Vallejo v. Garda CL Sw., Inc.

• Decision Date: 04 June 2013
• Docket Number: Civil Action No. H–12–0555.
• Citation: 948 F.Supp.2d 720
• Parties: Christian VALLEJO, Individually and on behalf of all similarly situated current and former employees, Plaintiff, v. GARDA CL SOUTHWEST, INC., Defendant.
• Court: U.S. District Court — Southern District of Texas

948 F.Supp.2d 720

Christian VALLEJO, Individually and on behalf of all similarly situated current and former employees, Plaintiff,

v.GARDA CL SOUTHWEST, INC., Defendant.

Civil Action No. H–12–0555.

United States District Court,

S.D. Texas,

Houston Division.

June 4, 2013.

Kevin A. Murray, Kevin A. Murray LLC, Houston, TX, for Plaintiff.

Robert F. Friedman, Russell R. Zimmerer, Littler Mendelson PC, Dallas, TX, for Defendant.

MEMORANDUM AND ORDER

LEE H. ROSENTHAL, District Judge.

This is a suit alleging a failure to pay the overtime required under the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. § 201 et seq. Christian Vallejo sued his former employer, Garda CL Southwest, Inc. (Garda), asserting a right to relief for himself and on behalf of other similarly situated employees. Garda moved to dismiss or stay and compel arbitration under an arbitration clause contained in a collective-bargaining agreement that Vallejo signed. (Docket Entry No. 15). On October 18, 2012, three other Garda employees—Artemio Caballero, Karlnetta Coleman, and Jason Winn—filed opt-in notices and then moved to intervene in the FLSA case against Garda. (Docket Entries No. 19–21, 32).

On January 30, 2013, 2013 WL 391163, this court granted the motion to dismiss in part and denied it in part. The motion was granted to the extent that Vallejo was compelled to arbitrate his own claims, which were dismissed. (Docket Entry No. 36). The motion to intervene was granted. On March 8, 2013, Garda moved to dismiss or stay the proceedings and compel arbitration as to the three intervenors, who filed a response, to which Garda replied. (Docket Entry No. 39, 43, 44). Based on the pleadings, the motion and response, and the relevant law, this court denies the motion to dismiss or to stay and compel arbitration as to the intervenors' claims. The reasons for this ruling are explained below.

I. BackgroundA. The Plaintiffs

1. Christian Vallejo

Although this court has ruled that Christian Vallejo must arbitrate his claims against Garda, his claims are helpful to understanding the present motion seeking to require the intervenors to arbitrate. Christian Vallejo worked as an armored-car driver and guard for Garda in Houston, Texas from July 2008 until Garda terminated his employment on January 26, 2012. Vallejo was a member of the Houston /North Houston Drivers Association, which Garda alleges is the employees' union for Garda armored-car personnel. Vallejo was subject to a collective-bargaining agreement between the union and Garda. The agreement, which Vallejo signed on October 21, 2011, stated that the union is the exclusive representative for collective-bargaining purposes. The agreement contained an arbitration clause covering “grievances,” which were defined as follows:

a legitimate controversy, claim or dispute by any employee, shop steward or the Union concerning rates of pay, entitlement to compensation, benefits, hours, or working conditions set forth herein .... any claim under any federal, state or local law, statute or regulation or under any common law theory whether residing in contract, tort or equity or any other claim related to the employment relationship.

(Docket Entry No. 15, Ex. A, Collective–Bargaining Agreement, Art. 5(a)). The agreement required employees to submit grievances first to Garda and then to an arbitrator, whose decision would be final and binding. The agreement also required any dispute about the “interpretation or application of this Agreement” to be arbitrated. ( Id.) The agreement had an effective date of November 1, 2011.

The agreement stated that it was between Garda and the drivers' association, identified as the union for, and the exclusive bargaining representative of, the armored car guards and drivers. It is undisputed that Vallejo signed the agreement. The signature line was below language stating that by signing, the employee had (1) read and understood the agreement, (2) signed it “freely and voluntarily,” and (3) expressly “agree[d] to its terms and conditions.” ( Id., at 16–17). Vallejo continued to work for Garda after receiving notice of the agreement with the arbitration provision and signing it.

2. The Intervenors

Jason Winn was employed by Garda as a driver, messenger, and guard at Garda's Houston facility until his employment was terminated on September 14, 2010. Karlnetta Coleman was employed by Garda from January 17, 2011 to January 31, 2012, when Garda terminated her employment. She was employed as a driver, messenger, and guard at Garda's Houston, Texas facility. Artemio Caballero began working for Garda on June 7, 2010 as a driver and messenger at its Houston facility. (Docket Entry No. 33).

According to Garda, the intervenors were all members of the drivers' association during the time they worked for Garda. (Docket Entry No. 39, at 5). But Garda has not produced collective-bargaining agreements signed by the intervenors. Instead, Garda explains that all drivers who worked during the same period were automatically members of the union and subject to the terms of the collective-bargaining agreement. According to Garda, “[a]n Agreement setting forth terms and conditions of employment for the drivers/messengers/guards and Garda (as well as its predecessors) has been negotiated and in effect since at least 2006. ( Id. (citing Docket Entry No. 40, App. at 5, Decl. of Winton Blackmon, ¶ 5)). “These Agreements are negotiated and bargained for by an exclusive bargaining representative (the Houston/North Houston Drivers Association) on all drivers/messengers/guards' behalf.” ( Id.)

The intervenors asserted that they never agreed to be part of the drivers' association or any union while at Garda. They deny signing a collective-bargaining agreement that contained an arbitration provision. Each intervenor submitted an affidavit supporting these assertions. (Docket Entry No. 43, Exs. A–D). The intervenors also point out that while Vallejo's signature is among the signatures on the Labor Agreement Garda produced, their signatures are not. In addition, Winn's employment terminated before the 2011 Labor Agreement's effective date. Finally, the intervenors argue that there is no evidence that they knew about the Labor Agreement during the time they worked for Garda. (Docket Entry No. 43, ¶ 6).

B. This Lawsuit

Vallejo claimed that he and other employees were entitled to overtime pay for their work at Garda. Vallejo proposed a class defined as “[a]ll individuals who were employed or are currently employed by one or more of the following: Defendant, its subsidiaries or affiliated companies as armored transport employees or in any other similarly titled position at any time during the relevant statute of limitations period.” (Docket Entry No. 16, ¶ 32). In his amended complaint, Vallejo alleged, among other things, that the drivers' association was a fraudulent or fictitious union, making the Labor Agreement containing the arbitration clause fraudulent as well. Vallejo asserted state-law claims, including for fraud, fraudulent inducement, negligence, and negligent misrepresentation, based on those factual allegations.

Garda moved to dismiss or in the alternative to stay the litigation and compel arbitration. (Docket Entry No. 15). Garda argued that Vallejo's claims were expressly covered by the grievance and arbitration provisions of the collective-bargaining agreement. Vallejo's claim that the collective-bargaining agreement was fraudulent was, according to Garda, a challenge to the validity of the contract as a whole rather than to the arbitration clause, and therefore was an issue for the arbitrator to decide. ( Id. at 12–13).

On October 18, 2012, Winn, Coleman, and Caballero filed notices of consent to join this collective action. (Docket Entries No. 19, 20, 21). Vallejo responded to Garda's motion to dismiss or to compel arbitration and moved for class certification. (Docket Entries No. 22, 23). Vallejo sought to divide the putative class into two subclasses. One would include employees like Vallejo who did sign the agreement. For this subclass, Vallejo argued, the arbitration clause would not be enforceable because the collective-bargaining agreement containing it was the product of fraud and fraudulent coercion. Vallejo also argued that even if the arbitration clause was enforceable, it would cover only those claims that arose after the collective-bargaining agreement's effective date. The second subclass would include employees like Winn, Coleman, and Caballero, whom Vallejo claimed had not signed the collective-bargaining agreement and were not otherwise bound by its grievance and arbitration provisions.

On November 14, 2012, this court held a hearing on the parties' motions. (Docket Entry No. 30). On December 10, 2012, Winn, Coleman, and Caballero moved to intervene with a proposed complaint. (Docket Entries No. 32, 33). On January 30, 2013, this court dismissed Vallejo's claims on the basis of the arbitration clause and granted Winn, Coleman, and Caballero leave to intervene. (Docket Entry No. 36). Garda moved to dismiss or to stay and compel arbitration as to the claims of Winn, Coleman, and Caballero. (Docket Entry No. 39). As with Vallejo, Garda argued that the Labor Agreement's arbitration clause mandated arbitration of the intervenors' claims. Garda also argued that arguments about the union's validity did not affect the validity of the arbitration clause and were for an arbitrator to decide. In response, the intervenors argued that Garda had not presented evidence that they assented to the arbitration clause in the Labor Agreement and repeated Vallejo's argument that the union itself was fictitious and fraudulent. (Docket Entry No. 43). Garda replied that the legal status of the union was irrelevant to whether the Labor Agreement's arbitration clause applied to employees such as Winn, Coleman, and Caballero. (Docket Entry No. 44).

These arguments and their responses are discussed...