Williams v. Dearborn Motors 1, LLC
| Decision Date | 30 August 2021 |
| Docket Number | 20-1351 |
| Parties | BRIAN WILLIAMS, et al., Plaintiffs-Appellants, v. DEARBORN MOTORS 1, LLC, dba All Pro Nissan of Dearborn, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Plaintiffs Brian Williams and Jay Howard appeal from a district court judgment upholding a class action waiver policy in a mandatory employment arbitration agreement provided by their former employer. Plaintiffs contend that the class waiver violates their civil rights by depriving them of the ability to pursue pattern-or-practice employment discrimination claims and by limiting the scope of relief available in such actions. However, the Supreme Court has repeatedly affirmed the validity of class waiver policies under the Federal Arbitration Act and federal labor laws, including with respect to employment discrimination disputes. Because the class waiver policy in this case did not violate any civil rights laws, dismissal of plaintiffs' class-based discrimination claims was proper. Similarly, because Williams's refusal to sign the arbitration agreement did not constitute a protected activity, he failed to establish a prima facie case for retaliation, and dismissal of his retaliation claims was also proper.
Brian Williams and Jay Howard are former employees of defendant Dearborn Motors 1, LLC, d/b/a All Pro Nissan of Dearborn, a car dealership located in Dearborn, Michigan. Several months into their employment, defendant advised plaintiffs that they were required to sign an arbitration agreement in order to remain employed. Williams refused to sign the arbitration agreement and was fired as a result. Howard did sign the agreement in order to continue his employment.
Williams subsequently filed charges with the Equal Employment Opportunity Commission ("EEOC") alleging that his termination constituted unlawful retaliation for his refusal to sign the arbitration agreement, which he contended was a violation of his legal rights under Title VII of the Civil Rights Act, the Americans with Disabilities Act ("ADA"), the Equal Pay Act, the Age Discrimination in Employment Act ("ADEA") and the Genetic Information Non-Disclosure Act. Williams also alleged that he experienced race discrimination in the form of lower compensation and less desirable placement, and disability discrimination because he was denied a reasonable accommodation in the form of alternative work at the dealership. After investigating, the EEOC determined that there was "reasonable cause" to believe that Williams's allegations were true "with respect to himself and a class of harmed parties." After efforts at conciliation with defendant failed, the EEOC issued Williams a Notice of Right to Sue letter. Around the same time Williams was fired, Howard complained to defendant of race-based compensation disparities. In the following month he filed race discrimination charges with the EEOC. The EEOC found "reasonable cause" that Howard's claims were true and issued a Notice of Right to Sue letter. Howard was terminated from his employment the following year and he subsequently amended his original charge to include charges of unlawful retaliation under Title VII.
Plaintiffs sought to represent a class of defendant's current and former employees who were required to sign an arbitration agreement as a condition of their employment or continued employment. In addition to the class-based discrimination claims, Williams raised individual claims for retaliation in violation of Title VII, the ADEA, and the ADA, based on his termination for refusing to sign the arbitration agreement. Howard also raised individual claims for retaliation in violation of Title VII based on his opposition to the arbitration agreement, race discrimination due to compensation disparities in violation of Michigan's Elliott-Larsen Civil Rights Act ("ELCRA"), and retaliation in violation of ELCRA based on his termination after having filed EEOC charges.
The arbitration agreement at issue in this case provides, in relevant part:
Employee agrees that all claims or disputes between employee and the company . . . will be litigated individually; that he/she will not consolidate his/her claims with the claims of any other individual; that he/she will not seek class or collective action treatment for any claim that he/she may have; and that he/she will not participate in any class or collective action treatment against the company .... If at any time the employee is made a member or [sic] a class in any proceeding, he/she will "opt out" at the first opportunity, and should any third party pursue any claims on his/her behalf, the employee shall waive his/her rights to any such monetary recovery.
Defendant moved to dismiss the class claims and compel arbitration of Howard's individual claims. The district court granted the motion in May 2018, three days after the Supreme Court issued a decision in Epic Systems Corp. v. Lewis 138 S.Ct. 1612 (2018), in which the Court upheld an arbitration agreement with a class waiver policy in an action asserting wage and overtime claims under the Fair Labor Standards Act ("FLSA"). Id. at 1632. Relying on Epic, the district court ruled that the class waiver in this case was valid and enforceable dismissed the class claims, and ordered that Howard's remaining claims be sent to arbitration. Plaintiffs moved for reconsideration of the court's decision and the court reaffirmed its prior order.
The parties subsequently filed cross motions for judgment on the pleadings on Williams's individual retaliation claims. The court denied plaintiffs' motion and granted judgment on the pleadings in favor of defendant, reasoning that Williams failed to allege a prima facie retaliation claim because his belief that the class waiver term in the arbitration agreement was unlawful was not objectively reasonable based on substantial federal caselaw upholding class waivers in similar cases. The court observed that Williams's conduct moreover could not qualify as protected activity under Title VII, the ADA, or the ADEA, because his refusal to sign the arbitration agreement did not constitute opposition to any discriminatory act or policy.
Plaintiffs timely appealed from the district court orders dismissing their class-based discrimination claims and Williams's individual retaliation claims. Defendant-appellee is not represented by counsel and has not filed a brief in this appeal.
Plaintiffs make two arguments on appeal. First, they claim that dismissal of their classbased discrimination claims was improper because defendant's class waiver policy was unlawful under Title VII, the ADA, and the ADEA, which we refer to collectively as the Civil Rights Acts ("Acts"), because the policy limited their right to pursue certain claims or obtain certain types of relief. Second, they argue that Williams presented a prima facie case of retaliation on the theory that his opposition to the mandatory arbitration agreement constituted protected activity because he reasonably believed he was opposing a discriminatory policy. Neither argument warrants reversal.[1]
Plaintiffs first contend that dismissal of their class claims was error because the class waiver policy constituted an "unlawful employment practice" under the Civil Rights Acts by limiting the employees "in any way" that would "deprive or tend to deprive" them of employment opportunities based on their protected status. See 42 U.S.C. § 2000e-2 (Title VII). See also 42 U.S.C. § 12112 (ADA); 29 U.S.C. § 623 (ADEA). We review the dismissal of the class claims de novo. Solo v. United Parcel Serv. Co., 819 F.3d 788, 793 (6th Cir. 2016).
Plaintiffs failed to state a cognizable claim to relief with respect to their class-based discrimination claims, because the claims are precluded by the Federal Arbitration Act's ("FAA") broad mandate in favor of upholding arbitration agreements. The FAA reflects Congress's intent to create a "liberal federal policy favoring arbitration." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). Arbitration entails a matter of contract, and the Supreme Court has instructed that "courts must rigorously enforce arbitration agreements according to their terms, including terms that specify with whom [the parties] choose to arbitrate their disputes and the rules under which arbitration will be conducted." Am. Exp. Co. v. Italian Colors Rest., 570 U.S. 228, 233 (2013) (internal quotation marks and citations omitted). "That holds true for claims that allege a violation of a federal statute, unless the FAA's mandate has been overridden by a contrary congressional command." Id. (internal quotation marks and citation omitted). In Italian Colors, the Court upheld a class action waiver policy as enforceable in the context of an antitrust action, observing that there was "[n]o contrary congressional command" requiring the Court to reject the class waiver. Id. at 233-39. Italian Colors recognized that class waiver policies are lawful under the FAA and enforceable, even with respect to claims that are commonly raised in class actions. See id. at 233. Consequently, for plaintiffs to prevail on their class claims, they must point to some "contrary congressional command" showing that the Civil Rights Acts override the FAA's mandate authorizing class waivers. Plaintiffs did not do so here.
Plaintiffs' contention that the Civil Rights Acts render class waivers unenforceable is inconsistent with Supreme Court precedent directly addressing one of the statutes in question. The Court upheld a class action waiver in the context of...
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