Judge v. Unigroup, Inc. et al

Filing 97

ORDER granting in part 82 --motion to compel arbitration; staying certain claims pending arbitration; directing the parties, if they have not received the arbitral decision by 5/1/2019, to submit by 5/8/2019 a report detailing the status of the arbitration. Signed by Judge Steven D. Merryday on 8/16/2018. (BK)

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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
JACK JUDGE, et al.,
Plaintiffs,
v.

CASE NO. 8:17-cv-201-T-23CPT

UNIGROUP, INC., et al.,
Defendants.
____________________________________/

ORDER
A September 8, 2017 order (Doc. 62) compels several of the plaintiffs to
arbitrate their claims. On March 7, 2018, Joe Lotts, Jerry Taylor, and John Mumby
filed (Docs. 78, 79, and 80) notices of consent to join the action. Moving (Doc. 82)
to compel arbitration of Lotts’s claims, Taylor’s claims, and Mumby’s claims, the
defendants argue that “because [Lotts, Taylor, and Mumby] entered enforceable
arbitration agreements that encompass their [Fair Labor Standards Act] claims, they
are not exempt from the [Federal Arbitration Act], and Defendants can enforce their
arbitration agreements pursuant to the relevant state contract law governing the
agreements.” (Doc. 82 at 2)
The independent-contractor operating agreements (“ICOA”) between Lotts
(Doc. 82-3), Taylor (Docs. 82-4 and 82-5), and Mumby (Doc. 82-6), on one side, and
their agents, on the other side, are similar to the ICOAs examined in the September 8

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order: Each agreement requires the parties to arbitrate, and each agreement prohibits
a consolidated or class arbitration. This order incorporates and adopts pages one
through seven of the September 8 order, which holds that the plaintiffs’ claims
originate in the ICOAs, that the arbitration clauses and the class waivers are
enforceable, and that the plaintiffs fail to establish that they are Section-1-exempt
employees. The remaining question is whether the defendants, non-parties to the
agreements, can compel arbitration.
Enforcement by a non-party
The plaintiffs argue that the defendants cannot compel arbitration because the
defendants are not parties to the agreements. But a non-party can compel arbitration
“if the relevant state contract law allows him to enforce the [arbitration] agreement.”
Lawson v. Life of the South Ins. Co., 648 F.3d 1166, 1171 (11th Cir. 2011). State law
controls whether a non-party can use an arbitration clause in a contract to compel
arbitration of a dispute between the non-party and the signatory. Arthur
Andersen LLP v. Carlisle, 556 U.S. 624, 631 (2009); Kroma Makeup EU, LLC v. Boldface
Licensing + Branding, Inc., 845 F.3d 1351, 1354 (11th Cir. 2017).
Florida law governs Lotts’s agreement (Doc. 82-3 at ¶ 24), Arkansas law
governs Taylor’s agreement (Doc. 82-4 at ¶ 24), Oklahoma law governs Taylor’s
second agreement (Doc. 82-5 at ¶ 24), and Michigan law governs Mumby’s
agreement (Doc. 82-6 at ¶ 24).

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Florida
For the reasons stated at pages eight through nine of the September 8 order,
the defendants can compel arbitration of Lotts’s agreement.
Arkansas
Arkansas law holds that “equitable estoppel can apply when a signatory to a
written agreement containing an arbitration clause must rely on the terms of the
written agreement in asserting claims against the nonsignatory.” Bigge Crane &
Rigging Co. v. Entergy Arkansas, Inc., 457 S.W.3d 265, 273 (Ark. 2015). The
defendants argue that Taylor must “rely upon the terms of the ICOA to assert his
claims against Defendants; . . . the ICOA . . . authorized Taylor to perform interstate
household goods moving services . . . . The ICOA governs the moving services that
Taylor provided, and Taylor’s claims depend on the existence of the ICOA.”
(Doc. 82 at 11) But the Arkansas appellate courts offer scant guidance on whether
Arkansas law permits a non-party to enforce an arbitration agreement.
Citing Cook v. U.S. Fid. & Guar. Co., 216 Ark. 743, 745 (1950), Taylor asserts
that Arkansas law prohibits a third party from recovering on a contract that the
contracting parties never intended to benefit the third party. Taylor argues that the
defendants are incidental beneficiaries to the ICOA. (Doc. 87 at 5) According to
Taylor, the defendants mistakenly apply Cook because Taylor need not rely on the
ICOA to assert his FLSA claims against the defendants.

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Also, Taylor asserts that the defendants cannot rely on promissory estoppel
because the defendants have failed to “make any arguments of prejudice or
detrimental reliance as to Taylor.” (Doc. 87 at 8) Estoppel requires detrimental
reliance. Anderson’s Taekwondo Ctr. Camp Positive, Inc. v. Landers Auto Grp. No. 1, Inc.,
2015 Ark. 268 at *9 (2015). The defendants advance neither fact nor law establishing
detrimental reliance. The defendants cannot compel arbitration of the agreement
governed under Arkansas law.
Oklahoma
Oklahoma law holds that a non-party can enforce an arbitration agreement
(based on estoppel) “when the claims are integrally related to the contract containing
the arbitration clause.” B.A.P., L.L.P. v. Pearman, 250 P.3d 332, 339
(Okla. Ct. App. 2011). “Further, given the scarcity of authority on the issue in
Oklahoma law, and the similarities between federal and Oklahoma arbitration law
. . . we find opinions from the federal circuit courts on this issue are also instructive.
The federal circuit courts generally follow the analysis in Long.”1 B.A.P., 250 P.3d

1

“In Long v. DeGeer, 1987 OK 104, 753 P.2d 1327, the defendant moved to compel
arbitration based on a clause contained in an agreement to which he was not a party but had signed
in his capacity as agent for his principal. . . . The Oklahoma Supreme Court, applying New York
state law, found that despite the lack of a contractual relationship between the parties to the dispute,
‘the nonsignatory agent handling matters within the scope of the arbitration agreement’ was entitled
‘to bring questions concerning those matters into arbitration under the agreement....’ Id. ¶ 7, 753
P.2d at 1329. The Court relied on the fact ‘that the basis for the action against appellant was the
existence of the ... agreement’ and the defendant’s actions in carrying out the business that was the
subject matter of the agreement. Id. ¶ 6, 753 P.2d at 1328. Because ‘[t]he arbitration agreement ...
provided for arbitration of disputes arising out of or relating to’ the subject of the agreement and
transactions concerning the agreement, the Court found that the dispute ‘clearly lies within the ambit
of the arbitration provision.’Id. ¶ 7, 753 P.2d at 1329.” B.A.P., 250 P.3d at 338.

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at 339–340. In sum, a non-party can compel arbitration of a claim “arising out of
and relating to his duties under” an agreement. B.A.P., 250 P.3d at 340.
Citing Florida law and Eleventh Circuit precedent,2 the defendants argue that
they can enforce the arbitration agreement if Taylor’s allegations are “intimately
founded in and intertwined with the underlying contract obligations.”
(Doc. 82 at 12) “Like the claims of [Oliveira] and [Judge], . . . Taylor’s claims that
he was misclassified as an independent contractor are intimately found in and
intertwined with the agreement classifying him as such, and Defendants can enforce
Opt-In Plaintiff Taylor’s claims pursuant to Oklahoma law.” (Doc. 82 at 12)
The arbitration clause covers “[a]ny dispute . . . arising in connection with or
relating to [the] agreement.” Taylor’s allegation that he was an employee and thus
entitled to relief under the FLSA is “intimately founded in and intertwined” with the
agreement, which classifies him as an independent contractor; Taylor’s argument
that he is owed minimum wages under the FLSA depends on whether Taylor was
mischaracterized as an independent contractor. In sum, Taylor’s FLSA claims
“aris[e] out of and relat[e] to his duties” under the agreement. The defendants can
compel arbitration of the agreement governed under Oklahoma law.

2

“[W]e find opinions from the federal circuit courts on this issue are also instructive. The
federal circuit courts generally follow the analysis in Long.” B.A.P., 250 P.3d at 339–340.

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Michigan
Michigan law holds that a non-party can enforce an arbitration agreement if
the claims are “so intertwined with the agreement containing the arbitration clause
that it would be unfair to allow the signatory to rely on the agreement in formulating
its claims but to disavow the availability of the arbitration clause of that same
agreement.” Tobel v. AXA Equitable Life Ins. Co., No. 298129, 2012 WL 555801, at
*9–12 (Mich. Ct. App. Feb. 21, 2012). Stated simply, Michigan law holds that
“estoppel[] is applicable to enforce a [non-party’s] request for arbitration against
plaintiffs.” Tobel, 2012 WL 555801 at 10. The defendants argue that Mumby’s
allegation that he was an employee entitled to relief under the FLSA — as opposed
to an independent contractor not entitled to relief under the FLSA — is “intimately
founded upon and intertwined with the agreement[] that classifie[s] [him] as [an]
independent contractor[].” Thus, the defendants argue, Michigan law allows the
defendants to enforce the arbitration agreement. (Doc. 82 at 10–11)
Mumby asserts that instead of relying on the ICOA as a basis for his claims
against the defendants, he “[relies] upon the economic realities test mandated by the
remedial purpose of the FLSA.” (Doc. 87 at 10) Further, Mumby argues that “at no
point has [he] ever relied upon the ICOA with Defendants’ Michigan affiliate to
bring his claims against Defendants.” (Doc. 87 at 11) But Mumby’s “economic
realities test” argument lacks merit. For the reasons stated by the defendants,
Mumby is equitably estopped from arguing that his claims against the defendants are

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not subject to arbitration, and the defendants may compel arbitration under Michigan
law.
CONCLUSION
The defendants’ motion (Doc. 82) to compel arbitration is GRANTED IN
PART. Under 9 U.S.C. § 3, the parties must individually arbitrate (1) Lotts’s claims,
(2) Mumby’s claims, and (3) Taylor’s claims that arise from the ICOA (Doc. 82-5)
between Taylor and Armstrong Transfer & Storage Co., Inc./Armstrong Relocation
Company. Lotts’s claims, Mumby’s claims, and Taylor’s claims that arise from the
agreement between Taylor and Armstrong are STAYED pending arbitration. If the
parties have not received the arbitral decision by MAY 1, 2019, the plaintiff must
submit by May 8, 2019, a report detailing the status of the arbitration.
ORDERED in Tampa, Florida, on August 16, 2018.

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