United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER
J. HALE, JUDGE
Cassandra Jones filed this action against Defendant Good
Shepherd Healthcare Solutions, Inc., alleging violations of
the Fair Labor Standards Act with respect to unpaid overtime.
(D.N. 1) However, Jones concedes that her claims are within
the scope of her arbitration agreement with Good Shepherd.
(D.N. 12-2, PageID # 55; see D.N. 13, PageID # 72)
The Court, at Good Shepherd's request, stayed the case
pending resolution of three Supreme Court cases addressing
the enforceability of arbitration agreements similar to the
agreement between Jones and Good Shepherd. (D.N. 7) Once the
stay was lifted, Good Shepherd asked the Court to dismiss
this action, compel arbitration, and award it attorney fees
and costs. (D.N. 12) Jones opposed the motions but later
filed a notice of arbitrator appointment. (D.N. 13; D.N. 15)
The Court then ordered the parties to file a joint report
regarding the status of the arbitration. (D.N. 16) Unable to
come to an agreement, the parties filed separate reports
reiterating their respective positions on dismissal and fees
but nonetheless advised the Court that a final arbitration
date had been set. (D.N. 17; D.N. 18) For the following
reasons, the Court will grant in part and deny in part Good
Jones worked for Good Shepherd as a home healthcare aide,
providing services such as dressing, feeding, transportation,
and housekeeping to Good Shepherd's patients. (D.N. 12-1,
PageID # 41) In 2015, Good Shepherd allegedly stopped paying
its employees for overtime. (D.N. 1, PageID # 3) Thus, Jones
initiated the present action seeking unpaid overtime for
herself and her coworkers under the Fair Labor Standards Act.
Jones began working for Good Shepherd, the parties entered
into an arbitration agreement that encompasses her FLSA
claims and contains a class action waiver. (D.N. 4, PageID #
11) When Jones filed her complaint, Sixth Circuit precedent
held that such clauses were unenforceable. (D.N. 4, PageID #
14) Good Shepherd moved to stay the case because the issue of
enforceability of class action waivers in arbitration
agreements was then pending in three cases before the Supreme
Court. (D.N. 4, PageID # 14) The Court granted Good
Shepherd's motion. (D.N. 7) The Supreme Court ultimately
held that such clauses are enforceable, and the Court lifted
the stay in this action. (D.N. 10) See Epic Systems Corp.
v. Lewis, 138 S.Ct. 1612, 1625 (2018).
Shepherd then moved to dismiss Jones's claims, compel
arbitration, and award it attorney fees and costs. (D.N. 12)
Jones opposed Good Shepherd's motion on the ground that
Good Shepherd had not initiated arbitration, as she believed
it was required to do under the arbitration agreement. (D.N.
13, PageID # 73) Yet Jones subsequently filed a notice of
arbitrator appointment. (D.N. 15) Through separate reports,
the parties have since advised the Court that arbitration is
underway but restated their arguments with respect to Good
Shepherd's motion to dismiss and request for fees. (D.N.
17; D.N. 18)
MOTION TO COMPEL ARBITRATION
Shepherd asks the Court to compel arbitration. (D.N. 12-1,
PageID # 39). But arbitration is already underway: the
parties have selected an arbitrator and set a final
arbitration date. (D.N. 15, PageID # 85; D.N. 18, PageID #
90). Accordingly, Good Shepherd's motion to compel
arbitration will be denied as moot.
MOTION TO DISMISS
Shepherd moves to dismiss Jones's claims because the
parties entered into an arbitration agreement. (D.N. 12-1,
PageID # 39) Generally, proceedings brought before the Court
that are covered by valid arbitration agreements are stayed
pending the arbitration. See 9 U.S.C.A. § 3.
However, the Court has the authority to dismiss a suit
pending arbitration if all of the claims are subject to
arbitration. Ozormoor v. T-Mobile USA, Inc., 354
Fed.Appx. 972, 975 (6th Cir. 2009). In determining whether to
stay or dismiss proceedings, the Court considers whether the
parties agreed to arbitrate; the scope of the agreement;
whether any federal, non-arbitrable claims have been
asserted; and, if any of the claims are not subject to
arbitration, whether to stay the remainder of the
proceedings. Stout v. J.D. Byrider, 228 F.3d 709,
714 (6th Cir. 2000).
the parties agreed to arbitrate, and Jones does not dispute
the agreement's applicability to her claims or allege
that the claims are not arbitrable. (D.N. 12-2, PageID #
55-7; D.N. 13, PageID # 72) In fact, the parties have already
started the arbitration process and set a final arbitration
date. (D.N. 15; D.N. 18, PageID # 90) Finally, arbitration
will address all of Jones's claims. Thus, all of the
factors outlined above weigh in favor of dismissing the
contends, however, that the case should not be dismissed
because the arbitration agreement is unenforceable under
Northern Kentucky Area Development District v.
Snyder, No. 2017-SC-000277-DG, 2018 WL 4628143 (Ky.
Sept. 27, 2018). In Snyder, the Kentucky Supreme
Court held that, pursuant to Ky. Rev. Stat. §
336.700(2), arbitration agreements conditioning employment
upon their execution are unenforceable. Id. at *5.
The court explained that Ky. Rev. Stat. § 336.700(2) is
not preempted by federal law because it does not impede
arbitration agreements, but rather merely prohibits
conditioning employment on execution of an arbitration
agreement. Id. Snyder, though, is inapplicable here,
as there is no evidence that Jones's employment with Good
Shepherd was conditioned on the arbitration agreement. The
arbitration agreement states that the mutual obligations
contained within constitute the consideration for the
agreement; it does not say that its execution is a condition
precedent to Jones's employment. (D.N. 12-2, PageID # 57)
Because the parties have an enforceable arbitration agreement
that encompasses all of Jones's claims, dismissal is
appropriate. Stout, 228 F.3d at 714.
FOR ATTORNEY FEES AND COSTS
Good Shepherd asks the Court to award it fees and costs
incurred as a result of Jones filing this action. (D.N. 12-1,
PageID # 49) Absent statutory authorization or contractual
agreement between the parties, the prevailing American rule
is that each party in federal litigation pays his own
attorney fees and costs. See Alyeska Pipeline Serv. Co.
v. Wilderness Soc'y, 421 U.S. 240, 247, 263-64
(1975); Children's Ctr. for Developmental Enrichment
v. Machle, 612 F.3d 518, 524 (6th Cir. 2010);
Shimman v. Int'l Union of Operating Engineers, Local
18,744 F.2d 1226, 1229 (6th Cir. 1984). One exception
to this rule is that federal courts may award attorney fees
to a prevailing party if the losing party acted in “bad
faith, vexatiously, wantonly, or for oppressive
reasons.” Alyeska Pipeline Co., 421 U.S. at
258-59. Bad faith may exist where a claim ...