Walsh v. Arizona Logistics, Inc., No. 20-15765 (9th Cir. 2021)Annotate this Case
The Department of Labor brought an enforcement action against Larry Browne and his companies, alleging that Browne and his entities violated the Fair Labor Standards Act's (FLSA) minimum wage, overtime, record-keeping, and antiretaliation requirements by misclassifying delivery drivers as independent contractors rather than employees. The district court denied Browne's motion to compel arbitration pursuant to EEOC v. Waffle House, Inc., 534 U.S. 279 (2002).
The Ninth Circuit concluded, in light of Waffle House, that a private arbitration agreement does not bind the Secretary of Labor when bringing a FLSA enforcement action that seeks relief on behalf of one party to the arbitration agreement against the other party to that agreement. In Waffle House, the Supreme Court ruled that the EEOC was not party to Waffle House's arbitration agreement, and it was not bound by the agreement because the FAA "does not require parties to arbitrate when they have not agreed to do so." The panel explained that this same reasoning dictates that the Secretary cannot be compelled to arbitrate this case. Here, as in Waffle House, the remedial statute at issue unambiguously authorizes the Secretary to obtain monetary relief on behalf of specific aggrieved employees. The panel explained that, like the EEOC in Waffle House, the Secretary is not party to the arbitration agreement between Browne and his entities and the delivery drivers. Therefore, the panel affirmed the district court's denial of the motion to compel arbitration.