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Hobson v. Murphy Oil USA, Inc.

United States District Court, N.D. Alabama, Southern Division

July 8, 2015

SHEILA HOBSON, CHRISTINE PICKNEY, SUSAN ELLINGTON, and SANTRESSA LOVELACE, individually and on behalf of similarly situated employees, Plaintiffs,
MURPHY OIL USA, INC., Defendant.


LYNWOOD SMITH, District Judge.

Plaintiffs, Sheila Hobson, Christine Pickney, Susan Ellington, and Santressa Lovelace, filed a collective action against defendant, Murphy Oil USA, Inc. ("Murphy Oil"), on June 11, 2010, seeking a judgment for themselves and others similarly situated for unpaid overtime pursuant to the Fair Labor Standards Act of 1938, 29 U.S.C. ยง 201 et seq. ("FLSA"). Defendant subsequently moved to compel arbitration of this matter and dismiss the collective action allegations.[1] On September 18, 2012, this court adopted and approved the report and recommendation of Magistrate Judge Harwell Davis, granted defendant's motion, dismissed plaintiffs' collective action allegations with prejudice, ordered plaintiffs to submit their individual claims to arbitration, stayed this action pending resolution through arbitration, and directed the Clerk to close the file for this case for administrative and statistical purposes.[2] The court noted that "the file may be reopened, on either party's motion, for an appropriate purpose such as dismissal following settlement, entry of judgment, vacatur, or modification of an arbitrator's award."[3]

On February 25, 2015, almost two and a half years later, plaintiffs moved for reconsideration of the order dismissing the collective action allegations, requiring plaintiffs to submit their individual claims to arbitration, and staying this action pending resolution through arbitration.[4] This court denied that motion in an order dated June 15, 2015.[5]

In its response to plaintiffs' motion for reconsideration, defendant pointed out that plaintiffs had failed to submit their claims to arbitration, as required by the September 18, 2012 order.[6] As a result, defendant asks this court to dismiss plaintiffs' claims in their entirety pursuant to Federal Rule of Civil Procedure 41(b).[7] Plaintiffs were ordered to show cause, by June 22, 2015, why their complaint should not be dismissed "for failing to adhere to the court's order directing them to submit their claims to arbitration."[8] This order considers plaintiffs' show cause response, which was timely filed on June 22, 2015.[9]

Plaintiffs first assert that they "behaved reasonably in waiting to arbitrate and should not be subject to the harsh penalty of having their complaint dismissed."[10] One of the plaintiffs in this case, Sheila Hobson, filed an unfair labor practice charge with the National Labor Relations Board ("the Board" or "NLRB") during January of 2011, while the motion to compel arbitration still was pending before this court. See Murphy Oil USA, Inc. and Sheila M. Hobson, 361 NLRB No. 72, *4 (Oct. 28, 2014). In that charge, Hobson asserted that Murphy Oil's arbitration agreement violated Section 8(a)(1) of the National Labor Relations Act ("NLRA") "by maintaining and enforcing a mandatory arbitration agreement that prohibits employees from engaging in protected, concerted activities, " and by leading "employees reasonably to believe that they were prohibited from filing unfair labor practice charges with the Board." Id. [11] The Board ruled in Hobson's favor on October 28, 2014, finding that Murphy Oil violated Section 8(a)(1) "by requiring its employees to agree to resolve all employment-related claims through individual arbitration, and by taking steps to enforce the unlawful agreements in Federal district court when [Hobson] and three other employees filed a collective claim against [Murphy Oil] under the Fair Labor Standards Act." Id. at *3 (alterations supplied). The Board ordered Murphy Oil to rescind its arbitration agreement,

or revise it in all of its forms to make clear to employees that the Agreement and Waiver does not constitute a waiver of their right to maintain employment-related joint, class, or collective actions in all forums, and that it does not restrict employees' rights to file charges with the National Labor Relations Board.

Id. at *29. Murphy Oil also was ordered to notify all current and former employees, and all applicants for employment, who were required to sign the arbitration agreement, that the agreement had been rescinded. Id. at *30. Further, Murphy Oil was ordered to

[n]otify the United States District Court for the Northern District of Alabama that it has rescinded or revised the mandatory arbitration agreements upon which it based its motion to dismiss Sheila Hobson's and her coplaintiffs' FLSA collective action and to compel arbitration of their claims, and inform the court that it no longer opposes the plaintiffs' FLSA action on the basis of those agreements.

Id. (alteration supplied).

Murphy Oil filed a Petition For Review of the Board's decision with the United States Court of Appeals for the Fifth Circuit on November 7, 2014, and Murphy Oil's counsel represented to this court in a March 6, 2015 filing that the review still was pending.[12] Moreover, as the Fifth Circuit found in D.R. Horton, Inc. v. N.L.R.B., 737 F.3d 344 (5th Cir. 2013), the NLRB's decisions are not entitled to deference when they concern the interpretation of the Federal Arbitration Act, or any statutory provision other than the NLRA. Id. at 356.

Even so, plaintiffs assert that, until the Board issued its decision on October 28, 2014, "the question of whether, and to what extent, Defendant could enforce an individual arbitration agreement against its employees was litigated through two parallel but closely related proceedings: one before this Court and one before the NLRB."[13] Plaintiffs follow that assertion with this one:

Had Plaintiffs filed for individual arbitration during this period [between this court's September 18, 2012 order compelling arbitration and the NLRB's October 28, 2014 ruling], they would have effectively mooted their NLRB proceeding - at least with respect to their own claims - and deprived themselves of the ability to seek redress for the unfair labor practices they alleged.[14]

As an initial matter, "plaintiffs" did not have an NLRB proceeding. Only one plaintiff, Sheila Hobson, filed a complaint with the NLRB. The other plaintiffs cannot assert any prejudice from being unable to seek redress in that forum for any labor practices they believe are unfair.

More substantively, plaintiffs have not cited any authority to support their outlandish suggestion that a federal court order is without effect if there is a related proceeding pending before the NLRB. If plaintiffs truly were concerned about their rights under the NLRA being "irreparably harmed" by the requirement to arbitrate their individual claims, they could have requested either a stay of the arbitration order pending an outcome of the proceedings before the NLRB, or permission to seek an interlocutory appeal. They did neither. Instead, ...

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