Hawkins v. Hooters of America, Inc. ( 2011 )


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  • UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF COLUMBIA FI L E D
    KIANNA HAWKINS, et al., ) g;,,k U s Dism_ct
    ' ' ~ & Bank 1
    Plaintiffs § c°"= for the Dtsmcr of
    ) Civil Case No. 09-1475 (RJL)
    v. )
    )
    HOOTERS OF AMERICA, INC., et al., )
    )
    Defendants. )
    )
    7‘1__
    MEMORANDUM ORDER
    (July _ff_, 2011)[# 21]
    Presently before this Court is plaintiffs’ Motion Requesting the Court to Declare
    the Arbitration Agreement Unenforceable or in the Alternative to Vacate the Arbitrator’s
    Clause Construction Award. ("Pls.’ Mot."). For the following reasons, the motion is
    DENIED.
    On August 5, 2009, employees and former employees ("plaintiffs") of Hooters of
    America, Inc. and Hooters of Washington, D.C., LLC ("defendants") brought this action
    claiming unlawful deprivation of plaintiffs’ rights to the minimum wage and overtime
    compensation pursuant to the federal Fair Labor Standards Act ("FLSA"), 
    29 U.S.C. §§ 201
    , el seq., and the D.C. Code, §§ 32-1001, et seq. Compl. 111 l-Z. On August 25, 2009,
    defendants moved to dismiss the complaint and compel arbitration pursuant to the
    parties’ Agreement to Arbitrate. See Mot. to Dismiss and Compel Arb., Aug. 25, 2009
    [#6]. On September 21, 2009, in lieu of a response to defendants’ motion, plaintiffs filed
    an unopposed motion to stay the case while the parties pursued arbitration. Pls.’ Mot. to
    Stay [#15]. In that motion, plaintiffs specifically "agreed not to oppose Defendants’
    motion to pursue arbitration." Pls.’ Mot. to Stay at l. This Court granted plaintiffs’
    motion and stayed the case. Minute Order, Sept. 23, 2009.
    Thereafter arbitration commenced, and on April l2, 20l0, the Arbitrator issued a
    Clause Construction Award, determining that class arbitration was not permitted under
    the Agreement to Arbitrate absent a specific indication that it was contemplated by the
    parties. Pls.’ l\/[ot., Ex. l, Clause Construction Award. Plaintiffs now request that this
    Court find the arbitration agreement unenforceable and unconscionable.' Because
    plaintiffs had consented to arbitration, however, defendants contend that plaintiffs cannot
    now object to arbitration. l agree.z
    1 In the alternative, plaintiffs request that this Court vacate the award. Pls.’ Mot. at 17-
    18. Plaintiffs, however, have failed to show any of the grounds outlined in the Federal
    Arbitration Act, 9 U.S.C. § l0(a), on which a district court may vacate the arbitration
    award. Further, it is, at best, unclear in our Circuit whether the arbitrator’s award can be
    vacated under the "manifest disregard of the law" standard. See Hall Slreet Assocs.,
    L.L.C. v. Mattel, Inc., 
    552 U.S. 576
    , 584-85 (2008). Regardless, even if such a standard
    remains open to this Court, plaintiffs have clearly failed to meet it. See LaPraa’e v.
    Kia’a’er, Peabody & Co., 
    246 F.3d 702
    , 706 (D.C. Cir. 200l).
    2 Even if plaintiffs had preserved their objection, either at the time they agreed to arbitrate
    or during the arbitration proceedings, the agreement, as interpreted by the arbitrator,
    would nonetheless be enforceable. First, class arbitration is generally disfavored as
    undermining the efficiency benefits of the arbitration process. See AT&T Mobility v.
    Concepci``on, l3l S. Ct. 1740, 1751-52 (20l l) (suggesting that bilateral arbitration is
    preferred to class arbitration because class arbitration is inefficient, overly complex for
    the arbitration system, and greatly increases risk to defendants). Moreover, contrary to
    plaintiffs’ contention, the ability to proceed as a class is not a substantive right
    guaranteed by the FLSA. 29 U.S.C. § 2l6(b) (specifically limiting the right to pursue a
    FLSA claim on behalf of employees similarly situated); see also Aa'kins v. Labor Ready,
    Inc., 
    303 F.3d 496
    , 503 (4th Cir. 2002) (holding an arbitration agreement that waived
    class relief enforceable in the FLSA context). Rather, the FLSA language more
    accurately supports a party’s substantive right not to be a part of a class action. 29 U.S.C.
    § 2l6(b); see also Ellz``s v. Edwam’ D. Jones & Co., 
    527 F. Supp. 2d 439
    , 456 (W.D. Pa.
    2
    Indeed, "a party may not submit a claim to arbitration and then challenge the
    authority of the arbitrator to act after receiving an unfavorable result." Lopata v. Coyne,
    
    735 A.2d 931
    , 937 (D.C. l999) (emphasis added) (internal quotations omitted). Such a
    challenge to the arbitrability of the grievance must be preserved. See Howara’ Univ. v.
    Metro. Campus Polz``ce O/j‘lcer’s Unlon, 5l2 F.3d 7l6, 720 (D.C. Cir. 2008); Data
    Moantain Solutz``ons, Inc. v. Gz``orclano, 680 F. Supp. 2d ll0, 129 (D.D.C. 2010) (noting
    that failure to object to an arbitrator’s jurisdiction during arbitration waives the right to
    challenge it at a later point in time); see also United Fooa’ & Cornmercz``al Workers, Local
    400 v. Marval Poultry Co., 
    876 F.2d 346
    , 353 (4th Cir. 1989) ("Parties to arbitration
    proceedings cannot sit idle while an arbitration decision is rendered and then, if the
    decision is adverse, seek to attack the award collaterally on grounds not raised before the
    arbitrator." (quoting Unitea’ Streelworkers of Arnerz'ca v. Srnoke Craft Inc., 
    652 F.2d 1356
    ,
    1360 (9th Cir. 1981)); Lockman v. J.K. Harris & Co, No. 3:06-cv-258, 
    2007 WL 734951
    at *3 (W.D. Ky. Mar. 6, 2007) ("the Lockmans reserved the right to claim
    unconscionability when they argued ‘should the forum interpret the arbitration agreement
    in the manner that precludes the Lockmans from pursuing their class claims, the contract
    would then be both procedurally and substantively unconscionable and thus
    unenforceable"’).3
    2007) (the FLSA protects "the right of employers not to be sued in representative actions,
    and the right of employees not to have their rights litigated without their knowledge and
    express consent." (emphasis added)).
    3 Plaintiffs argue that they "[c]ould not waive their right to challenge the enforceability of
    the class action ban until the arbitrator determined that the ban existed." Pls.’ Reply at 3.
    However, neither case cited by plaintiffs in support of this position address the procedural
    3
    Thus, because plaintiffs did not preserve their right to challenge arbitrability either
    before the Court prior to consenting to arbitration, or before the arbitrator prior to his
    adverse ruling, plaintiffs cannot make such a challenge now. Such bait and switch tactics
    are not legally tolerable.
    Accordingly, it is hereby
    ORDERED that plaintiffs’ Motion Requesting the Court to Declare the
    Arbitration Agreement Unenforceable or in the Alternative to Vacate the Arbitrator’s
    Clause Construction Award is DENIED.
    SO ORDERED.
    United States District Judge
    steps necessary to preserve a challenge to the enforceability of the arbitration agreement.
    See Paczfz``care Health Sys., Inc. v. Book, 
    538 U.S. 401
    , 406-07 (2003); Vi)nar Seguros y
    Reaseguros, S.A. v. M/VSky Reefer, 
    515 U.S. 528
    , 540-41 (1995). Indeed, in Vz``mar the
    court emphasized that the arbitrability challenge had been preserved prior to the
    commencement of the arbitration proceedings. Vi``mar, 
    515 U.S. at
    540-4l.