Southard v. Newcomb Oil Co., LLC, No. 20-5318 (6th Cir. 2021)Annotate this Case
Southard worked for Newcomb, then filed a putative class action, alleging violations of the Fair Labor Standards Act, 29 U.S.C. 201, plus state-law claims. Newcomb removed the case to federal court. Southard amended his complaint to delete the FLSA claim. Newcomb moved to dismiss Southard’s complaint or to stay the action pending arbitration. The district court concluded that the parties did not form an agreement to arbitrate under the Federal Arbitration Act, 9 U.S.C. 3-4 and denied Newcomb’s motion, then remanded Southard’s remaining state-law claims to state court.
The Sixth Circuit affirmed. To invoke FAA remedies, the parties must have entered into a “written agreement for arbitration.” Courts evaluate whether an agreement qualifies as FAA arbitration based on the common features of classic arbitration: a final, binding remedy by a third party, an independent adjudicator, substantive standards, and an opportunity for each side to present its case. Southard’s application for employment states: I accept that any complaint or conflict that cannot be resolved internally may be referred to Alternative Dispute Resolution unless prohibited by law, before any other legal action is taken. The employee handbook states the employee agrees "to Alternative Dispute Resolution a forum or means for resolving disputes, as arbitration or mediation, that exists outside the state or federal judicial system, unless prohibited by law," and If there is a conflict that cannot be resolved, "both agree that the matter will be referred to mediation.”. The parties agreed to alternative dispute resolution generally, not arbitration specifically.