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Torgerson v. LCC International, Inc.

United States District Court, D. Kansas

January 9, 2020

RICHARD TORGERSON, et al., Plaintiffs,
v.
LCC INTERNATIONAL, INC., et al., Defendants.

          MEMORANDUM AND ORDER

          Daniel D. Crabtree United States District Judge.

         Here we are again. More than two years after the court ordered the parties to arbitrate their dispute, defendant LCC International, Inc. (“LCC”)[1] again applies for relief from the court's earlier decision compelling the parties to arbitrate the dispute whether their arbitration agreement authorizes collective arbitration. And, LCC again asks the court to vacate the arbitrator's decision that plaintiffs can assert Fair Labor Standards Act (“FLSA”) collective action claims on behalf of themselves and all others similarly situated in an arbitration proceeding against LCC. LCC's newest filing-a Motion to Vacate Class Determination Award (Doc. 105)-doesn't provide any reason for the court to change its earlier rulings or vacate the arbitrator's decision. The court thus denies the Motion to Vacate Class Determination Award (Doc. 105). It explains why, below.

         I. Factual Background

         Plaintiffs Richard Torgerson, Robert Hall, Shelley Gordon, Bryon Hughes, and Moses Boye-Doe worked for LCC as Migration Analysts. On February 3, 2016, plaintiffs filed this lawsuit, on behalf of themselves 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. Plaintiffs' Complaint seeks to recover unpaid overtime compensation under the FLSA on behalf of themselves and other, similarly situated Migration Analysts.

         As a condition of their employment with LCC, each plaintiff signed an Employee Agreement (“Agreement”). Among other things, the Agreement contains the following arbitration provision:

5.4 Arbitration: Any controversy or claim arising ou[t] of or relating to this Agreement, the breach or interpretation thereof or Employee's employment with LCC shall be settled by arbitration in Arlington, Virginia in accordance with the then prevailing rules of the American Arbitration Association, and judgment upon the award shall be final, conclusive and binding. All costs of arbitration shall be borne by the losing party, unless the arbitrators decide such costs should be allocated between the parties in particular proportions. Notwithstanding the foregoing, LCC shall be entitled to seek injunctive or other equitable relief pursuant to the provisions of Section 5.1 hereof in any federal or state court having jurisdiction.

Doc. 106-2 at 5.

         Based on this Agreement, LCC filed a Motion to Dismiss or, in the Alternative, to Stay Proceedings and Compel Arbitration. Doc. 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. Doc. 62. The court concluded that plaintiffs had signed an employment agreement that requires them to arbitrate their 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, the court ruled, the arbitrator must decide that issue. Id. at 8. And, for the same reasons, the court declined to decide plaintiffs' 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.

         On January 17, 2017, Mr. Torgerson submitted a Demand for Arbitration to the American Arbitration Association (“AAA”). Doc. 106-4 at 2. Mr. Torgerson's demand sought to assert a collective action on behalf of himself and others similarly situated. Id.

         On June 2, 2017, LCC filed a Motion for Clause Construction in the arbitration asking the arbitrator to dismiss the collective action claims. Doc. 106-7. On June 30, 2017, the arbitrator issued an Order on Threshold Matters and on Respondent's Motion for Clause Construction Award. Doc. 106-8. The arbitrator's Order determined that the arbitration provisions in plaintiffs' Agreement were valid and enforceable and that plaintiffs' FLSA claims fall within the scope of the Agreement's arbitration provisions. Id. at 7-8. Also, the arbitrator concluded that the Agreement authorizes plaintiffs to proceed on a collective basis. Id. at 11-13. Thus, the arbitrator dismissed LCC's Motion for a Final Clause Construction Award. Id. at 13.

         In 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. Petition to Vacate, LCC Int'l, Inc. v. Richard Torgerson, No. 17-00860 (E.D. Va. July 28, 2017), ECF 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.[2] On January 25, 2018, the court denied LCC's Petition to Vacate. LCC Int'l, Inc. v. Torgerson, No. 17-2508-DDC-TJJ, 2018 WL 558141 (D. Kan. Jan. 25, 2018). Among other things, the court held that the arbitrator had not exceeded his authority when he concluded that the parties' Agreement authorizes plaintiffs to assert FLSA claims on a collective basis. Id. at *10-11. The court thus denied LCC's Petition to Vacate. Id.

         Back in arbitration, LCC again moved the arbitrator to dismiss the collective action claims by filing a Motion to Decertify FLSA Collective Arbitration on May 1, 2019. Doc. 106-10. Among other things, LCC's motion argued that the Supreme Court's recent decision in Lamps Plus, Inc. v. Varela, 139 S.Ct. 1407 (2019), required the arbitrator to decertify the collective arbitration. Id. at 4, 12.

         On July 8, 2019, the arbitrator denied LCC's Motion to Decertify Collective Arbitration. Doc. 106-13. In response to LCC's argument about Lamps Plus, the arbitrator explained that the Supreme Court held in that case: “‘Courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis.'” Id. at 2 (quoting Lamps Plus, 139 S.Ct. at 1419). The arbitrator explained that the Lamps Plus holding does not apply to the Agreement at issue in the arbitration because “Varela's holding was explicitly limited to the question of whether ‘an ambiguous agreement can provide the necessary “contractual basis” for compelling class arbitration.'” Id. (quoting Lamps Plus, 139 S.Ct. at 1415) (emphasis added). In contrast, the arbitrator found that the Agreement at issue here is “unambiguous.” Id. And, based on the “unambiguous, express words of the parties' arbitration agreement, ” the arbitrator already had concluded that the parties had agreed to arbitrate their claims on a collective basis. Id. The arbitrator thus denied LCC's Motion to Decertify FLSA Collective Arbitration based on Lamps Plus. Id. at 2-3.

         Apparently undaunted, LCC applies to the court for relief again-this time from the arbitrator's latest ruling. LCC asks the court to vacate the arbitrator's Order denying LCC's Motion to Decertify FLSA Collective Arbitration. And it seeks an order requiring plaintiffs to arbitrate their FLSA claims on an individual basis. The court addresses LCC's arguments for vacatur, below.

         II. Legal Standard

         The 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 St. 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 St. 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)).

         Consistent 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 ...


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