Clark v. Southwest Airlines Co., 1:16-cv-00910

Plaintiff Tate Clark sued Southwest Airlines in Texas state court alleging FMLA interference and retaliation and sought lost wages, benefits, interest, and liquidated damages. Defendant removed to federal court.
Defendant moved to stay the federal litigation pending resolution of an ongoing labor arbitration; arbitration began March 30, 2017, with a later day expected in June 2017.
Defendant did not identify, describe, or quote any arbitration agreement in its stay motion.
Plaintiff argued arbitration cannot award liquidated damages and noted the arbitration had been pending nearly two years.
The Court found it could not apply the mandatory FAA stay provision (Section 3) without information about the arbitration agreement and evaluated only a discretionary stay request.
The Court denied the motion to stay without prejudice, concluding Defendant failed to show a clear case of hardship or inequity and that judicial economy alone did not justify a stay.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the suit must be stayed under FAA §3 (mandatory stay)	Clark implied arbitration cannot provide full relief (e.g., liquidated damages) and thus §3 inapplicable	Southwest argued arbitration is proceeding and issues may be resolved there	Court: §3 not applied because Defendant failed to identify or explain an arbitration agreement
Whether the court should exercise discretion to stay pending arbitration	Clark: arbitration limited and long-pending; harm from delay	Southwest: judicial economy favors stay until arbitrator clarifies relief	Court: denied discretionary stay — Defendant failed to show clear hardship or inequity and stay would be unwarranted now

Complaint of Hornbeck Offshore (1984) Corp., 981 F.2d 752 (5th Cir. 1993) (Section 3 of the FAA requires a stay when issues are referable to arbitration)
Waste Mgmt., Inc. v. Residuos Industriales Multiquim, S.A. de C.V., 372 F.3d 339 (5th Cir. 2004) (discusses applying FAA stay to nonsignatories when claims are intertwined)
Landis v. North American Co., 299 U.S. 248 (1936) (courts may stay proceedings to manage their dockets; stay requires balancing competing interests)
In re Davis, 730 F.2d 176 (5th Cir. 1984) (party seeking stay must show clear case of hardship or inequity)
Wedgeworth v. Fibreboard Corp., 706 F.2d 541 (5th Cir. 1983) (stay pending resolution of related proceedings must not be immoderate or indefinite)