Adkins v. Labor Ready, Inc.

• Citation: 185 F.Supp.2d 628
• Decision Date: 28 September 2001
• Docket Number: No. Civ.A.2:00-0884.,Civ.A.2:00-0884.
• Court: United States District Courts. 4th Circuit. Southern District of West Virginia
• Parties: Curtis M. ADKINS, Individually and on behalf of others similarly situated,<SMALL><SUP>1</SUP></SMALL> Plaintiff, v. LABOR READY, INC., and Labor Ready Mid-Atlantic, Inc., Defendants.

185 F.Supp.2d 628

Curtis M. ADKINS, Individually and on behalf of others similarly situated,¹ Plaintiff, v. LABOR READY, INC., and Labor Ready Mid-Atlantic, Inc., Defendants.

No. Civ.A.2:00-0884.

United States District Court, S.D. West Virginia, at Charleston.

September 28, 2001.

COPYRIGHT MATERIAL OMITTED

Stuart Calwell, Mary McQuain, Calwell & McCormick, Charleston, WV, for plaintiff.

Niall A. Paul, Kevin L. Carr, Spilman, Thomas & Battle, Charleston, WV, Carl Trieshmann, Schnader, Harrison, Segal & Lewis, LLP, Atlanta, GA, for defendant.

ORDER

COPENHAVER, District Judge.

This matter is before the court on defendant's motion to compel arbitration and stay proceedings, filed November 8, 2000.²

I. Background

Plaintiff filed this proposed class action³ in the circuit court of Kanawha County, West Virginia, on August 16, 2000, alleging that defendants Labor Ready, Inc., a temporary employment agency, and Labor Ready Mid-Atlantic, Inc., its wholly owned subsidiary (collectively "Labor Ready")⁴ violated "federal and state wage and hour laws and wage payment collection laws" by failing to pay for "call time, training time, travel time, [and] overtime." (Pl.'s Am. Compl. at XXX, XXXI.) While plaintiff's amended complaint, filed in state court on September 12, 2000, does not identify the "wage and hour laws" under which he proceeds, the plaintiff has since clarified that his claims are made pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b), as well as West Virginia's Minimum Wage and Maximum Hours Standards for Employees, ("Minimum Wage Act") West Virginia Code section 21-5C-1 et. seq., and West Virginia's Wage Payment Collection Act, West Virginia Code section 21-5-1 ("Wage Payment Act"). (Pl.'s Mem. in Suppt.Mot.Amend Compl. at 3-4.)⁵

On November 8, 2000, Labor Ready filed a motion to compel arbitration and stay proceedings, on the basis of an arbitration agreement signed by Adkins and each other Labor Ready job applicant. Before potential employees are assigned work through Labor Ready, they must complete an application upon which they "state their work experience and trade skills, authorize Labor Ready to contact previous employers, consent to drug/alcohol testing in the event of work-related injury or illness, sign a release of claims against Labor Ready's customers, promise to follow Labor Ready's rules and acknowledge and agree to Defendants' `Policy Regarding Dispatch Procedures, Employment and Arbitration.'" (Pl.'s Opp.Motion Compel Arbitration at 2.) The arbitration provision is contained within an enclosed box on the employment application, entitled "Policy Regarding Dispatch Procedures, Employment, and Arbitration." The policy states in its entirety:

I understand that I am not required to work on any particular day and whether I report in to the LABOR READY, INC. dispatch hall is always my choice. Whenever I wish to register my availability to work, I will visit the dispatch hall and sign in. I know that LABOR READY, INC. is not required to find work for me and is not required to contact me in any way in order to make work available to me. If I do not report to the dispatch hall and sign in, LABOR READY, INC. may assume that I am not available for work on that day.

I understand that after receiving a job assignment, I am free on my own time to leave the dispatch hall and do as I wish until the job assignment starts. I understand the importance of never being late for a job assignment.

If I have a REPEAT TICKET (defined as a request to return to the same job at a later date), I know that I am required to report my availability to LABOR READY, INC. in the manner indicated by the dispatcher at least one (1) hour before the scheduled start time and that if I do not, then LABOR READY, INC. may assume that I am not available to return to work.

I understand that my employment with LABOR READY, INC. is on a day-to-day basis. That is, at the end of the work day, I will be deemed to have quit unless and until I request and receive a work assignment at a later date.

I agree that any disputes arising out of my employment, including any claims of discrimination, harassment or wrongful termination that I believe I have against Labor Ready and all other employment related issues (excluding only claims arising under the National Labor Relations act or otherwise within the jurisdiction of the National Labor Relations Board) will be resolved by arbitration as my sole remedy. The arbitration shall be conducted by the American Arbitration Association under its Commercial Arbitration Rules and the decision of the arbitrator shall be final and binding. I understand that Labor Ready also agrees to arbitrate in the same manner any claims which the company believes it has against me.

I HAVE READ AND AGREE TO THE ABOVE STATEMENTS

(Def.'s Mot.Compel Arbitration, Exhibit 1, final full paragraph of policy hereinafter "Arbitration Agreement.") (capitalization in original). Labor Ready contends that the arbitration agreement is valid, covers the plaintiff's claims, and should be enforced.

Plaintiff has filed numerous "consent forms"⁶ by current and former employees of Labor Ready who wish to join as plaintiffs in this action. The individuals who have filed consent forms are hereinafter referred to as "opt-in plaintiffs," as distinguished from named plaintiff Adkins. The consent forms, with the first filed November 26, 2000, and the most recent filed on September 21, 2001, are approximately sixty-three in number.

Plaintiff filed, on December 4, 2000, and December 26, 2000, respectively, a motion for leave to amend the amended complaint, and a supplement to that motion, seeking to add as defendants sixty-four businesses for whom the opt-in plaintiffs worked through Labor Ready (hereinafter "Labor Ready's customers" or "proposed additional defendants"), on the basis that the proposed additional defendants are "joint employers" of the plaintiff and opt-in plaintiffs along with Labor Ready. The plaintiff contends that because he and the opt-in plaintiffs performed substantially all their work under the control and supervision of Labor Ready's customers and on their work sites, Labor Ready's customers are joint employers with Labor Ready pursuant to the "economic reality test."⁷ (Id. at 3-4.)

Both plaintiff and defendant have filed various other motions which are not material to the issue of whether Labor Ready can compel arbitration of the plaintiff's claims against it.⁸

II. Discussion

Labor Ready argues that plaintiff's claims against it must be stayed pending submission of this case to arbitration. Labor Ready's motions are based on sections 3 and 4 of the Federal Arbitration Act (the "Act"), 9 U.S.C. §§ 1-16. The Act embodies a "strong federal public policy in favor of enforcing arbitration agreements," and is designed to "ensure judicial enforcement of privately made agreements to arbitrate." Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 217-19, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). When presented with a valid arbitration agreement, "the Act leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed."⁹ Dean Witter, 470 U.S. at 218, 105 S.Ct. 1238. Once the court determines that a claim falls within the scope of an arbitration provision, the court has no authority to consider the merits of the claim, even if it appears to be frivolous, and must order the claim to arbitration. See AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986).

Section 1 of the Act provides that the Act applies to contracts involving commerce but specifically excludes from the Act's coverage "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 9 U.S.C. § 1. Section 2 of the Act provides that written agreements to arbitrate "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. Section 3 provides that, upon being satisfied that an issue involved in a lawsuit is one subject to arbitration under an arbitration agreement, a court may stay all proceedings pending resolution of the arbitration. 9 U.S.C. § 3. Section 4 gives district courts authority to compel arbitration when a party neglects or refuses to arbitrate a controversy subject to arbitration under an arbitration agreement. 9 U.S.C. § 4.

Both sections 3 and 4 "call for an expeditious and summary hearing, with only restricted inquiry into factual issues." Glass v. Kidder Peabody & Co., Inc., 114 F.3d 446, 453 (4th Cir.1997). When considering a motion brought under section 3 or 4 of the Act, a court must:

conduct a substantive arbitrability inquiry — meaning the court "engage[s] in a limited review to ensure that the dispute is arbitrable — i.e., that a valid agreement to arbitrate exists between the parties and that the specific dispute falls within the substantive scope of that agreement." If "the court determines that an agreement exists and that the dispute falls within the scope of the agreement, it then must refer the matter to arbitration without considering the merits of the dispute."

Id. (quoting PaineWebber, Inc. v. Hartmann, 921 F.2d 507, 511 (3d Cir.1990)).

Plaintiff contends that for a number of reasons, the arbitration clause he executed is unenforceable. Plaintiff claims that (1) the joint employers that he seeks to add as defendants were not signatories to the arbitration provision,...