Walthour v. Chipio Windshield Repair, LLC

• Citation: 745 F.3d 1326
• Decision Date: 21 March 2014
• Docket Number: No. 13–11309.,13–11309.
• Parties: Ashley WALTHOUR, Kevin Chappell, on behalf of themselves and all others similarly situated, Plaintiffs–Appellants, v. CHIPIO WINDSHIELD REPAIR, LLC, Kingco Promotions, Inc., Levaughn Hall, John Does I–X, Defendants–Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

745 F.3d 1326

Ashley WALTHOUR, Kevin Chappell, on behalf of themselves and all others similarly situated, Plaintiffs–Appellants,

v.CHIPIO WINDSHIELD REPAIR, LLC, Kingco Promotions, Inc., Levaughn Hall, John Does I–X, Defendants–Appellees.

No. 13–11309.

United States Court of Appeals,Eleventh Circuit.

March 21, 2014.

Stephen Michael Katz, The Katz Law Group, Marietta, GA, for Plaintiff–Appellant.

Joseph Michael English, Taylor English Duma, LLP, Michael D. Kabat, Wargo & French, LLP, Atlanta, GA, Lewis P. Janowsky, Rynn & Janowsky, LLP, Newport Beach, CA, for Defendant–Appellee.

Appeal from the United States District Court for the Northern District of Georgia. D.C. Docket No. 1:12–cv–01491–AT.

Before HULL and BLACK, Circuit Judges, and WALTER,^* District Judge.

HULL, Circuit Judge:

Plaintiffs-appellants Ashley Walthour and Kevin Chappell appeal the district court's order compelling arbitration and dismissing their complaint filed against defendants-appellees Chipio Windshield Repair, LLC; Kingco Promotions, Inc.; Levaughn Hall; and several “John Does.” This appeal presents the question of whether an arbitration agreement, which waives an employee's ability to bring a collective action under the Fair Labor Standards Act, is enforceable under the Federal Arbitration Act. After careful review and with the benefit of oral argument, we affirm the district court's order compelling arbitration.

I. BACKGROUND

The underlying action arises out of plaintiffs Ashley Walthour's and Kevin Chappell's (“plaintiffs”) employment with defendants Chipio Windshield Repair; Kingco Promotions, Inc.; and Levaughn Hall (collectively the “Chipio defendants”).

In August 2011, plaintiffs began working for the Chipio defendants as “Window Repairers.” “Window Repairers” perform “manual labor associated with repairing automobile windshields, work[ ] in Defendants'office, and driv[e] to locations where such window repairs [a]re made.” According to plaintiffs, the Chipio defendants did not pay plaintiffs the required minimum wage of $7.25 per hour or overtime wages for the hours they worked in excess of 40 hours per a week.

In October 2011, soon after the Chipio defendants hired plaintiffs, defendant Kingco Promotions entered into separate, identical arbitration agreements (the “Arbitration Agreements”) with plaintiffs. The Chipio defendants assert that Kingco Promotions was actually plaintiffs' employer and that defendants Chipio Windshield Repair and Hall were not plaintiffs' employer. However, for the purposes of this appeal and the Chipio defendants' motion to compel arbitration, both the Chipio defendants and plaintiffs have treated all three defendants—Kingco Promotions, Chipio Windshield Repair, and Hall—collectively as plaintiffs' employer.¹ And, plaintiffs and all three Chipio defendants have treated the arbitration agreement, signed by defendant Kingco Promotions, as applying to all three Chipio defendants.

Plaintiffs, each as “Employee,” and the Chipio defendants, as “Employer,” agreed that any kind of employment disagreement would be submitted to binding arbitration as follows:

all claims, disputes, controversies, or disagreements of any kind whatsoever arising out of or relating to any employment at-will agreement entered into between the parties, and/or Employee's employment with Employer, and which may have occurred prior to or after entering into this arbitration agreement ..., shall be submitted to binding arbitration. Employer and Employee agree that the requirement to arbitrate shall also apply to any claim that may arise out of or relate to Employee's employment and which Employee may assert against Employer's employees, officers, directors, agents, suppliers or service providers, in their capacity as such....

In their Arbitration Agreements, plaintiffs also agreed that they may bring claims only individually, not as class members, and that they were giving up their rights to participate in a class or other representative action as follows:

The arbitrator will have no authority to consider a class action by one or more employees or otherwise preside over any form of a representative or class proceeding. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. The award of the arbitrator may be enforced in any court of competent jurisdiction. BY SIGNING THIS AGREEMENT, EMPLOYEE AND EMPLOYER ARE EACH GIVING UP HIS/HER/ITS RIGHT TO A JURY TRIAL AND HIS/HER/ITS RIGHT TO PARTICIPATE IN A CLASS ACTION BECAUSE ALL CLAIMS WILL BE RESOLVED EXCLUSIVELY THROUGH ARBITRATION. EMPLOYEE AND EMPLOYER AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN HIS/HER/ITS INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING....Plaintiff Walthour's employment with the Chipio defendants ended in April 2012, and plaintiff Chappell's employment with the Chipio defendants ended in December 2011.

On April 30, 2012, plaintiffs Walthour and Chappell brought a putative collective action against the Chipio defendants, pursuant to the Fair Labor Standards Act (“FLSA”) § 16(b), 29 U.S.C. § 216(b). Plaintiffs' complaint alleges that the Chipio defendants (1) did not pay minimum wages to them, in violation of FLSA § 6, 29 U.S.C. § 206; (2) did not compensate them for the time that they worked in excess of 40 hours per week, in violation of FLSA § 7, 29 U.S.C. § 207; and (3) did not make adequate and accurate records of their wages and hours, in violation of FLSA §§ 11(c) and 15(a)(5), 29 U.S.C. §§ 211(c) and 215(a)(5) and 29 C.F.R. § 516.

After plaintiffs filed their complaint, the Chipio defendants filed (1) a motion to compel arbitration pursuant to the terms of the Arbitration Agreements and (2) a motion to dismiss the action or, alternatively, to stay the proceedings during the pendency of arbitration. Plaintiffs opposed the motions, arguing that their right to file a collective action under FLSA § 16(b) was a non-waivable, substantive right and that the Arbitration Agreements were invalid because they purported to waive that right.²

The district court granted the Chipio defendants' motions and dismissed plaintiffs' complaint. The district court determined, inter alia, that, “in the absence of binding precedent holding that such a [waiver] provision is unenforceable as a matter of law,” the Arbitration Agreements should be enforced, in light of the FAA's strong policy in favor of arbitration.

Plaintiffs timely filed this appeal.

II. DISCUSSION

A. The Federal Arbitration Act

The Federal Arbitration Act (“FAA”) generally governs the validity of an arbitration agreement. Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1367 (11th Cir.2005).³ The FAA was “enacted in 1925 as a response to judicial hostility to arbitration.” CompuCredit Corp. v. Greenwood, 565 U.S. ––––, ––––, 132 S.Ct. 665, 668, 181 L.Ed.2d 586 (2012). The FAA thus “embodies a liberal federal policy favoring arbitration agreements” and seeks “to relieve congestion in the courts and to provide parties with an alternative method for dispute resolution that is speedier and less costly than litigation.” Caley, 428 F.3d at 1367 (internal quotation marks omitted).

The FAA's primary substantive provision provides that a written agreement to arbitrate a controversy arising out of that contract “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; see Pendergast v. Sprint Nextel Corp., 691 F.3d 1224, 1231 & n. 7 (11th Cir.2012).

Consistent with the FAA's text, “courts must rigorously enforce arbitration agreements according to their terms, including terms that specify with whom [the parties] choose to arbitrate their disputes.” Am. Express Co. v. Italian Colors Rest., 570 U.S. ––––, ––––, 133 S.Ct. 2304, 2309, 186 L.Ed.2d 417 (2013) (citation and internal quotation marks omitted). Importantly, the “overarching purpose of the FAA ... is to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings.” AT & T Mobility LLC v. Concepcion, 563 U.S. ––––, ––––, 131 S.Ct. 1740, 1748, 179 L.Ed.2d 742 (2011); see Stolt–Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 682–83, 130 S.Ct. 1758, 1773–74, 176 L.Ed.2d 605 (2010) (recognizing that “the central or ‘primary’ purpose of the FAA is to ensure that ‘private agreements to arbitrate are enforced according to their terms' ” and that parties “may specify with whom they choose to arbitrate their disputes”).

Here, plaintiffs and defendant Kingco agreed to resolve various claims by way of binding arbitration. The parties do not dispute that plaintiffs' FLSA claims against the Chipio defendants fall within the scope of the Arbitration Agreements. Further, there is no dispute that, in the Arbitration Agreements, plaintiffs explicitly waived their rights to any representative arbitration and agreed only to individual arbitration. The FAA, standing alone, requires enforcement of the Arbitration Agreements according to their terms, which, in this case, means individual, not collective, arbitration.

Plaintiffs, however, argue that the Arbitration Agreements are unenforceable because they contain a waiver of plaintiffs' statutory right to file a collective action under the FLSA. According to plaintiffs, the FLSA's text, legislative history and purposes show that the statutory right to bring a collective action under the FLSA is substantive and cannot be waived and that the FLSA has overridden the FAA's requirement that the collective action waivers in the Arbitration Agreements be enforced.⁴ As we explain below, we require a contrary congressional command in the FLSA to override the FAA.

Therefore, we examine (1) the contrary congressional command inquiry, (2) then discuss the FLSA, and (3) finally, determine whether plaintiffs have shown that the FLSA overrides the FAA.

B. The Contrary...