Clark v. Southwest Airlines Co.

Filing 17

ORDER DENYING WITHOUT PREJUDICE 11 Motion to Stay Case Pending Labor Arbitration. Signed by Judge Robert Pitman. (ml)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
TATE CLARK,

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Plaintiff,
v.
SOUTHWEST AIRLINES COMPANY,
Defendant.

1:16-CV-910-RP

ORDER
Before the Court in the above-entitled action is Defendant’s Motion to Stay Proceedings.
(Dkt. 11). Having reviewed the motion and the responsive filings thereto, applicable law, and the
entire case law, the Court hereby issues the following Order.
I. BACKGROUND AND OVERVIEW
Plaintiff Tate Clark (“Plaintiff”) filed suit against Defendant Southwest Airlines Company
(“Defendant”) in Texas state court in June 2016, alleging Defendant violated the Family Medical
Leave Act (“FMLA”) by interfering with his rights under the FMLA and by retaliating against him
for engaging in activity protected by the FMLA. (See generally Dkt. 1-1). Plaintiff seeks damages
including lost wages and benefits, interest, and liquidated damages. (Id. at 4). Defendant removed the
matter to federal court on July 27, 2016. (Dkt. 1).
On January 26, 2017, Defendant filed the instant motion, which urges the Court to stay
these proceedings pending the outcome of labor arbitration. (Dkt. 11). The first day of labor
arbitration was held on March 30, 2017, but Defendant does not expect the second day of
arbitration to take place until, at the earliest, June 2017. (Supplement, Dkt. 16, ¶¶ 1–2).

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II. LEGAL STANDARD
Section 3 of the Federal Arbitration Act (“Section 3”) provides that a district court must stay
a lawsuit when a party demonstrates that any issue involved in the suit is “referable to arbitration
under an agreement in writing for such arbitration.” 9 U.S.C. § 3; Complaint of Hornbeck Offshore (1984)
Corp., 981 F.2d 752, 754 (5th Cir. 1993). The provision is mandatory and demands a stay of legal
proceedings “whenever the issues in a case are within the reach of an arbitration agreement.” Id. at
754 (quoting Midwest Mech. Contractors, Inc. v. Commonwealth Constr. Co., 801 F.2d 748 (5th Cir. 1986)).
The mandatory stay provision also applies to non-signatories to an arbitration agreement when the
suit sought to be stayed (1) involves the same operative facts, (2) involves inherently inseparable
claims, and (3) has a critical impact on the arbitration. Waste Mgmt., Inc. v. Residuos Industriales
Multiquim, S.A. de C.V., 372 F.3d 339, 345 (5th Cir. 2004).
Courts also have discretionary authority to issue a stay pending the outcome of the
arbitration. Hornbeck Offshore, 981 F.2d at 755. That power is “incidental to the power inherent in
every court to control the disposition of the causes on its docket with economy of time and effort
for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). Determining
whether to issue a discretionary stay “calls for the exercise of judgment, which must weigh
competing interests and maintain an even balance.” Id. at 254–55.
III. DISCUSSION
In the instant matter, the Court is unable to determine the applicability of Section 3 given
Defendant’s failure to identify, define, or explain the arbitration agreement in question. See Waste
Management, 372 F.3d at 340 (describing and identifying the arbitration agreement in question and
applying Section 3 to a non-signatory to that agreement); Broussard v. First Tower Loan, LLC, 150 F.
Supp. 3d. 709, 714–15 (E.D. La. 2015) (describing an arbitration agreement and granting a motion to
stay pursuant to Section 3).
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If the Court is to grant Defendant’s Motion to Stay, it must therefore do so pursuant to its
discretionary authority. As noted above, determining whether to issue a discretionary stay is an
exercise of judgment that weighs the competing interests of the parties. Landis, 299 U.S. at 254.
Ultimately, the burden is upon the party seeking the stay to “make out a clear case of hardship or
inequity in being required to go forward if there is even a fair possibility that the stay for which he
prays will work damage to someone else.” In re Davis, 730 F.2d 176, 178 (5th Cir. 1984) (quoting
Landis, 299 U.S. at 255). “[W]hen granting a stay pending resolution of another case, the court must
consider the time expected for resolution of that case. The resultant stay must not be of immoderate
or indefinite duration.” Pecan East Antonio Inv’rs, Inc. v. KPMG LLP, No. 5:04-CA-677, 2005 WL
2105751, at *4 (W.D. Tex. Aug. 31, 2005) (citing Wedgeworth v. Fibreboard Corp., 706 F.2d 541, 545
(5th Cir.1983)).
While Defendant cites a number of cases in which courts granted discretionary stays due to
ongoing arbitration proceedings, those opinions all incorporate a discussion of the arbitration
agreement in question. See U.S. ex. Rel. John Jamar Const. Servs. V. Travelers Cas. & Sur. Co. of Am., No.
H-14-3363, 2015 WL 757858, at *1 (S.D. Tex. Feb. 23, 2015) (“The subcontract . . . includes a broad
and mandatory arbitration clause.”); Mosaic Underwriting Serv., Inc. v. Moncla Marine Operations, L.L.C.,
No. 12-2183, 2013 WL 2903083, at *5 (E.D. La. June 12, 2013) (identifying a signatory defendant
and nonsignatory plaintiff); Suzlon Infrastructure, Ltd. V. Pulk, No. H-09-2206, 2010 WL 3540951, at
*2 (S.D. Tex. Sept. 10, 2010) (quoting the arbitration provision at issue); Shores of Panama, Inc. v. Safeco
Ins. Co. of Am., No. 07-602, 2008 WL 4417558, at *1 (S.D. Ala. Sept. 29, 2008) (describing a contract
between a plaintiff and defendant and quoting the contract’s arbitration provision); Midland Walwyn
Capital Inc. v. Spear, Leeds & Kellogg, No. 92-2236, 1992 WL 249914, at *1–2 (S.D.N.Y. Sept. 22, 1992)
(citing the arbitration agreement at issue).

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Here, Defendant argues that a stay is appropriate because “judicial efficiency and economy
weigh[] in favor of staying this litigation until clarity prevails regarding the relief, if any, the labor
arbitrator awards [Plaintiff].” (Mot. Stay, Dkt. 11, at 6). In response, Plaintiff argues that he would
not be able to obtain liquidated damages via the pending arbitration and that the arbitration has been
pending for almost two years. (Resp., Dkt. 12, at 2).
Given Defendant’s narrow emphasis on judicial economy and failure to “make out a clear
case of hardship or inequity in being required to go forward,” even in the face of potential damage
to Plaintiff, the Court finds that exercising its discretionary authority to issue a stay is unwarranted.
See in re Davis, 730 F.2d at 178.
IV. CONCLUSION
IT IS THEREFORE ORDERED that Defendant’s Motion to Stay, (Dkt. 11), is hereby
DENIED WITHOUT PREJUDICE.

SIGNED on April 21, 2017.

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ROBERT PITMAN
UNITED STATES DISTRICT JUDGE

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