Summary
finding non-signatory defendant could enforce arbitration provision under agency theory
Summary of this case from Amat v. Rey Pizza Corp.Opinion
No: 02-21005-CIV-MORENO
May 20, 2002
ORDER GRANTING MOTION TO COMPEL ARBITRATION
Plaintiff filed this action alleging non-payment of overtime and improper salary deductions under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. Before the Court is Defendant's Motion to Compel Arbitration and to Dismiss or Stay Action (D.E. No. 5), filed on May 2, 2002. Because the Court finds that Plaintiff's claims are subject to an arbitration agreement signed by Plaintiff, and that Defendant has standing to enforce the agreement, Defendant's motion is GRANTED.
BACKGROUND
Upon being hired as an airport security guard in May 2001, Plaintiff Olga Bolanos entered into a "Pre-Dispute Resolution Agreement" (the "Agreement") with Globe Aviation Services Corporation ("GASC"), Defendant's parent company. The agreement grants to GASC the option to force Plaintiff to arbitrate legal disputes. The scope of the agreement is set forth as follows:
As pointed out by Defendant, Plaintiff's name was apparently misspelled in the complaint and case caption.
This pre-dispute resolution agreement will cover all matters directly or indirectly related to your recruitment, hire, employment or termination of employment by the Company; including, but not limited to, claims involving laws against discrimination whether brought under federal and/or state law, and/or claims involving co-employees, but excluding Worker's Compensation claims.
On April 2, 2002, Plaintiff filed her complaint in this case, alleging violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. Plaintiff did not name GASC as the defendant, but rather its wholly-owned subsidiary Globe Airport Security Services, Inc. ("GASS"). Plaintiff claims that GASS has underpaid her for overtime work and has improperly deducted from her salary the cost of her uniform and identification badge. Plaintiff therefore seeks reimbursement for her lost salary and injunctive relief to prevent future deductions from her paychecks.
After Plaintiff filed her complaint, Defendant sought to exercise its option to force Plaintiff into arbitration. Plaintiff objected. Defendant subsequently filed the instant motion to compel arbitration.
ANALYSIS
Section 4 of the Federal Arbitration Act (the "FAA") provides that a party "aggrieved by the alleged failure, neglect or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court. . . for an order directing that such arbitration proceed in the manner provided for in such agreement." 9 U.S.C. § 4 (2002). In enacting the FAA, Congress established a strong federal policy in favor of arbitration agreements. MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 947 (11th Cir. 1999). "[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration . . . . Moses H. Cone Mem'l. Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25 (1983).
In this case, Defendant seeks to compel arbitration of Plaintiff's FLSA claims because Plaintiff signed an arbitration agreement that applies to any dispute relating to her employment except Workers Compensation. Plaintiff counters with three reasons why her claims are not subject to the terms of the Agreement. First, Plaintiff notes that she signed the Agreement with GASC, not GASS. Therefore, argues Plaintiff, GASS cannot enforce a contract to which it is not a party. Second, Plaintiff argues that the Agreement does not apply to claims under the ELSA. Third, Plaintiff contends that the specific language of the Agreement does not mention claims for overtime payment and therefore Plaintiff may not be compelled to arbitrate these claims. The Court now considers these three arguments and rejects each of them.
Working in reverse order, the language of the Agreement clearly includes claims for overtime payments. The Agreement covers "all matters directly or indirectly related to" Plaintiff's employment "including, but not limited to, claims involving laws against discrimination . . . ." Thus, Plaintiff's contention that the Agreement "appears to be limited to discrimination cases rather than wage and hour disputes" is directly contradicted by the plain language of the Agreement.
Next, Plaintiff's argument that her claims under the FLSA generally fall outside the "ambits of Arbitration" is unsupported by the law of this circuit. See Montes v. Shearson Lehman Bros., Inc., 128 F.3d 1456, 1457 (11th Cir. 1997) (finding that the district court's referral of ELSA claims to arbitration was proper). The strong public policy favoring arbitration applies to statutory claims. In re Managed Care Lit., 132 F. Supp.2d 989, 993 (S.D. Fla. 2000) modified 143 F. Supp.2d 1371 (S.D. Fla. 2001) (citing Mitsubishi Motors Corp. v. Soler Chrystler Plymouth, Inc., 473 U.S. 614, 625-26 (1985). "This approach favors the [FAA's] strong presumption in favor of arbitration." Id
Finally, GASS has standing to enforce the Agreement even though it was not a signatory. It is generally true that arbitration is a matter of contract, and therefore only parties to an arbitration agreement may enforce its terms. AT T Techs., Inc. v. Comm. Workers of Am., 475 U.S. 643, 648 (1985). There is an exception, however, where a non-signatory is an agent of the signatory. MS Dealer, 177 F.3d at 947. In Arnold v. Arnold Corp., 920 F.2d 1269, 1281-82 (6th Cir. 1990), for example, non-signatory defendants sought to compel the plaintiff to arbitrate based on an agreement executed by the defendants' principal. The Sixth Circuit found that the defendants had standing to compel arbitration because the defendants' alleged wrongful acts related to their responsibilities as agents of the principal that signed the agreement. Id. The Arnold court adopted the district court's rationale, noting that if it allowed the plaintiff to "avoid the practical consequences of an agreement to arbitrate by naming nonsignatory parties [as defendants] . . . the effect of the rule requiring arbitration would, in effect, be nullified." Id (quoting Arnold v. Arnold Corp., 668 F. Supp. 625, 629 (N.D. Ohio 1987)).
Plaintiff in this case does not dispute that GASS is the wholly-owned subsidiary of GASC or that GASS is the agent of GASC. Moreover, as Plaintiff is suing GASS in connection with her employment, it is clear that the claims relate to GASS's actions as a subsidiary corporation and agent of GASC. Allowing Plaintiff to escape the terms of the Agreement by naming GASS instead of GASC would thwart the federal policy in favor of arbitration. See Sam Reisfeld Son import Co. v. S.A. Eteco, 530 F.2d 679, 681 (5th Cir. 1976) (finding standing to enforce an arbitration agreement against non-signatory parent and successor corporations because the charges were "based on the same operative facts and were inherently inseparable"). Accordingly, the motion to compel arbitration must be granted.
CONCLUSION
Plaintiffs FLSA claims fall within the reach of the arbitration provision of the Agreement signed by her and GASC. In addition, GASS has derivative standing to enforce the arbitration provision despite the fact that it was not a formal party to the Agreement. GASS's motion to compel arbitration is therefore GRANTED. This action shall be STAYED pending arbitration pursuant to 9 U.S.C. § 3.