Colvin v. Muy Pizza Southeast, Llc

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

N.D. Fla.December 28, 2016

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF FLORIDA PENSACOLA DIVISION STEVEN GREGORY COLVIN, Case No.: 3: 16-cv-00646-MCR-GRJ Plaintiff, MUY PIZZA SOUTHEAST, LLC, MUY PIZZA SOUTHEAST, LLC'S MOTION ANDMEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS vs. Defendant. Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 1 of 27 TABLE OF CONTENTS MOTION TO DISMISS 1 MEMORANDUM OF LAW 1 INTRODUCTION 1 BACKGROUND 2 I. Proceedings in Federal Court and Arbitration 2 II. Proceedings Before the NLRB .4 III. Colvin's Complaint Seeking to Vacate Arbitration Order. 5 LEGAL STANDARD 5 ARGUMENT 7 I. Colvin Cannot Show That The Arbitrator Exceeded Her Powers in Enforcing the Collective Action Waiver As Set Forth In The Parties' Arbitration Agreement. 8 II. Colvin Has Failed To Show That The Arbitrator Is Guilty of Misconduct In Refusing to Postpone Arbitration Proceedings 18 CONCLUSION 21 1 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 2 of 27 TABLE OF AUTHORITIES Cases B.L. Harbert Int' I, LLC v. Hercules Steel Co., 441 F.3d 905 (lith Cir. 2006) 8, 19 Booth v. Hume Pub., Inc., 902 F.2d 925 (11th Cir. 1990) 20 Caley v. Gulfttream Aerospace Corp., 428 F.3d 1359 (11th Cir. 2005) 8, 12 Cat Charter, LLC, v. Schurtenberger, 646 F.3d 836 (1Ith Cir. 2011) 6 Cellular Sales of Missouri, LLC v. Nat 'ILabor Relations Bd., 824 F.3d 772 (8th Cir. 2016) 10 Citigroup Tech., Inc. v. Nat 'ILabor Relations Bd., 2016 WL 7174107 (5th Cir. Dec. 8, 2016) 10 CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2012) 13 De Oliveira v. CiticorpN Am., Inc., 2012 WL 1831230 (M.D. Fla. May 18,2012) 13 DlRECTV, LLC v. Arndt, 546 F. App'x 836 (1Ith Cir. 2013) 9 Dock Loaders & Unloaders of Freight Cars & Barges, ILA Local UnionNo. 854 v. W L. Richeson & Sons, Inc., 280 F. Supp. 402 (E.D. La. 1968) 16 Dorward v. Macy's Inc., 588 F. App'x 951 (lith Cir. 2014), cert. denied, 136 S. Ct. 33 (2015) 6 11 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 3 of 27 D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013) passim E. Assoc. Coal Corp. v. Mine Workers, 531 U.S. 57, 121 S. Ct. 462 (2000) 6 Gen. Warehousemen& Helpers Local 767 v. Standard Brands, Inc., 579F.2d 1282 (5thCir. 1978) 15, 16 Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S. Ct. 1647 (U.S. 1991) 12 Hall Street Associates, L.L.c., v. MatteI, Inc., 552 U.S. 576, 128 S. Ct. 1396 (2008) 6 Hodgson v. lAP Readiness Mgmt. Support, 2010 WL 3943698 (N.D. Fla. Sept. 20, 2010), report and recommendation adopted, 2010 WL 3943696 (N.D. Fla. Oct. 5,2010) 5 Johnson v. Directory Assistants, Inc., 797 F.3d 1294 (lIth Cir. 2015) 18 Levison v. Mastec, Inc., 2016 WL 4491868 (M.D. Fla. Feb. 3, 2016) 13-14 Mills v. Foremost Ins. Co., 511 F.3d 1300 (lIth Cir. 2008) ; 5 Moeller v. D.E. Frey & Co., 2004 WL 1173397 (N.D. Fla. May 10, 2004) 18 Murphy Oil USA, 361 NLRB No. 72 9 Murphy Oil USA, Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015) 10 111 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 4 of 27 New Orleans Typographical Union No. 17v. N L. R. B., 368 F.2d 755 (5th Cir. 1966) 16 NLRB v. US Postal Serv., 888 F.2d 1568 (11th Cir. 1989) 15 Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. 2013) 10-11 Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064 (2013) 6, 7,8, 19 Pilot Freight Carriers, Inc. v. Int 'IBhd. of Teamsters, Chauffeurs, Warehousemen&Helpers of Am., 495 F. Supp. 619 (M.D.N.C. 1980), vacated, 659 F.2d 1252 (4th Cir. 1981) 16, 17 S Commc 'ns Servs., Inc. v. Thomas, 829 F. Supp. 2d 1324 (N.D. Ga. 2011), aff'd, 720 F.3d 1352 (1Ith Cir. 2013) 7, 9 Schmidt v. Finberg, 942 F.2d 1571 (11th Cir. 1991) 18,20 Select Temporaries, LLC &Dioselin Gray, 2016 WL 4772318 (Sept. 13, 2016) 9 Steingruber v. Family Dollar Stores of Florida, Inc., 2015 WL 10818618 (M.D. Fla. Aug. 13,2015) 12-13 Stolt-Nielsen SA. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 130 S. Ct. 1758 (2010) 6, 8, 9 Sutherland v. Ernst & YoungLLP, 726 F.3d 290 (2nd Cir. 2013) 11 T.WM v. Am. Med. Sys., Inc., 886 F. Supp. 842 (N.D. Fla. 1995) 6 IV Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 5 of 27 Walthour v. Chipio WindshieldRepair, LLC, 745 F.3d 1326 (11th Cir. 2014) 11, 12 Rules Fed. R. Civ. P. 12(b)(6) 1,5 Statutes 9 U.S.C. § 6 5 9 U.S.C. § 10 6, 7 9 U.S.C. § 10(a)(3) 5,6 9 U.S.C. § 10(a)(4) passim 9 U.S.C. § 11 6 29 U.S.C. § 160(f) 17 Other NLRB Rules and Regulations § 102.48 .4 v Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 6 of 27 MOTION TO DISMISS Defendant MDY Pizza Southeast, LLC ("MUY") respectfully moves this Court for an Order dismissing the Complaint of Plaintiff Steven G. Colvin ("Colvin") for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. This motion is based upon the file, record, pleadings in the case, and the following memorandum of law. MEMORANDUM OF LAW MUY respectfully submits this Memorandum of Law in Support of its Motion to Dismiss for failure to state a claim upon which relief can be granted. INTRODUCTION A request to vacate an arbitration order is not an opportunity to re-litigate issues resolved by the Arbitrator. The scope of review is confined to whether the Arbitrator's order was even arguably grounded in the contract at issue and any applicable law, as opposed to the mere whim of the Arbitrator. This extreme deference prevents motions to vacate from becoming broad-based appellate proceedings that would strip arbitration of its primary benefits - efficiency, cost- effectiveness and finality. Despite these well-established principles, Colvin asks this Court to second guess the Arbitrator's findings and legal conclusions s and vacate her order enforcing the collective action waiver contained in the parties' arbitration agreement. Colvin is not entitled to this sort of a "second bite at the apple." This is especially true in 1 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 7 of 27 this case, because the Arbitrator's decision was based on the same federal case law that this Court would likely look to if the question of the viability of the waiver was properly before it-but, in any case, that question is not properly before this Court. Arbitral decisions are simply not subject to broad-based appeals. Similarly, Colvin's challenge to the Arbitrator's refusal to postpone her decision pending a related National Labor Relations Board ("Board") proceeding fails in light of the Arbitrator's recognition that doing so would likely delay the arbitration for over a year, unnecessarily drawing out a process intended to facilitate efficiency and finality. Further, the Arbitrator correctly recognized that a Board ruling adverse to MUY would, at most, constitute an intermediate order that would inevitably be appealed to either the Court of Appeals for the Eleventh or Fifth Circuit. And, as she recognized, in view of existing precedents, either Circuit would almost certainly overturn a Board decision that was adverse to MUY. Accordingly, MUY respectfully requests that the Court afford proper deference to the Arbitrator's decision and that Colvin's Complaint be dismissed for failure to state a claim upon which relief can be granted. BACKGROUND I. Proceedings in Federal Court and Arbitration. On February 8, 2016, Colvin filed suit in the U.S. District Court for the Northern District of Florida, alleging that his employer, MUY, had failed to fully 2 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 8 of 27 reimburse him for expenses he incurred using his personal vehicle to deliver MDY' s products to customers, which he alleged reduced his "net" wage to less than the federal minimum, in a violation of the Fair Labor Standards Act ("FLSA,,).l It later became apparent to MUY's counsel that Colvin was subject to an arbitration agreement. MDY's counsel forwarded the agreement to Colvin's counsel, who then voluntarily dismissed the federal action. The case was dismissed on April 18, 2016. On April 21, 2016, Colvin initiated arbitration by filing a Statement of Claim before the American Arbitration Association ("AAA"), alleging essentially the same claims he had raised in the federal action. Notwithstanding the express waiver of class and collective claims in the arbitration agreement, Colvin brought the arbitration as a putative collective arbitration. But the agreement expressly provides that: [MUYJ and I agree that any and all claims subject to arbitration under this Agreement to Arbitrate may be instituted and arbitrated only in an individual capacity, and not on behalf of or as apart of any purported class, collective, representative, or consolidated action (collectively referred to in this Agreement to Arbitrate as a "Class Action "). Furthermore, [MUYJ and I agree that neither party can initiate a Class Action in court or in arbitration in order to pursue any claims that are subject to arbitration under this Agreement to Arbitrate. 1 Case No. 3: 16-CV-00046-RV-CJK. 3 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 9 of 27 (Declaration of William A. McNab ("McNab Decl.") Ex. 1) MUY then moved the Arbitrator for an order enforcing the agreement and requiring that Colvin pursue his claims solely in an individual capacity. On September 7, 2007, the Arbitrator issued an Interim Order enforcing the collective action waiver and ordering that the arbitration proceed as an individual action. (McNab Decl. Ex. 2 ("Interim Order") at 5) II. Proceedings Before the NLRB. On April 18, 2016, and prior to initiating arbitration, Colvin filed an unfair labor practices charge with the Board, claiming that the collective action waiver violated the NLRA. On July 28, 2016, the Board issued a Complaint alleging that the collective action waiver in the arbitration agreement violated the National Labor Relations Act ("NLRA"). In November 2016, MUY and the Board's General Counsel filed position briefs with the Administrative Law Judge ("ALJ") overseeing the Board proceeding.' On December 21,2016, the ALJ issued a decision in which he recommended that the Board deem MUY's collective action waiver a violation of the NLRA. (McNab Decl. Ex. 3 at 5) The decision is not a final order of the Board.' (See id. at 5 n.3) 2 The parties stipulated to the undisputed facts of the case and agreed to proceed without a hearing. 3 Pursuant to NLRB Rules, the ALJ's decision will only become a final order if no objections are filed within twenty-eight days of the order transferring further proceedings to the Board. See NLRB Rules and Regulations § 102.48. 4 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 10 of 27 III. Colvin's Complaint Seeking to Vacate Arbitration Order. On December 6, 2016, Colvin filed a Complaint with this Court seeking to vacate the Arbitrator's Interim Order enforcing the collective action waiver, arguing that the Arbitrator: i) exceeded her authority by declining to defer to the purported "primary jurisdiction" of the NLRB; and, ii) committed misconduct by refusing to postpone the arbitral proceedings until the NLRB issued a decision on its complaint. See 9 U.S.C. §§ 10(a)(3), (4). MUY's Motion to Dismiss to the Complaint for failure to state a claim for which relief can be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6), follows." LEGAL STANDARD A Rule 12(b)(6) motion seeks dismissal of the complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). In considering a Rule 12(b)(6) motion, the Court accepts all factual allegations of the complaint as true and construes them in the light most favorable to the plaintiff. Mills v.Foremost Ins. Co., 511 F.3d 1300, 1303 (11th Cir. 2008). "However, regardless of the alleged 4 MUY has styled its opposition to Colvin's request for vacatur as a motion to dismiss pursuant to Rule 12(b)(6) because Colvin pursued the requested relief by filing a Complaint. The correct manner in which to seek to vacate an arbitration award is through a motion to vacate. See 9 U.S.C. § 6; and see Hodgson v. lAP Readiness Mgmt. Support, No. 510CV86, 2010 WL 3943698, at *1 (N.D. Fla. Sept. 20,2010), report and recommendation adopted, No. 510CV86, 2010 WL 3943696 (N.D. Fla. Oct. 5,2010) (treating complaint seeking vacatur as motion to vacate). 5 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 11 of 27 facts, Rule l2(b)( 6) does authorize a court to dismiss a complaint on a dispositive issue oflaw." T.WM v.Am.Med. Sys., Inc., 886 F. Supp. 842, 844 (N.D. Fla. 1995). Sections 10 and 11 of Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 10, 11, provide the "exclusive grounds" for vacatur and modification of an arbitration award. Dorward v. Macy's Inc., 588 F. App'x 951, 953 (11th Cir. 2014), cert. denied, 136 S. Ct. 33 (2015) (citing Hall Street Associates, L.L.c., v.Mattei, Inc., 552 U.S. 576, 583, 128 S. Ct. 1396, 1403 (2008)). Specifically, Section 10provides that an arbitration order may be vacated where the arbitrator "exceeded [her] power" or where the arbitrator was "guilty of misconduct by refusing to postpone the hearing." 9 U.S.C. §§ 10(a)(3), (4). However, the scope of district court review under Section lOis extremely limited: "arbitrators do not act as junior varsity trial courts where subsequent appellate review is readily available to the losing party." Cat Charter, LLC, v. Schurtenberger, 646 F.3d 836, 842-43 (lith Cir. 2011). Notably, it "is not enough for [a party] to show that the panel committed an errOf- or even a serious error." Stolt-Nielsen S.A. v. Animall/eeds Int'l Corp., 559 U.S. 662, 671, 130 S. Ct. 1758, 1767 (2010). "[A]n arbitral decision 'even arguably construing or applying the contract must stand regardless of a court's view of its (de)merits.'" Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064, 2068 (2013) (quotingE. Assoc. Coal Corp. v.Mine Workers,531 U.S. 57,62,121 S. Ct. 462, 466 (2000)). The only question for the reviewing Court "is whether the arbitrator (even 6 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 12 of 27 arguably) interpreted the parties' contract, not whether [she] got its meaning right or wrong." Id. ARGUMENT As the cases cited above make clear, a request for vacatur pursuant to 9 U.S. § 10 is not a quasi-appeal where the arbitrator's findings and legal reasoning are subjected to exacting scrutiny and the movant is entitled to a "do-over" in federal court. On the contrary, arbitral decisions are entitled to "extraordinary deference," and the statutory grounds upon which they can be vacated are "exceedingly narrow." S. Commc'ns Servs., Inc. v. Thomas, 720 F.3d 1352, 1357 (lIth Cir. 2013). None of those exceedingly narrow grounds exists in this case. The Arbitrator did not exceed her powers; rather, she simply enforced the parties' arbitration agreement as written. In reaching her conclusions, she relied heavily on a body of Eleventh Circuit case law upholding the enforceability of collective action waivers in arbitration agreements. Colvin's claim that the Arbitrator improperly declined to defer to the Board's "primary jurisdiction" and stay proceedings pending a Board decision is without merit and is belied by the fact that Colvin himself initiated the arbitration, after he filed his charge with the Board. The Arbitrator was justified in declining to stay proceedings pending a Board decision to be made "at some yet to be determined date," recognizing that doing so would "subvert the purpose of the FAA which is to relieve court congestion and 7 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 13 of 27 provide a speedy and less costly alternative to litigation." (Interim Order at 4-5.) (citing Caley v.GulfstreamAerospace Corp.,428 F.3d 1359, 1367(lIth Cir. 2005)). Because Colvin has failed to establish any of the narrow statutory grounds that would permit the Arbitrator's Interim Order to be vacated, the Complaint must be dismissed. I. Colvin Cannot Show That The Arbitrator Exceeded Her Powers in Enforcing the Collective Action Waiver As Set Forth In The Parties' Arbitration Agreement. Section 10(a)(4) of the FAA authorizes a federal court to set aside an award "where the arbitrator[] exceeded [her] powers." This relief must be sparingly granted. The U.S. Supreme Court has recognized that "[i]f parties could take 'full- bore legal and evidentiary appeals,' arbitration would become 'merely a prelude to a more cumbersome and time-consuming judicial review process." Oxford Health, 133 S. Ct. at 2068. "A showing that the arbitrator merely misinterpreted, misstated, or misapplied the law is insufficient" to vacate an arbitration award. B.L. Harbert Int'l, LLC v. Hercules Steel Co., 441 F.3d 905, 910 (lIth Cir. 2006). "It is only when an arbitrator strays from interpretation and application of the agreement and effectively' dispenses [her] own brand of industrial justice' that [her] decision may be unenforceable." Stolt-Nielsen, 559 U.S. at 662 (internal citations omitted). "The arbitrator's award may have been ugly, and could have been mistaken, incorrect, or 8 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 14 of 27 in manifest disregard of the law, but those are not grounds for vacating the award under § 10(a)(4)." DIRECTV, LLCv. Arndt, 546 F. App'x 836,841 (l1th Cir. 2013). Colvin argues that the Arbitrator erred by applying federal case law rather than following the Board's general policy position that collective action waivers in employment agreements violate the NLRA. See, e.g., Murphy Oil USA, 361 NLRB No. 72; Select Temporaries, LLC & Dioselin Gray, 31-CA-157821, 2016 WL 4772318 (Sept. 13, 2016). But this argument misses the point. Under Section 10(a)(4), the scope of review does not extend to whether the Arbitrator correctly chose federal law over Board policy, or even whether the Arbitrator correctly interpreted and applied federal case law. Instead, the analysis is confined to determining whether the Arbitrator identified and applied any law in interpreting the contract, as opposed to her "own conception of sound policy." Stolt-Nielsen S.A., 559 U.S. at 675; s. Commc'ns Servs., Inc. v. Thomas, 829 F. Supp. 2d 1324, 1339- 40 (N.D. Ga. 2011), aff'd, 720 F.3d 1352 (11th Cir. 2013) (Court is not to "second- guess the arbitrator's interpretation and application of the law to the Agreement because the question before the Court is whether [she] identified a rule of law to govern the interpretation of the contract, not whether [she] got it right."). The Arbitrator's Interim Order meets this standard. First, the Arbitrator recognized that the majority of federal circuits have upheld an employer's right to enforce a collective action waiver in an arbitration agreement and prohibited 9 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 15 of 27 individual plaintiffs from pursuing collective actions under the FLSA. (Interim Order at 2-3) In particular, the Arbitrator cited the recent Murphy Oil and D.R. Horton decisions from the Fifth Circuit, where twice the Court explicitly overruled Board orders holding that the enforcement of collective action waivers in arbitration agreements violated the NLRA. See Murphy Oil USA,Inc. v.NLRB, 808 F.3d 1013 (5th Cir. 2015) (reversing Board and holding that the employer "committed no unfair labor practice by requiring employees to relinquish their right to pursue class or collective claims in all forums by signing the arbitration agreements at issue here."); and see D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 360-61 (5th Cir. 2013) (overturning Board decision on and holding that collective action waiver did not violate NLRA); see also Citigroup Tech., Inc. v. Nat 'ILabor Relations Bd., No. 15- 60856,2016 WL 7174107, at *1 (5th Cir. Dec. 8,2016) (yet again reversing Board ruling that collective action waiver in an arbitration agreement violated NLRA). The Arbitrator also cited decisions from the Eighth and Second Circuits, which have also rejected the Board's position that collective action waivers violate the NLRA. See Cellular Sales of Missouri, LLC v. Nat' I Labor Relations Bd., 824 F.3d 772 (8th Cir. 2016) (holding that Cellular Sales "did not violate section 8(a)(I) [of the NLRA] by requiring its employees to enter into an arbitration agreement that included a waiver of class or collective actions in all forums to resolve employment related disputes," and overturning the Board's order to the contrary); Owen v. Bristol 10 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 16 of 27 Care, Inc., 702 F.3d 1050, 1053 (8th Cir. 2013) (holding that there is "no inconsistency between either the FLSA text or its legislative history and the conclusion that arbitration agreements containing class waivers are enforceable in cases involving the FLSA," and finding the Board's then-recent D.R. Horton decision unpersuasive); Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2nd Cir. 2013) (declining to follow the Board's soon-to-be-reversed decision inD.R. Horton, noting that it owed no deference to the Board's reasoning). Further, the Arbitrator recognized that although the Eleventh Circuit has not directly addressed the Board's position that collective action waivers violate the NLRA, it has upheld collective action waivers in the face of similar challenges premised on the FLSA. (Interim Order at 3, citing Walthour v. Chipio Windshield Repair, LLC, 745 F.3d 1326 (11th Cir. 2014)) In Chipio, the plaintiffs brought a putative collective action under the FLSA and the district court granted the defendant's motion to compel arbitration. See 745 F.3d at 1329. The plaintiffs appealed to the Eleventh Circuit. The Chipio Court considered whether the FLSA contains a "contrary congressional command" overriding the FAA's mandate that arbitration agreements be enforced according to their terms. See id. at 1330-31. After careful review, the Court found no such congressional command in the text of the FLSA. See id. at 1332-36. Accordingly, the Eleventh Circuit affirmed the district court. 11 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 17 of 27 Chipio's holding is consistent with prior Eleventh Circuit decisions. In particular, in Caley v. Guifstream Aerospace Corp., plaintiffs advancing FLSA, ADEA, and ERISA claims challenged the enforceability of a class action waiver in an arbitration agreement on unconscionability grounds. 428 F.3d 1359, 1378 (lith Cir. 2005). The Court held that the agreement's prohibition of class actions was "consistent with the goals of 'simplicity, informality, and expedition' touted by the Supreme Court," and therefore the agreement could not be unconscionable. Id. (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31,111 S. Ct. 1647, 1655 (U.S. 1991)). While the Caley Court did not address whether the FLSA provided a substantive non-waivable right to collective proceedings, as the Chipio Court did, it is nonetheless illustrative of the Eleventh Circuit's commitment to enforcing collective action waivers in the employment context. In addition to the foregoing decisions from the Eleventh Circuit, the Arbitrator also noted that Florida's federal district courts have consistently rejected the Board's position that collective action waivers in arbitration agreements violate the NLRA. (Interim Order at 3) Most recently, in Steingruber v. Family Dollar Stores of Florida, Inc., the district court concluded that the "argument that the [arbitration agreement] is void because it violates [plaintiffs] substantive rights under the NLRA to bring a collective action is without merit because 'neither the NLRA's statutory text nor its legislative history contains a congressional command against 12 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 18 of 27 application of the FAA.'" No. 3:15-CV-199-J-20JBT, 2015 WL 10818618, at *4 (M.D. Fla. Aug. 13, 2015) (quoting CompuCredit Corp. v. Greenwood, 132 S. Ct. 665,669 (2012)). The district court also cited with approval the Fifth Circuit's D.R. Horton decision rejecting the Board's position that the NLRA's Section 7 provided a substantive, as opposed to procedural, right to proceed collectively. See id. (citing D.R. Horton, Inc. v. NLRB, 737 F.3d at 355-57). Similarly, the Arbitrator noted that inDe Oliveira v. CiticorpN Am., Inc., the district court had rejected the assertion that a collective action waiver was invalid based on the Board'sD.R. Horton decision. No. 8:12-CV-251-T-26TGW,2012WL 1831230, at *2 (M.D. Fla. May 18,2012). The district court concluded that it was not bound by the Board's decision because it was inconsistent with Eleventh Circuit precedent "as announced by the Caley court." Id. The district court's decision not to follow the Board's policy position is especially noteworthy because it came before the Fifth Circuit overruled D.R. Horton and before the Eleventh Circuit issued its waiver-friendly decision in Chipio. A court within the Eleventh Circuit considering the Board's argument today would therefore have an even stronger basis to reject it. See also Levison v. Mastec, Inc., No. 8:15-CV-1547-T-26AEP, 2016 WL 4491868, at *1 (M.D. Fla. Feb. 3, 2016) (noting "the trend in the Eleventh Circuit to uphold class waivers in employment contracts"). 13 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 19 of 27 In concluding, the Arbitrator determined that the law of the Eleventh Circuit should control because Colvin was employed in Florida and filed suit in federal court there before the case was referred to arbitration, and the case law from within that jurisdiction "has implied that it would follow the D.R. Horton line of cases in order to conclude that a collective action waiver does not violate the NLRA and should be enforced." (Interim Order at 4) She also acknowledged that "two Florida district court courts interpreted the Eleventh Circuit cases as leading to this conclusion," before finally holding that the collective action waiver was enforceable. (Id.) The Arbitrator's application of Eleventh Circuit law was supported by the parties' contacts with that jurisdiction, and Colvin has not challenged the Arbitrator's interpretation of Eleventh Circuit law. And it should not be overlooked that Arbitrator's decision was premised in large part on case law from Florida federal district courts-the same case law to which this Court would look if it were tasked with resolving this issue in the first instance. Therefore, it cannot be claimed that the Arbitrator exceeded her authority by issuing a decision that was unmoored from the language of the contract and any applicable law; on the contrary, she applied the plain language of the contract and the most relevant law available. While the merits of the Arbitrator's decision to apply federal case law, as opposed to Board policy, is beyond the proper scope of review on amotion to vacate, Colvin's assertion that Board policy should control is without merit in any regard. 14 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 20 of 27 First, Board policy positions are at best persuasive authority. See NLRB v. Us. Postal Serv., 888 F.2d 1568, 1570-71 (11th Cir. 1989) (noting that while orders of the NLRB are entitled to deference, they are not binding precedent). Here, the Arbitrator wasmore than justified in declining to follow a Board policy that has been rejected by numerous federal circuits and is out of step with Eleventh Circuit precedent requiring that collective action waivers in arbitration agreements be enforced. Second, while the Board may one day issue a final order that is adverse to MUY, no order (or ALI recommendation) had been issued at the time of the Arbitrator's decision. Indeed, there is still no final Board decision. Therefore, Colvin is really suggesting that the Arbitrator exceeded her authority by declining to defer, speculatively, to a decision that had not (and still has not) yet been issued. This distinguishes this case from many of the cases Colvin cites, which, at most, stand for the proposition that an arbitrator ought to defer to the Board where a Board determination has actually been made. See, e.g., Gen. Warehousemen & Helpers Local 767 v. Standard Brands, Inc., 579 F.2d 1282, 1291 (5th Cir. 1978) (affirming district court refusal to enforce arbitration award that would have created an irreconcilable conflict with Board's certification of exclusive bargaining agent for employees involved in dispute); New Orleans Typographical UnionNo. 17 v. N L. R. B., 368 F.2d 755, 767 (5th Cir. 1966) (concluding that a final Board decision takes 15 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 21 of 27 precedence over arbitration proceedings); Dock Loaders & Unloaders of Freight Cars & Barges, ILA Local Union No. 854 v. W L. Richeson & Sons, Inc., 280 F. Supp. 402, 405 (E.D. La. 1968) (Board decision inconsistent with grievance committee award barred grievance committees award of damages); Pilot Freight Carriers, Inc. v. Int'l Bhd. of Teamsters, Chauffeurs, Warehousemen& Helpers of Am., 495 F. Supp. 619, 639 (M.D.N.C. 1980) (concluding Board's finding of no accretion was inconsistent with arbitrator's decision), vacated, 659 F.2d 1252 (4th Cir. 1981). These cases do not stand for the proposition that in the absence of a final Board determination, an arbitrator must guess what the Board might do in the future, and at the same time, ignore well-established case law. Instead, these cases merely suggest that in certain circumstances, an arbitration award that is inconsistent with a prior final Board determination may not be enforceable.' 5 Notably, most of the cases Colvin cites to are also distinguishable as they deal with arbitration awards that conflicted with Board determinations arising out of the collective bargaining context, such as work assignment disputes between unions, and disputes regarding bargaining agents and units. See, e.g., Gen. Warehousemen, 579 F.2d at 1291 (arbitration award unenforceable where it contradicted Board decision appointing one union as exclusive bargaining agent over other union);New Orleans Typographical Union No. 17, 368 F.2d at 767 (Board order regarding assignment of work to one union took precedence over arbitration awarding work to alternative union); W L. Richeson & Sons, Inc., 280 F. Supp. at 405 (damages awarded by grievance committee barred where inconsistent with NLRB work assignment order); Pilot Freight Carriers, Inc., 495 F. Supp. at 639 (Board's determination that Florida employees were excluded from union's national bargaining unit took precedence over contradictory determination by grievance committee). Moreover, one of these cases, Pilot Freight, is a district court decision from the Fourth Circuit, which means it is not binding in this proceeding. Colvin has 16 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 22 of 27 Further, it would have made little sense for the Arbitrator rule on the basis of an anticipated Board decision against MUY, because such a decision would be an intermediate decision subject to appeal. If the Board eventually deems the collective action waiver unenforceable, MUY will be permitted to appeal that decision to the U.S. Court of Appeals for the Fifth or Eleventh Circuit, as a matter of right." 29 U.S.C. § 160(f) ("Any person aggrieved by a final order of the [Board] granting or denying in whole or in part the relief sought may obtain a review of such order in any United States court of appeals in the circuit wherein the unfair labor practice in question was alleged to have been engaged in or wherein such person resides or transacts business..."). Given the well-established precedent upholding collective action waivers in those circuits, a Board decision unfavorable to MUY would ultimately be reversed. So even if the Arbitrator owed some degree of deference to an (actual) adverse Board determination, that obligation would be short-lived. The Arbitrator's decision to apply well-established federal case law from the Eleventh Circuit and elsewhere, instead of a general Board policy, is beyond the proper scope of review under Section IO(a)(4). But even if that decision was appealable, it was fully justified and legally correct in any case. The Arbitrator did failed to identify any federal case law indicating that an arbitrator must defer to the NLRB's policy regarding the enforceability of a collective action waiver, which is at odds with the majority of federal case law on the subject. 6 MUY is a Texas limited liability company, and it does business in Florida. 17 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 23 of 27 not exceed her authority under section 10(a)(4) by applying federal law, and the Complaint must be dismissed. II. Colvin Has Failed To Show That The Arbitrator Is Guilty of Misconduct In Refusing to Postpone Arbitration Proceedings. Section 10(a)(3) permits a court to vacate an arbitration award where the arbitrator was "guilty of misconduct in refusing to postpone the hearing." To establish misconduct, Colvin must show that there was no reasonable basis for the Arbitrator's decision not to postpone the hearing. See Johnson v. Directory Assistants, Inc., 797 F.3d 1294, 1301 (lith Cir. 2015);Moeller v.D.E. Frey & Co., No. 4:03 MC7-SPM, 2004 WL 1173397, at *2 (N.D. Fla. May 10, 2004) ("When refusal to postpone an arbitration hearing is raised as a ground for vacating an award, the court's task is to determine whether there was 'any reasonable basis' for the refusal."). This deferential standard recognizes "the broad discretion arbitrators have in conducting hearings and the 'the basic policy behind arbitration, which is to permit parties to resolve their disputes in an expeditious manner without all the formalities and procedures that might attend full fledged litigation.'" Moeller, 2004 WL 1173397, at *2 (quoting Schmidt v. Finberg, 942 F.2d 1571, 1574 (lith Cir. 1991». This is another high bar that Colvin cannot clear. Colvin contends that the Arbitrator was guilty of misconduct because she refused to postpone her ruling on the collective action waiver pending a decision from the Board. Yet, even if the purported primary jurisdiction of the Board was a 18 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 24 of 27 basis to postpone the arbitration proceeding (and it was not, since there was-and still is-no final order), there were other legitimate reasons for denying a stay. It cannot be said that there was no reasonable basis for the Arbitrator's decision. First, Colvin's assertion that the Arbitrator was required to stay the proceedings pending a Board decision is belied by his own decision to invoke Arbitrator's jurisdiction after he filed his Complaint with the Board. Notably, he not only initiated arbitration, he willingly submitted the question of the enforceability of the collective action waiver to the Arbitrator, and only now complains because she ruled against him. It is more than disingenuous for Colvin to challenge the Arbitrator's decision now. As the U.S. Supreme Court has recognized, a party who contracts for arbitration "must live with that choice," "good, bad or ugly." See OxfordHealth Plans LLC, 133 S. Ct. at 2071. While Colvin may be disappointed in the decision, he is not entitled to re-litigate it when it was both reasonable and legally justified. See Hercules Steel Co., 441 F.3d at 913-14 ("When a party who loses an arbitration award assumes a never-say-die attitude and drags the dispute through the court system without an objectively reasonable belief it will prevail, the promise of arbitration is broken."). Second, as discussed above, in the event the Arbitrator had chosen to stay the proceedings, a Board decision adverse to MUY would have been only temporary, because it could not survive an appeal to the Eleventh or Fifth Circuit Court of 19 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 25 of 27 Appeals. In light of this reality, the Arbitrator chose not to stay the proceedings, noting that a final decision from the Board and resulting appeal could take over a year. (Interim Order at 4-5) She recognized that waiting for the parallel Board proceeding to play out to a final conclusion would run counter to the principles of efficiency and cost-effectiveness that arbitration is meant to serve. See Schmidt v. Finberg, 942 F.2d at 1573 ("we must always bear in mind that the basic policy of conducting arbitration proceedings is to offer a means of deciding disputes expeditiously and with lower costs than in ordinary litigation."); Booth v. Hume Pub., Inc., 902 F.2d 925, 933 (lIth Cir. 1990) (explaining that the FAA's enunciation of specific grounds for vacating an award "was not intended to overthrow the general advantage of speedy and effective decision of disputes by arbitration and the creation of these general grounds does not obliterate the hesitation with which courts should view efforts to re-examine awards" and "[t]o do otherwise would defeat the primary advantages of speed and finality which led to the development of arbitration"). Accordingly, there were reasonable bases for the Arbitrator's decision not to wait for a final Board decision and Colvin cannot show that she committed misconduct by declining to postpone her ruling. Once again, the Complaint fails to state a claim upon which relief may be granted and it must be dismissed. 20 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 26 of 27 CONCLUSION For the reasons stated above, MUY Pizza Southeast, LLC respectfully requests that the Court issue an Order dismissing Colvin's Complaint on the merits and with prejudice. CERTIFICATE OF WORD COUNT In accordance with N.D. Fla. Loc. R. 7.1(F), the undersigned hereby certifies that this Memorandum of Law contains 5,788 words, exclusive of the case style and signature block, according to the Microsoft Word 2013 word count tool. Dated: December 28,2016 WINTHROP & WEINSTINE, P.A. s/William A. McNab William A. McNab (MN #0320924) Admitted Pro Hac Vice Winthrop &Weinstine, P.A. 225 South Sixth Street, Suite 3500 Minneapolis, MN 55402 wmcnab@winthrop.com 612.604.6652 Counselfor MUY Pizza Southeast, LLC 12858805v2 21 Case 3:16-cv-00646-MCR-GRJ Document 10 Filed 12/28/16 Page 27 of 27