Collins et al v. NPC International, Inc.

Filing 87

ORDER: The Motion to Compel Individual Arbitration or, Alternatively,to Stay Proceedings filed by Defendant NPC, International, Inc. (Doc. 40 ) is GRANTED in part and DENIED in part. This case is STAYED pending the Supreme Court's ruling in Lewis v. Epic Systems Corp. Because this case is stayed, Defendant NPC's Motion for Protective Order (Doc. 71 ) is also GRANTED. Defendant NPC's motion to compel arbitration, as well as the Motion for Conditional Certification filed by Plaintiffs Tony Collins, Naimatullah Nayzee, and Ann Murray (Doc. 18 ) are DENIED without prejudice and may be refiled once the Supreme Court issues its opinion. Signed by Judge Nancy J. Rosenstengel on 10/25/2017. (mlp)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
TONY COLLINS, NAIMATULLAH
NAYZEE, and ANN MURRAY, for
themselves and all others similarly
situated,
Plaintiffs,
vs.
NPC, INTERNATIONAL, INC.,
Defendant.

)
)
)
)
)
)
)
)
)
)
)
)

Case No. 3:17-CV-00312-NJR-RJD

MEMORANDUM AND ORDER
ROSENSTENGEL, District Judge:
This matter comes before the Court on the Motion for Conditional Certification
filed by Plaintiffs Tony Collins, Naimatullah Nayzee, and Ann Murray on March 31,
2017 (Doc. 18), the Motion to Compel Individual Arbitration or, Alternatively, to Stay
Proceedings filed by Defendant NPC, International, Inc. (“NPC”) on May 1, 2017
(Doc. 40), and the Motion for Protective Order filed NPC on August 7, 2017 (Doc. 71).
Plaintiffs filed a response in opposition to NPC’s motion to compel or to stay
proceedings on May 31, 2017 (Doc. 52). Both parties have supplied the Court with
supplemental authority in support of their respective positions. For the reasons set forth
below, the Court grants NPC’s motion to stay these proceedings pending the Supreme
Court’s decision in Lewis v. Epic Systems Corp. Plaintiffs’ motion for conditional
certification and NPC’s motion to compel arbitration are denied without prejudice.

Page 1 of 9

BACKGROUND
Plaintiffs bring this suit as a proposed collective action under the Fair Labor
Standards Act (“FLSA”) as well a proposed class action under Illinois, Missouri, and
Florida state law. NPC is the largest Pizza Hut franchisee in the United States, operating
more than 1,240 Pizza Hut restaurants across the country (Doc. 14, p. 4). Plaintiffs are
delivery drivers for NPC. As delivery drivers, Plaintiffs all have the same primary
responsibility: to deliver pizza and other food and beverages to customers using their
personal vehicles (Id., p. 5). Plaintiff Collins works for NPC in Illinois, Plaintiff Nyazee
works for NPC in Missouri, and Plaintiff Murray works for NPC in Florida (Id., p. 2-3).
Plaintiffs allege NPC under-reimbursed its delivery drivers for vehicular wear
and tear, gas, and other driving-related expenses, effectively paying drivers well below
the minimum wage (Id., p. 2). Plaintiffs claim NPC continues to under-reimburse them,
“preferring to selfishly pocket excess profits rather than fairly pay its employees.” (Id.).
According to Plaintiffs, NPC requires delivery drivers to maintain and provide a safe,
functioning, insured, and legally operable automobile to make deliveries. NPC also
requires its delivery drivers to bear all out of pocket costs associated with their vehicles,
including gas, depreciation, insurance, maintenance, and repairs (Id., p. 6). Nevertheless,
Plaintiffs allege, NPC only reimburses them between $0.25 and $0.35 per mile – much
lower than the $0.535 mileage rate set by the IRS in 2017 (Id.). Because Plaintiffs and their
colleagues typically drive an average of five to ten miles per delivery and make an
average of four deliveries each hour, Plaintiffs aver they are under-reimbursed by $4.00

Page 2 of 9

to $12.00 each hour (Id.). Plaintiffs also claim NPC undercounted the number of miles
they actually drove (Id.).
Plaintiffs have moved to conditionally certify a collective of all NPC drivers
(Docs. 19, 20). NPC denies Plaintiffs’ claims and has moved to compel individual
arbitration pursuant to an arbitration agreement signed by each named Plaintiff.
Alternatively, NPC asks the Court to stay all proceedings until the United States
Supreme Court decides the legality of the class action waivers contained in the
arbitration agreements. See Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. 2016), cert
granted, 85 U.S.L.W. 3343 (U.S. Jan. 13, 2017) (No. 16-285).
The arbitration agreement signed by the named Plaintiffs requires them to use
binding individual arbitration for any claims and expressly prohibits Plaintiffs from
acting on behalf of or as a part of any purported class, collective, representative, or
consolidated action (Docs. 41-2, 41-3 41-4, 41-5, 41-6, 41-7). The provision specifically
provides that “the waiver of Class Action claims and proceedings is an essential and
material term of this Agreement to Arbitrate, and NPC and I agree that if it is
determined by a court of competent jurisdiction that it is prohibited or invalid under
applicable law, then this entire Agreement to Arbitrate is held to be unenforceable.” (Id.).
Plaintiffs electronically signed the Arbitration Agreement “in exchange for my
employment or continued employment, as well as the mutual promises to resolve
disputes through arbitration contained in this Agreement . . . .” (Id.). Just above the
signature line is an acknowledgment, in bold, that by entering into the agreement,

Page 3 of 9

Plaintiffs were waiving any right to a jury trial or to bring any employment-related claim
as a class, collective, representative, or consolidated action (Id.).
Currently, Seventh Circuit law holds that mandatory arbitration provisions
precluding employees from seeking any class, collective, or representative remedies to
wage-and-hour disputes are unenforceable because they interfere with employees’
rights to engage in concerted activity under the National Labor Relations Act (“NLRA”).
Lewis, 823 F.3d at 1155. The Ninth Circuit held likewise in Morris v. Ernst & Young, LLP,
834 F. 3d 975 (9th Cir. 2016). The Second, Fifth, and Eighth Circuits have all held,
however, that employee arbitration agreements containing class waivers are enforceable.
See Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2d Cir. 2013); NLRB v. Murphy Oil USA,
Inc., 808 F.3d 1013 (5th Cir. 2015); Cellular Sales of Missouri, LLC v. NLRB, 824 F.3d 772 (8th
Cir. 2016). On January 13, 2017, the Supreme Court granted the petition for certiorari in
Lewis and consolidated the case with Morris and Murphy Oil. The Supreme Court heard
oral argument on October 2, 2017, and an opinion is expected sometime in early 2018.
LEGAL STANDARD
“The power to stay proceedings is incidental to the power inherent in every court
to control the disposition of cases on its docket with economy of time and effort for itself,
for counsel and for litigants.” Tel. Sci. Corp. v. Asset Recovery Sols., LLC, No. 15 C 5182,
2016 WL 47916, at *2 (N.D. Ill. Jan. 5, 2016) (quoting Texas Indep. Producers & Royalty
Owners Ass’n v. E.P.A., 410 F.3d 964, 980 (7th Cir. 2005)). “The decision to grant a stay is
committed to a court’s discretion, though that discretion must be exercised consistently
with principles of fairness and judicial economy.” Walker v. Monsanto Co. Pension Plan,

Page 4 of 9

472 F. Supp. 2d 1053, 1054 (S.D. Ill. 2006) (internal citations omitted). In determining
whether to grant a motion to stay, courts typically consider three factors: (1) whether a
stay will unduly prejudice or tactically disadvantage the non-moving party; (2) whether
a stay will simplify the issues in question and streamline the trial; and (3) whether a stay
will reduce the burden of litigation on the parties and the court. Id.
DISCUSSION
NPC has asked the Court to compel arbitration or, alternatively, to stay the case
pending the outcome of the Supreme Court’s review of Lewis. Defendants argue that
because the Supreme Court’s decision in Lewis will have a direct impact on this case, an
immediate stay will simplify the issues in question, streamline the proceedings, and
thus, reduce the burden of litigation on the parties and the court. Defendant asserts a
stay will preserve both the Court’s and the parties’ resources in briefing, arguing, and
determining pending and future motions.
Plaintiffs oppose NPC’s motion to compel arbitration as well as the alternative
request to stay the litigation pending the Supreme Court’s opinion in Lewis. Plaintiffs
argue that a stay would prejudice Plaintiffs and the other delivery drivers because it
would cause claims to extinguish. Under the FLSA, the statute of limitations continues to
run until a plaintiff opts in to the collective action and files his or her notice of written
consent with the court. See 29 U.S.C. § 256(b). And, because a plaintiff’s consent does not
relate back to the original filing date of the complaint, waiting to certify the collective
and give notice of the action means potential plaintiffs’ claims could expire. Plaintiffs
further argue that a stay would allow NPC to continue paying unlawfully low wages

Page 5 of 9

and would frustrate the wage and hour laws intended to protect workers. Finally,
Plaintiffs argue that granting a stay would not meaningfully reduce the burden of
litigation on the Court or the parties. Whether or not the class waiver in the agreement is
enforceable, Plaintiffs assert, the Court would still be obligated to certify the proposed
collective action because arbitration defenses are irrelevant at the conditional
certification stage.
Upon considering the second and third factors—whether a stay will simplify the
issues in question, streamline the trial, and reduce the burden of litigation—the Court
finds that these issues weigh in favor of staying the case. Conditionally certifying a
collective and permitting class discovery, only to later decertify the collective a few
months later (if the Supreme Court reverses the Seventh Circuit in Lewis) would defeat
the purpose of judicial economy. The ruling in Lewis will have a direct impact on the
issues in this case; in just a few months, Plaintiffs will know whether the arbitration
clause they signed is valid. Under these circumstances, the Court finds that staying the
case is “reasonable and prudent.” Carter v. Arise Virtual Sols., Inc., No. 16 C 6262 (N.D. Ill.
Feb. 14, 2017) (finding its decision to stay the case pending the Supreme Court’s ruling in
Lewis to be “reasonable and prudent” given that the Supreme Court’s guidance will
directly impact the issues raised by the motion for conditional certification and motion
to compel arbitration); see also Tel. Sci. Corp. v. Asset Recovery Solutions, LLC, No. 15 C
5182, 2016 WL 47916 (N.D. Ill. Jan. 5, 2016) (staying proceedings pending Supreme
Court’s Spokeo decision, finding that litigation would be streamlined by imposition of the
stay and the burdens of litigation would be reduced). “Proceeding in the face of

Page 6 of 9

uncertainty, when the issues will be conclusively resolved in the near future, does not
serve the interests of any of the parties or the Court.” Id.
Furthermore, allowing notice to go out to thousands of potential class members 1
and permitting class discovery (and refereeing potential discovery disputes) would be a
waste of the parties’ and the Court’s resources when the validity of the arbitration
agreement is unknown. See Campanelli v. ImageFIRST Healthcare Laundry Specialists, Inc.,
No. 15-CV-04456-PJH, 2017 WL 2929450, at *4 (N.D. Cal. July 10, 2017) (holding it would
be a waste of resources to permit wide-ranging discovery when it is not clear whether
plaintiffs waived their right to proceed in a class or collective action); see also Meetz v.
Wisconsin Hosp. Grp. LLC, No. 16-C-1313, 2017 WL 3736776, at *3 (E.D. Wis. Aug. 29,
2017) (“Because a plaintiff’s discovery demands upon conditional certification may
impose a tremendous financial burden to the employer, courts must be careful to avoid
wasting the parties’ time and resources in cases that do not warrant certification.”)
(citations and quotations omitted).
While Plaintiffs claim no resources would be saved because the Court must
conditionally certify the class regardless of any arbitration defenses, they have not cited
any binding authority to support their proposition. One of the district court cases cited
by Plaintiffs distinguishes between situations where all of the named plaintiffs signed an
arbitration agreement (as is the case here) and where only some members of a proposed
class may be subject to an arbitration provision. Campbell v. Pincher’s Beach Bar Grill Inc.,
No. 215CV695FTM99MRM, 2016 WL 3626219, at *6 (M.D. Fla. July 7, 2016). The court in

The Complaint alleges that the Illinois, Missouri, and Florida classes each likely exceed 1,000 people
(Doc. 14, ¶¶ 41, 52, 63).

1

Page 7 of 9

Campbell noted that the latter situation does not preclude the conditional certification of a
class. Id. Here, however, NPC has presented evidence that all three named Plaintiffs
would be prohibited from bringing a collective action should the Supreme Court’s ruling
in Lewis favor NPC, and Plaintiffs have not argued that there are any putative class
members who have not signed an arbitration agreement. Thus, the Court does not
believe it must conditionally certify the class regardless of Defendant’s arbitration
defense.
The only argument presented by Plaintiffs that gives the Court pause is their
assertion that staying the case will unduly prejudice them by extinguishing the claims of
potential members of the collective action, because an action is not “commenced” under
the FLSA until an opt-in plaintiff’s consent is filed. The Court notes, however, that at
least twelve other individuals have opted-in to this lawsuit despite no notice having
been issued. And, “nothing in FLSA suggests that once one plaintiff has asserted a claim
against an employer, all other potential plaintiffs are relieved of their respective
obligations to exercise their own diligence with respect to the investigation and/or
assertion of their own claims against that employer.” Sylvester v. Wintrust Fin. Corp., No.
12 C 01899, 2014 WL 10416989, at *3 (N.D. Ill. Sept. 26, 2014) (denying a motion to
equitable toll the statute of limitations solely because of the court’s delay in ruling on the
conditional certification motion). Nevertheless, the Court is unaware of any restrictions
prohibiting the parties from entering a tolling agreement that would protect the interests
of putative class members until a decision is reached by the Supreme Court. See id.;
Carter v. Arise Virtual Sols., Inc., No. 16 C 6262 (N.D. Ill. Feb. 14, 2017) (noting that the

Page 8 of 9

parties had entered a tolling agreement). The Court finds that Plaintiffs have not
demonstrated undue prejudice that would preclude the application of a stay in this case.
For these reasons, the Motion to Compel Individual Arbitration or, Alternatively,
to Stay Proceedings filed by Defendant NPC, International, Inc. (Doc. 40) is GRANTED
in part and DENIED in part. This case is STAYED pending the Supreme Court’s ruling
in Lewis v. Epic Systems Corp. Because this case is stayed, Defendant NPC’s Motion for
Protective Order (Doc. 71) is also GRANTED. Defendant NPC’s motion to compel
arbitration, as well as the Motion for Conditional Certification filed by Plaintiffs Tony
Collins, Naimatullah Nayzee, and Ann Murray (Doc. 18) are DENIED without
prejudice and may be refiled once the Supreme Court issues its opinion.
IT IS SO ORDERED.
DATED: October 25, 2017
____________________________
NANCY J. ROSENSTENGEL
United States District Judge

Page 9 of 9