Morgan v. Sundance, Inc., No. 19-2435 (8th Cir. 2021)Annotate this Case
The Eighth Circuit reversed the district court's order denying Sundance's motion to compel arbitration of plaintiff's claims. Plaintiff filed suit against Sundance for violations of the Fair Labor Standards Act (FLSA), alleging that Sundance failed to pay her, and other similarly situated employees, for overtime. The court concluded that the district court erred in determining Sundance waived its right to arbitrate because Sundance's conduct, even if inconsistent with its right to arbitration, did not materially prejudice plaintiff.
In this case, Sundance does not dispute its knowledge of an existing right to arbitration because the employment agreement included the arbitration clause; Sundance acted inconsistently with its right to arbitration where it substantially invoked the litigation machinery primarily by waiting eight months to assert its right to arbitrate this dispute, and failed to mention the arbitration clause in its answer or motion to dismiss; but plaintiff was not prejudiced by Sundance's litigation strategy where discovery was not conducted and the record lacks any evidence that plaintiff would have to duplicate her efforts during arbitration.
Court Description: [Grasz, Author, with Colloton and Gruender, Circuit Judges] Civil case - Arbitration. The district court erred in denying defendant's motion to compel arbitration of plaintiff's Fair Labor Standards Act claims; while defendant's strategy of waiting to assert its right to arbitration until after filing a motion to dismiss and an answer demonstrates an active participation in the litigation process and a seeming invocation of the litigation machinery, the motion to dismiss focused on a claim that the case should be dismissed under the "first-to-file" rule since a similar case had been filed in Michigan federal district court; so, although there was an eight-month delay in asserting the right to arbitration, the parties spent little time focusing on the merits of the case, and, as a result, plaintiff could not show the late assertion of the right prejudiced her; in the absence of prejudice to plaintiff, defendant did not waive its contractual right to invoke arbitration. Judge Colloton, dissenting.