Arvion Taylor v. Pilot Corp.

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 17a0340n.06
Case No. 16-5326
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
ARVION TAYLOR, on her own behalf and others ) Jun 19, 2017
similarly situated, ) DEBORAH S. HUNT, Clerk
)
Plaintiff-Appellee, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE WESTERN
) DISTRICT OF TENNESSEE
PILOT CORPORATION, PILOT TRAVEL )
CENTERS LLC, ) OPINION
)
Defendants-Appellants, )
BEFORE: SILER, CLAY, and McKEAGUE, Circuit Judges.
McKEAGUE, Circuit Judge. No company wants its employees to receive a letter
informing them that they might be eligible to join a lawsuit against it. This sometimes happens
when an employee brings a “collective action” against the company under the Fair Labor
Standards Act—or FLSA, for short. See 29 U.S.C. § 216(b). In such lawsuits, a lead plaintiff
may request that the trial court approve notice to some class of employees that she hopes to
represent. Usually, a defendant who thinks the court erred in approving notice cannot vindicate
that belief until well after the mail goes out because we lack jurisdiction over an appeal until a
final judgment on the merits.
Defendants here, who we’ll refer to collectively as “Pilot,” maintain that the district court
erred in approving notice of this collective action to many of their employees because those
Case No. 16-5326, Taylor, et al. v. Pilot Corp., et al.
employees agreed to arbitrate any FLSA claims. Pilot contends that in this case we can correct
this supposed error immediately because the Federal Arbitration Act—or FAA—provides us
with jurisdiction over certain interlocutory orders. For the following reasons, we disagree with
Pilot and hold that we lack jurisdiction to resolve this issue in an interlocutory appeal. As to the
other issue Pilot raises—whether the district court erred in denying its request for a stay under
the FAA—we have jurisdiction, but find no error. Thus, we affirm.
I
Pilot operates a large, nationwide chain of truck stops. Some locations house both a
convenience store and a fast food restaurant. As a result, Pilot employs tens of thousands of
workers to man cash registers, stock shelves, and make sandwiches—many positions are hourly
and protected by the FLSA’s overtime rules.
Plaintiff Arvion Taylor worked at a Pilot truck stop for about two years. She says that
during this time her managers routinely altered her time sheets to avoid paying her overtime.
According to Taylor, Pilot’s managers rolled back workers’ hours at locations across the country
as a matter of policy.
She sought to recover from Pilot for these alleged overtime violations by bringing this
“collective action” under the FLSA. See 29 U.S.C. § 216(b). A collective action allows Taylor
to proceed against Pilot with other employees who are “similarly situated” to her. See id. In that
a collective action lets Taylor represent a larger group with similar claims, it somewhat
resembles a class action under Rule 23 of the Federal Rules of Civil Procedure.
Class actions and collective actions differ, however, in at least two ways important here.
First, whereas Rule 23 creates a regime where class members are either bound by the litigation or
must opt out of a suit to avoid becoming parties bound by any judgment, the FLSA requires
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employees to opt in to the action. Compare Fidel v. Farley, 534 F.3d 508, 513 (6th Cir. 2008)
(holding that a non-named class member with opportunity to opt out constitutes a “party” bound
by a settlement) with 29 U.S.C. § 216(b). Second, whereas Rule 23 outlines a relatively detailed
class-certification process, the FLSA says little about how collective actions should work.
Compare Fed. R. Civ. P. 23 with 29 U.S.C. § 216(b). It never defines, for example, what it
means for employees to be “similarly situated.” See § 216(b).
The FLSA’s silence has left trial courts to develop a method for managing collective
actions. The collective action’s intuitive similarity with Rule 23 class actions has led trial courts
to call the process that has emerged “class certification.” See, e.g., Comer v. Wal-Mart Stores,
Inc., 454 F.3d 544, 546 (6th Cir. 2006). Yet, the collective action’s substantive differences with
a class action mean the process looks little like class certification under Rule 23.
Generally, “class certification” in a collective action unfolds in two stages. At stage one,
the court supervises plaintiff’s notice to employees who may become plaintiffs. Id. at 547. The
court will usually receive a motion from the plaintiff asking it to approve a letter informing
employees that they may be “similarly situated” to her and may consent to joining the action. Id.
at 547. At this point, the court conditionally decides which employees count as being “similarly
situated” to the plaintiff and thus eligible to receive a court-approved letter. See id. (citing
Hoffmann–La Roche, Inc. v. Sperling, 493 U.S. 165, 167–68 (1989)). Courts and litigants often
refer to this stage as “conditional class certification.” See, e.g., id. Unlike actual class
certification under Rule 23, however, its only effect is to allow notice to the employees—the
“conditional-class members” do not become parties or obtain any “independent legal status.”
Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1530 (2013).
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At stage two, the court reexamines whether the employees actually meet the similarly-
situated requirement and should be allowed to proceed collectively. See Comer, 454 F.3d at 547.
At this point, the court knows who has opted in and generally has more information to work with
from discovery. Id. It can always remove employees from the “class” it “certified” at stage one.
Cf. id.The trial court here followed this framework. At stage one, Taylor asserted that all Pilot
employees with certain job titles were similarly situated to her and should receive notice. Pilot
opposed this request. Although neither Taylor nor the seven employees that joined her before
stage one agreed to arbitrate, Pilot said it likely had agreements with other putative class
members but would address the issue in a separate motion. Pilot also argued that Taylor’s class
covered so many employees—about 80,000—that it would make class litigation unmanageable.
The district court sided with Taylor and “conditionally certified” her proposed class.
Understandably, Pilot disliked this outcome. Whether these employees have meritorious
claims under Taylor’s theory or no claims at all, Pilot would likely prefer that they not receive a
letter informing them that they might. So, Pilot asked the court to dismiss some 50,000
employees with arbitration agreements from the class. It argued both that these employees
lacked similarity to Taylor and that the court lacked subject-matter jurisdiction over their claims.
As alternative relief, Pilot asked the court to stay the proceedings under section 3 of the FAA
until “all arbitration have been had.” R. 84-15, PID 883.
The district court declined to do either. It said that it would determine whether Pilot’s
standard arbitration contracts were enforceable only after it collected and reviewed information
on who opted into the litigation. Pilot then filed this appeal asking for interlocutory review.
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II
Pilot primarily wants this court to hold that the district court erred in “conditionally
certifying” Taylor’s class, and thus in approving notice to its employees with arbitration
agreements. But it appears that we cannot reach the merits of that question due to a jurisdictional
roadblock. And Pilot never quite finds a satisfactory way around it.
A
Generally, we would lack authority to review a conditional class certification on
interlocutory appeal. The statute providing this court with general appellate jurisdiction only
allows appeals from a district court’s “final decisions.” 28 U.S.C. § 1291. This statute embodies
the so-called final-judgment rule which requires a party to “raise all claims of error in a single
appeal following final judgment on the merits.” Flanagan v. United States, 465 U.S. 259, 263
(1984) (citations and quotations omitted).
A district court’s decision to approve notice to a conditionally-certified FLSA class is not
a final judgment on the merits. It is also not a collateral order excepted from the final-judgment
rule. Comer, 454 F.3d at 549. As the qualifier “conditional” indicates, it does not even purport
to resolve conclusively the issue it addresses—whether employees are “similarly situated” to the
named plaintiff. See id. Therefore, our precedent has held that we cannot hear immediate
appeals from such decisions. Id.-5-
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B
Pilot insists that it found two paths around this obstacle, however, through the FAA. As
Pilot points out, the FAA allows immediate appeal over certain interlocutory orders:
(a) An appeal may be taken from--
(1) an order--
(A) refusing a stay of any action under section 3 of this title,
(B) denying a petition under section 4 of this title to order
arbitration to proceed,
(C) denying an application under section 206 of this title to compel
arbitration,
(D) confirming or denying confirmation of an award or partial
award, or
(E) modifying, correcting, or vacating an award;
(2) an interlocutory order granting, continuing, or modifying an injunction
against an arbitration that is subject to this title; or
(3) a final decision with respect to an arbitration that is subject to this title.
9 U.S.C. § 16(a). Pilot says that its first path to us runs through § 16(a)(1)(A). The second
supposedly runs through § 16(a)(1)(B).
1
The first path indeed allows Pilot to immediately present something to this court. The
FAA allows for an immediate appeal from “[a]n order . . . refusing to stay any action under
section 3” of the FAA. § 16(a)(1)(A). Pilot requested a stay under section 3 of the FAA. See R.
84-15, PID 883. The district court refused to stay the action. See R. 95, PID 1527. Pilot
appealed that decision. Ergo, Pilot is appealing an order refusing to stay an action under section
3 of the FAA.1
1
Contrary to Taylor’s assertions, whether Pilot was entitled to a stay does not affect our
jurisdiction. See Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 628–29 (2009). Even the
“utter frivolousness of the underlying request for a § 3 stay cannot turn a denial into something
other than ‘[a]n order . . . refusing a stay of any action under section 3.” Id. (citing 9 U.S.C.
§ 16(a)(1)(A)). To hold otherwise would conflate the jurisdictional question with the merits. Id.-6-
Case No. 16-5326, Taylor, et al. v. Pilot Corp., et al.
But this jurisdictional path can only take Pilot so far. This court interprets § 16 to grant
us jurisdiction over immediate appeals from specific arbitration-related decisions—not over
other issues that a court happens to address in the same order as those decisions. See Turi v.
Main St. Adoption Servs., LLP, 633 F.3d 496, 502 (6th Cir. 2011) (holding that the court lacked
jurisdiction over personal-jurisdiction and venue defenses addressed in a district court’s order
refusing to dismiss and compel arbitration). Pilot can appeal the denial of its stay request—but it
cannot use the denial as a smuggling route for otherwise non-appealable issues. We hold that
§ 16(a)(1)(A) grants us authority to consider only the denial of Pilot’s request for a stay.2
2
As to the denial of Pilot’s request for a stay, we see no error. Section 3 entitles a party to
a stay of any “suit or proceeding . . . brought . . . upon any issue referable to arbitration under an
agreement in writing for such arbitration.” 9 U.S.C. § 3. Pilot requested a stay “until all
2
Pilot suggests, without any supporting argument, that this court could exercise pendent
appellate jurisdiction over some non-appealable issues in this case. Pilot’s Principal Brief at 36,
n. 22; Reply Brief at 21. We cannot exercise this discretionary jurisdiction over the district
court’s conditional-certification decision, however. For this court to exercise pendent appellate
jurisdiction over an otherwise non-appealable issue, that issue must be “inextricably intertwined”
with an appealable issue. Turi, 633 F.3d at 502. Meaning, our resolution of the appealable issue
must “necessarily and unavoidably” decide the non-appealable issue. Id. Here, that would
require our decision on whether the FAA entitled Pilot to a stay to unavoidably resolve whether
the employees with arbitration agreements are similarly situated under § 216(b) of the FLSA.
The two issues here simply do not rise and fall together. If we affirm the district court’s
decision to deny a stay, we remain free to come out either way on whether the court improperly
deemed the employees “similarly situated” under § 216(b). See Comer, 454 F.3d at 549. Pilot
does not discuss pendent appellant jurisdiction in any depth, so we decline to discuss the
intertwinement issue any further.
Further, even if we could exercise pendent jurisdiction, we would decline to do so here.
Given that the FAA allows intermediate appeals over any denial of a request for a stay, some
possibility exists that defendants might make far-fetched or premature stay requests to delay
litigation. See Arthur Andersen LLP, 556 U.S. at 634 (Souter, J., dissenting). Where, as here,
we find a request premature, granting pendent appellate jurisdiction over other issues might
encourage litigants to make meritless requests for stays as a means to challenge other non-
appealable decisions.
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arbitrations have been had” as alternative relief to its request that the district court remove
employees with agreements from the conditional class. R. 84-15. It seems unclear from the
record when, exactly, Pilot wanted the court to stay the proceedings. Perhaps it meant
immediately. But perhaps it instead meant for the court to stay the proceedings after any future
opt-in plaintiffs with claims referable to arbitration completed their respective arbitrations.
To the extent Pilot wanted a stay immediately, its request lacked merit. As previously
stated, a “conditional certification” under the FLSA “does not produce a class with an
independent legal status, or join additional parties to the action.” Genesis Healthcare Corp,
133 S. Ct. at 1530. It simply allows the sending of court-approved written notice to employees
who must then affirmatively opt in to the litigation. Id. (citing Hoffmann–La Roche Inc., supra,at 171–172). When Pilot requested a stay, no plaintiff in the litigation had a claim—or an issue
in a claim—referable to arbitration. Some opt-in plaintiffs possibly will. But until they join this
action, Pilot lacks any entitlement to a stay under the FAA.
To the extent Pilot meant to request a stay at some indeterminate point in this litigation’s
future, its request was premature. Further, that the FAA would actually entitle Pilot to stay the
proceedings with respect to plaintiffs that never agreed to arbitrate with Pilot until Pilot finished
arbitrating with those who had seems questionable. See Mendez v. Puerto Rican Int'l
Companies, Inc., 553 F.3d 709, 711 (3d Cir. 2009) (“We conclude that Section 3 was not
intended to mandate curtailment of the litigation rights of anyone who has not agreed to arbitrate
any of the issues before the court.”). But we have no occasion to address that issue now.
C
Pilot’s second jurisdictional path through § 16(a)(1)(B) leads it nowhere. This section
allows appeals from orders “denying a petition under section 4 of [the FAA] to order arbitration
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to proceed.” § 16(a)(1)(B). Section 4 of the FAA allows a “party aggrieved by the alleged
failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration” to
“petition any United States district court which, save for such agreement,” would have
jurisdiction “to direct arbitration to proceed.” 9 U.S.C. § 4.
Pilot never filed a petition to compel arbitration under section 4. Nor would it have
reason to do so. No party to this litigation has agreed to arbitrate with Pilot. And Pilot points to
no one else with a written arbitration agreement who has so far failed, neglected, or refused to
arbitrate. Hence, Pilot can cite no order denying a petition under section 4 to appeal from.3
This would seem to resolve the matter. But Pilot argues that the denial of its motion to
dismiss employees with arbitration agreements from the conditionally-certified class
nevertheless constitutes an appealable order under this provision. For support, it cites cases
where we have found appellate jurisdiction under § 16 after a district court refused “to enforce,
through dismissal or stay,” a plaintiff’s agreement to arbitrate with a defendant. Simon v. Pfizer,
Inc., 398 F.3d 765, 772 (6th Cir. 2005); Turi, 633 F.3d at 501 (citing Simon, 398 F.3d at 772–
73).
Pilot misunderstands what made those cases immediately appealable, however. In both
Turi and Simon, the defendants’ motions to dismiss functioned as requests to compel arbitration.
In each case, the court faced a motion to dismiss claims that were brought (1) by an actual party
to the litigation; (2) who had allegedly agreed in writing to arbitrate; but (3) refused to do so.
See Turi, 633 F.3d at 501; Simon, 398 F.3d at 771–72. Although we cited to § 16 without
3
Again, it matters that neither Taylor nor those who have joined her thus far have agreed to
arbitrate. If Taylor had, this would change things. See Reyna v. Int'l Bank of Commerce, 839
F.3d 373, 373 (5th Cir. 2016) (holding that the district court erred in refusing to compel named
plaintiff to arbitration because it wanted to consider the enforceability his arbitration agreement
after receiving opt ins). If that were the case, Pilot could actually point to a party refusing to
arbitrate and seek to compel arbitration.
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referencing a subsection, we recognized that the movant sought to compel arbitration. See Turi,
633 F.3d at 509 (describing the employer in Simon as seeking “to compel arbitration” and
analyzing the district court’s decision in its case as whether “an order to arbitrate” should be
granted). Each request, then, functionally sought relief similar to a section-4 petition.
Pilot’s motion differs from these motions. It challenged the district court’s conditional
determination that employees met the FLSA’s similarly-situated requirement and thus should
receive notice about this action. Pilot’s motion never sought to force any intransigent party with
an arbitration contract into an arbitral forum. Instead, the motion merely aimed to prevent non-
parties to this litigation from hearing about it.
Pilot thinks these differences should be irrelevant to evaluating our jurisdiction, however.
It wants us to only consider that its motion requested “dismissal.” Pilot’s thinking goes
something like this: (1) the motions denied in Turi and Simon were motions to dismiss; (2) we
had jurisdiction to review their denial; (3) Pilot’s motion called itself a motion to dismiss; (4) the
Supreme Court has said that jurisdiction over “appeal must be determined by focusing upon the
category of order appealed from,” Arthur Andersen, LPP, 556 U.S. at 628; (4) thus, we must
have jurisdiction over the order denying Pilot’s motion because the motion fits into the same
“category” as those denied in Turi and Simon.
There is a fatal flaw in this reasoning. We found jurisdiction in Turi and Simon despite
those orders’ failure to fit facially into an appealable “category” under the FAA—such as an
order “denying a petition under section 4” or an order “refusing to grant a stay under section 3.”
We have no occasion—or authority—to revisit Turi’s or Simon’s holdings. But we refuse to read
those cases to say that we have jurisdiction over the denial of Pilot’s motion simply because it
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uses the same term as a different motion that itself only functionally resembled a petition under
section 4. This would simply be one too many degrees of separation from the FAA’s text.
Finally, Pilot vaguely invokes the policy behind the FAA. It cites various cases for the
proposition that the FAA allows immediate appeal from orders “hostile” to arbitration. See
Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 86 (2000) (“Section 16 generally permits
immediate appeal of orders hostile to arbitration.”); Preferred Care of Delaware, Inc. v. Estate of
Hopkins, 845 F.3d 765, 770 (6th Cir. 2017) (stating that the FAA “permits review of orders that
interfere with arbitration[.]”). These statements indeed reflect the statutory scheme’s gist: it
makes many orders that might interfere with arbitration immediately appealable. But they do not
say that we can create new categories of appealable orders simply by reciting the FAA’s policy.
III
We hold that we have jurisdiction over this appeal only to the extent that Pilot challenges
the denial of its request for a stay. On this issue, we affirm.
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