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Maynard v. Modern Industries, Inc.

United States District Court, E.D. Michigan, Southern Division

June 12, 2019

Ronald Maynard, et al., Plaintiff,
Modern Industries, Inc., et al., Defendants.

          Elizabeth A. Stafford U.S. Magistrate Judge.


          Arthur J. Tarnow, Senior United States District Judge.

         Plaintiffs, three employees of Defendant, Modern Industries, Inc., bring this suit for unpaid overtime pursuant to the federal Fair Labor Standards Act (“FLSA”). See 29 U.S.C. § 201 et seq. Defendant filed a motion pursuant to Fed.R.Civ.P. 12(b)(6) asking the Court to dismiss the action. Though the motion was labelled a motion for summary judgment, it will be construed as a motion to dismiss, as the motion's standard of review section is that of a motion to dismiss, not a Rule 56 motion for summary judgment.

         Factual and Procedural Background

         Plaintiffs-Ronald Maynard, Ray Monroe, and David Tornow-allege that they were routinely underpaid during their time working for Defendant, a concrete supply company based in Flint, MI. Because this motion is brought under Fed.R.Civ.P. 12(b)(6), all of Plaintiffs' plausible allegations will be taken true. Maynard was employed as a driver from March 2013 to October 2017. (Compl. ¶ 10). He worked 50-60 hours per week and by the end of his employ was paid $23.00 per hour. (Id. ¶¶ 13-14). Monroe worked for Defendant from July 2015 to April 2018. (Id. at ¶ 21). He was paid $23.50 per hour by the end of his employment and worked 70-80 hours per week. Tornow was employed from July 2014 to September 2015, and his final wage was $24.25 per hour. (Id. at ¶¶ 32 & 36). He worked 70 hours per week. (Id. at 37).

         All three plaintiffs allege that they were underpaid because although they routinely worked through their daily 30-minute lunch break, they were not paid for that time. (Compl. ¶¶ 15, 26, & 38). They filed this suit on August 14, 2018. [Dkt. # 1]. Defendants filed this Motion [5] on August 31, 2018. The motion is now fully briefed, and the Court finds it suitable for determination without a hearing in accord with Local Rule 7.1(f)(2).


         I. The Collective Bargaining Agreement's Grievance and Arbitration Procedure

         The Collective Bargaining Agreement (“CBA”) between Teamsters Local 332, the union to which Plaintiffs belong, and Modern Concrete, provides for an arbitration and grievance procedure. (CBA Art. 10). The CBA explains,

A grievance shall be defined to be any complaint, or dispute arising as to the interpretation, application, or observance of any of the provisions of this Agreement. It is mutually agreed that all grievances arising under and during the term of this Agreement shall be settled in accordance with the procedure herein provided and that there shall at no time be any strikes, tie-ups of equipment, slowdowns, walk-outs or any other cessation of work through the use of any method of lockout or legal proceeding.

(CBA Art. 10 § 1).

         Defendant argues that the complaint clearly arises out of the CBA, even though the CBA is not mentioned by name. The unpaid lunch-break that Plaintiffs allege that they regularly worked through are described under Art. 5 § 5 of the CBA: Lunch Period. A dispute as to whether an employee did or did not work during his lunch break arise from the “interpretation, application, or observance” of the CBA. Putting aside Defendant's failure to even mention the Federal Arbitration Act in its motion, compelling arbitration is not appropriate where the arbitration clause at issue did not clearly foreclose filing suit.

         Courts have long held that employees have individual labor rights under the FLSA that are separate and distinct from their collective rights under a collective bargaining agreement. Vega v. New Forest Home Cemetery, LLC, 856 F.3d 1130, 1134 (7th Cir. 2017) (“[A]n employee's statutory rights are distinct from his contractual rights and as such must be analyzed separately with respect to his right to enforce them in court.”). An employee's participation in a collective agreement to arbitrate disputes arising from a collective bargaining agreement does not automatically preclude that employee from vindicating his or her FLSA rights in federal court, even where the rights provided are identical (e.g., time-and-a-half compensation for hours worked over a forty-hour work week.). “While courts should defer to an arbitral decision where the employee's claim is based on rights arising out of the collective bargaining agreement, different considerations apply where the employee's claim is based on rights arising out of a statute designed to provide minimum substantive guarantees to individual workers.” Barrentine v. Arkansas-Best Freight Systems, Inc., 450 U.S. 728, 737 (1981). The Barrentine Court went on to note that since unions are called on to balance individual and collective interests, and because arbitrators may be better versed in “the law of the shop, not the law of the land, ” employees should retain the option to pursue their individual statutory rights in federal court, even where there is an option for redress by union-sponsored arbitration. Id. at 742-43.

         As Defendant observes, the Supreme Court ruled in Epic Systems v. Lewis, 138 S.Ct. 1612 (2018) that mandatory arbitration clauses are enforceable even where the employee seeks to vindicate claims arising from the Fair Labor Standards Act. Lewis dealt with a contract that unambiguously provided that arbitration was the exclusive remedy for disputes between employer and employee. Id. at 1619-20. A contract that does not clearly disavow the parties' access to federal court cannot compel arbitration, however. “The language of the agreement … must be clear and unmistakable in order for it to be enforced against an employee who wishes to ...

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