JPMorgan Chase Bank N.A. ("Chase")
We have reviewed the petition, the response in opposition, petitioner's reply in support, the respondent's sur-reply, the exhibits attached to those submissions, and the applicable law. We also heard full oral argument and commend the attorneys for their excellent briefing and advocacy on a contracted briefing schedule.
Chase has shown that the issue presented is irremediable on ordinary appeal and that the writ of mandamus is appropriate under the circumstances, but Chase *498has not shown a clear and indisputable right to the writ. We thus deny the petition. We hold, however, that the district court appears to have erred by ordering that notice be sent to employees who signed arbitration agreements (the "Arbitration Employees") and by requiring Chase to provide personal contact information for the Arbitration Employees. We continue the stay of the district court's December 10, 2018, order for thirty days to give the court full opportunity to reconsider that order.
I.
The FLSA permits collective actions in which "any one or more employees" may bring an action against their employer "for and on behalf of himself or themselves and other employees similarly situated."
Plaintiffs moved to certify conditionally a collective action that would include about 42,000 current and former call-center employees, and plaintiffs asked the district court to send notice of the action to all putative collective members. Chase responded that approximately 35,000 (or 85%) of the putative collective members had waived their right to proceed collectively by signing binding arbitration agreements.
Over Chase's objections, the district court, on December 10, 2018, conditionally certified the collective action, including the 35,000 Arbitration Employees. The court reasoned that even if Chase was correct that notice may not be sent to individuals who signed arbitration agreements and thus might be compelled to arbitrate, "the Court cannot determine that there is no possibility that putative class members will be able to join the suit until Defendant files a motion to compel arbitration against specific individuals." Because Chase had not moved to compel arbitration, the court conditionally certified the collective and directed that notice "be sent to all putative class members via First Class Mail and e-mail." The court also ordered Chase to produce contact information for all 42,000 putative collective members (including of course the Arbitration Employees) within two weeks, i.e., by Christmas Eve 2018.
Chase moved for the district court to certify its order for interlocutory appeal under
II.
A writ of mandamus is "a drastic and extraordinary remedy reserved for really extraordinary cases," In re Depuy Orthopaedics, Inc. ,
A.
The first requirement is that the error presented "is truly 'irremediable on ordinary appeal.' " Depuy ,
B.
Second, this court "must be satisfied that the writ is appropriate under the circumstances." Cheney ,
Mandamus relief would be especially appropriate here. Whether notice of a collective action may be sent to Arbitration Employees is an increasingly recurring issue.
C.
Finally, the writ may issue only if Chase has demonstrated a "clear and indisputable right to the writ." Satisfying this condition "require[s] more than showing that the district court misinterpreted the law, misapplied it to the facts, or otherwise engaged in an abuse of discretion." Lloyd's Register ,
1.
Unlike members in Rule 23 class actions, putative collective members must affirmatively opt in to FLSA actions. Sandoz v. Cingular Wireless LLC ,
Although Hoffmann-La Roche gave district courts discretion to send notice of pending FLSA actions to potential opt-in plaintiffs, it did not explain whether Arbitration Employees waiving their right to proceed collectively count as "potential plaintiffs." That lack of clarity has produced conflicting results from district courts, especially where they use the popular two-stage Lusardi method to certify a collective action.
Under Lusardi , stage one "begins when the plaintiff moves for conditional certification *501of the collective action." Reyna v. Int'l Bank of Commerce ,
The second stage "usually occurs after discovery is complete ... when the employer moves to decertify the collective." Reyna ,
The standard for satisfying step one is "fairly lenient." Mooney , 54 F.3d at 1214. Most discovery happens after the first stage, so the district court, based on "minimal evidence," makes the initial determination whether the putative collective members are sufficiently similarly situated to the named plaintiff to proceed collectively. Id . Accordingly, many district courts, including some in this circuit, wait until the second stage, when discovery is complete, to determine the applicability of arbitration agreements.
2.
Though some district courts have read the Lusardi framework as encouraging courts to wait until stage two to consider the existence of arbitration agreements, we hold that district courts may not send notice to an employee with a valid arbitration agreement unless the record shows that nothing in the agreement would prohibit that employee from participating in the collective action.
(i)
As noted above, Hoffmann-La Roche does not define the "potential plaintiffs" whom a district court may notify about a pending FLSA action. Chase understands "potential plaintiffs" to mean "potential participants," asserting that Hoffmann-La Roche gives district courts discretion to facilitate notice to persons who will be eligible to participate in the pending suit. Chase continues that courts must treat any Arbitration Employee as ineligible to opt in to a FLSA collective action. That is because, Chase explains, the FAA makes arbitration agreements "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."
We agree that district courts do not "have unbridled discretion" to send notice to potential opt-in plaintiffs. Hoffmann-La Roche ,
Identifying Arbitration Employees among the full workforce first requires the court to decide which employees have entered into valid arbitration agreements. "Determining whether there is a valid arbitration agreement is a question of state contract law and is for the court." Huckaba v. Ref-Chem, L.P. ,
It is only logical to conclude, from this, that if there is a genuine dispute as to the existence or validity of an arbitration agreement, an employer that seeks *503to avoid a collective action, as to a particular employee, has the burden to show, by a preponderance of the evidence, the existence of a valid arbitration agreement for that employee.
Plaintiffs insist, to the contrary, that all putative collective members-including Arbitration Employees-have a right to be given notice of any FLSA claims that they might have, even if they cannot join the current collective action. Not so. Neither FLSA's text nor Hoffmann-La Roche offers any support whatsoever for that notion.
(ii)
The district court's error was compounded by its transgression of the Supreme Court's explicit warning "to avoid even the appearance of judicial endorsement on the merits of the action." Hoffmann-La Roche ,
Far from "avoid[ing] even the appearance of judicial endorsement on the merits of the action," the district court-by referring to the "victims of this illegality"-appeared to say that Chase had violated *504the FLSA. That disregards Hoffmann-La Roche 's stern command that "courts must be scrupulous to respect judicial neutrality" and may not use their discretion to facilitate the notice process "merely [to] stir[ ] up litigation," id ., which is precisely what this district judge did.
3.
In spite of our holding that the district court erred in ordering notice to Arbitration Employees, the court did not "clearly and indisputably " err, as is required for a writ of mandamus. Occidental Petroleum ,
Additionally, although ordering that 35,000 employees, who cannot participate in the litigation, receive notice of its pendency comes close to the "solicitation of claims" forbidden by Hoffmann-La Roche ,
III.
In sum, Hoffmann-La Roche does not give district courts discretion to send or require notice of a pending FLSA collective action to employees who are unable to join the action because of binding arbitration agreements.
We issue this published opinion as a holding on these legal issues, which are squarely presented for decision. We do so in part under our supervisory authority to correct errant caselaw from district courts under our jurisdiction. The district court should revisit its decision in light of this opinion, which is now binding precedent throughout the Fifth Circuit.
*505To facilitate that review, the stay entered on December 21, 2018, is EXTENDED for thirty days from the date of this opinion.
The complaint inaccurately names the defendant "JP Morgan Chase & Co.," but that remains the official caption.
Because Chase petitions for an order that restricts the district court, the petition might better be called a petition for writ of prohibition. See Pulliam v. Allen ,
Chase maintains that one of the named plaintiffs, Kaylah Casuccio, who was added to the complaint in February 2018, is subject to a binding arbitration agreement, which provides that "[n]o claims may be arbitrated on a class or collective basis unless required by applicable law."
The Supreme Court recognizes "use [of] the writ as a one-time device to 'settle new and important problems' that might have otherwise evaded expeditious review." In re EEOC ,
Federal district courts, in at least 210 decisions, have wrestled with the applicability of arbitration agreements at the conditional-certification stage of FLSA suits. But only six of those decisions issued before 2009; ninety-nine were in the past three years.
This court has previously found mandamus appropriate where, among other things, "the district courts have developed their own tests." Volkswagen ,
Some courts exclude employees who signed arbitration agreements from the conditionally certified collective and thus from receiving notice. See, e.g. , Hudgins v. Total Quality Logistics, LLC , No.
Lloyd's Register ,
Will v. United States ,
See Lusardi v. Xerox Corp. ,
See generally, e.g. , Campbell v. City of L.A. ,
See, e.g. , Esparza v. C&J Energy Servs., Inc. , No. 15-850,
This is no criticism of the well-intended efforts of the various district courts (including the court a quo ), in the absence of guidance from any court of appeals, to follow the law in the light of the challenging practicalities of collective actions. As stated above, we decide this issue as part of our supervisory authority to "settle [a] new and important problem[ ]." Schlagenhauf ,
Hoffmann-La Roche ,
The court stated that it included Arbitration Employees in the class because it could not "determine that there is no possibility that putative class members will be able to join the suit until Defendant files a motion to compel arbitration against specific individuals." We explain later why Chase's failure to move to compel arbitration is of no moment.
Indeed, plaintiffs have acknowledged the multiplicity of potential proceedings that this case implicates in district court. They averred that "[t]he Plaintiffs who have valid arbitration agreements will go the route of arbitration and the remaining Plaintiffs will proceed before this Court."
Hoffmann-La Roche also roots the discretion afforded district courts to facilitate "joining multiple parties" so it can "ascertain[ ] the contours of the action at the outset." Hoffmann-La Roche ,
We assume that in the ordinary case, as here, the party or parties seeking the collective action would not raise a genuine dispute as to the existence of an arbitration agreement, thus obviating the need for a preponderance determination as to that employee.
This holding is consistent with this court's requirement that before conditionally certifying a collective action, a district court must decide whether a named plaintiff is bound by an arbitration agreement. See Edwards v. Doordash, Inc. ,
Hoffmann-La Roche , for example, states only that district courts have the discretion to facilitate notice-not that they must. Moreover, this "notice of rights" theory looks a lot like "solicitation of claims," which Hoffmann-La Roche forbids, instead of permissibly facilitating notice "for case management purposes." Hoffmann-La Roche ,
Nor does Chase's failure to move to compel arbitration doom its petition, as plaintiffs maintain. It is true that courts cannot compel individuals to arbitrate when they are yet to be identified and have not joined the suit. But to stay within the discretion authorized in Hoffmann-La Roche , district courts must respect the existence of arbitration agreements and must decline to notify Arbitration Employees, who waived their right to proceed collectively, of the pending action.
This does not keep Arbitration Employees from attempting to opt-in to the collective action. Once they do, however, the employer can move to compel them to arbitrate. Nonetheless, under Hoffmann-La Roche , district courts do not have the discretion to order that Arbitration Employees receive notice of the action.
As the case progresses, the district judge should make every reasonable effort to avoid the perception that he has pre-judged any aspect of this proceeding. The court's statements can be read as saying that Chase is guilty of an "illegality," presumably in regard to the FLSA. That would be a violation of the prohibition in Hoffmann-La Roche ,
Lloyd's Register ,
Will ,
The same applies to requiring the employer to provide contact information.
This follows the procedure we utilized in Depuy . There, although denying the petition for writ of mandamus, we nonetheless "request[ed] the district court to vacate its ruling." Depuy ,
In anticipation of any suggestion that a court of appeals exceeds its proper role in ruling on pending issues but nonetheless denying mandamus, we note that this court has routinely held, sometimes in published opinions, that a district court erred, despite stopping short of issuing a writ of mandamus. E.g. , In re Dean ,527 F.3d 391 (5th Cir. 2008) (per curiam) (holding that district court had "violated" a federal statute); In re United States , No. 07-40629,2007 WL 9627781 ,2007 U.S. App. LEXIS 30793 (5th Cir. July 19, 2007) (per curiam) (holding that district court "abused its discretion"); In re U.S. Dep't of Homeland Sec. ,459 F.3d 565 (5th Cir. 2006) (holding that district court "erred in declaring that no law enforcement privilege exists"); In re Kleberg Cty. ,86 F. App'x 29 (5th Cir. 2004) (holding that district court "impermissibly violated the County's privilege not to reveal its confidential informants" and ran "afoul of controlling law"); In re Avantel, S.A. ,343 F.3d 311 (5th Cir. 2003) (holding that district court erred in compelling production of allegedly privileged documents); In re Stone ,986 F.2d 898 (5th Cir. 1993) (per curiam) (holding that district court abused its discretion in ordering who must be present at settlement conference); In re Office of Thrift Supervision ,948 F.2d 910 (5th Cir. 1991) (holding that district court erred as a matter of law in attempting to transfer the proceeding, but noting that petitioner "has not made an adequate showing ... of harm that cannot be undone if the order is reversed on appeal").
Under the rule for weekends, the extension runs through Monday, March 25, 2019. See Fed. R. Civ. P. 6(a)(1)(C).
