19-5410
6th Cir.Apr 9, 2020Background:
- Taylor filed an FLSA collective-action alleging Pilot required nonexempt employees to work off the clock; the collective ultimately included ~5,145 opt-ins.
- Pilot asserted that many opt-ins signed arbitration agreements at hire; Pilot produced some electronically signed agreements but not employment-date proof in the record.
- Plaintiffs moved to compel production of opt-in Plaintiffs’ employment dates to test whether alleged arbitration agreements were signed while employed.
- The district court ordered Pilot to produce employment dates; Pilot moved to reconsider, arguing the agreements’ delegation clauses required an arbitrator to decide formation; the court denied reconsideration, holding the court must first determine whether individuals agreed to arbitrate.
- Pilot appealed the November 2018 discovery order; the district court then denied Pilot’s motion to compel arbitration without prejudice (March 2019) because the November appeal impeded further proceedings.
- The Sixth Circuit dismissed Pilot’s consolidated appeals for lack of jurisdiction, concluding the November order was a routine, unappealable discovery order and the March 2019 denial without prejudice was a ministerial docketing action.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court or arbitrator decides whether opt-ins actually formed the arbitration agreements (signature/formation question) | Court must decide formation before sending disputes to arbitration | Broad delegation clauses give arbitrator authority to decide formation | Court may determine formation as a threshold matter; Sixth Circuit suggests district courts retain authority to decide signature/formation challenges |
| Whether the November 2018 order compelling employment dates is immediately appealable under FAA §16 | Order is routine discovery necessary to resolve arbitrability; not a denial of arbitration | Characterized as unlawfully ceding authority to the arbitrator and thus appealable | Not appealable: it is a discovery/case-management order that merely delays ruling on arbitration and does not deny a §4 petition |
| Whether the March 2019 order denying the motion to compel arbitration without prejudice is appealable under FAA §16 | Denial without prejudice was ministerial and issued only because of Pilot’s pending appeal; not intended to foreclose arbitration | Pilot argued any denial of motion to compel (even without prejudice) confers §16 jurisdiction | Not appealable here: the denial was purely docket-management, left Pilot free to re-file, and caused no irreparable harm |
| Whether Pilot may use interlocutory appeals to obtain early review of arbitrability | Plaintiffs: interlocutory appeal is improper; FAA §16 limits immediate appeals to actual denials under §4 | Pilot: seeks immediate review under §16 by treating discovery and docket orders as denials | Appeal dismissed for want of jurisdiction; Pilot may re-raise arbitrability after district court proceeds and, if denied on merits, appeal then |
Key Cases Cited
- Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019) (court must determine whether a valid arbitration agreement exists before referring dispute to arbitrator)
- Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (2010) (court must resolve issues calling into question formation or applicability of a specific arbitration clause)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (distinguishes contract validity questions from existence/signature questions)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) (separability doctrine for arbitration clauses)
- Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Univ., 489 U.S. 468 (1989) (arbitration is a matter of consent, not coercion)
- Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., 925 F.2d 1136 (9th Cir. 1991) (courts may decide genuineness of signatures to avoid forcing arbitration based on forged agreements)
- Van Dusen v. Swift Transp. Co., 830 F.3d 893 (9th Cir. 2016) (case-management orders that only delay arbitration rulings are not appealable under §16)
- Continental Cas. Co. v. Staffing Concepts, Inc., 538 F.3d 577 (7th Cir. 2008) (delay of ruling equals denial only if it causes irreparable harm)
- Sandvik AB v. Advent Int’l Corp., 220 F.3d 99 (3d Cir. 2000) (a district court’s denial of a motion to compel arbitration may be immediately appealable)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) (jurisdiction depends on the category of order appealed, not on merits strength)
- Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361 (7th Cir. 1999) (denial of motion to compel pending discovery was held appealable under §16 in that posture)
- McLaughlin Gormley King Co. v. Terminix Int’l Co., 105 F.3d 1192 (8th Cir. 1997) (orders favoring litigation over arbitration can be immediately appealable)
- Masco Corp. v. Zurich Am. Ins. Co., 382 F.3d 624 (6th Cir. 2004) (distinguishing existence versus validity challenges to contracts containing arbitration clauses)
- Burden v. Check Into Cash of Ky., LLC, 267 F.3d 483 (6th Cir. 2001) (suggests district courts may decide formation/existence challenges to contracts)