Taylor v. Pilot Corp.

• Decision Date: 09 April 2020
• Docket Number: Nos. 18-6270/19-5410,s. 18-6270/19-5410
• Citation: 955 F.3d 572
• Parties: Arvion TAYLOR, on her own behalf and others similarly situated, Plaintiff-Appellee, v. PILOT CORPORATION, a Tennessee Corporation; Pilot Travel Centers, LLC, a Delaware Limited Liability Company, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

955 F.3d 572

Arvion TAYLOR, on her own behalf and others similarly situated, Plaintiff-Appellee,

v.PILOT CORPORATION, a Tennessee Corporation; Pilot Travel Centers, LLC, a Delaware Limited Liability Company, Defendants-Appellants.

Nos. 18-6270/19-5410

United States Court of Appeals, Sixth Circuit.

Argued: October 22, 2019

Decided and Filed: April 9, 2020

CLAY, Circuit Judge.

In this consolidated appeal, Defendants Pilot Corporation and Pilot Travel Centers LLC (collectively "Pilot" or "Defendant"), appeal from the district court’s orders (1) denying Defendant’s motion to reconsider the district court’s order compelling discovery of employment dates and (2) dismissing, without prejudice, Defendant’s motion to compel arbitration. Plaintiff Arvion Taylor, on behalf of herself and others similarly situated, initiated this Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. , lawsuit against Defendant. As it did in its last appeal in this case, Defendant cites the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq. , in an attempt to establish that this Court has jurisdiction over the instant appeal. Unfortunately for Pilot, it has once again misread this statute. For the reasons set forth below, we DISMISS this appeal for want of jurisdiction.

BACKGROUND

This case centers on a "collective action" brought under the FLSA. 29 U.S.C. § 216(b). Defendants Pilot Corporation, Pilot Travel Centers LLC, and various subsidiaries and divisions of Pilot Corp. operate a large, nationwide chain of travel centers and travel plazas. On April 24, 2014, Plaintiff Arvion Taylor filed a complaint for FLSA overtime violations against Pilot. Taylor alleged that Pilot routinely violated FLSA overtime protections by not paying her the overtime wages she was due. She claimed that this policy was a "pattern and practice" that affected Pilot employees across the country. Taylor v. Pilot Corp. , 697 F. App'x 854, 857 (6th Cir. 2017). Pilot allegedly required nonexempt hourly employees to perform work off the clock, including before and after their scheduled shifts and during their scheduled breaks. In its Answer, Pilot asserted that the claims raised by Plaintiff are covered by an arbitration agreement "in whole or in part." R. 39, PageID # 177.

In June 2015, the district court granted conditional certification to a collective action that came to include 5,145 current and former Pilot employees as opt-in Plaintiffs. In November 2015, Pilot moved for reconsideration of the certification order. The district court denied the motion and this Court dismissed the subsequent appeal for want of jurisdiction. Taylor , 697 F. App'x at 857 ; see also id. at 859 (permitting Pilot’s appeal of the denial of its request for a stay of proceedings pending arbitration but stating that Pilot "cannot use the denial as a smuggling route for otherwise non-appealable issues," like the denial of the motion for reconsideration).

In June 2018, Plaintiffs filed a motion to compel the production of employment dates of all opt-in Plaintiffs. One week after the motion was filed, the parties reached a partial settlement that resolved the claims of 1,209 opt-in Plaintiffs—including Taylor—whom Pilot admitted had not signed an arbitration agreement.

In August 2018, Pilot filed a motion to compel the remaining opt-in Plaintiffs to arbitrate their claims. This motion was based on arbitration agreements Pilot claimed each of the opt-in Plaintiffs had signed at their time of hire. Pilot claimed its employees signed one of two agreements: the National Agreement or the Texas Agreement, both of which allegedly commit particular issues to an arbitrator to decide.

Before the district court ruled on Pilot’s motion to compel arbitration, Plaintiffs urged the court to grant its pending motion to produce the employment dates, contending that several opt-in Plaintiffs were not employees of Pilot on the date Pilot claimed they signed the at-issue arbitration agreements. That is, Plaintiffs suggested that with respect to the opt-in Plaintiffs who did not sign an arbitration agreement on the date Pilot claims they did, no valid arbitration agreement was formed. The district court granted Plaintiffs’ motion to compel employment dates, ordering Pilot to produce the dates within two weeks of the order. However, instead of complying with that deadline, Pilot filed a motion to reconsider the order compelling production of the dates. Pilot argued that the purported arbitration agreements require the district court to allow an arbitrator to decide whether Pilot must turn over the employment dates and whether the arbitration agreements were validly formed. On November 19, 2018, the district court denied Pilot’s motion to reconsider (the "November 2018 Order"). It held that:

Pilot’s assertion that the arbitrator should determine whether Pilot must produce the employment dates is not logical. Taking a very broad perspective, certainly dates of employment are related to the formation and applicability of arbitration agreements, as whether an individual is subject to the agreement depends on what they signed when they began their work. However, that is exactly why the production of the dates of employment cannot, at this point, be within the purview of the arbitrator. What Plaintiffs seek here is to determine whether individuals were employed at the time arbitration agreements were signed. That is, they are asking the threshold question of whether certain individuals have even agreed to arbitration.

The Court respects the arbitration agreement entered into by certain Plaintiffs when they began their work with Defendants. However, asking the Court to cede authority to the arbitrator before it has been determined that all of these individuals are subject to the agreement in the first place is asking the Court to presuppose the answer. This the Court will not do.

R. 202, PageID # 7689–90. In essence, the district court agreed with Plaintiffs’ contention that the employment dates must be produced before the district court can rule on Pilot’s motion to compel arbitration. As a threshold matter, the agreements must have been validly formed (i.e. , actually signed by the opt-in Plaintiffs while employed by Pilot), in order for the agreements to be enforceable such that the Plaintiffs may be compelled to arbitrate their claims against Pilot.

Pilot then appealed the November 2018 Order to this Court. This placed the district court in a strange position. On the one hand, it was impeded in ruling on Pilot’s motion to compel arbitration because the employment dates had not yet been produced. On the other hand, it could not further attempt to compel Pilot to produce the dates because of Pilot’s pending appeal. Accordingly, on March 29, 2019, the district court issued orders denying, without prejudice, all outstanding motions by both parties, pending the resolution of Pilot’s appeal of the November 2018 Order. One such order denied, without prejudice, Pilot’s pending motion to compel arbitration (the "March 2019 Order"). Pilot now appeals both the November 2018 and March 2019 Orders.

DISCUSSION

The core of the parties’ dispute is whether the opt-in Plaintiffs signed the alleged arbitration agreements. This is an issue of contract formation. Pilot claims each opt-in Plaintiff signed an arbitration agreement at their time of hire and purports to possess the electronically signed arbitration agreements confirming this fact. These agreements are not in the record below.¹ In any event, some number of Plaintiffs claim that they were not employees of Pilot on the dates indicated on those alleged agreements and thus no binding arbitration agreement was formed. Pilot responds that because of the broad delegation clauses in the alleged agreements, only an arbitrator can decide this question and that the district court’s orders to the contrary are unlawful denials of its valid petition for arbitration.

While the purported arbitration agreements appear to delegate virtually all disputes to an arbitrator, Plaintiffs and the district court agree that it is for the court to decide whether the contract was validly formed in the first place. We, however, are not able to resolve this dispute for one main reason: the district court has not yet issued an order "denying a petition under section 4 of [the FAA] to order arbitration to proceed," as is required by 9 U.S.C. § 16(a)(1)(B) for this Court to have jurisdiction over Pilot’s appeals. Instead, a decision on Pilot’s motion to compel arbitration has merely been delayed. As will be discussed below, this does not constitute a denial of a petition to arbitrate. We thus dismiss these consolidated appeals for lack of jurisdiction. However, because the parties thoroughly briefed the formation issue and because it underlies Pilot’s appeals in the present case, we will address some comments to the current state of the law on that issue.

A. Formation of a Valid Arbitration Agreement

This Court has not expressly addressed whether a district court may decide whether a valid arbitration agreement has been formed prior to adjudicating a motion to compel arbitration, when a delegation clause purports to grant an arbitrator authority over contract formation issues. The Supreme Court recently noted that "before referring a dispute to an arbitrator, the court determines whether a valid arbitration agreement exists." Henry Schein, Inc. v. Archer and White Sales, Inc. , ––– U.S. ––––, 139 S. Ct. 524, 530, 202 L.Ed.2d 480 (2019). In Granite Rock Co. v. International Brotherhood of Teamsters , 561 U.S. 287, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010), the Supreme Court held that to be satisfied that the parties have agreed to arbitrate a particular dispute and thus may order arbitration of that dispute, a district court "must resolve any issue that calls into question the formation or applicability of the specific arbitration clause that a party seeks to have the court enforce." Id. at 297, 130 S.Ct. 2847.

The...