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Bowman v. Phoenix Trinity Manufacturing, Inc.

United States District Court, S.D. Ohio, Western Division, Dayton

December 13, 2019

MICHAEL BOWMAN, et al., Plaintiffs,
v.
PHOENIX TRINITY MANUFACTURING, INC., et al., Defendants.

          THOMAS M. ROSE DISTRICT JUDGE

          REPORT AND RECOMMENDATION [1] THAT: (1) DEFENDANTS' MOTION TO COMPEL ARBITRATION AND TO STAY THIS CASE (DOC. 19) BE GRANTED; AND (2) THIS CASE BE STAYED PENDING ARBITRATION, ORDER AND ENTRY ORDERING DEFENDANTS TO SHOW CAUSE AS TO WHY THEY SHOULD NOT BE HELD IN CONTEMPT

          MICHAEL J. NEWMAN UNITED STATES MAGISTRATE JUDGE

         This civil case is before the Court on Defendants' motion to compel arbitration and stay these proceedings. Doc. 19. Plaintiffs filed a memorandum in opposition to Defendants' motion. Doc. 20. Thereafter, Defendants filed a reply. The undersigned has carefully considered all of the foregoing, and Defendants' motion is ripe for decision.

         I.

         Plaintiffs Michael Bowman and James Adams filed this action on October 3, 2018 against Defendants Phoenix Trinity Manufacturing and Tiffany Williams alleging that Defendants failed to pay them overtime compensation in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., and the Ohio Minimum Fair Wage Standards Act, Ohio Revised Code Chapter 4111. Doc. 1. On November 30, 2018, Defendants filed an answer which makes no mention of an agreement to arbitrate employment or wage disputes as an affirmative defense or otherwise. Doc. 6.

         Subsequently, the parties conferred, agreed to a discovery plan, and filed a report pursuant to Fed.R.Civ.P. 26(f). Doc. 7. In that report, the parties recommended disclosing primary expert witnesses by mid-October 2019, disclosing rebuttal experts by mid-November 2019, and completing discovery by January 13, 2020. Doc. 7. On May 29, 2019, the Court issued a Preliminary Pretrial Conference Order pursuant to Fed.R.Civ.P. 16. Doc. 8. The Court's Order adopted the deadlines proposed by the parties in their Rule 26(f) report and set the case for a jury trial to commence on September 14, 2020. Id.

         Thereafter, the parties exchanged initial disclosures and, on June 4, 2019, Plaintiffs served interrogatories and document requests on Defendants. Doc. 20-1 at PageID 73. When discovery responses were not timely received, Plaintiffs' attorney contacted Defendants' previous attorney regarding the status of those responses. Id. On August 5, 2019, the undersigned held a telephone discovery status conference with counsel for the parties. See doc. 9. At that time, Defendants' previous counsel represented that Defendants were late in responding to Plaintiffs' written discovery requests. Id. Thereafter, as requested by counsel without objection, the Court ordered Defendants to respond to written discovery, provide dates for depositions, and respond to Plaintiffs' settlement demand within fourteen days from the entry of that Order, i.e., on or before August 19, 2019. Doc. 10. The Court set a follow-up discovery conference with counsel to occur on August 21, 2019, which was later reset for August 22, 2019. Id.

         On August 22, 2019, previous counsel for Defendants was still attempting to complete responses to Plaintiffs' written discovery requests and, without objection, the Court set an additional discovery conference by telephone for August 27, 2019. Doc. 13. On August 26, 2019, however, Defendants' previous attorney moved to withdraw as counsel and to stay proceedings pending Defendants retaining new counsel to represent them in this case. Doc. 14. The undersigned denied both motions that same day, but without prejudice to refiling once Defendants retained new counsel. To allow Defendants time to retain new counsel before further discussing the status of discovery, the undersigned vacated the August 27, 2019 telephone discovery status conference and reset it for September 16, 2019.

         On September 9, 2019, new counsel entered an appearance on behalf of Defendants and the Court, thereafter, granted previous counsel's motion to withdraw. Docs. 17, 18. During the telephone discovery status conference on September 16, 2019, new counsel for Defendants advised the Court of Defendants' intent to file the instant motion to compel arbitration and to stay proceedings pending arbitration. Those motions were filed on October 2, 2019. Doc. 19.

         In moving to compel arbitration and to stay these proceedings, Defendants point to the following clause in the employment agreements between Plaintiffs and Defendants in this case:

Settlement by Arbitration. Any claim or controversy that arises out of or relates to this agreement, or the breach of it, shall be settled by arbitration accordance with the rules of the American Arbitration Association. Judgment upon the award rendered may be entered in any court with jurisdiction.

Doc. 19-1 at PageID 52, 55. Plaintiffs do not offer any argument in opposition to Defendants' assertion that the arbitration clause governs this dispute and, instead, oppose Defendants' motion on the grounds that Defendants waived the contractual agreement to arbitrate by acting in a manner inconsistent with the arbitration provision, namely by engaging in this litigation for a year before asserting such contractual right. Doc. 20.

         II.

         Courts “examine[] arbitration language in a contract in light of the strong federal policy in favor of arbitration, resolving any doubts as to the parties' intentions in favor of arbitration.” Albert M. Higley Co. v. N/S Corp., 445 F.3d 861, 863 (6th Cir. 2006). An agreement to arbitrate is waivable and, in fact, “a party may waive an agreement to arbitrate by engaging in two courses of conduct: (1) taking actions that are completely inconsistent with any reliance on an arbitration agreement; and (2) “delaying its assertion to such an extent that the opposing party incurs actual prejudice.” Hurley v. Deutsche Bank Tr. Co. Americas, 610 F.3d 334, 338 (6th Cir. 2010) (citations omitted). “Both elements must be found to establish waiver.” Aqualucid Consultants, Inc. v. Zeta Corp., 721 Fed.Appx. 414, 418 (6th Cir. 2017); Shy v. Navistar Int'l Corp., 781 F.3d 820, 828 (6th Cir. 2015) (“Both ...


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