United States District Court, D. Kansas
LCC INTERNATIONAL, INC., n/k/a TECH MAHINDRA NETWORK SERVICES INTERNATIONAL, INC., Petitioner,
RICHARD TORGERSON, individually and on behalf of all others similarly situated, Respondents.
MEMORANDUM AND ORDER
D. Crabtree United States District Judge
28, 2017, petitioner LCC International, Inc.
(“LCC”) filed a Petition to Vacate in the Eastern
District of Virginia, seeking to vacate an arbitrator's
Order denying LCC's Motion for Clause Construction Award.
After the parties jointly stipulated to transfer LCC's
Petition to the District of Kansas, the Eastern District of
Virginia transferred the case to our court on September 1,
2017. Respondent Richard Torgerson (who is asserting Fair
Labor Standards Act (“FLSA”) claims on behalf of
himself and all other similarly situated in arbitration
against LCC) opposes LCC's Petition to Vacate. Mr.
Torgerson asks the court to deny LCC's Petition to Vacate
and dismiss this action.
considering the parties' arguments, the court rejects
LCC's assertion that the arbitrator exceeded his
authority in his June 30, 2017 Order denying LCC's Motion
for Clause Construction Award (Doc. 13-1). The court thus
denies LCC's Petition to Vacate and dismisses this
Torgerson worked for LCC as a Migration Analyst and Senior
Migration Analyst at its office in Overland Park, Kansas. On
February 3, 2016, Mr. Torgerson filed a lawsuit in the
Western District of Missouri, on behalf of himself and others
similarly situated, alleging that LCC had violated the FLSA
by improperly classifying all LCC employees working in a
Migration Analyst position as employees exempt from the
FLSA's overtime requirements. Mr. Torgerson's suit
seeks to recover unpaid overtime compensation under the FLSA
on behalf of himself and other, similarly situated Migration
filed a motion asking the Western District of Missouri to
dismiss the case based on improper venue. The Western
District of Missouri agreed that venue was improper but
refused to dismiss the case. Instead, on July 11, 2016, the
Western District of Missouri transferred the action to our
court. See Torgerson v. LCC Int'l, Inc., No.
16-2495-DDC-TJJ (D. Kan. July 11, 2016), ECF 54.
condition of his employment with LCC, Mr. Torgerson signed an
Employee Agreement (“Agreement”). Among other
things, Mr. Torgerson agreed in the Agreement to arbitrate
certain disputes “in accordance with the then
prevailing rules of the American Arbitration
Association.” Doc. 1-2 at 5.
on this Agreement, LCC filed a Motion to Dismiss or, in the
Alternative, to Stay Proceedings and Compel Arbitration.
See Torgerson v. LCC Int'l, Inc., No.
16-2495-DDC-TJJ (D. Kan. Apr. 4, 2016), ECF 28. On
August 10, 2016, the court granted in part and denied in part
defendants' Motion to Dismiss or, in the Alternative, to
Stay Proceedings and Compel Arbitration. See Torgerson v.
LCC Int'l, Inc., No. 16-2495-DDC-TJJ (D. Kan. Aug.
10, 2016), ECF 62. The court concluded that Mr.
Torgerson had signed an employment agreement that requires
him to arbitrate his FLSA claims. Id. at 5. The
court thus granted defendants' request to stay the case
and compelled the parties to proceed to arbitration.
Id. at 6. Also, the court denied the portion of
defendants' motion asking the court to decide whether the
employment agreement permits collective arbitration because
it determined that the arbitrator must decide that issue.
Id. at 8. And, for the same reasons, the court
declined to decide Mr. Torgerson's Motion for Conditional
Certification of Class Claims Under § 216(b) of the FLSA
without prejudice to their right to present this request to
an arbitrator. Id.
Torgerson moved for reconsideration of the court's Order
compelling the parties to arbitration. The court denied that
motion on January 3, 2017. See Torgerson v. LCC
Int'l, Inc., No. 16-2495-DDC-TJJ (D. Kan. Jan. 3,
2017), ECF 69.
January 17, 2017, Mr. Torgerson submitted a Demand for
Arbitration to the American Arbitration Association
(“AAA”). Mr. Torgerson's demand sought to
assert a collective action on behalf of himself and others
similarly situated. On June 30, 2017, the arbitrator issued
an Order on Threshold Matters and on Respondent's Motion
for Clause Construction Award. Doc. 13-1. In this Order, the
arbitrator determined that the arbitration provisions in Mr.
Torgerson's Agreement were valid and enforceable and that
Mr. Torgerson's FLSA claims fall within the scope of the
Agreement's arbitration provisions. Id. at 7-8.
The arbitrator also concluded that the Agreement's Forum
Selection Clause was valid and enforceable, requiring
arbitration to take place in Arlington, Virginia.
Id. at 10. Finally, the arbitrator concluded that
the Agreement authorizes Mr. Torgerson to proceed on a
collective basis. Id. at 11-13. Thus, the arbitrator
dismissed LCC's Motion for a Final Clause Construction
Award dismissing the collective action allegations.
Id. at 13. The arbitrator described his order as a
“non-final decision” that “does not pertain
to class action.” Id. He also determined that
the AAA rules do not require “a stay of these
proceedings to permit a party to seek judicial review of this
Order, since this Order is not a final class arbitration
determination.” Id. (first citing AAA
Supplementary Rule for Class Actions 5(d); then citing
Jock v. Sterling Jewelers Inc., 188 F.Supp.3d 320,
327 (S.D.N.Y. 2016)).
response to the arbitrator's decision, LCC filed a
Petition to Vacate the Arbitrator's Final Clause
Construction Award in the Eastern District of
Virginia. Doc. 1. After the parties entered a Joint
Stipulation to transfer LCC's Petition to the District of
Kansas, the Eastern District of Virginia transferred the
action to our court. Doc. 11. Mr. Torgerson then filed a
Memorandum in Opposition to LCC's Petition to Vacate.
Doc. 13. And LCC filed a Reply. Doc. 15. The court considers
the parties' competing arguments for and against vacating
the arbitrator's award, below.
Federal Arbitration Act (“FAA”) provides that
courts may vacate an arbitrator's decision but
“only in very unusual circumstances.” Oxford
Health Plans LLC v. Sutter, 569 U.S. 564, 568 (2013)
(quoting First Options of Chi., Inc. v. Kaplan, 514
U.S. 938, 942 (1995)). “That limited judicial review .
. . ‘maintain[s] arbitration's essential virtue of
resolving disputes straightaway.'” Id.
(quoting Hall Street Assocs., LLC v. Mattel, Inc.,
552 U.S. 576, 588 (2008)). Because “[i]f parties could
take ‘full-bore legal and evidentiary appeals, '
arbitration would become ‘merely a prelude to a more
cumbersome and time-consuming judicial review
process.'” Id. (quoting Hall Street
Assocs., 552 U.S. at 588). And, “by agreeing to
arbitrate, a party ‘trades the procedures and
opportunity for review of the courtroom for the simplicity,
informality, and expedition of arbitration.'”
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S.
20, 31 (1991) (quoting Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985)).
with this governing standard, our Circuit has explained that
“[j]udicial review of arbitration panel decisions is
extremely limited[.]” Dominion Video Satellite,
Inc. v. Echostar Satellite, LLC, 430 F.3d 1269, 1275
(10th Cir. 2005). The Circuit even has described it as
“‘among the narrowest known to law.'”
Id. (quoting Bowen v. Amoco Pipeline Co.,
254 F.3d 925, 932 (10th Cir. 2001)). The court must
“afford maximum deference to the arbitrator's
decision” because “[a]ny less deference would
risk improperly substituting a judicial determination for the
arbitrator's decision that the parties bargained
for.” THI of N.M. at Vida Encantada, LLC v.
Lovato, 864 F.3d 1080, 1083, 1084 (10th Cir. 2017)
(citations, internal quotation marks, and internal
10 of the FAA permits a federal district court to vacate an
arbitration award in only four circumstances:
(1) where the award was procured by corruption, fraud, or
(2) where there was evident partiality or corruption in the
arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in
refusing to postpone the hearing, upon sufficient cause
shown, or in refusing to hear evidence pertinent and material
to the controversy; or of any other misbehavior by which the
rights of any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so
imperfectly executed them that a mutual, final, and definite
award upon the subject matter submitted was not made.
9 U.S.C. § 10. Outside the four reasons enumerated in
§ 10, the Tenth Circuit also has recognized a
“handful of judicially created reasons that a district
court may rely on to vacate an arbitration award, ”
including violation of public policy, manifest disregard of
the law, and denial of a fundamentally fair hearing.
Sheldon v. Vermonty, 269 F.3d 1202, 1206 (10th Cir.
2001); seealso THI of N.M., 864 F.3d at
1084 (recognizing that “[t]o supplement these statutory
grounds, [the Tenth Circuit has] recognized a judicially
created exception to the rule that even an erroneous
interpretation or application ...