaining motions require little discussion. Defendant's requests for costs relies on the two "indemnity clauses" discussed above, with defendant arguing that plaintiff's attempt to bring a collective action is a violation of the arbitration agreement. Because I am invalidating the prohibition on collective actions, plaintiff's attempt cannot serve as the basis for an award of costs. This moots plaintiff's motion to "strike" the request for costs.

Also moot is defendant's motion to sanction plaintiff's counsel for contacting potential members of the collective action without notifying defendant or the court. Because I am agreeing with defendant that plaintiff's claims are subject to arbitration, I cannot decide the motion for sanctions. Defendant will have to raise that issue with the arbitrator.

ORDER

IT IS ORDERED that

1. Defendant Waterstone Mortgage Corporation's motion to dismiss, or, in the alternative to compel arbitration, and for costs, dkt. #13, is GRANTED IN PART. Plaintiff Pamela Herrington's claims must be resolved through arbitration, but she must be allowed to join other employees to her case.

2. Defendant's requests for costs is DENIED.

3. Plaintiff's motion to file a surreply brief, dkt. #35, is GRANTED.

4. Plaintiff's motion to "strike" defendant's request for costs, dkt. #15, is DENIED as moot.

5. Defendant's "motion to strike, for protective order and for sanctions," dkt. #18, is DENIED as moot.

6. Because the arbitration may dispose of the disputed issues, I am directing the clerk of court to close the case administratively, subject to reopening on motion of any party if issues remain for resolution after the arbitration has been completed.

OPINION AND ORDER

Plaintiff Pamela Herrington filed this proposed class action under the Fair Labor Standards Act and state law, alleging that defendant Waterstone Mortgage Corporation failed to pay its loan officers for overtime work. Shortly thereafter, defendant moved to dismiss or stay the action on the ground that plaintiff's claims were subject to arbitration. In an order dated March 16, 2012, dkt. #57, I concluded that plaintiff's claims would have to be resolved through arbitration under an agreement between the parties, but that the National Labor Relations Act gave plaintiff the right to join other employees in her case. I closed the case administratively to allow the parties to proceed with arbitration.

Plaintiff commenced arbitration on March 23, 2012. George Pratt, a former judge for the Court of Appeals for the Second Circuit, was chosen as arbitrator. Arbitrator Pratt issued an order determining that the arbitration could proceed as a collective action. Ultimately, 174 class members opted into the arbitration. While arbitration was pending, I denied several motions by defendant seeking review of the arbitrator's decisions and of this court's initial order regarding arbitration. Dkt. ##72, 89, 92, 97. The arbitrator issued several interim orders relating to liability and held a hearing in two parts on October 17, 19-21, 2016, and December 20-21, 2016. On July 5, 2017, the arbitrator issued a final decision, holding that defendant was liable under the Fair Labor Standards Act for unpaid minimum wages and overtime and attorney fees and costs, but not liable under Wisconsin statutory or contract law. Arbitrator Pratt ordered that defendant owed $7,267,919.00 in damages, $3,318,851.00 in attorney fees and costs and an incentive fee in the sum of $20,000 to be paid to named plaintiff Herrington.

Now before the court are several motions relating to the arbitrator's final award. Plaintiff has moved for confirmation of the award under 9 U.S.C. § 9, dkt. #99, while defendant has moved to vacate or modify the award. Dkt. #112. Plaintiff has moved for sanctions against defendant, arguing that defendant's objections to confirmation of the award are frivolous. Dkt. #125. Finally, defendant has moved to stay any action relating to the award until the United States Supreme Court reaches a decision in the consolidated cases of Ernst & Young, LLP v. Morris, 137 S.Ct. 809 (2017); Epic Systems Corp. v. Lewis, 137 S.Ct. 809 (2017); and National Labor Relations Board v. Murphy Oil USA, Inc., 137 S.Ct. 809 (2017) (collectively "Morris"), in which the Court is considering whether class and collective action waivers in arbitration agreements violate the National Labor Relations Act. Dkt. #118.

For the reasons below, I am denying defendant's motion to stay, defendant's motion to vacate the arbitration award and plaintiff's motion for sanctions. I am confirming the arbitration award, with one modification to correct the mathematical error identified by both parties.

OPINION

A. Motion to Stay

In March 2012, I concluded that plaintiff's employment agreement required that her wage claims be resolved through arbitration, but that the provision of the employment agreement prohibiting collective arbitration violated the National Labor Relations Act, as set forth in In re D.R. Horton, Inc., 357 NLRB No. 184 (2012), available at 2012 WL 36274. Dkt. #57. Since that time, multiple courts of appeal have considered whether class or collective action waivers in employment agreements violate the National Labor Relations Act. The Eighth, Fifth and Second Circuits have upheld class and collective action waivers in arbitration agreements and found that these waivers do not violate the Act. Cellular Sales of Missouri, LLC v. National Labor Relations Board, 824 F.3d 772 (8th Cir. 2016); Murphy Oil USA, Inc. v. National Labor Relations Board, 808 F.3d 1013 (5th Cir. 2015); D.R. Horton, Inc. v. National Labor Relations Board, 737 F.3d 344, 362 (5th Cir. 2013); Patterson v. Raymours Furniture Co., 659 F. Appx. 40 (2d Cir. 2016). The Ninth, Sixth and Seventh Circuits have held that such class action waivers violate the Act and are unenforceable. Morris v. Ernst & Young, LLP, 834 F.3d 975 (9th Cir. 2016); National Labor Relations Board v. Alternative Entertainment, Inc., 858 F.3d 393 (6th Cir. 2017); Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. 2016). The Supreme Court granted certiorari to review this issue in the consolidated Morris cases, and arguments were held in October 2017. Defendant argues that this court should stay all proceedings pending the outcome of Morris.

Defendant has moved for a stay pursuant to the court's inherent power to stay cases before it. Landis v. North American Co., 299 U.S. 248, 254-55 (1936) ("The power to stay proceedings is incidental to the power inherent in every court to control the disposition of the cases on its docket with economy of time and effort for itself, for counsel, and for litigants."). In determining whether to issue a stay, courts often consider the following factors: "(1) whether the litigation is at an early stage; (2) whether a stay will unduly prejudice or tactically disadvantage the non-moving party; (3) whether a stay will simplify the issues in question and streamline the trial; and (4) whether a stay will reduce the burden of litigation on the parties and on the court." Grice Engineering, Inc. v. JG Innovations, Inc., 691 F.Supp.2d 915, 920 (W.D. Wis. 2010) (citations omitted). In this instance, defendant argues that the Supreme Court's decision will confirm whether this case properly proceeded as a collective action during arbitration.

Defendant has not shown that a stay is warranted. Nken v. Holder, 556 U.S. 418, 433-34 (2009) ("The party requesting a stay bears the burden of showing that the circumstances justify an exercise of that discretion.") This case has been pending since 2011 and is not at an early stage. A further delay would prejudice plaintiff, who has been waiting several years through numerous delays to recover unpaid wages. Additionally, despite defendant's assertion that a stay would "greatly simplify the issues and reduce the burden of litigation," Dft.'s Br., dkt. #119, at 6, I am not persuaded that the Supreme Court's decision will necessarily simplify the issues in this case, however it rules.

Defendant suggests that if the Supreme Court concludes that class and collective action waivers do not violate the National Labor Relations Act, defendant will be able to rely on that decision to file a motion under Federal Rule of Civil Procedure 60(b)(6) challenging this court's March 2012 decision. But defendant's assumption is flawed. As I explained previously when denying a similar Rule 60 motion filed by defendant, "a change in law showing that a previous judgment may have been incorrect is not an `extraordinary circumstance' justifying relief under Rule 60(b)(6)." Dkt. #92 at 4 (quoting Nash v. Hepp, 740 F.3d 1075, 1078 (7th Cir. 2014)). See also Selective Insurance Co. of South Carolina v. City of Paris, 769 F.3d 501, 509 (7th Cir. 2014) ("Rule 60(b) cannot be used to reopen the judgment in a civil case just because later authority shows that the judgment may have been incorrect.") Defendant has made no attempt to explain why a change in the law would justify reconsideration of a decision made in this case five years ago.

Moreover, the ultimate decision whether to allow this case to proceed on a collective basis was made by the arbitrator, not this court. In concluding that plaintiff should be permitted to proceed with arbitration on a collective basis, the arbitrator noted that this court had held that the class waiver provision was invalid under the National Labor Relations Act and that he was bound by that decision. Dkt. #99-3 at 8. However, the arbitrator also noted that the arbitration clause in the employment agreement was ambiguous: although it contained a waiver clause, it also stated that arbitration should proceed "in accordance with the rules of the American Arbitration Association," which permits class arbitration. Id. at 9. The arbitrator noted that defendant "at the very least created an ambiguity, which must be construed against [defendant,] the party who drafted the Agreement." Id. The arbitrator also noted plaintiff's argument that the language of the so-called "waiver" clause should actually be read as permitting class or collective arbitration, rather than prohibiting it, though the arbitrator chose not to resolve that dispute. Id. at 8. In other words, the arbitrator's discussion suggests that he believed there were independent bases for permitting collective arbitration, aside from this court's previous decision. Thus, it is far from clear that the Supreme Court's decision in the Morris cases would cause the arbitrator to change his decision to permit collective arbitration.

Finally, regardless whether this case should have proceeded on a collective basis, it would have been necessary to take up defendant's claims of arbitrator bias and misconduct as they relate to plaintiff's individual claim. Additionally, it is possible that the arbitrator's merits decisions would apply in subsequent individual arbitrations under the doctrine of issue preclusion. E.g., Brown v. R.J. Reynolds Tobacco Co., 611 F.3d 1324, 1332 (11th Cir. 2010) (holding that factual findings in prior class action that had been decertified could have preclusive effect on subsequent individual actions). In short, the Supreme Court's decision will not clearly simplify the issues in this case. Under these circumstances, I decline to grant defendant's request for a discretionary stay of this case.

B. Arbitration Award

1. Standard of review

Under the Federal Arbitration Act, courts may only "overturn the arbitrator's award on very narrow grounds." Flexible Manufacturing Systems Pty. Ltd. v. Super Products Corp., 86 F.3d 96, 99 (7th Cir. 1996). See also Health Services Management Corp. v. Hughes, 975 F.2d 1253, 1258 (7th Cir. 1992) ("[T]he court's function in confirming or vacating an arbitration award is severely limited.") Parties are not entitled to reargue their original claims in a proceeding to vacate an arbitral award, Widell v. Wolf, 43 F.3d 1150, 1151 (7th Cir. 1994), and "[f]actual or legal errors by arbitrators—even clear or gross errors—do not authorize courts to annul awards." Flexible, 86 F.3d at 100 (citation and quotations omitted). See also Baravati v. Josphthal, Lyon & Ross, Inc., 28 F.3d 704, 706 (7th Cir. 1994) ("By including an arbitration clause in their contract the parties agree to submit disputes arising out of the contract to a nonjudicial forum, and we do not allow the disappointed party to bring his dispute into court by the back door, arguing that he is entitled to appellate review of the arbitrators' decision." (citations omitted)). The Federal Arbitration Act identifies four limited circumstances in which an arbitral award may be set aside:

9 U.S.C. § 10(a)(1)-(4). The Court of Appeals for the Seventh Circuit has explained that § 10(a)(4) permits a court to vacate an arbitration award if the award (1) requires the parties to violate the law, or (2) does not adhere to legal principles specified by the contract. Halim v. Great Gatsby's Auction Gallery, Inc., 516 F.3d 557, 563 (7th Cir. 2008). To warrant vacatur under § 10(a), the party challenging the arbitration award must "overcome, with clear and convincing evidence, the presumption of validity that an arbitral award enjoys." Flexible, 86 F.3d at 100. If the award is not vacated under § 10(a), then it is confirmed. 9 U.S.C. § 9 ("[A]ny party to the arbitration may apply to the court . . . for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected. . . .").

2. Analysis

After holding a multi-day hearing and receiving extensive briefing from the parties, the arbitrator issued several decisions relating to plaintiff's claims in this case. On April 13, 2017, the arbitrator issued a 30-page Partial Award on Liability, finding defendant liable under the Fair Labor Standards Act for unpaid minimum wages and overtime and attorney fees and costs, and dismissing plaintiff's Wisconsin statutory and common law contract claims. Dkt. #99-5. He then issued separate decisions on damages, dkt. #99-6, and attorney fees and costs, dkt. #99-7, and incorporated all of his findings into a final award, dkt. #99-9.

As an initial matter, the parties agree that the final award contains a mathematical error relating to the $20,000 incentive fee for named plaintiff Herrington. In particular, on page 2 of the final award, the arbitrator awarded plaintiff $3,318,851 in attorney fees, costs and incentive fees against defendant. Dkt. #99-9 at 2. However, on the next page, the arbitrator stated that plaintiff was entitled to $3,318,851 in attorney fees and costs, plus an additional $20,000 in incentive fees. Id. at 3. Both parties agree that page 3 contains a mathematical error and that the total amount of attorney fees, costs and incentive fees owed plaintiff is $3,318,851. Therefore, I will modify the final award accordingly.

Plaintiff contends that the remainder of the final award should be confirmed, as there is no valid reason to vacate the award under 9 U.S.C. § 10(a)(1)-(4). For its part, defendant argues that the award should be vacated for two reasons: (1) Arbitrator Pratt was biased against defendant; and (2) Arbitrator Pratt committed misconduct by sleeping during portions of the hearing. Neither of defendant's arguments is persuasive.

a. Arbitrator Pratt's alleged bias

Defendant argues that Arbitrator Pratt demonstrated bias in favor of plaintiff when he sent a survey to potential class members as part of his decision whether to certify a class. Defendant points out that when the survey was submitted, discovery on class certification was closed and the arbitrator had stated that plaintiff's evidence supporting class certification was lacking. Additionally, defendant argues that the phrasing of the survey was biased in favor of plaintiff.

I disagree that the survey demonstrates bias against defendant. The questions are simply "yes" and "no" questions regarding the experiences of putative class members. Dkt. #108-7. Further, the arbitrator permitted the parties to argue and submit briefing regarding the survey and issued a written decision explaining his reasons for considering the results. Dkt. ##108-2, 108-6. The arbitrator later issued a well-reasoned 16-page written decision on class certification, explaining the survey results and his conclusion that the results supported class certification. Dkt. #108-8. Finally, the arbitrator made it clear in his decision that he understood the evidentiary limitations of the survey results, noting that, "[o]f course, the questionnaire results cannot be considered as proof that Waterstone has actually violated the FLSA. Such proof, if it exists, must come later. These answers were anonymous and unsworn. They were devoid of context and not subject to cross-examination." Id. at 7. In sum, there is nothing about the arbitrator's decision to send out the survey and consider the responses that suggests bias in favor of plaintiff or against defendant. Defendant also suggests that Arbitrator Pratt made several stray comments that suggested bias, including comments that (1) being an arbitrator was better than being a federal judge because it was more difficult for his decisions to be overturned; (2) an arbirator's duty was not to follow the law per se, but to do what he thought was right and fair; and (3) allowing further discovery regarding class certification would allow him to continue working on, and being paid for, the case, which he found interesting. Dft.'s Br., dkt. #117, at 8. However, as with the survey, nothing about these alleged stray comments demonstrates bias against defendant. Rather, they suggest simply that the arbitrator was interested in this case and enjoyed arbitrating it. Such comments are not a basis for vacating an arbitration award.

b. Arbitrator's alleged sleeping during proceedings

Next, defendant argues that the arbitration award should be vacated because Arbitrator Pratt slept through portions of the evidentiary hearing. Defendant submits declarations of people attending the hearings who state that Arbitrator Pratt appeared to be sleeping during some testimony, as well as pictures of Arbitrator Pratt with his eyes closed. Dkt. ##114, 128. Defendant argues that Arbitrator Pratt's alleged sleeping amounts to abdication of his duties and qualifies as misconduct sufficient to justify vacating the arbitration award. Plaintiff disputes that Arbitrator Pratt slept during the hearing.

Defendant's argument is not persuasive. There appears to be a factual dispute regarding whether Arbitrator Pratt dozed during portions of the multi-day hearing and if so, when he did so. As an initial matter, I agree with plaintiff that if defendant believed Arbitrator Pratt was dozing off, defendant should have asked for a break during the hearing. To raise this issue now seems far too late. But even setting that aside and assuming that the arbitrator dozed off, defendant has pointed to nothing suggesting that it was prejudiced by the alleged napping. Defendant says that Arbitrator Pratt slept during important testimony, but it has failed to identify any specific testimony that Pratt missed. For example, defendant does not point to anything in Pratt's final decision on liability as evidence that Pratt misunderstood or missed important testimony. Defendant's arguments about prejudice are based entirely on speculation. Therefore, I will not vacate the arbitration award based on defendant's suggestion that Arbitrator Pratt may have been sleeping during portions of testimony that may have been important to his final decision.

In sum, defendant has identified no basis for vacating the arbitration award, with the exception of the mathematical error discussed above. Accordingly, I will confirm the award with modification of the amount owed in attorneys' fees.

C. Plaintiff's Motion for Sanctions

Plaintiff has moved for sanctions against defendant, arguing that defendant should be sanctioned because all of its arguments against confirmation of the award were frivolous. I consider this a close question, but will deny it. I agree with plaintiff that defendant appears to have delayed this litigation far longer than necessary and continues to do so. However, his arguments opposing confirmation of the award were not wholly frivolous, although they were not persuasive. Defendant identified the mathematical error in the final arbitration award and pointed out the correct statute regarding post-judgment interest. Dft.'s Br., dkt. #107, at 20. Additionally, although I do not believe that defendant's concerns about the arbitrator's not being fully engaged during hearing testimony are sufficient reason to vacate an award, they are not wholly frivolous. Accordingly, I decline to issue sanctions against defendant for seeking to vacate the award.

ORDER

IT IS ORDERED that

1. Plaintiff Pamela Herrington's motion to enforce judgment of the arbitration award, dkt. #99, and defendant Waterstone Mortgage Corp.'s motion to vacate arbitration award or, in the alternative, to modify the award, dkt. #112, are GRANTED IN PART and DENIED IN PART as follows:

2. Plaintiff is entitled to post-award interest at the rate set under 28 U.S.C. § 1961(a).

3. Defendant's motion to stay, dkt. #118, is DENIED.

4. Plaintiff's motion for sanctions, dkt. #125, is DENIED.

JUDGMENT IN A CIVIL CASE

This action came before the court for consideration with District Judge Barbara B. Crabb presiding. The issues have been considered and a decision has been rendered.

IT IS ORDERED AND ADJUDGED that judgment is entered in favor of plaintiff Pamela Herrington against defendant Waterstone Mortgage Corporation confirming the arbitration award in the amount of $7,267,919.00 in damages, $3,298,851.00 in attorney fees and costs, and a $20,000.00 incentive fee together with post-award interest rate set at 28 U.S.C. § 1961 (a).

Approved as to form this 8th day of December, 2017.