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rejecting argument that enforcing arbitration agreement under the Tennessee Uniform Arbitration Act violated Rule 23 because a "party's contractual choice to assert claims individually and not through a class action does not conflict with a statute or procedural rule that would have governed a different choice"
Summary of this case from Butler v. ATS Inc.Opinion
Case No. 1:19-cv-92
2020-01-17
April GREEN, individually and on behalf of others similarly situated, Plaintiff, v. U.S. XPRESS ENTERPRISES, INC. et al., Defendants.
Justin L. Swidler, Pro Hac Vice, Matthew D. Miller, Pro Hac Vice, Travis Martindale-Jarvis, Pro Hac Vice, Swartz Swidler, LLC, Cherry Hill, NJ, for Plaintiff. Alaina C. Hawley, Elizabeth A. Paynter, James A. Eckhart, Pro Hac Vice, James H. Hanson, Karen Reisinger, Pro Hac Vice, Scopelitis Garvin Light Hanson & Feary, P.C., Indianapolis, IN, for Defendants.
Justin L. Swidler, Pro Hac Vice, Matthew D. Miller, Pro Hac Vice, Travis Martindale-Jarvis, Pro Hac Vice, Swartz Swidler, LLC, Cherry Hill, NJ, for Plaintiff.
Alaina C. Hawley, Elizabeth A. Paynter, James A. Eckhart, Pro Hac Vice, James H. Hanson, Karen Reisinger, Pro Hac Vice, Scopelitis Garvin Light Hanson & Feary, P.C., Indianapolis, IN, for Defendants.
MEMORANDUM AND ORDER
TRAVIS R. MCDONOUGH, UNITED STATES DISTRICT JUDGE
Before the Court is Defendants' motion to compel arbitration pursuant to the Tennessee Uniform Arbitration Act ("TUAA"), Tenn. Code Ann. § 29-5-302 et seq. , and to dismiss this action (Doc. 49). For the reasons set forth below, the Court will GRANT IN PART and DENY IN PART the motion. The Court will compel arbitration on all of Plaintiff's claims but will STAY this matter pending arbitration, rather than dismiss it. Additionally, the Court will DENY AS MOOT Plaintiff's motion for conditional certification of a collective action (Doc. 36).
I. BACKGROUND
Plaintiff April Green and those she seeks to represent in a collective action worked as commercial truck drivers in Defendants' Lease-Purchase Driver Program (the "Program"). The Program allegedly required participants to lease trucks and other equipment from Defendant U.S. Xpress Leasing, Inc. ("USXL"), and "subleas[e] the tractors and their driving services" to Defendant U.S. Xpress, Inc. ("USX"). (Doc. 1, at 4, 12.) Defendant U.S. Xpress Enterprises, Inc. ("USXE"), is a parent corporation of USXL and USX. (Id. at 3.) These three corporations (collectively, "Defendants") haul and deliver freight across the United States. (Id. at 3.) Defendants John Does One through Twenty are persons who created or implemented the defendant corporations' allegedly unlawful policies and those who controlled their payroll processing. (Id. at 5.) Defendants classified Plaintiff and other drivers in the Program as independent contractors. (Id. at 14.)
Allegedly as a requirement to participate in the Program, Plaintiff signed an Independent Contractor Agreement ("ICA") with USX and an Equipment Lease Agreement ("ELA") with USXL. (Id. at 4.) Both agreements include arbitration provisions. (Doc. 50-1, at 16–17 (arbitration provision in ICA); id. at 45 (arbitration provision in ELA).) The ICA provides for disputes arising from the ICA to be resolved in arbitration as follows:
The Court may consider the ICA and the ELA in resolving Defendants' motion to compel arbitration because courts routinely consider matters outside the pleadings in ruling on a motion to compel arbitration and dismiss. Great Earth Companies, Inc. v. Simons , 288 F.3d 878, 889 (6th Cir. 2002). Additionally, although neither document is attached to the pleadings, the complaint refers to both. See Luis v. Zang , 833 F.3d 619, 626 (6th Cir. 2016) ("In evaluating a motion to dismiss, [a court] ‘may consider the complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the complaint and are central to the claims contained therein.’ ").
To the extent any disputes (including requests for preliminary relief) arise in connection with or relate to this Agreement, including any allegation of a tort, or of breach of this Agreement, or of violations of the requirements of any applicable government authorities, whether local, state, federal, or foreign, including but not limited to the federal leasing regulations (49 C.F.R. Part 376), CARRIER and INDEPENDENT CONTRACTOR agree to submit such disputes to final and binding arbitration in accordance with (1) the Commercial Arbitration Rules (and related arbitration rules governing requests for preliminary relief) of the American Arbitration Association or of such other arbitration organization as the parties agree on in writing ("AAA"), (2) the Federal Arbitration Act (ch. 1 of tit. 9 of United States Code, with respect to which the parties agree that this Agreement is not an exempt "contract of employment") or, if the Federal Arbitration Act is held not to apply, the arbitration laws of the State of Tennessee (including the Tennessee Arbitration Act, codified at Tenn. Code § 29-5-302 et seq. ) and (3) the procedures that follow. The parties intend the arbitrator to decide all issues, including those relating to the scope of this Paragraph 19, to the maximum extent permitted by law. Any demand for arbitration shall be filed with the AAA's office located in or closest to Chattanooga, TN, within one (1) year of the accrual of the claim. The arbitration shall be conducted at a point agreed upon in writing by the parties or in Chattanooga, TN. Any civil action for enforcement of this Paragraph 19 or of any arbitration award issued under it shall be brought exclusively in, and the parties hereby consent to the jurisdiction and
venue of, the state and federal courts of competent jurisdiction serving Hamilton County, TN. Failure to file the demand within the one-year period shall be deemed a full waiver of the claim. Notwithstanding anything to the contrary contained or referred to in this Agreement, THE PARTIES AGREE THAT NO CONSOLIDATED OR CLASS ARBITRATIONS SHALL BE ALLOWED AND THAT THE ARBITRATOR IS NOT EMPOWERED TO CERTIFY, CONDUCT, OR AWARD RELIEF IN A CONSOLIDATED OR CLASS ARBITRATION. If a court or arbitrator nevertheless allows or requires a consolidated or class arbitration, the parties agree that such a determination is immediately appealable and that all proceedings, including discovery, shall be stayed pending the appeal. In the event the determination is not reversed on appeal, the parties agree that this Paragraph 19 in its entirety, and any prior or subsequent arbitration award under it, shall be null and void, and any disputes between the parties shall be resolved by court action, not arbitration. Each party shall pay its own AAA arbitration filing fees and an equal share of the fees and expenses of the arbitrator, provided that if INDEPENDENT CONTRACTOR leases no more than one commercial motor vehicle to all carriers combined, CARRIER shall pay the full fees and expenses of the arbitrator as well as (i) the full arbitration filing fee, if CARRIER is the claimant, or (ii) the portion of the AAA filing fee that exceeds the filing fee then in effect for civil actions in the United States District Court for the district that includes Chattanooga, TN, if INDEPENDENT CONTRACTOR is the claimant. In all other respects, except to the extent otherwise determined by law, as construed and applied by the arbitrator, the parties shall be responsible for their own respective arbitration expenses, including attorneys' fees. Both parties agree to be fully and finally bound by the arbitration award, and, where allowed by law, a judgment may be entered on the award in any court having jurisdiction thereof.
(Id. at 16–17 (emphasis in original).) The arbitration provision in the ELA states:
DISPUTE RESOLUTION .
a. Arbitration Required for All Disputes. Any dispute (including a request for preliminary relief) arising in connection with or relating to this Agreement, its terms, or its implementation, including any allegation of a tort, or of breach of this Agreement, or of violations of the requirements of any applicable government authorities, whether local, state, federal, or foreign, including but not limited to the federal leasing regulations (49 C.F.R. Part 376), shall be fully and finally resolved by arbitration in accordance with (1) the Commercial Arbitration Rules (and related arbitration rules governing requests for preliminary relief) of the American Arbitration Association ("AAA"); (2) the Federal Arbitration Act (ch. 1 of tit. 9 of United States Code, with respect to which the parties agree that this Agreement is not an exempt "contract of employment") or, if the Federal Arbitration Act is held not to apply, the arbitration laws of the state of Tennessee; and (3) the procedures set forth below.
b. No Consolidated or Class Arbitrations. Notwithstanding anything to the contrary contained or referred to in this Agreement, the parties agree that no consolidated or class arbitrations shall be conducted. If a court or arbitrator decides for any
reason not to enforce this ban on consolidated or class arbitrations, the parties agree that this Section 34, in its entirety, shall be null and void, and any disputes between the parties shall be resolved by court action, not arbitration. In such event, jurisdiction for any such action shall lie exclusively within the Circuit Courts serving Chattanooga, Tennessee.
(Id. at 45 (emphasis in original).)
Green filed this action on March 26, 2019, asserting: (1) individual and collective claims for failure to pay minimum wage for all hours worked, pursuant to Section 16(b) of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b) ; and (2) individual and class claims for (a) violations of the Federal Leasing Regulations, 49 C.F.R. § 376.12, promulgated under the Truth-in-Lending Act, 49 U.S.C. § 14704 et seq. ("TILA"), (b) breach of contract, (c) violations of the Tennessee Consumer Protection Act ("TCPA"), and (d) unjust enrichment, pursuant to Federal Rule of Civil Procedure 23. (Doc. 1.) Green moved for conditional certification of her FLSA claim on July 26, 2019, seeking to represent herself and all individuals who worked for Defendants as Lease Drivers from March 26, 2016, through the present. (Doc. 36.)
Plaintiff refers to this claim as brought under the "Truth in Leasing Act." (Doc. 1, at 2.)
On October 18, 2019, Defendants moved to compel arbitration and dismiss the complaint. (Doc. 49.) Plaintiff timely responded, opposing the motion. (Doc. 53.) Defendants' motion is now ripe for the Court's review.
Defendants asserted that the Court should resolve their motion to compel arbitration before ruling on Plaintiff's motion to conditionally certify a collective action. (Doc. 50, at 19–20.) Plaintiff did not respond to this argument, and the Court agrees with Defendants that resolving the motion to compel arbitration first is the proper course of action. See Gaffers v. Kelly Servs., Inc. , 203 F. Supp. 3d 829, 842 (E.D. Mich. 2016), rev'd on other grounds and remanded , 900 F.3d 293 (6th Cir. 2018) (addressing a motion to compel arbitration before a motion for conditional certification, even though certification motion was filed first).
II. STANDARD OF REVIEW
Usually when the Court considers a motion to compel arbitration, its analysis is governed by the Federal Arbitration Act ("FAA"). Here, however, the parties agree that the FAA exempts these agreements from its coverage because they are part of employment contracts with interstate truckers. (Doc. 50, at 7 n. 1; Doc. 53, at 1.) The Court, too, agrees that the FAA does not govern the parties' dispute.
The FAA specifically exempts "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 9 U.S.C. § 1. The United States Supreme Court has interpreted this provision to exempt employment contracts for "transportation workers," Circuit City Stores, Inc. v. Adams , 532 U.S. 105, 119, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001), and has recently clarified that the exclusion applies both to contracts between employers and employees and to "contracts that require an independent contractor to perform work." New Prime, Inc. v. Oliveira , ––– U.S. ––––, 139 S. Ct. 532, 539, 202 L.Ed.2d 536 (2019). Thus, regardless of whether the Program's drivers were employees or independent contractors, the FAA does not govern this dispute.
The TUAA, which includes no exemption for transportation workers, provides for parties to agree to arbitrate their disputes, as follows:
(a) A written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable
and irrevocable save upon such grounds as exist at law or in equity for the revocation of any contract; provided, that for contracts relating to farm property, structures or goods, or to property and structures utilized as a residence of a party, the clause providing for arbitration shall be additionally signed or initialed by the parties.
(b) The making of an agreement described in this section providing for arbitration in this state confers jurisdiction on the court to enforce the agreement under this part and to enter judgment on an award thereunder.
Tenn. Code Ann. § 29-5-302 ; see, e.g., Glassman, Edwards, Wyatt, Tuttle & Cox, P.C. v. Wade , 404 S.W.3d 464, 466–67 (Tenn. 2013). "[A]rbitration agreements in contracts are favored in Tennessee both by statute and existing case law." Benton v. Vanderbilt Univ. , 137 S.W.3d 614, 617 (Tenn. 2004) ; Buraczynski v. Eyring , 919 S.W.2d 314, 317–18 (Tenn. 1996). Tennessee courts have stated that "[a]n agreement to arbitrate does not affect the rights and duties of the parties" but "simply shifts the forum of dispute settlement." T.R. Mills Contractors, Inc. v. WRH Enters., LLC , 93 S.W.3d 861, 868 (Tenn. Ct. App. 2002) (citing Buraczynski , 919 S.W.2d at 319 ).
III. ANALYSIS
Defendants move for an order compelling Plaintiff to arbitrate all of her claims pursuant to the TUAA. (Doc. 50, at 7.) Defendants argue that, because Plaintiff's claims are exempt from the FAA, the TUAA requires the Court to order arbitration "[o]nce [the] Court finds a valid written agreement to arbitrate." (Id. at 9.) Plaintiff does not dispute the validity of the arbitration agreements. (See generally Doc. 53.) Nor does she dispute Defendants' assertion that the agreements cover all of Plaintiff's claims against all Defendants. (See generally id. ; Doc. 49, at 1 (Defendants asserting that Plaintiff's claims against USXE must be submitted to arbitration because "her theory of recovery against USXE is one of joint employment").) Instead, Plaintiff responds that none of her claims is arbitrable. First, she argues that FAA-exempt arbitration agreements are unenforceable because the FAA preempts state laws that allow for enforcement of these agreements. (Doc. 53, at 8–11.) Second, she argues that her FLSA claims are not arbitrable because "a collective action waiver [of an FLSA claim] contained in a FAA-exempt arbitration agreement is unenforceable." (Id. at 2; see id. at 3–8.)
A. Whether the FAA Preempts State Statutes that Provide for Enforcement of FAA-Exempt Agreements
The parties disagree about the effect of FAA exemption on state statutes that provide for the enforcement of arbitration agreements. Defendants argue that the Court should enforce the parties' agreement to arbitrate under the TUAA in the event that the FAA was held not to apply to them. (See Doc. 50-1, at 16.) Plaintiff argues that the FAA preempts application of the TUAA to FAA-exempt claims. (Doc. 53, at 8–11.) She asserts that, in exempting certain types of disputes from the reach of the FAA, Congress intended to create a different federal regime for them. (Id. at 9–10.) According to Plaintiff, Congress planned to set these types of disputes aside for future federal legislation and, therefore, intended to entirely preclude states' authority over their arbitration. (Id. )
The Supreme Court has described the FAA's purpose as "ensur[ing] judicial enforcement of privately made agreements to arbitrate." Dean Witter Reynolds, Inc. v. Byrd , 470 U.S. 213, 219–20, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). As the Supreme Court explained in Southland Corp. v. Keating , 465 U.S. 1, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984), "[t]he problems Congress faced [before the FAA was passed] were ... twofold: the old common law hostility toward arbitration, and the failure of state arbitration statutes to mandate enforcement of arbitration agreements." Id. at 15, 104 S.Ct. 852. In Southland Corp. , the Supreme Court "decided that Congress would not have wanted state and federal courts to reach different outcomes about the validity of arbitration in similar cases .... [I]t held that state courts cannot apply state statutes that invalidate arbitration agreements." Allied-Bruce Terminix Companies, Inc. v. Dobson , 513 U.S. 265, 272, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995) ; see also Adams , 532 U.S. at 121, 121 S.Ct. 1302 (stating that the FAA is "applicable in state courts and pre-emptive of state laws hostile to arbitration"). Thus, it is clear that the FAA preempts conflicting state law, specifically state law that would preclude enforcement of arbitration agreements that are subject to the FAA.
However, the Supreme Court has never held, or even suggested, that the FAA preempts state law with respect to the disputes Congress exempted from the FAA's coverage. The Supreme Court has explained Congress's purpose in creating the exemption, noting that: "[b]y the time it adopted the [FAA] in 1925, Congress had already prescribed alternative employment dispute resolution regimes for many transportation workers. And it seems Congress did not wish to unsettle those arrangements in favor of whatever arbitration procedures the parties' private contracts might happen to contemplate." Adams , 532 U.S. at 121, 121 S.Ct. 1302 (internal quotations marks omitted).
Courts that have considered the FAA's effect on exempted disputes have held that the effect of making the FAA inapplicable to the excluded categories "is merely to leave the arbitrability of disputes in the excluded categories as if the Arbitration Act had never been enacted." Mason-Dixon Lines, Inc. v. Local Union No. 560, Int'l Bhd. of Teamsters, Chauffeurs, Warehousemen & Helpers of Am. , 443 F.2d 807, 809 (3d Cir. 1971) ; see also Palcko v. Airborne Express, Inc. , 372 F.3d 588, 595–96 (3d Cir. 2004) (reversing district court's decision and holding that FAA-exempt status of an employee does not preempt enforcement of arbitration agreement under Washington state law when the employment contract clearly informed the employee that state arbitration law would apply if the FAA were found to be inapplicable); Cole v. Burns Int'l Sec. Servs. , 105 F.3d 1465, 1472 (D.C. Cir. 1997) ("[W]e have little doubt that, even if an arbitration agreement is outside the FAA, the agreement still may be enforced ...."); Byars v. Dart Transit Co. , No. 3:19-CV-00541, 2019 WL 5304488, at *2 (M.D. Tenn. Oct. 21, 2019) (collecting cases); Breazeale v. Victim Servs., Inc. , 198 F. Supp. 3d 1070, 1079 (N.D. Cal. 2016) ("When a contract with an arbitration provision falls beyond the reach of the FAA, courts look to state law to decide whether arbitration should be compelled nonetheless."); Atwood v. Rent-A-Center East, Inc. , No. 15-cv-1023-MJR-SCW, 2016 WL 2766656, at *3 (S.D. Ill. May 13, 2016) ("[T]he fact that the [FAA] doesn't apply only means that its enforcement mechanisms aren't available, not that the whole dispute can't be arbitrated by enforcing the contract through another vehicle (like state law)."); Valdes v. Swift Transp. Co., Inc. , 292 F. Supp. 2d 524, 529 (S.D.N.Y. 2003) (" Section 1 [of the FAA] does not, however, in any way address the enforceability of employment contracts exempt from the FAA. It simply excludes these contracts from FAA coverage entirely."). But see Rittmann v. Amazon.com, Inc. , 383 F. Supp. 3d 1196, 1202 (W.D. Wash. 2019) (declining to compel arbitration because it was unclear what law would govern when FAA-exempt agreement explicitly stated that state law would not apply). In sum, the general consensus appears to be that "[s]tate arbitration law governs [arbitrability] ... if the FAA does not apply." Valdes , 292 F. Supp. 2d at 529.
Plaintiff argues against that general consensus, asserting that the FAA preempts the TUAA and other state laws through conflict preemption. Conflict preemption exists when enforcement of a state law would "stand[ ] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Hines v. Davidowitz , 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941). Plaintiff asserts that state laws requiring the enforcement of FAA-exempt arbitration agreements are preempted because those state laws conflict with Congress's purpose in creating a carveout for exempt disputes. (Doc. 53, at 8.)
Plaintiff concedes that the other preemption principles, express and field preemption, do not apply here (Doc. 53, at 8), and the Court agrees. See Volt Info. Scis., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ. , 489 U.S. 468, 477, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989) ("The FAA contains no express pre-emptive provision, nor does it reflect a congressional intent to occupy the entire field of arbitration.").
The United States Court of Appeals for the Third Circuit rejected this argument in Palcko v. Airborne Express, Inc. , in which, as here, the parties contracted for state arbitration law to apply if the FAA did not. 372 F.3d at 596. Its analysis is instructive:
The Supreme Court has stated that "passage of the Act was motivated, first and foremost, by a congressional desire to enforce agreements into which parties had entered, and [courts] must not overlook this principal objective when construing the statute, or allow the fortuitous impact of the Act on efficient dispute resolution to overshadow the underlying motivation." [ Dean Witter Reynolds , 470 U.S. at 220, 105 S.Ct. 1238 ].... The Court has also stated that parties to an arbitration agreement, "[h]aving made the bargain to arbitrate ... should be held to it unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue." Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc. , 473 U.S. 614, 628 [105 S.Ct. 3346, 87 L.Ed.2d 444] (1985).
...
... [W]e conclude that the District Court erred in holding that Palcko's exemption status under section 1 of the FAA preempts the enforcement of the arbitration agreement under Washington state law. It is telling that the arbitration agreement itself envisioned the possibility that Palcko's employment contract would be deemed exempt from the FAA's coverage under section 1 of the Act. It provided for that contingency by including the following: "To the extent that the Federal Arbitration Act is inapplicable, Washington law pertaining to agreements to arbitrate shall apply." App. at 19. We see no reason to release the parties from their own agreement.... Here, enforcement of the arbitration agreement ... does not contradict any of the language of the FAA, but in contrast furthers the general policy goals of the FAA favoring arbitration.
Id. at 595–96. This Court is similarly unconvinced, and Plaintiff offers no additional arguments for the contention that, in exempting certain types of disputes from the reach of the FAA, Congress evinced a clear intention to preclude states from enacting laws to govern those disputes. There is no conflict between state laws enforcing arbitration agreements and Congress's purposes and objectives in passing the FAA. See Hines , 312 U.S. at 67, 61 S.Ct. 399. The FAA exemption provision does not preempt the TUAA's application to exempted disputes.
Plaintiff next argues that this Court may not compel arbitration pursuant to the TUAA, because doing so would allow the TUAA to abrogate Rule 23 of the Federal Rules of Civil Procedure. (Doc. 53, at 11–15.) In support of this argument, Plaintiff cites Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co. , 559 U.S. 393, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010), in which the Supreme Court held that a state statute prohibiting class actions in suits seeking penalties or statutory-minimum damages was preempted to the extent it conflicted with Rule 23. Id. at 402– 10, 130 S.Ct. 1431. But Shady Grove distinguished itself from cases like this one. See id. at 398, 130 S.Ct. 1431. Here, the TUAA's provision for the enforcement of the parties' agreement to arbitrate in no way conflicts with or limits the application of Rule 23's "categorical permission" for parties to proceed as a class action. Id. at 398, 130 S.Ct. 1431. Rule 23 provides for, but does not require, plaintiffs to bring certain claims by class action. The TUAA merely allows the parties to enforce Plaintiff's waiver of the class-action avenue otherwise provided to her by Rule 23. A party's contractual choice to assert claims individually and not through a class action does not conflict with a statute or procedural rule that would have governed a different choice. Arbitration does not abrogate Rule 23. To the contrary, it is Plaintiff's prior agreement that renders Rule 23 irrelevant.
Relatedly, Plaintiff argues that Defendants may not enforce the arbitration agreements "through the procedure contained in the TUAA" but must, instead, "file a counterclaim, as mandated by Fed. R. Civ. P. 13 [,]" then "seek a judgment on such a claim, perhaps via Rule 56 or trial." (Doc. 53, at 14.) Such procedural exercises would waste the parties' and the Court's time and resources, without leading to a different result. At any rate, Plaintiff offers no support, other than her unexplained reliance on Shady Grove , for her claim that this Court lacks the authority to compel the parties to enforce their contract as written, even though a state court would have that authority. (See id. at 14–15.) As discussed above, there appears to be a general consensus that state arbitration law—in this case, the TUAA—governs when the FAA does not. The Court is unpersuaded that it has less authority to enforce the governing law than a state court would enjoy.
For these reasons, the Court finds that it must enforce the parties' arbitration agreements pursuant to the TUAA unless there are other reasons the agreements are unenforceable. Accordingly, the Court will now proceed to Plaintiff's argument that her FLSA claims are not arbitrable because collective-action waivers of FAA-exempt FLSA claims are not enforceable.
B. Whether Collective-Action Waivers of FLSA Claims in FAA-Exempt Agreements are Enforceable
The parties' arbitration agreements contain clear class-action waivers and undisputedly include FLSA claims within their scope. (See Doc. 50-1, at 16–17 (arbitration provision in ICA); id. at 45 (arbitration provision in ELA).) Plaintiff argues that the collective-action waivers contained in the parties' arbitration agreements are contrary to the federal policy set forth in the FLSA and are, as a result, unenforceable in the absence of the FAA's countervailing pro-arbitration policy. (Doc. 53, at 2.) Plaintiff notes that this Court reached that conclusion in July 2016, when it denied Defendants' motion to compel arbitration in a different case involving truck drivers alleging FLSA violations. (Id. at 1 (citing Doc. 142 in Salinas v. U.S. Xpress Enters., Inc. et al. , 1:13-CV-245-TRM-SKL).)
In Salinas , this Court interpreted the Sixth Circuit's guidance in Killion v. KeHe Distributors, LLC , 761 F.3d 574 (6th Cir. 2014), to mean that, because "the FLSA sets forth a policy favoring plaintiffs' ability to bring collective actions, ... contractual waivers [are] unenforceable absent some contrary federal policy." (Doc. 53-2, at 6 (citing Killion , 761 F.3d at 592 ).) The Court further held, in reliance on Killion , that arbitration could not be compelled under the TUAA because the FLSA's "preference for collective actions" preempted the TUAA to the extent that the TUAA "st[ood] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress" in enacting the FLSA. (Doc. 53-2, at 6 n.3 (quoting Hines , 312 U.S. at 67, 61 S.Ct. 399 ).) The Court concluded that, because the plaintiff's claims were excluded from the FAA, and there was no other applicable "countervailing federal policy that outweighs the policy articulated in the FLSA[,]" the claims were not subject to mandatory individual arbitration. (Id. (citing Killion , 761 F.3d at 592 ).)
Since Salinas , however, the United States Supreme Court has stated unequivocally that "the FLSA expressly authorizes [collective actions] yet allows parties to contract for bilateral arbitration instead." Epic Sys. Corp. v. Lewis , ––– U.S. ––––, 138 S. Ct. 1612, 1632, 200 L.Ed.2d 889 (2018). Although Epic did not involve an FAA-exempt dispute, the Supreme Court's discussion makes clear that parties may contract to resolve their FLSA or ADEA disputes through individual arbitration not only because those statutes fail to override the FAA's policy favoring arbitration, but also because there is no conflict between the collective-action rights provided by these statutes and parties' freedom to waive those rights. See id. at 1626. As the court explained, "a statute's express provision for collective legal actions does not necessarily mean that it precludes ‘individual attempts at conciliation’ through arbitration." Id. at 1626 (quoting Gilmer v. Interstate/Johnson Lane Corp. , 500 U.S. 20, 32, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) ); see also Alexander v. Gardner-Denver Co. , 415 U.S. 36, 52, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974) ("[A] contractual right to submit a claim to arbitration is not displaced simply because Congress also has provided a statutory right against discrimination. Both rights have legally independent origins and are equally available to the aggrieved employee.").
The Supreme Court noted that it "held decades ago that an identical collective action scheme (in fact, one borrowed from the FLSA) does not displace the Arbitration Act or prohibit individualized arbitration proceedings." Id. (quoting Gilmer , 500 U.S. at 32, 111 S.Ct. 1647 (emphasis in original)) (discussing the Age Discrimination in Employment Act). The Supreme Court need not have pointed out that the ADEA "does not displace the Arbitration Act" and that it does not "prohibit individualized arbitration proceedings" if those two clauses were redundant. See id. ; see also Gilmer , 500 U.S. at 26, 111 S.Ct. 1647 (quoting Mitsubishi , 473 U.S. at 628, 105 S.Ct. 3346 ) (" ‘By agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum.’ "). Epic 's clear implication is that, even in the absence of the FAA, there is no conflict between the FLSA's provision for collective actions and an employee's right to submit an FLSA claim to an alternative forum.
After Epic was decided, United States Court of Appeals for the Sixth Circuit clarified, in harmony with Epic , that Killion did not "establish that one-on-one agreements are illegal under the FLSA" because the agreements in Killion did not provide for arbitration. Gaffers v. Kelly Servs., Inc. , 900 F.3d 293, 297 (6th Cir. 2018). The court explained:
The FLSA provision at issue provides that an employee can sue on behalf of himself and other employees similarly situated ... gives employees the option to bring their claims together. It does not require employees to vindicate their rights in a collective action, and it does not say that agreements requiring one-on-one arbitration become a nullity if an employee decides that he wants to sue collectively after signing one.
Id. at 296 (citing Epic , 138 S.Ct. at 1624 ).
Lastly, Defendants have stipulated that "the arbitrator will apply the FLSA statute of limitations under 29 U.S.C. § 255(a)" rather than the shorter limitation period provided in the arbitration agreements. (Doc. 56, at 2.) As a result, there appears to be no impediment to Plaintiff's effective vindication of her FLSA claims in individual arbitration. And "so long as the prospective litigant effectively may vindicate [his or her] statutory cause of action in the arbitral forum, the statute will continue to serve both its remedial and deterrent function." Gilmer , 500 U.S. at 28, 111 S.Ct. 1647 (quoting Mitsubishi , 473 U.S. at 637, 105 S.Ct. 3346 ). "[U]nder the correct reconciliation of the sometimes-perceived conflict between arbitration agreements in the employment context and federal anti-discrimination laws, the choice to arbitrate statutory claims will change only the forum of decision and not the substantive protections afforded by the statutes in question." Morrison v. Circuit City Stores, Inc. , 317 F.3d 646, 653 (6th Cir. 2003) (citing Mitsubishi , 473 U.S. at 628, 105 S.Ct. 3346 ).
Because Plaintiff has agreed to individually arbitrate all of her claims, and because her right to enter such an agreement does not conflict with her rights under the FLSA, the Court will compel arbitration of Plaintiff's FLSA claims, along with her other claims, pursuant to the TUAA. Because Plaintiff's FLSA claims are subject to mandatory individual arbitration, Plaintiff's motion for conditional certification of a collective action (Doc. 36) is moot.
IV. CONCLUSION
For the reasons set forth above, the Court GRANTS IN PART Defendants' motion (Doc. 49), to the extent it seeks to compel arbitration. The TUAA provides that "the correct procedure in the trial court is to stay the matter pending arbitration and not ... dismiss it[,]" even when all claims are subject to arbitration. White v. Empire Exp., Inc. , No. W2010-02380-COA-R3CV, 2011 WL 6182091, at *6 (Tenn. Ct. App. Dec. 13, 2011) (citing Tenn Code. Ann. § 29-5-303(d) and collecting cases). Accordingly, the Court DENIES IN PART the motion (Doc. 49), to the extent it seeks dismissal of this action. Plaintiff's motion for conditional certification of an FLSA collective action (Doc. 36) is DENIED AS MOOT .
The parties are hereby ORDERED to proceed to individual arbitration, and this case is STAYED pending the conclusion of arbitration. Additionally, the parties are ORDERED to file a status report with the Court within six months of the date of this order and at three-month intervals thereafter, until the arbitration proceedings conclude. At that time, the parties SHALL inform the Court within fourteen days of the conclusion and outcome of the proceedings.