United States District Court, S.D. Ohio, Western Division, Dayton
M. ROSE DISTRICT JUDGE
REPORT AND RECOMMENDATION  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
MICHAEL J. NEWMAN UNITED STATES MAGISTRATE JUDGE
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.
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.
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.
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.
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.
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.
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.
“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 ...