Robinson v. American Family Care Inc

Filing 25

MEMORANDUM OPINION AND ORDER- Deft's motion to dismiss and compel arbitration is GRANTED IN PART and DENIED IN PART (Doc 13 ); Pltf's motion to stay pending arbitration is GRANTED (Doc 20 ); This action is STAYED pending resolution through arbitration; The parties are DIRECTED to file a notice with the court upon settlement of the case or the conclusion of arbitration, whichever event shall first occur. Signed by Magistrate Judge Staci G Cornelius on 4/10/18. (MRR, )

FILED
2018 Apr-10 PM 03:41
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ADRIAN ROBINSON, on behalf of
himself and all others similarly
situated,
Plaintiff,
v.
AMERICAN FAMILY CARE, INC.,
Defendant.

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Case No.: 2:18-cv-00116-SGC

MEMORANDUM OPINION AND ORDER1
The court has before it the March 5, 2018 motion to dismiss and compel
arbitration filed by Defendant American Family Care, Inc. (“AFC”). (Doc. 13). In
response, Plaintiff filed a motion to stay pending arbitration. (Doc. 20). Pursuant
to the court’s March 7, 2018 order (Doc. 17), the motions are fully briefed and
under submission as of March 27, 2018 (Docs. 14, 20-22).

For the reasons

explained below, Defendant’s motion to dismiss and compel arbitration is due to
be granted in part and denied in part, and Plaintiff’s motion to stay is due to be
granted.

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The parties have consented to the exercise of dispositive jurisdiction by a magistrate judge
pursuant to 28 U.S.C. § 636(c). (Doc. 23).

I.

PROCEDURAL BACKGROUND
Plaintiff Adrian Robinson, on behalf of himself and other similarly situated

current and former employees, filed the instant complaint on January 23, 2018,
alleging a violation of the Fair Labor Standards Act. (Doc. 1). Specifically, the
complaint states Plaintiff and other similarly situated current and former
employees were misclassified as “exempt” employees and denied overtime wages.
(Id.). Subsequently, Plaintiffs Kenner (Doc. 4), Gladney (Doc. 7), Hess (Doc. 8),
and Weddington (Doc. 9) all “opted in” and agreed to be plaintiffs in this lawsuit.
Plaintiffs filed an amended complaint on February 19, 2018, and in response,
Defendant filed a motion to dismiss and compel arbitration. (Docs. 12, 13).
II.

STATEMENT OF FACTS
AFC owns and operates AFC clinic locations in several states, including

Alabama, Georgia, Tennessee, and Florida. (Doc. 12 at 3-7). Robinson worked
for AFC in various positions at various locations from 2015 until January 2018.
(Doc. 12 at 11-13; Doc. 14-1 at 2). Kenner, Gladney, Hess, and Weddington all
worked for AFC in various positions at various locations at different points in time
between 2012 to 2017. (Docs. 4, 7, 8, 9; Doc. 14-1 at 2-3).
At or around the time of their hire, Robinson, Gladney, Hess, Weddington,
and Kenner all individually agreed to comply with AFC’s arbitration agreement
and procedures. (Doc. 14-3 at 2; Doc.14-4 at 2; Doc. 14-5 at 2; Doc. 14-6 at 2;
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Doc. 14-7 at 2). By signing the arbitration agreement and beginning employment
with AFC, Plaintiffs agreed all claims, as defined by the arbitration agreement,
would be submitted to binding arbitration and not to litigation. (Id.). Specifically,
the arbitration agreement states:
As a condition of my continued employment with American Family
Care, Inc, (hereinafter referred to as “AFC”), AFC and Employee
agree to settle any controversy, dispute or claim arising out of or
relating to my employment with AFC or the cessation of my
employment with AFC, by final and binding arbitration administered
by the American Arbitration Association under its National Rules for
the Resolution of Employment Disputes (then in effect), and a
judgment upon the award rendered by the single arbitrator may be
entered by any court having jurisdiction thereof. By way of example
only, such claims shall include, but not be limited to, claims asserted
under any federal, state or local statutory or common law, such as the
Pregnancy Discrimination Act (as amended), the Americans with
Disabilities Act (as amended), the Equal Pay Act (as amended), the
Family and Medical Leave Act (as amended), the Immigration
Reform and Control Act (as amended), the law of contract and the law
of tort. The location of the arbitration hearing shall be in Birmingham,
Alabama, AFC and Employee shall share equally all the
administrative costs associated with the filing and prosecution of the
Arbitration. Employee understands that he/she shall bear the expense
of his/her own legal counsel, if necessary. The arbitrator shall,
however, have the power to grant any relief available under the
applicable federal or state statute, including attorneys’ fees and costs.
AFC and Employee acknowledge and understand that employment
with AFC involves and affects interstate commerce.
(Id.).
The amended complaint alleges violations of the FLSA. (Doc. 12). The
arbitration agreement applies to “any controversy, dispute or claim arising out of or
relating to [employee’s] employment with AFC”, which includes claims regarding
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disputes over wages and employment classifications. (Doc. 14-3 at 2; Doc.14-4 at
2; Doc. 14-5 at 2; Doc. 14-6 at 2; Doc. 14-7 at 2).
III.

DISCUSSION
The parties agree the claims at issue are subject to arbitration. (Doc. 21 at

3). The parties do not agree as to whether the court should dismiss the instant
action or stay it during the arbitration proceedings. (Id.).
Section 3 of the FAA states
If any suit or proceeding be brought in any of the courts of the United
States upon any issue referable to arbitration under an agreement in
writing for such arbitration, the court in which such suit is pending,
upon being satisfied that the issue involved in such suit or proceeding
is referable to arbitration under such an agreement, shall on
application of one of the parties stay the trial of the action until such
arbitration has been had in accordance with the terms of the
agreement, providing the applicant for the stay is not in default in
proceeding with such arbitration.
9 U.S.C. § 3. The Eleventh Circuit strictly adheres to the language of the statute
and has held a district court generally does not have discretion to dismiss a case
under 9 U.S.C. § 3.2

Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698, 699

(11th Cir. 1992). Specifically, in Bender, the Eleventh Circuit concluded district
courts do not have the power to choose dismissal over a stay:

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The court is aware of the split in the circuit courts as to whether dismissal is allowed under 9
U.S.C. § 3. See Braxton v. O'Charley's Rest. Props., LLC, 1 F. Supp. 3d 722, 728–29 (W.D. Ky.
2014) (discussing circuit split); see also Richard A. Bales & Melanie A. Goff, An Analysis of an
Order to Compel Arbitration: To Dismiss or Stay?, 115 PENN ST. L. REV. 539, 547 (2011);
This court is bound to follow the precedent of the Eleventh Circuit.
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The district court properly found that the state law claims were subject
to arbitration, but erred in dismissing the claims rather than staying
them. Upon finding that a claim is subject to an arbitration
agreement, the court should order that the action be stayed pending
arbitration. 9 U.S.C. § 3. If the parties do not proceed to arbitration,
the court may compel arbitration. 9 U.S.C. § 4. Therefore, we vacate
the dismissal of the state law claims and remand with instructions that
judgment be entered staying all claims pending arbitration.
971 F.2d at 699.
That being said, Defendant contends the last phrase of 9 U.S.C. § 3 applies
and argues Plaintiff “is in default in seeking the stay since Plaintiff first invoked
the court’s jurisdiction rather than proceed to arbitration when he was aware a
dispute existed between the parties.” (Doc. 22 at 6). The statute states the court
shall stay the litigation unless “the applicant for the stay is not in default in
proceeding with such arbitration.” 9 U.S.C. § 3. “A default occurs when a party
‘actively participates in a lawsuit or takes other action inconsistent with’ the right
to arbitrate.” N & D Fashions, Inc. v. DHJ Industries, Inc., 548 F.2d 722, 728 (8th
Cir. 1976) (quoting Cornell & Co. v. Barber & Ross Co., 360 F.2d 512, 513 (D.C.
Cir. 1966)); see also American Sugar Refining Co. v. The Anaconda, 138 F.2d 765,
767 (5th Cir. 1943); Radiator Specialty Co. v. Cannon Mills, 97 F.2d 318, 319 (4th
Cir. 1938). The court cannot find, and Defendant did not supply, any case law
stating the mere filing of a complaint equates with a default under 9 U.S.C. § 3.
Instead, case law suggests something more is required. See Parcel Tankers, Inc. v.
Formosa Plastics Corp., 569 F. Supp 1459, 1467 (S.D. Texas 1983) (“[a]ctions
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constituting waiver may include . . . the applicant’s engaging in some combination
of filing an answer, setting up a counterclaim, pursuing discovery, and moving for
continuance prior to moving for a stay pending arbitration.”); Cornell & Co., 360
F.2d at 513; Radiator Specialty Co., 97 F.2d at 319.
For these reasons, Defendant’s motion to dismiss and compel arbitration is
GRANTED IN PART and DENIED IN PART. (Doc. 13). Plaintiff’s motion to
stay pending arbitration is GRANTED. (Doc. 20). This action is STAYED
pending resolution through arbitration. The parties are DIRECTED to file a
notice with the court upon settlement of the case or the conclusion of arbitration,
whichever event shall first occur.
DONE and ORDERED this 10th day of April, 2018.

______________________________
STACI G. CORNELIUS
U.S. MAGISTRATE JUDGE

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