JOSEPH et al v. QUALITY DINING, INC.
MEMORANDUM/OPINION THAT DEFENDANTS' MOTION TO DISMISS IS GRANTED. THE LEAD PLAINTIFFS MUST, THEREFORE, PROCEED IN INDIVIDUAL ARBITRATION, SO THEIR CLAIMS ARE DISMISSED AND THE ACTION CLOSED. TO THE EXTENT THE ADDITIONAL OPT-IN PLAINTIFFS HAVE BROUGHT CLAIMS, THEY TOO ARE DISMISSED WITHOUT PREJUDICE TO A NEW FILING OR FILINGS BY THOSE PARTIES. SIGNED BY HONORABLE JEFFREY L. SCHMEHL ON 3/21/17. 3/21/17 ENTERED AND COPIES E-MAILED.(ky, )
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 1 of 15
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
STEPHANIE JOSEPH and RYAN
RUTHERFORD, on behalf of themselves and
similarly situated employees,
QUALITY DINING, INC., and GRAYLING
SCHMEHL, J. /s/ JLS
March 21, 2017
Plaintiffs, who worked as servers at Chili’s restaurants operated in Pennsylvania
by Defendants, and who intend to represent a class of similar plaintiffs, brought suit
challenging a particular tip-pooling practice as in violation of the Fair Labor Standards
Act (FLSA) and the Pennsylvania Minimum Wage Act (PMWA). Defendants moved to
dismiss on the basis of arbitration agreements signed by Plaintiffs. The Court must
consider several issues: questions related to which agreement documents actually apply
to each lead Plaintiff; whether the Court or the arbitrator should determine the availability
of class-based arbitration; if that matter is for the Court, whether class arbitration is
available; and what to do about numerous opt-in plaintiffs if the lead plaintiffs’ claims are
dismissed in favor of individual arbitration.
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 2 of 15
Factual and Procedural Background
Because the issues at hand concern only the arbitration agreements, the facts of
the underlying claims are not of great importance. Suffice it to say that Plaintiffs were
servers paid below minimum wage with the difference to be made up by tips; the tip
funds were pooled and shared not only by servers, but also by employees called
“expediters.” Plaintiffs argue this violated the FLSA and PMWA because expediters do
not have sufficient interaction with customers.
Lead Plaintiffs Stephanie Joseph and Ryan Rutherford originally filed in Lehigh
County, pursuing only a PMWA claim. After Defendants removed the action to this
Court under the Class Action Fairness Act, Plaintiffs amended their complaint to include
the FLSA claim. Defendants filed a motion to dismiss on the basis of signed arbitration
agreements. Plaintiffs then filed forms signed by fifteen additional individuals (and later
a sixteenth) expressing their consent under Section 16(b) of the FLSA, 29 U.S.C.
§ 216(b), to become party plaintiffs in this action. Defendants also filed a motion
regarding their rights to communicate with putative class members, which the Court has
previously resolved. The Court heard oral argument on the motion to dismiss, and
Plaintiffs have since filed a motion for conditional class certification.
Some of the key issues for the motion to dismiss are currently on appeal in other
cases pending before both the Third Circuit and the United States Supreme Court. It is
not clear if the Third Circuit is awaiting the Supreme Court’s ruling, but briefing before
the Supreme Court has been extended to at least late July; therefore, because the motion
in this case has already been pending for some time, the Court thinks it best to issue a
ruling now rather than delay further.
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 3 of 15
It seems clear and agreed that the two lead Plaintiffs have valid arbitration
agreements, so their claims must be dismissed in favor of arbitration. 1 But several legal
issues must be resolved first: Who decides whether Plaintiffs may proceed as a class in
arbitration, the Court or the arbitrator? If the Court decides, is class arbitration available
or not? And finally, what happens to the claims of the sixteen opt-in plaintiffs when the
lead Plaintiffs’ claims are dismissed?
Before considering these legal questions, the Court must consider the threshold
factual matter of what agreement documents are applicable to Plaintiffs, in particular Ms.
Joseph. Defendants have offered copies of both lead Plaintiffs’ two-page arbitration
agreements, each of which incorporates by reference the “Company Rules for the
Resolution of Employment Disputes” (“Rules”). Defendants have presented a single copy
of the latter document. Plaintiffs argue that because Ms. Joseph’s arbitration agreement
has a computer file footer suggesting it is a 2001 version of the agreement and the Rules
document Defendants have offered bears a footer marking it as a September 2002
version, the Court should conclude that Ms. Joseph was shown a different, earlier version
of the Rules, even though she actually signed in 2009. The issue is important because
while Mr. Rutherford’s arbitration agreement (a 2012 version) expressly calls for only
The decision of Administrative Law Judge Raymond P. Green concerning Plaintiff Rutherford’s NLRB
charge suggests at one point that Defendants must withdraw their motion to dismiss entirely, but the waiver
of the right to proceed as a class is the issue, not the agreement to arbitrate altogether. Both Joseph’s and
Rutherford’s versions of the arbitration agreement contain severability clauses at paragraph 9. And while
the conclusion of Plaintiffs’ brief asks the Court to deny the motion to dismiss, the brief nowhere argues
that the two lead Plaintiffs have not at least agreed to arbitration.
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 4 of 15
individual arbitration, Ms. Joseph’s does not and can be read to waive class arbitration
only based on the class waiver in the Rules.
Because enforcement of an arbitration agreement is essentially a final
determination on a factual issue, factual disputes must be decided by a summary
judgment standard or go to a jury. See Par-Knit Mills, Inc. v. Stockbridge Fabrics Co.,
636 F.2d 51, 54 n.9 (3d Cir. 1980). But as the very case Plaintiffs cite for use of the
summary judgment standard recognizes, “‘an inference based upon ... speculation or
conjecture does not create a material factual dispute sufficient to defeat entry of summary
judgment.’” Choice v. Option One Mortg. Corp., No. CIV.A. 02-6626, 2003 WL
22097455, at *4 (E.D. Pa. May 13, 2003) (quoting Robertson v. Allied Signal, Inc., 914
F.2d 360, 382 n. 12 (3d Cir. 1990)). Here, the idea that Ms. Joseph may have agreed to an
older version of the Rules and that such an older version may not have waived class
arbitration is based on speculation. Plaintiffs’s theory does not explain why Defendants
would create a version of the Rules in 2002 but not be using it seven years later when Ms.
Joseph signed her arbitration agreement; it is at least equally reasonable that Defendants
began using the revised Rules in 2002 along with the 2001 version of the arbitration
agreement until that document was updated in 2012. And the older version of the Rules
may also have waived class arbitration anyway. Further, both versions of the arbitration
agreement provide that the employee may inspect the Rules upon request: given that Ms.
Joseph would presumably have been shown the 2002 Rules if she asked to see them and
that the incorporation of the Rules is valid even if she never read them, see Friedman v.
Yula, 679 F. Supp. 2d 617, 624 n.15 (E.D. Pa. 2010), it is far too speculative to apply to
Ms. Joseph an older version of the Rules that she may have been shown at the time she
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 5 of 15
signed, that has not been presented, and that may not even have differed in the relevant
respect. It is worth noting that the present Rules also provide that the version of the Rules
in effect at the time of the demand for arbitration will apply (Rules at 7-8, para. C1). All
things considered, Plaintiffs have not raised a genuine issue of fact and the Court will
apply the 2002 Rules to Ms. Joseph’s claim.
Moving on to the main legal issues, precedent answers the first question quite
clearly. An issue relating to an arbitration agreement is presumptively for the court to
decide if it is a “question of arbitrability.” Opalinski v. Robert Half Int'l Inc., 761 F.3d
326, 330 (3d Cir. 2014) (quoting Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83
(2002). The Third Circuit held in Opalinski that “whether an agreement provides for
classwide arbitration is a ‘question of arbitrability’ to be decided by the District Court.”
Id. at 332; see also Chesapeake Appalachia, LLC v. Scout Petroleum, LLC, 809 F.3d 746,
753 (3d Cir.), cert. denied, 137 S. Ct. 40, 196 L. Ed. 2d 27 (2016).
The presumption that the Court decides a question of arbitrability can only be
overcome if “the parties clearly and unmistakably provide otherwise.” Opalinski, 761
F.3d at 330 (quoting Howsam, 537 U.S. at 83). “The burden of overcoming the
presumption is onerous, as it requires express contractual language unambiguously
delegating the question of arbitrability to the arbitrator. Silence or ambiguous contractual
language is insufficient to rebut the presumption.” Id. at 335 (citations omitted). In
Chesapeake Appalachia, the Court extensively analyzed a set of leases and American
Arbitration Association rules, and concluded the presumption was not overcome because
the chain of incorporation by reference was too tenuous and the relevant language at the
end of the chain was insufficiently concrete. See 809 F.3d at 758-66.
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 6 of 15
The only language in either the arbitration agreements or the Rules that might
indicate a delegation of class availability to the arbitrator is found in section C8 of the
Rules, “Power of the Arbitrator.” That section provides in part:
The Arbitrator will have all the powers a judge would have in dealing with
any question or dispute that may arise before, during, and after the
arbitration hearing, including but not limited to issues relating to the
validity, enforceability, formation, or scope of these arbitration provisions,
whether an enforceable arbitration agreement exists between the parties …
or any other matter relating to the arbitrability of the dispute at issue. …
The Arbitrator will have no power to change the lawful policies and
procedures of the Company (including those applicable to the Dispute
Resolution Program) …. The Arbitrator must enforce, and not deviate in
any way from, these rules ….
Some of that language is quite comprehensive and suggests it is not up to the
Court to decide even issues such as which version of the Rules to apply, because
such issues would seem to be related to the enforceability and formation of the
agreements. But of course the Court had to decide those issues because without
determining that the Rules apply, the Court would not even be able to consider
this very provision about the power of the arbitrator.
The language also appears to delegate all matters of arbitrability, and as the
precedent makes clear, class availability is a question of arbitrability. But the language
does not mention class explicitly, and the parties have engaged in at least some argument
as to whether class availability is an issue of arbitrability to be decided by the court, so
the blanket phrase “any other matter relating to the arbitrability of the dispute at issue”
does not include class with unmistakable clarity. Further, the language says that the
arbitrator cannot change lawful polices or deviate from the Rules (which, as discussed
below, do waive the right to proceed as a class), so at some level the Court would have
the power to determine if the arbitrator exercised his or her power unlawfully or in
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 7 of 15
conflict with the Rules. Although magic words are not to be required, see Chesapeake
Appalachia, 809 F.3d at 758, it would be very easy to expressly mention class and this
language does not. The Court cannot find that the issue of class availability has been
clearly and unmistakably delegated to the arbitrator; therefore, the Court will consider the
Except for the question of whether the Rules apply to Ms. Joseph, which the
Court answered affirmatively above, the parties agree that the arbitration agreements,
with the Rules incorporated, waive the right to proceed as a class. Section C4 of the Rules
is titled “Individual Arbitration” and provides: “Only one Employee may be a party to
any particular arbitration unless otherwise agreed by the parties. Each arbitration is
limited to the claims of the Employee who is a party to that arbitration and shall not
include claims pertaining to any other Employee unless otherwise agreed by the parties.”
Mr. Rutherford’s version of the arbitration agreement itself also contains identical
language at paragraph 4. Thus the agreements waive class proceedings.
Plaintiffs argue, however, that such a waiver is unenforceable because it violates
the National Labor Relations Act. Section 7 of the Act provides: “Employees 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.A. § 157. Even courts that ultimately disagree with Plaintiffs’
argument do not strongly oppose the initial idea that “other concerted activities” covers
class-styled legal proceedings and dispute resolution. See D.R. Horton, Inc. v. N.L.R.B.,
737 F.3d 344, 356–57 (5th Cir. 2013). Rather, the disagreement centers on the question
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 8 of 15
of whether, by prohibiting class waivers, the NLRA conflicts with the Federal Arbitration
Act, which requires that arbitration agreements be enforced (with some exception). The
FAA favors arbitration agreements, providing:
A written provision in … a contract evidencing a transaction involving
commerce to settle by arbitration a controversy thereafter arising out of
such contract or transaction, or the refusal to perform the whole or any
part thereof, or an agreement in writing to submit to arbitration an existing
controversy arising out of such a contract, transaction, or refusal, shall be
valid, irrevocable, and enforceable, save upon such grounds as exist at law
or in equity for the revocation of any contract.
9 U.S.C. § 2. This provision “requires courts to enforce agreements to arbitrate according
to their terms.” CompuCredit Corp. v. Greenwood, 565 U.S. 95, 98 (2012). Arbitration
agreements need not be enforced, however, if applying the FAA’s mandate conflicts with
another statutory command, see CompuCredit, 565 U.S. at 99, or if the agreement is
invalid as stated in the statute’s own “saving clause,” that is, “upon such grounds as exist
at law or in equity for the revocation of any contract,” see AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 339 (2011).
Several Circuits have held that proceeding as a class is a mere procedural right
and the FAA overrides the purported NLRA prohibition of class arbitration waivers. D.R.
Horton, Inc., 737 F.3d at 358 (5th Cir. 2013); Sutherland v. Ernst & Young LLP, 726
F.3d 290, 297 (2d Cir. 2013); see also Owen v. Bristol Care, Inc., 702 F.3d 1050, 105255 (8th Cir. 2013) (finding class arbitration waivers enforceable for FLSA claims without
engaging the procedural and substantive rights analysis that other courts have
considered). Other Circuits and the National Labor Relations Board have come to the
opposite conclusion, holding that the NLRA prohibits class arbitration waivers and does
not conflict with the FAA because proceeding as a class is a substantive right, which the
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 9 of 15
FAA is not meant to disturb. See Morris v. Ernst & Young, LLP, 834 F.3d 975, 980 (9th
Cir. 2016), cert. granted, 137 S. Ct. 809 (2017); Lewis v. Epic Sys. Corp., 823 F.3d 1147
(7th Cir. 2016), cert. granted, 137 S. Ct. 809 (2017); In Re D. R. Horton, Inc., 357 NLRB
2277 (2012). The Third Circuit and the Supreme Court have not yet spoken on the issue.
The NLRB has taken the position that waivers of class arbitration violate the
NLRA, reasoning as follows: a class or collective action, in court or arbitration, is a
protected concerted activity under Section 7 (which makes interfering with such actions
an unfair labor practice under Section 8 and gives the NLRB the power to prevent such
interference under Section 10, 29 U.S.C. §§ 158 and 160); prohibiting class arbitration
waivers for employment claims does not conflict with the FAA because the NLRA’s
protection of concerted activity is a substantive right, and because the FAA’s saving
clause allows that an arbitration agreement may be invalid on grounds that exist at law or
in equity, which includes illegality under the NLRA. See In Re D. R. Horton, Inc., 357
NLRB at 2285–87.
The Fifth Circuit disagreed in its review of the NLRB’s D.R. Horton decision,
noting in part that “[t]he use of class action procedures…is not a substantive right.” D.R.
Horton, Inc., 737 F.3d at 357. The Court relied heavily on the Supreme Court’s opinion
in Concepcion, reasoning that prohibiting class arbitration waivers would discourage
arbitration in general, to an extent that is impermissible under the FAA. Id. at 359-60.
The Court also found no sufficiently explicit evidence within the NLRA’s text or related
legislative history to conclude there is a congressional command to override the FAA. Id.
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 10 of 15
Last year, the Seventh Circuit sided with the NLRB’s interpretation in Lewis,
holding that the NLRA and FAA do not actually conflict, largely because of the saving
clause. See 823 F.3d at 1156-57. The FAA itself provides that arbitration agreements are
valid except “upon such grounds as exist at law or in equity for the revocation of any
contract”; the Court asserted that “[i]llegality is one of those grounds.” Id. at 1157 (citing
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 (2006)). Thus, because the
NLRA makes class arbitration waivers in employment contracts illegal, the FAA by its
own terms does not require enforcement of such agreements. Id. The Seventh Circuit
criticized the Fifth, both for overstating the power of Concepcion regarding the idea that
the FAA bars any provision that merely discourages arbitration, and for not making a
deliberate effort to find interpretations of both Acts that harmonizes them. Id. at 1158.
The Court separately considered the argument that the NLRA’s protections are only
procedural, arguing to the contrary that the protection of collective action “lies at the
heart of the restructuring of employer/employee relationships that Congress meant to
achieve in the statute,” 2 and that Section 7 should be understood as a substantive
provision because all the other sections of the NLRA are enforcement mechanisms
supporting Section 7. Id. at 1160. The Ninth Circuit has since agreed, also emphasizing
the structure of the NLRA. See Morris, 834 F.3d at 986. The most notable addition in the
Ninth Circuit’s Morris opinion is the argument that the FAA is not strongly implicated in
this situation because it is the agreement to bring claims individually that is at issue, not
the agreement to bring them in arbitration. See Morris, 834 F.3d at 984 (“But the
It is worth noting that the Seventh Circuit is somewhat critical of the Fifth Circuit’s reliance on the
general purpose of the FAA rather than explicit terms, while itself putting a good deal of emphasis on the
general purpose of the NLRA.
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 11 of 15
arbitration requirement is not the problem. The same provision in a contract that required
court adjudication as the exclusive remedy would equally violate the NLRA.”). 3
This Court does not find the Seventh and Ninth Circuits’ reasoning persuasive.
First, the Supreme Court’s opinion in Concepcion, as recognized by the Fifth Circuit,
does clearly support a strong view of the FAA’s preference for enforcing arbitration
agreements. See Concepcion, 563 U.S. at 339, 341-52. “The ‘principal purpose’ of the
FAA is to ‘ensur[e] that private arbitration agreements are enforced according to their
terms.’” Id. at 344 (quoting Volt Info. Scis., Inc. v. Bd. of Trustees of Leland Stanford
Junior Univ., 489 U.S. 468, 469 (1989)). The opinion also suggests a fairly circumspect
understanding of the sorts of grounds for invalidity represented by the FAA’s saving
clause. Id. at 339 (“This saving clause permits agreements to arbitrate to be invalidated
by generally applicable contract defenses, such as fraud, duress, or unconscionability, but
not by defenses that apply only to arbitration or that derive their meaning from the fact
that an agreement to arbitrate is at issue.” (quotation omitted)). The Court gave several
examples of rules limiting arbitration agreements that might hide under the heading of
unconscionability, which would appear to fit within the saving clause as a basic ground
for invalidity, to demonstrate the danger of an expansive understanding of the saving
clause. Id. at 341-44. To avoid that danger, the Court implored attention to ensuring that
the saving clause does not undermine the purpose of the FAA. Id. at 344-52. And for a
substantial set of reasons related to the complexity, formality, and high stakes of
The Ninth Circuit reiterates this argument to counter the argument made by the Fifth Circuit that
prohibiting class arbitration waivers disfavors arbitration: “[T]he enforcement defense in this case does not
specially ‘disfavor’ arbitration. … The contract here would face the same NLRA troubles if Ernst & Young
required its employees to use only courts, or only rolls of the dice or tarot cards, to resolve workplace
disputes—so long as the exclusive forum provision is coupled with a restriction on concerted activity in
that forum.” Morris, 834 F.3d at 989. The obvious response from the Fifth Circuit’s perspective is that the
complications of proceeding as a class and the incentives present when class arbitration is available do
necessarily discourage arbitration.
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 12 of 15
classwide proceedings and the lack of expertise in class procedures among arbitrators, the
Court held that “[r]equiring the availability of classwide arbitration interferes with
fundamental attributes of arbitration and thus creates a scheme inconsistent with the
FAA.” Id. at 344, 344-52. Even though Concepcion dealt with a California state-level,
judicially created rule prohibiting waivers of classwide procedures rather than a federal
statutory rule as with the NLRA, this statement by the Supreme Court, holding there is an
impermissible conflict between a class requirement rule and the FAA, is the best
guidance for this Court absent controlling precedent in the Third Circuit. 4
Further, in this Court’s view, the disagreement over the procedural or substantive
nature of the right provides little support to Plaintiffs’ and the NLRB’s position. First, the
distinction may not be completely relevant. The NLRB first raised the issue by arguing
that “the Supreme Court's jurisprudence under the FAA … makes clear that the
agreement may not require a party to ‘forgo the substantive rights afforded by the
statute.’” In Re D. R. Horton, Inc., 357 NLRB at 2285 (quoting Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (U.S. 1991)). But Gilmer did not assert a
command; it was descriptive, and merely “recognized that ‘[b]y agreeing to arbitrate a
statutory claim, a party does not forgo the substantive rights afforded by the statute.’”
Gilmer, 500 U.S. at 26 (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
Inc., 473 U.S. 614, 628 (1985)). Mitsubishi, in turn, referred to the switch to arbitration
instead of court as a trade of procedures. See Mitsubishi, 473 U.S. at 628. It is
unreasonable to take the simple recognition that a party’s substantive rights afforded by a
statute may be equally enforced through court or arbitration and turn it into a key point of
Another District Court within this Circuit concurs. See Kobren v. A-1 Limousine Inc., No. CV 16-516BRM-DEA, 2016 WL 6594075, at *4 (D.N.J. Nov. 7, 2016).
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 13 of 15
analysis mandating that “substantive rights” as a category may not be affected by an
agreement to arbitrate.
Even if the substantive/procedural distinction is important, the way “substantive
rights” was used in Gilmer and Mitsubishi casts doubt on the idea that the NLRA right at
issue here is substantive in the right way. Those cases were talking about situations where
the actual right underlying the suit (or arbitration) was created by a statute (the ADEA in
Gilmer and the Sherman Act, federal Automobile Dealers’ Day in Court Act, and Puerto
Rico statutes in Mitsubishi). The analogous provisions in this case are the FLSA and the
PMWA, which provide the rights and remedies upon which Plaintiffs’ claims are based,
not the NLRA, which at most says Plaintiffs may pursue those claims together with other
employees. The Seventh and Ninth Circuits focus on the idea that the protection of
concerted activity is “at the heart” of the NLRA’s purpose, but it is the substantive
purposes of the FLSA and PMWA that are most relevant here.
Moreover, being “at the heart” of a statute with other sections providing
enforcement mechanisms does not mean a right is necessarily substantive rather than
procedural. A procedural right can certainly be the fundamental point of a piece of
legislation. For instance, if Congress passed a law requiring employers to provide
employees a lunchroom snack machine meeting some dietary health standard, and
included an additional provision requiring notice and opportunity for comment before
changing the snack machine, that would be a substantive right supported by a procedural
right; on the other hand, however, if the law simply said that snack machines may not be
removed or changed without notice and comment and then included surrounding
provisions establishing an agency to investigate when notice and comment have been
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 14 of 15
denied and providing that denying notice and comment is illegal and subject to a fine or
other penalty, that would be a procedural right backed up by various enforcement
mechanisms—there is no substantive entitlement as with the first example’s dietary
standards. 5 The existence of a central element supported by other provisions does not
automatically mean the central element is substantive in nature. The ability to proceed as
a class strikes this Court as a procedural device. Even concerted, collective activity
generally speaking should be understood as a method, a means, a procedure for securing
the other underlying rights, entitlements, and interests that employees wish to pursue—
such as the fair, legal use of tip pooling to compensate servers paid nominally below the
minimum wage that is the real substantive right in this case. In any event, this Court does
not see the substantive versus procedural argument as sufficient to alter its conclusion
given the weight of Concepcion.
Finally, because the Court finds that the lead Plaintiffs are both bound by
agreements to arbitrate individually and that such agreements are not unenforceable
under the NLRA, the status of the sixteen opt-in plaintiffs must be addressed.
Defendants’ citations on this point are sufficient to persuade the Court that dismissal of
the lead Plaintiffs’ claims properly terminates the case and disperses the putative class,
without prejudice to the opt-in plaintiffs bringing their claims anew. See Diaz v.
Michigan Logistics Inc., 167 F. Supp. 3d 375, 383 (E.D.N.Y. 2016), appeal dismissed
(July 11, 2016); Murphy v. Glob. Response Corp., No. 14-62673-CIV, 2015 WL
3574346, at *5 (S.D. Fla. June 5, 2015), appeal dismissed (Apr. 26, 2016); White v.
Without extensively considering the vast body of law concerning the Administrative Procedure Act, the
APA appears to be an example of legislation that creates no substantive rights but contains many provisions
supporting its central procedural protections. See Navab-Safavi v. Broad. Bd. of Governors, 650 F. Supp.
2d 40, 71 (D.D.C. 2009), aff'd sub nom. Navab-Safavi v. Glassman, 637 F.3d 311 (D.C. Cir. 2011).
Case 5:16-cv-01907-JLS Document 58 Filed 03/21/17 Page 15 of 15
Baptist Mem'l Health Care Corp., No. 08-2478, 2011 WL 1883959, at *14 (W.D. Tenn.
May 17, 2011), aff'd, 699 F.3d 869 (6th Cir. 2012).
As explained above, the Court views the version of the Rules document offered
by Defendants as incorporated into the arbitration agreements of both lead Plaintiffs.
Those Rules give fairly wide power over arbitrability to the arbitrator, but they do not
clearly and unmistakably give the arbitrator authority to decide the availability of class
procedures; therefore, the Court has the duty to make that determination. The agreements
and incorporated Rules plainly purport to waive class procedures in arbitration. The
Court declines to follow recent out-of-Circuit decisions holding such a waiver void under
the NLRA and instead considers more persuasive the holdings of the Fifth Circuit and
other courts that enforce class arbitration waivers under the FAA. The lead Plaintiffs
must, therefore, proceed in individual arbitration, so their claims are dismissed and the
action closed. To the extent the additional opt-in plaintiffs have brought claims, they too
are dismissed without prejudice to a new filing or filings by those parties.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?