Shakoor v. VXI Global Solutions, Inc., 2017 Ohio 8018

Background

Plaintiffs LaShonna Shakoor and Anzel Milini sued VXI Global Solutions asserting unpaid pre-shift work violated Ohio wage law and sought class treatment.
VXI invoked an employment arbitration agreement and moved to compel individual arbitration, arguing the contract does not authorize class arbitration.
On initial appeal (Shakoor I) this court held that whether the contract permits class arbitration is a gateway issue for the court, and remanded for that determination.
On remand plaintiffs asked the trial court to stay proceedings pending resolution of an NLRB matter (challenging class-waiver enforcement as an unfair labor practice); instead the trial court found the agreement silent on class arbitration, dismissed the action, and referred claims to individual arbitration.
The appellate court affirmed that the agreement does not permit class arbitration, reversed the dismissal (holding the case must be stayed under R.C. 2711.02(B)), and remanded for the trial court to decide whether federal preemption (Garmon) requires staying its decision pending the NLRB/Supreme Court developments.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the arbitration agreement permits class arbitration	Agreement authorizes arbitrator to decide class arbitration; plaintiffs sought class arbitration	Agreement is silent on class or AAA class rules and uses individual pronouns, so it does not allow class arbitration	Agreement does not permit class arbitration; silence insufficient to authorize class arbitration
Whether the trial court should stay the action or dismiss it after referring claims to arbitration	Court must stay the action pending arbitration under R.C. 2711.02(B)	Dismissal is appropriate when all claims are arbitrable (some Ohio decisions)	Trial court erred by dismissing; R.C. 2711.02(B) requires a stay pending arbitration
Whether the trial court should have addressed federal preemption (Garmon) / NLRB proceedings before deciding class-arbitration question	NLRB decisions (D.R. Horton/Murphy Oil) support that enforcing class-waivers may be an unfair labor practice; Garmon preemption may bar state-court adjudication and warrants a stay	The court should resolve the contract question first; the NLRB decision is contested by federal circuit authority	Preemption is a gateway issue the trial court should decide in the first instance; because a circuit split existed, remand for court to address preemption is required
Whether plaintiffs were denied due process by the trial court resolving class-arbitration without additional briefing on preemption	Plaintiffs timely raised preemption and sought more time; resolution without full briefing prejudiced them	Plaintiffs chose to prioritize the preemption argument and did not show good cause for an extension	No due-process reversal: court had discretion to proceed; plaintiffs failed to show good cause for extension

Key Cases Cited

Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (U.S. 2010) (class arbitration cannot be imposed absent contractual authorization)
Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (U.S. 2002) (distinguishing gateway vs. procedural questions for courts vs. arbitrators)
Reed Elsevier, Inc. v. Crockett, 734 F.3d 594 (6th Cir. 2013) (arbitration clause silence does not authorize class arbitration)
Huffman v. Hilltop Cos., LLC, 747 F.3d 391 (6th Cir. 2014) (same: class arbitration not authorized by silent clause)
Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2d Cir. 2013) (individual arbitration provisions enforceable under FAA; NLRA does not bar them)
Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. 2013) (agreeing individual arbitration provisions are enforceable under the FAA)
Lewis v. Epic Sys. Corp., 823 F.3d 1147 (7th Cir. 2016) (held class-waivers unenforceable under NLRA; contributed to circuit split)
Morris v. Ernst & Young LLP, 834 F.3d 975 (9th Cir. 2016) (joined Seventh Circuit in holding class-waivers unenforceable under NLRA)