Enrique Collado filed a collective action lawsuit under the Fair Labor Standards Act alleging that J. & G. Transport, Inc. (J & G) failed to pay its truck drivers for overtime work.
I.
In June 2014 Collado filed an amended complaint alleging that he had worked for J & G as a truck driver hauling garbage, debris, and mulch from July 2013 into January 2014, during which time he worked about 85 hours per week. According to Collado, J & G made its truck drivers sign an independent contractor agreement in a scheme to evade the FLSA’s overtime wage requirements. He sought compensatory and liquidated damages for the purported failure to pay him and similarly situated employees the overtime wages required by the FLSA.
Immediately after the close of discovery and shortly before trial was scheduled to begin, Collado moved to file a second amended complaint seeking to add state law claims for breach of contract and quantum meruit. He asserted that an addendum to the agreement provided that his compensation was to be 35% of the adjusted gross revenue received by J & G for loads that he accepted and completed, but that on the last day of discovery J & G had disclosed documents showing that he was actually paid less than that. And, he continued, it was not until after discovery ended that J & G explained, in response to an interrogatory, its position that the addendum did not apply to Collado because of the type of loads he was hauling.
J & G opposed the motion to amend the complaint, arguing that Collado should not be permitted to file a second amended complaint so close to trial because he had been aware of the potential breach of contract claim for some time. It pointed to allegations in Collado’s first amended complaint, filed a year earlier, and asserted that they showed that he had been aware of a potential breach of contract claim at that time. J & G also argued that shortly
The district court granted Collado’s motion to file, a second amended complaint; finding that he could not have discovered the potential breach of contract claim until he learned how much money J & G earned per haul. After Collado filed his second amended complaint, J & G immediately moved to dismiss the new state law claims or, in the alternative, to compel arbitration of those claims. J & G conceded that it had waived arbitration of Collado’s FLSA claim but argued that the second' amendment to his complaint revived’its right to elect arbitration of the state law claims because those new claims unexpectedly broadened the' scope of the case.
The district court denied J'& G’s motion. It concluded that while Collado’s second amended complaint altered the theory of the case, the alteration was not unexpected and fairness did not compel reviving J & G’s right to elect arbitration.
II.
We review de novo a district court’s denial of a motion to compel arbitration. Klay v. All Defendants,
J & G concedes that it waived its right to compel arbitration with respect to Collado’s FLSA claim but’ contends that it has the right' to compel arbitration of the state law claims that were not'pleaded until after it had litigated to the point of waiver the FLSA claim. The pleading of the state law claims in the second amended complaint, it argues, unexpectedly changed the scope or theory of the litigation.
The parties rely on our Krinsk decision as the closest precedent on point, but that case is not quite the same as this one. In
This, case is different from Krinsk because the amended complaint in that case “asserted revised, but mostly similar, claims.” Id. at 1199, It did not plead any new claims. The change that motivated the Krinsk decision was, instead, the substantial increase in the size of the plaintiff class and the resulting increase in the size of the defendant’s potential liability. The defendant had waived the right to arbitrate the claims of hundreds of plaintiffs, but it had not waived the right to arbitrate the claims of thousands, if not tens of thousands, of plaintiffs, id. at 1198-99, 1204.
The change wrought by the amendment in this case was not in the number of plaintiffs but in the type of claim asserted. The case began as one asserting a federal claim. Only after J & G had waived by litigation its right to arbitrate that claim did Collado file the amendment changing the case to one asserting both federal and state claims. Waiver of the right to arbitrate a federal claim does not extend to later asserted state claims. Some cases speak of revival of a waived right to arbitrate. See, e.g., id. at 1202-03 (collecting cases). In these circumstances, however, it is more accurate to say that there was never a waiver of the right to arbitrate the state claims in the first place,
‘ A Seventh Circuit case is instructive. In Dickinson v. Heinold Securities, Inc.,
The Seventh Circuit. determined that even though “the, complaint might eventually have been construed, within the loose strictures of notice pleading, as stating a claim for breach of contract,” it was reasonable for the defendant, to assume that the complaint raised only non-arbitrable federal securities claims. Id. at 641-42. As a result,' the defendant had not waived its right to compel arbitration of the state law claims — not even for the breach of contract claim alluded to, but not clearly stated, in the original complaint.- Id.
As in Dickinson, J & G did not waive the right to arbitrate the -state law claims
J & G did argue, in response to Collado’s motion to file a second amended complaint, that his first amended complaint “reveal[ed] that a potential breach of contract action was an issue then known to Collado[].” From that Collado argues that J & G must also have known there was a state law claim lurking in the case. But knowing that a potential claim may lurk in the shadows of a case is not the same as litigating against a claim that has been brought out into the open in a pleading. A defendant is not required to litigate against potential but unasserted claims. By the same token, a defendant will not be held to have waived the right to insist that previously unasserted claims be arbitrated once they are asserted. Any other rule would put a defendant in an awkward if not absurd position. A defendant who was willing to litigate the claim pleaded against it would need to identify all of the possible claims that could have been but weren’t pleaded against it and file a motion insisting that those impleaded claims be arbitrated. Otherwise, under Collado’s approach, the defendant would waive the right to arbitrate those claims if they ever were pleaded.
We hold that J & G’s waiver through litigation of the right to arbitrate Collado’s FLSA claim does not extend to the state law claims- that were pleaded for the first time after J & G had litigated to the point of waiver the FLSA claim. See Morewitz v. W. of Eng. Ship Owners Mut. Prot. & Indem. Ass’n,
We VACATE the district court’s order denying J & G’s motion to compel arbitration of the state law claims and REMAND the case for further proceedings consistent with this opinion.
Notes
. Collado also named two of J & G's corporate officers, but they are not parties to this appeal.
. Collado's initial complaint and first amended complaint also raised an FLSA claim relating to J & G’s purported failure to pay him and other drivers the minimum wage, Because he dropped that claim in his second amended complaint, we do not address it.
. J & G relies heavily on' an unpublished decision from this Court, Plaintiffs’ Shareholders Corp. v. Southern Farm Bureau Life Insurance Co.,