Tiffany v. Ko Huts, Inc.

178 F. Supp. 3d 1140, 2016 U.S. Dist. LEXIS 49540, 2016 WL 1453056
CourtDistrict Court, W.D. Oklahoma
DecidedApril 13, 2016
DocketNO. CIV-15-1190-HE
StatusPublished
Cited by3 cases

This text of 178 F. Supp. 3d 1140 (Tiffany v. Ko Huts, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tiffany v. Ko Huts, Inc., 178 F. Supp. 3d 1140, 2016 U.S. Dist. LEXIS 49540, 2016 WL 1453056 (W.D. Okla. 2016).

Opinion

[1143]*1143ORDER

JOE HEATON, CHIEF UNITED STATES DISTRICT JUDGE

Plaintiff Michael Tiffany filed this action on behalf of himself and other delivery drivers for defendant KO Huts, Inc. (“KO Huts”), which operates Pizza Hut franchise stores in several states. He asserts claims under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219, and under the Oklahoma Minimum Wage Act (“OMWA”), 40 Okla. Stat. §§ 197.1-197.14, to recover unpaid minimum wages. Defendant KO Huts filed a motion to compel plaintiff to arbitrate his claims only on an individual basis.

Plaintiff responded by filing a motion to strike the motion to compel and by initiating an FLSA collective action arbitration. KO Huts then filed a motion seeking a preliminary injunction staying the arbitration pending a final judicial decision as to the “scope, validity and enforceability of the [parties’] arbitration agreement.” Doc. #23, p. 1. This order disposes of the motions to strike and for preliminary injunction. The motion to compel will be addressed by separate order.

Background

Plaintiff is a former employee of KO Huts, a Pizza Hut franchisee that operates Pizza Hut restaurants in Kansas and Oklahoma. Plaintiff worked as a delivery driver for KO Huts in Enid, Oklahoma from May 27 to July 20, 2015. It is undisputed that before plaintiff started working for KO Huts he signed an Agreement to Arbitrate (“Agreement”), which requires plaintiff to arbitrate his wages dispute. It is also undisputed that the Agreement includes a waiver of the right to arbitrate as part of any class or collective action. The dispute is who determines the validity of the waiver, the court or the arbitrator.2 -

Plaintiff filed this lawsuit in October 2015, seeking to pursue his FLSA claim as a collective action and his OMWA claim as a class action. Defendant answered and counterclaimed, seeking a declaratory judgment that, among other things, Tiffany was required to arbitrate his wage claims in an individual action and that the court, not the arbitrator, should determine issues relating to arbitrability.3 Defendant also filed a motion to compel plaintiff to arbitrate his FLSA and OMWA claims on an individual basis. Plaintiff then filed a demand to arbitrate his FLSA claim with the American Arbitration Association, submitting the case rns a collective action, and defendant filed its motion for a preliminary injunction. Defendant seeks to enjoin plaintiff from arbitrating the “collective-action FLSA claim” until the court decides the “scope, validity and enforceability of the arbitration agreement.” Doc. #23, p. 1. Plaintiff objects to an injunction and also contends defendant’s motion to compel should be stricken, claiming it has refused to arbitrate.

Primary Jurisdiction

The court previously directed the parties to advise it of the effect, if any, of the Complaint and Notice of Hearing the National Labor Relations Board (“NLRB”) filed, based on plaintiff’s charge that defendant violated Section 7 of the NLRA by [1144]*1144maintaining and enforcing the class and collective action waivers in the parties’ arbitration agreement. The court’s concern was whether the NLRB has primary jurisdiction over the dispute and whether this matter should be stayed pending resolution of the unfair labor practice charge.

“Under principles announced in San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), both state and federal courts generally lack original jurisdiction to determine disputes involving conduct actually or arguably prohibited or protected by the NLRA.” United Ass’n of Journeymen & Apprentices of the Plumbing & Pipe Fitting Indus. v. Bechtel Power Corp., 834 F.2d 884, 886 (10th Cir.1988). However, this is not a situation in which the challenged conduct is even “arguably prohibited” by the NLRA. Hickey v. Brinker Int’l Payroll Co., L.P., 2014 WL 622883 (D. Colo. Feb. 18, 2014). As the Fifth Circuit noted in D.R. Horton, Inc. v. N.L.R.B., 737 F.3d 344, 362 (5th Cir.2013), “[ejvery ... circuit[] to consider the issue has either suggested or expressly stated that they would not defer to the NLRB’s rationale,4 and held arbitration agreements containing class waivers enforceable.”5 See generally Tamburello v. Comm-Tract Corp., 67 F.3d 973, 977 (1st Cir.1995) (“A primary justification of the preemption doctrine is ‘the need to avoid conflicting rules - of substantive law in the labor relations area and the desirability of leaving the development of such rules to the administrative agency created by Congress for that purpose. ...’”) (quoting Vaca v. Sipes, 386 U.S. 171, 180, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967)).

As stated by one court, “[gjiven the recent morbidity of In re D.R. Horton, the outcome of plaintiffs’ charge before the NLRB thus seems a foregone conclusion. Hickey, 2014 WL 622883 at *2. Therefore, because “it is clear or may fairly be assumed” that KO Huts, by requiring its employees to sign arbitration agreements with collective or class action waivers, did not commit unfair labor practices, the court concludes it does not have to “yield” jurisdiction and defer to the NLRB. Garmon, 359 U.S. at 244, 79 S.Ct. 773.6 Motion to Strike

Another preliminary issue is whether defendant waived its right to compel arbitration by its conduct. The issue merits little discussion. Plaintiff claims defendant’s motion to compel should be stricken, citing a portion of a sentence from a letter KO Huts sent the American Arbitration Association (“AAA”), in which it states: “KO Huts does not intend to submit payment, file an answer, or otherwise proceed with arbitration at this time.” Doc. #19-5, p. 3.7 It is clear, though, when the letter is read in its entirety and defendant’s behavior is considered in light of the procedural history of this case, that KO [1145]*1145Huts did not breach the arbitration agreement and is not “in default in proceeding with [the] arbitration.” Pre-Paid Legal Servs., Inc. v. Cahill, 786 F.3d 1287, 1294 (10th Cir.2015) (internal quotation, marks omitted), cert. denied, — U.S. -, 136 S.Ct. 373, 193 L.Ed.2d 292 (2015). Although it had been advised by the AAA Case Filing Specialist that it did not have to pay the initial case filing fee, KO Huts has paid the fee and complied with the directions of the Case Filing Specialist regarding the arbitration. Plaintiffs motion to strike is without merit and will be denied.

KO Hut’s Motion, for Preliminary Injunction

Defendant seeks an order enjoining plaintiff from proceeding with the arbitration until “the scope and enforceability of the Agreement to Arbitrate has been fully and finally litigated, with all appeals exhausted, in this litigation and in. proceedings currently pending with the National Labor Relations Board.” Doc. #24, pp. 1-2. Defendant claims that the four elements of a preliminary injunction are easily satisfied.

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Bluebook (online)
178 F. Supp. 3d 1140, 2016 U.S. Dist. LEXIS 49540, 2016 WL 1453056, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tiffany-v-ko-huts-inc-okwd-2016.