Thomas et al v. Downriver Staffing Group, LLC et al

Filing 35

OPINION and ORDER Denying Defendants' 32 Motion to Vacate Arbitration Award In Favor of Plaintiff Vincent Thomas. Signed by District Judge Linda V. Parker. (RLou)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
VINCENT THOMAS and ALAN QUEEN,
Plaintiffs,
v.

Civil Case No. 15-10055
Honorable Linda V. Parker

RIGHT CHOICE STAFFING GROUP, LLC,
ADEPT SERVICES GROUP, INC.,
DOWNRIVER STAFFING GROUP, LLC,
AUTOLINE TRANSPORTATION, INC.,
TIMOTHY SCHULTZ, and TRACY SHAFFER,
Defendants.
_______________________________________/
OPINION AND ORDER DENYING DEFENDANTS’ MOTION TO
VACATE ARBITRATION AWARD IN FAVOR OF
PLAINTIFF VINCENT THOMAS
Plaintiffs filed this putative class action lawsuit against Defendants asserting
violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219.
Defendants thereafter moved to compel arbitration based on an arbitration clause in
an agreement signed by Plaintiffs. In a decision issued July 6, 2015, this Court
granted in part and denied in part Defendants’ motion. (ECF No. 27.) Finding the
arbitration agreement effective as of December 16, 2013, the Court held that
Plaintiffs could be compelled to arbitrate only their FLSA claims arising after that
date. (Id. at Pg ID 13.) The Court stayed Plaintiffs’ FLSA claims arising before
that date until arbitration was concluded. (Id. at 30.) The matter is presently

before the Court on Defendants’ motion to vacate the arbitration award, filed
March 19, 2018. (ECF No. 32.) The motion has been fully briefed. (ECF Nos.
33, 34.) Finding the facts and legal arguments sufficiently presented by the parties,
the Court is dispensing with oral argument with respect to Defendants’ motion
pursuant to Eastern District of Michigan Local Rule 7.1(f).
Background
Sometime after the Court issued its July 6, 2015 decision compelling
arbitration, Plaintiff Vincent Thomas (“Thomas”) and Defendants proceeded to
arbitration through the American Arbitration Association (“AAA”).1 The parties
subsequently agreed to consolidate the arbitration case for hearing with another
case in which the Honorable Judith E. Levy had ordered arbitration of FLSA
claims brought by Gary Conner, Jr. (“Conner”) against Right Choice Staffing
Group, LLC (“Right Choice”) and Adept Services Group, Inc. (“Adept”): Gary
Conner, Jr. v. Right Choice Staffing Grp., LLC, et al., Civil Case No. 14-12887
(E.D. Mich. filed July 23, 2014). The parties subsequently selected Michael R.
Blum as the arbitrator.
On October 27, 2016, Arbitrator Blum submitted a General Arbitrator Oath
Form to AAA, answering “yes” in response to the question: “Have you had any

Plaintiff Alan Queen’s claims were subsequently dismissed by the arbitrator due
to his failure to appear at the arbitration hearing. (See Defs.’ Br. in Supp. of Mot.
at 3 n.1, ECF No. 32 at Pg ID 345.)
2

1

professional or social relationship with counsel for any party in this proceeding or
the firms for which they work.” (Defs.’ Mot., Ex 10, ECF No. 32-11 at Pg ID
478.) Arbitrator Blum explained that he is a member of the Macomb County Bar
Association (“MCBA”) Labor and Employment Committee and that Conner’s
counsel, Heidi Sharp, also is a committee member and served at the time as its
Chairperson. (Id.) Arbitrator Blum submitted a supplemental disclosure on
October 31, 2016, adding that he had not been particularly active in the MCBA
Labor and Employment Committee in the past few years and had not attended
committee meetings for the past year. (Id., Ex. 11, ECF No. 32-12.) Arbitrator
Blum included that he did not believe his relationship with Sharp would affect his
ability to act fairly and impartially. (Id.) He then submitted a second supplemental
disclosure on May 1, 2017, stating that he appeared opposite another lawyer in
Sharp’s firm, Joseph Golden of Burgess Sharp & Golden, in an ongoing matter and
that they attended an EEOC conciliation in the matter on that date. (Id., Ex. 16,
ECF No. 32-17.)
The consolidated arbitration hearing regarding Thomas’ and Conner’s
claims was held on August 9 or September 8, 2017.2 On October 6, 2017,

Defendants indicate that the hearing occurred on the earlier date and the
arbitrator’s interim decision provides the same date. (Defs.’ Br. in Supp. of Mot. at
11, ECF No. 32 at Pg ID 353; Id. Ex. 20 at 1, ECF No. 32-21 at Pg ID 591.) The
arbitrator’s final award, however, states that the hearing occurred on the latter date.
3
2

Arbitrator Blum issued a Decision and Interim Award. (Defs.’ Mot., Ex. 20, ECF
No. 32-21.) Arbitrator Blum first found that Thomas and Conner were employees,
not independent contractors, and thus entitled to overtime pay under the FLSA.
(Id. at 5, Pg ID 595.) Arbitrator Blum next found that Conner suffered damages in
the form of unpaid overtime totaling $6,170.63, and that Thomas’ damages totaled
$5,409.63 (which included a credit of $661.00 previously paid pursuant to a
Department of Labor investigation). (Id. at 5-6, Pg ID 595-96.) In the “Award”
section of the decision, however, Arbitrator Blum listed Conner’s damages as
$9,459.00. (Id. at 7, ECF No. 597.)
Arbitrator Blum additionally awarded Conner and Thomas liquidated
damages under the FLSA in the same amounts as their actual damages and
concluded that they were entitled to an award of attorneys’ fees and costs. (Id. at
6, 7, Pg ID 596-97.) Finding insufficient documentation to determine the
appropriate award of attorneys’ fees or costs, Arbitrator Blum retained jurisdiction
and instructed the parties to file submissions regarding the issue. (Id.) Lastly,
Arbitrator Blum dismissed Thomas’ and Conner’s claims against Adept and
Downriver Staffing Group, LLC, finding that they never worked for these
companies, and concluded that there was no basis to hold Tracy Shaffer personally

(Id., Ex. 21 at 3, ECF No. 32-22 at Pg ID 601.) The discrepancy is irrelevant with
respect to the pending motion.
4

liable. (Id. at 7, Pg ID 597.) He found Right Choice, Autoline, and Timothy
Schultz jointly liable for the arbitration award. (Id.)
Right Choice and Schultz subsequently filed a motion for modification,
noting the discrepancy in the amounts awarded to Conner in the interim award and
arguing that Conner was entitled to a much lower award, $1,532.07 or less. See
Resp. to Mot., Ex. 1, Conner v. Right Choice Staffing Grp., LLC, et al., No. 1412887 (E.D. Mich. Apr. 2, 2018), ECF No. 30-2. On December 20, 2017,
Arbitrator Blum issued a Final Award of Arbitration, awarding Thomas $9,459.00
in damages, the same amount in liquidated damages, and attorneys’ fees totaling
$25,650.00 against Right Choice, Autoline, and Schultz.3 (Defs.’ Mot., Ex. 21,
ECF No. 32-22.) Arbitrator Blum awarded Conner $6,170.63, the same amount in
liquidated damages, and attorneys’ fees and costs totaling $24,271.00. (Id)
On March 19, 2018, Defendants filed the pending motion to vacate the
arbitration award in favor of Thomas.4 Defendants indicate in their motion that
“[f]ollowing the arbitration hearing, [they] discovered that the arbitrator had not
disclosed pertinent information regarding his relationship to Conner’s attorney and
In the final award, Arbitrator Blum states that upon review of the damage
calculations in response to the motion for modification, he found an error in the
amount he had awarded to Thomas in his interim decision. (Defs.’ Mot., Ex. 21 at
8 n.4, ECF No. 32-22 at Pg ID 606.)
4
On the same date, Right Choice and Adept also moved to vacate the award in
favor of Conner in the case pending before Judge Levy. See Mot., Conner, No. 1412287 (E.D. Mich. filed Mar. 19, 2018), ECF No. 27. The motion is scheduled for
hearing on August 16, 2018.
5
3

other partners in her firm.” (Defs.’ Mot. at 4, ECF No. 32 at Pg ID 346.)
Specifically, Defendants identify that Arbitrator Blum failed to previously disclose
the following:
(1) [H]e was apparently a founding member of the Macomb County
ADR Committee, together with Joseph Golden, a partner at Burgess,
Sharp, and Golden and, at that time, a director of the Macomb County
Bar Association. (Exhibit 13, at 12-14);
(2) Sharp was also a member of the Macomb County ADR Committee
at the same time as Arbitrator Blum (Exhibit 14, at 20)[;]
(3) [H]e organized a presentation on November 4, 2013 on ADR
techniques with Golden, which featured Sharp as one of the event’s
speakers. (Exhibit 15, at 2; Ex. 13, at 13-14[.]) At the time, the ADR
Committee consisted of just 26 members. (Ex. 13, at 14)[;]
(4) Sharp, Blum, and Golden were all members of the ADR
Committee as of at least February 2015, after [Judge Levy] entered an
Order compelling arbitration of Conner’s claims on January 16, 2015.
(Ex. 14, at 20)
(Defs.’ Mot. at 8-9, ECF No. 32 at Pg ID 351-52, footnotes omitted.) Defendants
contend that Arbitrator Blum’s relationship with Golden and Sharp caused him to
be biased in favor of Sharp’s client, Conner, as demonstrated by his award to
Conner of nearly twice the maximum damages he sought, an award against Schultz
and Autoline where Conner never named them as defendants in his federal
complaint, and allowing Sharp to file pleadings beyond set deadlines.

6

Discussion
The Federal Arbitration Act (“FAA”) expresses a federal policy favoring the
enforcement of arbitration clauses negotiated between parties to a contract.5 See
Volt Info. Sciences, Inc. v. Bd. of Trs., 489 U.S. 468, 475-76 (1989). To encourage
parties to agree to arbitration in the first place, the FAA ensures that “arbitration
awards are both fair and final.” Solvay Pharm. Inc. v. Duramed Pharm, Inc., 442
F.3d 471, 475 (6th Cir. 2006). The act promotes finality “by substantially limiting
the occasions for judicial review,” id., and expressing “a presumption that
arbitration awards will be confirmed.” Andersons, Inc. v. Horton Farms, Inc., 166
F.3d 308, 328 (6th Cir. 1998). At the same time, however, fairness is achieved “by
requiring courts to intervene when arbitrators so improperly execute their
responsibilities as to discourage others from arbitrating in the future.” Solvay, 442
F.3d at 475.
Pursuant to the FAA, a court may intervene and vacate an arbitration award
upon application of any party to the arbitration:
(1) where the award was procured by corruption, fraud, or undue
means;
(2) where there was evident partiality or corruption in the arbitrators,
or either of them;
When they moved to compel arbitration, Defendants contended that the arbitration
agreement was subject to the FAA. (See Defs.’ Br. in Supp. of Mot at 9-11, ECF
No. at Pg ID 116-18.) Plaintiffs did not dispute this contention in response. (See
Pls.’ Resp., ECF No. 21.)
7

5

(3) where the arbitrators were guilty of misconduct in refusing to
postpone the hearing, upon sufficient cause shown, or in refusing to
hear evidence pertinent and material to the controversy; or of any
other misbehavior by which the rights of any party have been
prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award upon the
subject matter submitted was not made.
9 U.S.C. § 10(a). In this case, Defendants argue that vacatur is necessary because
Arbitrator Blum exhibited evident partiality. (See Defs.’ Br. in Supp. of Mot. at
14, ECF No. 32 at Pg ID 356.)
An arbitration award may be vacated on the basis of evident partiality only
where “a reasonable person would have to conclude that an arbitrator was partial to
the other party to the arbitration.” Apperson v. Fleet Carrier Corp., 879 F.2d
1344, 1358 (6th Cir. 1989) (quotations omitted). As a result, “[t]he alleged
partiality must be direct, definite, and capable of demonstration, and ‘the party
asserting evident partiality must establish specific facts that indicate improper
motives on the part of the arbitrator.’” Andersons, Inc., 166 F.3d at 329 (quoting
Consol. Coal Co. v. Local 1643, United Mine Workers of Am., 48 F.3d 125, 129
(4th Cir. 1995)). Defendants fail to satisfy this standard.
First, Defendants do not identify facts from which “a reasonable person
would have to conclude that” Arbitrator Blum was partial to one party to the
arbitration. Arbitrator Blum’s professional involvement with Golden in forming
8

the MCBA ADR committee and organizing a brown bag lunch to present ADR
techniques—both which occurred at least four years before the arbitration—would
not necessarily render him biased in favor of Conner, who was represented in the
arbitration by someone with whom Golden later formed a partnership.6 See Uhl v.
Komatsu Forklift Co., 512 F.3d 294, 307 (6th Cir. 2008) (finding that a reasonable
person would not be forced to conclude that the arbitrator was partial toward the
plaintiff or counsel of intervening insurance company based on fact that the
arbitrator previously worked as co-counsel on two cases with intervening
plaintiff’s attorney and had appeared in other cases in which this other attorney had
represented an intervenor); Apperson, 879 F.2d at 1360 (declining to vacate
arbitrator’s award where arbitrator adjudicated a case that involved his former law
partners whose practice he left two-and-a-half years earlier). As the Sixth Circuit
has stated: “Certainly, arbitrators and attorneys frequently participate in activities
that result in communication unrelated to the subject matter of litigation before the
arbitrator, … and it would be unreasonable to suggest such contacts in unrelated
matters are prohibited.” Nationwide Mut. Ins. Co. v. Home Ins. Co., 429 F.3d 640,
649 (2005) (internal citation omitted) (finding that arbitrator’s previous service in
six matters as arbitrator for one of the parties and social engagements with party’s

In response to Defendants’ motion, Thomas indicates that Golden and Sharp
became business partners a year after the November 2013 ADR presentation.
(Pl.’s Resp. Br. at 4, ECF No. 33 at Pg ID 622.)
9

6

attorneys at events that did not involve any communication about the arbitration
did not require vacatur of his award). Moreover, Arbitrator Blum’s previous
professional involvement with Conner’s attorney, Sharp, and Sharp’s law partner,
Golden, certainly do not suggest partiality in favor of Thomas.
Second, Defendants fail to identify concrete actions in which Arbitrator
Blum appeared to actually favor Conner or Thomas. “An adverse award in and of
itself is no evidence of bias absent some evidence of improper motivation.”
Andersons, Inc., 166 F.3d at 330. As evidence of partiality, Defendants also point
to Arbitrator Blum’s holding Autoline and Schultz jointly liable where Conner did
not name them as defendants in his federal lawsuit suit and Arbitrator Blum’s
award of damages to Conner that exceeded the amount he sought in his
specification of claims.
Autoline and Schultz were included as named respondents in the
consolidated arbitration matter, however. (See, Defs.’ Mot., Ex. 21 at 1 n.2, ECF
No. 32-22 at Pg ID 599.) Moreover, Arbitrator Blum specifically explained why
he found them jointly liable under the FLSA. 7 (Id. at 10, Pg ID 608.) With
respect to the amount of damages, there are several explanations other than bias for
why the award exceeded the amount stated in Conner’s specification of claims.
Arbitrator Blum found that Schultz owned or partly owned Right Choice, who
Conner did include in his federal complaint, and Right Choice was Autoline’s
successor after it shut down in April 2013. (See, e.g., Defs.’ Mot., Ex. 21, ECF
No. 32-22 at Pg ID 601.)
10

7

For example, it may have resulted from a miscalculation, an error of fact, or a
determination by Arbitrator Blum that Conner was due the amount awarded.8
Defendants cite no authority for their contention that the arbitrator may not award
damages greater than those stated in a claimant’s specification and they did not
raise this as an argument when seeking modification of the interim award. See
Pl.’s Resp., Ex. 1, Conner, No. 14-12887 (E.D. Mich. filed Apr. 2, 2018), ECF No.
30-2.
Finally, the fact that Arbitrator Blum may have allowed Thomas to file his
specification of claims beyond the original deadline is not evidence of his
partiality. Thomas sought leave for his delayed filing. Judges routinely extend
deadlines to parties and their doing so is not evidence of bias.
In short, Defendants fail to demonstrate that Arbitrator Blum was partial to
Conner or Thomas. As such, they do not establish a basis for vacatur.

A factual error does not, on its own, empower a district court to vacate an
arbitration award. See United Paperworkers Int’l Union v. Misco, Inc., 484 U.S.
29, 36 (1987) )“The courts are not authorized to reconsider the merits of an award
even though the parties may allege that the award rests on errors of fact or on
misinterpretation of the contract.”).
11

8

Attorney’s Fees
In response to Defendants’ motion to vacate the arbitration award, Thomas
asks the Court to award him the reasonable attorneys’ fees he has incurred
defending against the motion.
The FLSA mandates an award of attorney’s fees to a prevailing plaintiff. 29
U.S.C. § 216(b). As such, the Court concludes that Thomas is entitled to an award
for the reasonable attorneys’ fees he incurred responding to Defendants’ motion to
vacate the arbitration award. Within fourteen (14) days of this decision, Thomas
shall file documentation supporting the amount sought. Defendants shall submit
objections to the requested amount within fourteen (14) days of Thomas’ filing.
Accordingly,
IT IS ORDERED that Defendants’ motion to vacate the arbitrator’s award
in favor of Plaintiff Vincent Thomas (ECF No. 32) is DENIED;
IT IS FURTHER ORDERED that pursuant to 29 U.S.C. § 216(b), Thomas
is awarded the reasonable attorneys’ fees he incurred in responding to Defendants’
motion. At a later date, the Court will issue a separate order setting forth the
amount awarded.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: June 18, 2018
12

I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, June 18, 2018, by electronic and/or U.S.
First Class mail.
s/ R. Loury
Case Manager

13