Hobson et al v. Murphy Oil USA, Inc.
MEMORANDUM OPINION AND ORDER that the plaintiffs' claims are DISMISSED with prejudice; costs are taxed to plaintiffs, but defendant's request for attorney's fees is DENIED, as more fully set out in order. Signed by Judge C Lynwood Smith, Jr on 7/8/2015. (AHI)
2015 Jul-08 AM 10:40
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SHEILA HOBSON, CHRISTINE
ELLINGTON, and SANTRESSA
LOVELACE, individually and on
behalf of similarly situated
MURPHY OIL USA, INC.,
Civil Action No. CV-10-S-1486-S
MEMORANDUM OPINION AND ORDER
Plaintiffs, Sheila Hobson, Christine Pickney, Susan Ellington, and Santressa
Lovelace, filed a collective action against defendant, Murphy Oil USA, Inc.
(“Murphy Oil”), on June 11, 2010, seeking a judgment for themselves and others
similarly situated for unpaid overtime pursuant to the Fair Labor Standards Act of
1938, 29 U.S.C. § 201 et seq. (“FLSA”). Defendant subsequently moved to compel
arbitration of this matter and dismiss the collective action allegations.1 On September
18, 2012, this court adopted and approved the report and recommendation of
Magistrate Judge Harwell Davis, granted defendant’s motion, dismissed plaintiffs’
Doc. no. 14.
collective action allegations with prejudice, ordered plaintiffs to submit their
individual claims to arbitration, stayed this action pending resolution through
arbitration, and directed the Clerk to close the file for this case for administrative and
statistical purposes.2 The court noted that “the file may be reopened, on either party’s
motion, for an appropriate purpose such as dismissal following settlement, entry of
judgment, vacatur, or modification of an arbitrator’s award.”3
On February 25, 2015, almost two and a half years later, plaintiffs moved for
reconsideration of the order dismissing the collective action allegations, requiring
plaintiffs to submit their individual claims to arbitration, and staying this action
pending resolution through arbitration.4 This court denied that motion in an order
dated June 15, 2015.5
In its response to plaintiffs’ motion for reconsideration, defendant pointed out
that plaintiffs had failed to submit their claims to arbitration, as required by the
September 18, 2012 order.6 As a result, defendant asks this court to dismiss
plaintiffs’ claims in their entirety pursuant to Federal Rule of Civil Procedure 41(b).7
Doc. no. 41.
Id. at 4.
Doc. no. 43.
Doc. no. 47.
See doc. no. 46, at 14-16.
Plaintiffs were ordered to show cause, by June 22, 2015, why their complaint should
not be dismissed “for failing to adhere to the court’s order directing them to submit
their claims to arbitration.”8 This order considers plaintiffs’ show cause response,
which was timely filed on June 22, 2015.9
Plaintiffs first assert that they “behaved reasonably in waiting to arbitrate and
should not be subject to the harsh penalty of having their complaint dismissed.”10
One of the plaintiffs in this case, Sheila Hobson, filed an unfair labor practice charge
with the National Labor Relations Board (“the Board” or “NLRB”) during January
of 2011, while the motion to compel arbitration still was pending before this court.
See Murphy Oil USA, Inc. and Sheila M. Hobson, 361 NLRB No. 72, *4 (Oct. 28,
2014). In that charge, Hobson asserted that Murphy Oil’s arbitration agreement
violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) “by
maintaining and enforcing a mandatory arbitration agreement that prohibits
employees from engaging in protected, concerted activities,” and by leading
“employees reasonably to believe that they were prohibited from filing unfair labor
practice charges with the Board.” Id.11 The Board ruled in Hobson’s favor on
Doc. no. 47, at 2.
Doc. no. 48.
Id. at 2.
Section 8(a)(1) makes it unlawful for an employer to “interfere with, restrain, or coerce
employees in the exercise of the rights guaranteed in section 157 of this title.” 29 U.S.C. §
October 28, 2014, finding that Murphy Oil violated Section 8(a)(1) “by requiring its
employees to agree to resolve all employment-related claims through individual
arbitration, and by taking steps to enforce the unlawful agreements in Federal district
court when [Hobson] and three other employees filed a collective claim against
[Murphy Oil] under the Fair Labor Standards Act.” Id. at *3 (alterations supplied).
The Board ordered Murphy Oil to rescind its arbitration agreement,
or revise it in all of its forms to make clear to employees that the
Agreement and Waiver does not constitute a waiver of their right to
maintain employment-related joint, class, or collective actions in all
forums, and that it does not restrict employees’ rights to file charges
with the National Labor Relations Board.
Id. at *29. Murphy Oil also was ordered to notify all current and former employees,
and all applicants for employment, who were required to sign the arbitration
agreement, that the agreement had been rescinded. Id. at *30. Further, Murphy Oil
was ordered to
[n]otify the United States District Court for the Northern District of
Alabama that it has rescinded or revised the mandatory arbitration
agreements upon which it based its motion to dismiss Sheila Hobson’s
and her coplaintiffs’ FLSA collective action and to compel arbitration
of their claims, and inform the court that it no longer opposes the
plaintiffs’ FLSA action on the basis of those agreements.
158(a)(1). Section 157 provides, in pertinent part, that “[e]mployees shall have the right to
self-organization, to form, join, or assist labor organizations, to bargain collectively through
representatives of their own choosing, and to engage in other concerted activities for the purpose of
collective bargaining or other mutual aid or protection.” 29 U.S.C. § 157 (alteration supplied).
Id. (alteration supplied).
Murphy Oil filed a Petition For Review of the Board’s decision with the United
States Court of Appeals for the Fifth Circuit on November 7, 2014, and Murphy Oil’s
counsel represented to this court in a March 6, 2015 filing that the review still was
pending.12 Moreover, as the Fifth Circuit found in D.R. Horton, Inc. v. N.L.R.B., 737
F.3d 344 (5th Cir. 2013), the NLRB’s decisions are not entitled to deference when
they concern the interpretation of the Federal Arbitration Act, or any statutory
provision other than the NLRA. Id. at 356.
Even so, plaintiffs assert that, until the Board issued its decision on October 28,
2014, “the question of whether, and to what extent, Defendant could enforce an
individual arbitration agreement against its employees was litigated through two
parallel but closely related proceedings: one before this Court and one before the
NLRB.”13 Plaintiffs follow that assertion with this one:
Had Plaintiffs filed for individual arbitration during this period [between
this court’s September 18, 2012 order compelling arbitration and the
NLRB’s October 28, 2014 ruling], they would have effectively mooted
their NLRB proceeding — at least with respect to their own claims —
and deprived themselves of the ability to seek redress for the unfair
labor practices they alleged.14
Doc. no. 46, at 2. A review of the KeyCite history of the NLRB’s decision on Westlaw
confirms that no decision has been rendered, or at least published, on appeal.
Doc. no. 48, at 3.
Id. at 3-4 (alteration supplied).
As an initial matter, “plaintiffs” did not have an NLRB proceeding. Only one
plaintiff, Sheila Hobson, filed a complaint with the NLRB. The other plaintiffs
cannot assert any prejudice from being unable to seek redress in that forum for any
labor practices they believe are unfair.
More substantively, plaintiffs have not cited any authority to support their
outlandish suggestion that a federal court order is without effect if there is a related
proceeding pending before the NLRB. If plaintiffs truly were concerned about their
rights under the NLRA being “irreparably harmed” by the requirement to arbitrate
their individual claims, they could have requested either a stay of the arbitration order
pending an outcome of the proceedings before the NLRB, or permission to seek an
interlocutory appeal. They did neither. Instead, they simply disregarded this court’s
order because it required them to do something they did not want to do. That is not
Plaintiffs also assert that, even if their decision to wait to initiate arbitration
proceedings was not reasonable, dismissal of their claims with prejudice is too harsh
of a punishment. Federal Rule of Civil Procedure 41(b), upon which defendant’s
request for dismissal is based, provides: “If the plaintiff fails to prosecute or to
comply with these rules or a court order, a defendant may move to dismiss the action
or any claim against it.”
Rule 41(b) makes clear that a trial court has discretion to impose
sanctions on a party who fails to adhere to court rules. Fed. R. Civ. P.
41(b). But that discretion is not unlimited, and the “[d]ismissal of a case
with prejudice is considered a sanction of last resort, applicable only in
extreme circumstances.” Goforth v. Owens, 766 F.2d 1533, 1535 (11th
Cir. 1985). Dismissal with prejudice is not proper unless “the district
court finds a clear record of delay or willful conduct and that lesser
sanctions are inadequate to correct such conduct.” Betty K Agencies, Ltd.
[ v. M/V MONADA,] 432 F.3d [1333,] 1339[ (11th Cir. 2005)]. Mere
negligence or confusion is not sufficient to justify a finding of delay or
willful misconduct. McKelvey v. AT & T Techs., Inc., 789 F.2d 1518,
1520 (11th Cir. 1986).
Zocaras v. Castro, 465 F.3d 479, 483 (11th Cir. 2006) (first alteration in original,
other alterations supplied).
Here, there is a clear record of delay and willful misconduct. As discussed
above, plaintiffs’ decision to delay their filing of arbitration proceedings was not
reasonable, and instead constituted a willful disregard of court orders for the purpose
of gaining strategic advantage. Plaintiffs allege confusion or negligence, but the
circumstances support the inference that plaintiffs acted willfully and knowingly, not
that they were confused or careless. Finally, no lesser sanction would adequately
correct plaintiff’s conduct. If, for example, plaintiffs were subjected to a monetary
fine and required to immediately submit their claims to arbitration, they still would
have received the benefit of their willful non-compliance with this court’s order for
nearly two and a half years. There is no way to undo the effect of plaintiffs’ dilatory
There is no Eleventh Circuit decision directly supporting this outcome, but a
number of courts in other jurisdictions have held that dismissal is an appropriate
remedy for a plaintiff who disregards a district court’s order compelling arbitration.
The Seventh Circuit’s opinion in James v. McDonald’s Corp., 417 F.3d 672 (7th Cir.
2005), is instructive. There, the district court ordered James to submit her claims to
arbitration on February 4, 2003. Id. at 675. For months, she did not do so, asserting
that the costs of initiating the arbitration proceedings were prohibitive. Instead, she
filed a request for reconsideration nearly one year later, on January 15, 2004, and
alternatively requested that her case be dismissed so she could exercise her right of
appeal. Id. The district court denied the motion as untimely, explaining:
This request comes far too late in the day. . . . James took no
steps following the Court’s February 2003 order compelling arbitration
to carry out that order’s directive, seek reconsideration, or request
certification for an interlocutory appeal. Our ruling did not give James
the option of foregoing arbitration, waiting nearly a year, asking this
Court for another bite at the same apple, and then reviving for appeal
purposes a ruling made more than a year ago. If James wanted to appeal
the February 2003 order, she should have made that request within a
reasonable time after the order was entered.
Id. at 675-76, 681. The court allowed Ms. James one week to show cause why her
claims should not be dismissed for failure to prosecute in arbitration. She responded
three weeks later, and then only reiterated her previous arguments. Id. at 676. The
Seventh Circuit affirmed the district court’s decision, stating that, once the district
court ordered Ms. James to submit her claims to arbitration, “it was incumbent upon
Ms. James to abide by the district court’s ruling and not to continue submitting
arguments that the district court already had determined were meritless.” Id. at 681.
As a result of Ms. James’s “failure to pursue promptly the [district] court’s
reconsideration, or this court’s review on interlocutory appeal,” the district court’s
decision was not an abuse of discretion. Id. (alteration supplied). See also Renobato
v. Compass Bank Corp., 480 F. App’x 764, 766-67 (5th Cir. 2012) (dismissal not an
abuse of discretion when plaintiff did not initiate arbitration proceedings for three
years, even after being given a second chance to do so by the district court); Salt Lick
Bancorp v. F.D.I.C., 187 F. App’x 428, 446-47 (6th Cir. 2006) (dismissal not an
abuse of discretion when plaintiff did not initiate arbitration proceedings for two and
a half years, despite plaintiff’s alleged inability to retain counsel and obtain
documents from a third party); Windward Agency, Inc. v. Cologne Life Reinsurance
Co., 123 F. App’x 481, 483-84 (3rd Cir. 2005) (dismissal not an abuse of discretion
after a six-year delay in initiating arbitration).
Plaintiffs assert that the issue of their delay in commencing arbitration
proceedings is a matter for the arbitrator, not this court, to decide. It is generally true
that “‘procedural’ questions which grow out of the dispute and bear on its final
disposition should be left to the arbitrator.” Aluminum Brick and Glass Workers
International Union v. AAA Plumbing Pottery Corp., 991 F.2d 1545, 1550 (11th Cir.
1993) (quoting John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557 (1964)).
Even so, this “procedural” question does not grow out of the underlying dispute; it
grows out of plaintiffs’ failure to comply with this court’s order. Under similar
circumstances, the Third Circuit in Windward Agency, Inc. v. Cologne Life
Reinsurance Co., 123 F. App’x 481 (3rd Cir. 2005), held that the issue of a plaintiff’s
failure to submit a claim to arbitration was for the court, not the arbitrator, to decide.
Id. at 483-84.
It cannot be that the arbitration agreement demands the submission of
Windward’s failure to appoint an arbitrator to an arbitration panel which
has not yet been constituted. Were this a failure to cooperate with the
arbitration panel or some other form of foot-dragging on the part of
Windward post-appointment of the panel, we might well be compelled
. . . to leave any issues of delay to the broad jurisdiction of the
arbitrators under the agreement. Where, however, a party fails for many
years to abide by a district court order to initiate arbitration proceedings,
it is an issue for the district court, and not the non-existent arbitration
Id. (footnote omitted). Although that decision is unpublished, this court finds its
reasoning to be persuasive. This court has jurisdiction to determine the appropriate
penalty for plaintiffs’ failure to comply with this court’s orders.
In accordance with the foregoing, plaintiffs’ claims are DISMISSED, with
prejudice, pursuant to Federal Rule of Civil Procedure 41(b). Costs are taxed to
plaintiffs, but defendant’s request for attorney’s fees is DENIED. The Clerk is
directed to close this file.
DONE and ORDERED this 8th day of July, 2015.
United States District Judge
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