1 

UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

VINCENT THOMAS AND 

ALAN QUEEN, 

 Plaintiffs, 

 

 

v. Civil Case No. 15-10055 

Honorable Linda V. Parker 

 

RIGHT CHOICE STAFFING 

GROUP, LLC, ADEPT 

SERVICES GROUP, INC., 

DOWNRIVER STAFFING 

GROUP, LLC, AUTOLINE 

TRANSPORTATION, INC. 

TIMOTHY SCHULTZ, AND 

TRACY SHAFFER, 

 Defendants. 

__________________________/

 

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART 

DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND STAY OR 

DISMISS PROCEEDINGS

 On January 7, 2015, Plaintiffs filed this putative class action lawsuit against 

Defendants alleging violations of the Fair Labor Standards Act (“FLSA”), 29 

U.S.C. §§ 201-219. Plaintiffs filed an amended complaint on February 20, 2015. 

(ECF No. 4.) Presently before the Court is Defendants’ Motion to Compel 

Arbitration and Stay or Dismiss Proceedings, filed April 1, 2015. (ECF No. 20.) 

The motion has been fully briefed. (ECF Nos. 21, 23-24, 26.) Finding the facts 

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and legal arguments sufficiently presented in the parties’ pleadings, the Court 

dispensed with oral argument pursuant to Eastern District of Michigan Local Rule 

7.1(f) on April 28, 2015. (ECF No. 22.) For the reasons that follow, the Court is 

granting in part and denying in part Defendants’ motion. 

Factual and Procedural Background

 Defendants Right Choice Staffing Group, LLC (“Right Choice”), Adept 

Services Group, Inc. (“Adept”), Downriver Staffing Group, LLC (“Downriver 

Staffing”), and Autoline Transportation, Inc. (“Autoline”) (collectively “Defendant 

Entities”) are in the business of moving automobiles, primarily for Chrysler Group, 

LLC, from one location to another within the State of Michigan. (Am. Compl. 

¶ 29.) Defendant Timothy Schultz (“Schultz”) is the resident agent, authorized 

officer, and manager of the Defendant Entities. (Id. ¶ 20.) Defendant Tracy 

Shaffer (“Shaffer”) is the Staffing Manager, Manager, and Human Resources agent 

for the Defendant Entities. (Id. ¶ 21.) The Defendant Entities share the same 

resident agent, managers, office location, staff, and employees, and otherwise 

operate as the same business entity. (Id. ¶ 22; see also Pls.’ Resp., Ex. 1, ECF No. 

21-2.) Autoline, which was incorporated on June 15, 2012, was dissolved as a 

Michigan corporation on February 25, 2014. (Am. Compl. ¶ 19; Pls.’ Resp., Ex. 1, 

ECF No. 21-1.) 

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 Defendants hire qualified drivers to move vehicles as needed by Defendants’ 

clients. Plaintiff Vincent Thomas (“Thomas”) began working as a driver in 

September 2012. Although Defendants state that Thomas was hired by Right 

Choice, the Michigan Department of Licensing and Regulatory Affairs’ website 

reflects Right Choice as having been formed only on September 17, 2013. (Pls.’ 

Resp., Ex. 1, ECF No. 21-2.) On October 21, 2013, Thomas signed a document 

with the heading “Adept Services Group” in which he represents that he is a 

“contractor” or “contract worker” of Adept or its subsidiaries, including but not 

limited to Autoline and Right Choice and that, as such, he is “responsible for [his] 

own health insurance pursuant to the Affordable Care Act . . ..” (Defs.’ Mot., Ex. 

2, ECF No. 20-3.) Thomas also executed a “Subcontractor Agreement” between 

himself and Right Choice. (Id., Ex. 3, ECF No. 20-4.) 

 The Subcontractor Agreement states that it is “made and effective” on 

December 16, 2013, and it is signed by Shaffer as Chief Operating Officer of Right 

Choice. (Id.) The document provides that “the Contractor [Right Choice] has 

entered into an agreement with the Subcontractor [Thomas] for various duties such 

as driveway work known henceforth as ‘Subcontractor Work.’ ” (Id.) It further 

provides that Thomas “shall be employed as an independent contractor and shall be 

responsible to provide and furnish all tools, materials and supplies needed or 

necessary to the performance of the work . . ..” (Id.) The agreement reflects that 

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Thomas would be paid $8.00 per hour for his work. (Id.) It contains the following 

arbitration clause: 

Any and all disputes arising out of the Subcontract between 

Contractor and Subcontractor shall be resolved by binding arbitration. 

In doing so, the parties expressly waive their right to a jury trial if any, 

on these issues and further agree that the award of the arbitrator shall 

be final and binding upon them as though rendered by a court and 

shall be enforceable in any court having jurisdiction over the same. 

(Id. ¶ 8.) 

 Plaintiff Alan D. Queen (“Queen”) began working as a driver on or about 

February 26, 2013. On October 21, 2013, Queen also signed an “Adept Services 

Group” document, stating that he is a contractor and responsible for his own health 

insurance pursuant to the Affordable Care Act. (Defs.’ Mot., Ex. 4, ECF No. 20-

5.) On December 16, 2013, Queen also executed a Subcontractor Agreement, 

which is identical to the agreement signed by Thomas except that Queen’s hourly 

rate is identified as $11.00. (Id., Ex. 5, ECF No. 20-6.) 

 In this lawsuit, Plaintiffs allege that although classified as independent 

contractors, they in fact were employees and thus were entitled under the FLSA to 

one and a half times their regular rates of pay for hours worked over forty hours in 

a week. Plaintiffs allege that they and other similarly situated individuals worked 

more than forty hours per week, but were not compensated by Defendants in 

accordance with the FLSA.

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Defendants’ Arguments and Plaintiffs’ Response

 In their pending motion, Defendants argue that the Subcontractor 

Agreement, specifically the arbitration clause therein, requires Plaintiffs to 

arbitrate their FLSA claims, including their claim that they were erroneously 

classified as independent contractors rather than employees. Defendants maintain 

that the Honorable Judith E. Levy compelled arbitration in a case against Right 

Choice and Adept in which the same Subcontractor Agreement governed the 

parties’ relationship. (Defs.’ Br. in Supp. of Mot. at Pg ID 125, citing Order 

Granting in Part and Den. in Part Defs.’ Mot. to Compel Arbitration and Stay or 

Dismiss Proceedings, Conner v. Right Choice Staffing Group, LLC, No. 14-12887, 

(E.D. Mich. Jan. 16, 2015), ECF No. 21.) 

Defendants argue that Plaintiffs must submit their claims to arbitration 

individually, rather than for class-wide arbitration. Defendants contend that 

Plaintiffs’ claim against Downriver Staffing, Autoline, Schultz, and Shaffer should 

be dismissed with prejudice because Plaintiffs did not work for them, but rather 

only Right Choice. 

Alternatively, Defendants contend that Plaintiffs’ claim against Downriver 

Staffing, Autoline, Schultz, and Shaffer should be submitted to arbitration pursuant 

to the terms of the Subcontractor Agreement based on the agency relationship 

between these defendants and Right Choice and because the claim is intertwined 

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with the underlying contract. Specifically, Defendants argue, Plaintiffs claims 

against all defendants is dependent upon whether Plaintiffs were fully compensated 

and worked as independent contractors. 

Finally, Defendants argue that Plaintiffs settled their claims when they 

received, endorsed, and presented for payment checks they received from Right 

Choice in a settlement with the United States Department of labor. (Defs.’ Mot., 

Exs. 7, 8, ECF Nos. 20-8, 20-9.) Thomas was paid $661.00, and Queen was paid 

$1,307.48. (Id.) 

Plaintiffs argue in response that because they are not claiming that Right 

Choice violated any terms of the Subcontractor Agreements, their FLSA claims do 

not fall within the arbitration clause of those agreement.1

 Plaintiffs contend that 

their claims instead arise out of the employment relationship. Analogizing their 

case to Bratt Enterprises, Inc. v. Noble International Limited, 338 F.3d 609 (6th 

Cir. 2003), Plaintiffs maintain that the language of the arbitration clause in the 

Subcontractor Agreements is not sufficiently broad to encompass their claims. 

 

1 Plaintiffs stress that their opposition to Defendants’ motion to compel is not 

premised on an argument that the Subcontractor Agreements are unenforceable, 

unconscionable, or obtained through fraud or duress or that Defendants waived any 

right to arbitration. (Pls.’ Resp. Br. at Pg ID 158-59, ECF No. 21.) Plaintiffs 

indicate that they also are not arguing that the arbitration provision is 

unenforceable because it impinges on federally guaranteed substantive or 

procedural rights or because of a lack of knowing and voluntary waiver of any 

rights on Plaintiffs’ behalf. (Id.) 

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But even if their claims fall within the scope of the Subcontractor 

Agreements, Plaintiffs contend that there is no basis for requiring them to arbitrate 

their claims against any defendant but Right Choice, as Adept, Downriver Staffing, 

and Autoline are neither parties to nor third-party beneficiaries of the 

Subcontractor Agreements, and, Plaintiffs argue, they do not fall within any of the 

recognized factors under which non-signatories are bound to arbitration 

agreements. Plaintiffs contest Defendants’ assertion that they worked only for 

Right Choice-- pointing out that Right Choice was formed only after Thomas and 

Queen were hired. Plaintiffs maintain that whether they were contractors or 

employees also is a fact in dispute. 

Plaintiffs argue that the facts and legal arguments asserted by the parties in 

Bratt Enterprises are distinguishable from the present case and thus Judge Levy’s 

decision in that case provides no support for Defendants’ arguments here. Finally, 

Plaintiffs argue that they have not settled their claims by accepting, endorsing, and 

submitting for payment the checks they received pursuant to Right Choice’s 

settlement with the Department of Labor, because there is no showing of an 

informed and meaningful agreement to waive their right to bring a private action. 

Applicable Law and Analysis

The Court addresses first Defendants’ arguments that Plaintiffs already 

settled their claims and that Downriver Staffing, Autoline, Schultz, and Shaffer 

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should be dismissed with prejudice because Plaintiffs did not work for them. 

Defendants fail to show an informed and meaningful agreement by Plaintiffs to 

waive their right to bring a private action. The mere cashing of a check for back 

wages does not constitute an “agreement” to settle and thus a waiver of the 

employee’s right to sue. See, e.g., Walton v. United Consumers Club, Inc., 786 

F.2d 303, 305-06 (7th Cir. 1986) (explaining Department of Labor’s distinctive 

treatment for settlements it believes constitute a full settlement on behalf of 

employees and those that fall short); see also Beauford v. ActionLink, LLC, 781 

F.3d 396, 406 (8th Cir. 2015) (“Simply tendering a check and having the employee 

cash that check does not constitute an ‘agreement’ to waive claims” . . . the 

employee must also sign a waiver of any legal claims in a process supervised by 

the Department of Labor); Sneed v. Sneed’s Shipbuilding, Inc., 545 F.2d 537 (5th 

Cir. 1997) (finding valid waiver under the FLSA where the employee agreed to 

accept the payment the Department of Labor determined to be due and signed a 

waiver). 

Defendants offer no evidence in support of their assertion that Plaintiffs 

never worked for any entity but Right Choice, and the assertion is contrary to the 

allegations in Plaintiffs’ amended complaint. (See, e.g., Am. Compl. ¶ 1.) 

Plaintiffs’ allegations must be presumed true for purposes of deciding Defendants’ 

motion to dismiss. See Erickson v. Pardus, 551 U.S. 89, 94 (2007). Moreover, 

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Plaintiffs both began working as drivers before Right Choice is reflected as being 

formed. Thus they presumably worked for one or more of the other defendants 

prior to that time. Lastly, the documents Plaintiffs signed related to health 

insurance coverage bears the heading “Adept Services Group.” 

Plaintiffs allege that Schultz and Shaffer worked as a manager, staffing 

manager, or human resources agent. Shaffer signed the Subcontractor Agreements 

as Right Choices’ Chief Operating Officer. The FLSA imposes individual liability 

on “any person acting directly or indirectly in the interest of an employer in 

relation to an employee . . ..” 29 U.S.C. § 203(d). The Sixth Circuit uses an 

“economic reality” test to determine whether a person is an “employer” responsible 

for FLSA obligations. Fegley v. Higgins, 19 F.3d 1126, 1131 (6th Cir.), cert. 

denied, 513 U.S. 875 (1994). This test considers whether the individual has 

operational control of the corporation, has a significant ownership interest in it, 

controls significant functions of the business, determines salaries, or makes hiring 

decisions. Id.; see also U.S. Dep’t of Labor v. Cole Enter., Inc., 62 F.3d 775, 778 

(6th Cir. 1995). At this stage of the proceedings, Schultz’s and Shaffer’s roles are 

not sufficiently developed to determine whether they can or cannot be held liable 

under the FLSA. 

For these reasons, the Court cannot conclude that Downriver Staffing, 

Autoline, Schultz, or Shaffer must be dismissed with prejudice or that Plaintiffs 

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settled their claims. Thus the Court turns to the question of whether Plaintiffs’ 

claims against these defendants and Right Choice are subject to arbitration. 

When considering a motion to stay proceedings and compel arbitration 

under the Federal Arbitration Act (“FAA”), the court has four tasks: (1) to 

determine whether the parties agreed to arbitrate; (2) to determine the scope of any 

agreement to arbitrate; (3) if federal statutory claims are asserted, to decide 

whether Congress intended those claims to be non-arbitrable; and (4) if the court 

finds some, but not all, claims subject to arbitration, to decide whether to stay the 

remainder of the proceedings pending arbitration. Stout v. J.D. Byrider, 228 F.3d 

709, 714 (6th Cir. 2000). 

Plaintiffs do not dispute that they agreed to arbitrate certain matters. The 

Sixth Circuit has concluded that FLSA claims are arbitrable. Floss v. Ryan’s 

Family Steak Houses, Inc., 211 F.3d 306 (6th Cir. 20000). Thus the only tasks this 

Court has to perform are determining whether the arbitration agreement’s scope 

extends to Plaintiffs’ FLSA claims and, if it reaches some but not all of Plaintiffs’ 

claims, whether a stay of any non-arbitrable claim is appropriate. 

When analyzing the scope of an arbitration agreement, courts in the Sixth 

Circuit examine the language of the agreement “in light of the strong federal policy 

in favor of arbitration, resolving any doubts as to the parties’ intentions in favor of 

arbitration.” Albert M. Higley Co. v. N/S Corp., 445 F.3d 861, 863 (6th Cir. 2006) 

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(citing Great Earth Cos., Inc. v. Simons, 288 F.3d 878 (6th Cir. 2002)); see also 

Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983) 

(interpreting the FAA as establishing that “as a matter of federal law, any doubts 

concerning the scope of arbitrable issues should be resolved in favor of 

arbitration”). “However, countervailing principles also apply,” Nestle Waters N. 

Am., Inc. v. Bollman, 505 F.3d 498, 504 (6th Cir. 2007), as “the federal policy in 

favor of arbitration is not an absolute one[.]” Albert M. Higley Co., 445 F.3d at 

863. Rather, “[a]rbitration under the [FAA] is ‘a matter of consent, not 

coercion.’ ” Id. (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford 

Junior Univ., 489 U.S. 468, 479 (1989)). Thus, “[w]hile ambiguities in the 

language of the agreement should be resolved in favor of arbitration, we do not 

override the clear intent of the parties, or reach a result inconsistent with the plain 

text of the contract, simply because the policy favoring arbitration is implicated.” 

EEOC v. Waffle House, Inc., 534 U.S. 279, 294 (2002) (internal citation omitted). 

In sum, “no matter how strong the federal policy favors arbitration, arbitration is a 

matter of contract between the parties, and one cannot be required to submit to 

arbitration a dispute which it has not agreed to submit to arbitration.” Simon v. 

Pfizer Inc., 398 F.3d 765, 775 (6th Cir. 2005) (citations omitted). 

Plaintiffs can prevail in this matter only if they are found to have been 

employees rather than independent contractors, because “[u]nder the FLSA, only 

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employees are entitled to overtime and minimum-wage compensation. . . . 

Independent contractors do not enjoy [the] FLSA’s protections.” Keller v. Miri 

Microsystems LLC, 781 F.3d 799, 807 (6th Cir. 2015) (citing cases). The 

agreements signed by Plaintiffs require the parties to submit to binding arbitration 

“[a]ny and all disputes arising out of this Subcontract between Contractor and 

Subcontractor[.]” (Defs.’ Mot. Exs. 3, 5 (emphasis added).) The agreements do 

more than establish the hourly rate to be paid Plaintiffs. (Id.) They define 

Plaintiffs as independent contractors. (Id.) The dispute regarding Plaintiffs’ 

classification therefore arises out of the agreements and falls within the scope of 

the arbitration provision. See Muriithi v. Shuttle Exp., Inc., 712 F.3d 173, 179 (4th 

Cir. 2013) (finding arbitration clause in agreement classifying the plaintiff as an 

independent contractor sufficiently broad to render arbitrable the issue of 

plaintiff’s classification for purposes of his FLSA claim). The Court, however, 

must address the fact that the Subcontractor Agreements were effective only as of 

December 16, 2013 (after Plaintiffs began the work for which they claim 

entitlement to overtime pay) and the fact that the agreements are between Plaintiffs 

and Right Choice, only. 

As relevant to the effective date of the agreements, the FLSA statute of 

limitations is two years for non-willful violations and three years for willful ones. 

29 U.S.C. § 255(a). In their amended complaint, Plaintiffs allege that Defendants’ 

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violations were willful. (Am. Compl. ¶ 35.) Thomas began working in September 

2012, and Queen began working in February 2013. As such, Plaintiffs are seeking, 

and can seek, relief under the FLSA for a period before the Subcontractor 

Agreements became effective. The plain language of the agreements does not 

render them retroactive. Nothing in the language of the agreements reflects an 

intent to impose a duty to arbitrate matters arising before the effective date, nor do 

the agreements define the work Plaintiffs’ performed before the effective date. 

Therefore, the Court concludes that Plaintiffs cannot be compelled to arbitrate their 

claims with respect to their FLSA rights before December 16, 2013.2

With respect to the fact that only Right Choice is a signatory to the 

agreements with Plaintiffs, a contract generally cannot bind a nonparty. AFSCME 

Council 25 v. Wayne Cnty., 811 N.W.2d 4, 11 (Mich. Ct. App. 2011) (quoting 

 

2 The Court acknowledges the Michigan courts’ preference for disputes in a case 

being resolved in a single forum. See City of Detroit Police & Fire Ret. Sys. v. 

GSC CDO Fund, Ltd., No. 289185, 2010 WL 1875758, at *4 (Mich. Ct. App. May 

11, 2010) (quoting Rooyakker & Sitz, PLLC v. Plante & Moran, PLLC, 742 

N.W.2d 409, 421 (Mich. Ct. App. 2007) (“[T]his state has a strong public policy 

that favors arbitration ‘as a single, expeditious means of resolving disputes,’ and 

that this policy would be thwarted if all disputed issues in a case had to be 

segregated into arbitrable and non-arbitrable categories.”). Nevertheless, as 

indicated, “[w]hile ambiguities in the language of the agreement should be 

resolved in favor of arbitration, [the court] do[es] not override the clear intent of 

the parties, or reach a result inconsistent with the plain text of the contract, simply 

because the policy favoring arbitration is implicated.” Huffman v. Hilltop Co., 747 

F.3d 391, 396 (6th Cir. 2014). “Moreover, because arbitration is a creature of 

contract, a party may not be compelled to arbitrate any dispute he has not agreed to 

arbitrate.” Id. (internal quotation marks, citation, brackets, and ellipsis omitted). 

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EEOC v. Waffle House, Inc., 534 U.S. 279, 294 (2002) (“It goes without saying 

that a contract cannot bind a nonparty.”)). Therefore, “a party cannot be required 

to arbitrate when it is not legally or factually a party to the agreement.” St. Clair 

Prosecutor v. AFSCME, 388 N.W.2d 231, 239 (Mich. 1986). Nevertheless, 

“[n]onsignatories of arbitration agreements can still be bound by [the] agreement 

pursuant to ordinary contract-related legal principles, including incorporation by 

reference, assumption, agency, veil-piercing/alter ego, and estoppel.” AFSCME 

Council 25, 811 N.W.2d at 81 (citing Thomson-CSF, S.A. v. Am. Arbitration Ass’n, 

64 F.3d 773, 776 (2d Cir. 1995)). State law governs the question of whether a nonparty can enforce an arbitration clause against a party. Arthur Andersen LLP v. 

Carlisle, 556 U.S. 624, 631 (2009). 

Under Michigan law, “a party to an arbitration agreement may be equitably 

estopped from litigating its claims against non-parties in court and may be ordered 

to arbitration . . . ‘when the signatory raises allegations of substantially 

interdependent and concerted misconduct by both the non-signatory and one or 

more signatories to the contract.’ ” City of Detroit Police and Fire Ret. Sys. v. 

GSC CDO Fund, Ltd., No. 289185, 2010 WL 1875758, at *6 (Mich. Ct. App. May 

11, 2010) (unpublished opinion) (quoting Brown v. Pacific Life Ins. Co., 462 F.3d 

384, 398 (5th Cir. 2006)). Several federal circuit courts have utilized this estoppel 

theory-- termed “alternative estoppel”-- to bind a signatory to arbitrate with a non4:15-cv-10055-LVP-MKM Doc # 27 Filed 07/06/15 Pg 14 of 22 Pg ID 260
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signatory at the non-signatory’s insistence because of the close relationship 

between the entities involved, the relationship of the alleged wrongs to the 

obligations and duties in the contract, and the fact that the signatory’s claims 

“ ‘were intimately founded in and intertwined with the underlying contract 

obligations.’ ” Thomson-CSF, 64 F.3d at 779 (brackets removed) (quoting Sunkist 

Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir. 1993), 

abrogated on other grounds by Carlisle, 556 U.S. 624); see also J.J. Ryan & Sons, 

Inc. v. Rhone Poulenc Textile, S.A., 863 F.2d 315, 320-21 (4th Cir. 1988); McBro 

Planning & Dev. Co. v. Triangle Elec. Constr. Co., 741 F.2d 342, 344 (7th Cir. 

1984), abrogated on other grounds by Carlisle, 556 U.S. 624. Specifically related 

to the present case, courts have relied on alternative estoppel to require arbitration 

of a signatory’s charges against a parent company where the signatory entered into 

an arbitration agreement with the parent’s subsidiary. J.J. Ryan & Sons, 863 F.2d 

at 320-21 (citing cases) (“when the charges against a parent company and its 

subsidiary are based on the same facts and are inherently inseparable, a court may 

refer claims against the parent to arbitration even though the parent is not formally 

a party to the arbitration agreement.”). 

The Honorable Judith E. Levy recently relied on alternative estoppel when 

requiring the signatories to an arbitration agreement to arbitrate their FLSA claims 

against a non-signatory in Southerland v. Corporate Transit of America, No. 13-

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14462, 2014 WL 4906891, at *5 (E.D. Mich. Sept. 30, 2014) (unpublished)-- a 

case different than the one cited in Defendants’ motion. In Southerland, the 

plaintiffs were delivery drivers who provided transportation services to third 

parties on behalf of the defendant, Corporate Transit of America (“CTA”). Id. at 

*1. CTA obtained the plaintiffs’ services through a third party, Subcontracting 

Concepts, LLC (“SCI”). Id. The plaintiffs alleged they were employed as drivers 

by CTA and thus entitled to overtime pay under the FLSA. Id. CTA alleged that 

the plaintiffs were independent contractors and thus not entitled to the FLSA’s 

protections. Id. 

In order to work for CTA, the plaintiffs had to sign both an Independent 

Contractor Acknowledgment Form with CTA and an Owner/Operator Agreement 

with SCI. Id. The latter agreement contained an arbitration clause. Id. at **1-2. 

When the plaintiffs sued CTA for FLSA violations, CTA moved to compel 

arbitration pursuant to the terms of the SCI agreement and Judge Levy granted the 

motion. The court relied on the undisputed fact that CTA and SCI were closely 

related, that the plaintiffs foresaw the involvement of CTA in their relationship 

with SCI, and finally that “most, if not all, of the issues raised by the plaintiff[s] 

. . . are explicitly addressed by the SCI Agreement.” Id. at 5. 

Similarly, in the present case, the Defendant Entities are closely related. 

Plaintiffs in fact allege that “Defendant corporations share the same Resident 

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Agent, Managers, office location, staff and employees and otherwise operate as the 

same business entity.” (Am. Compl. ¶ 22.) The issues raised by Plaintiffs-- that is, 

whether they were employees or independent contractors-- are explicitly addressed 

by the Subcontractor Agreements. This Court therefore concludes that Plaintiffs 

are required to arbitrate their FLSA claims against all Defendants relating to work 

performed as of the effective date of the Subcontractor Agreements. 

Having reached the above conclusions, the Court next turns to Plaintiffs’ 

request for classwide relief. Plaintiffs’ request raises two issues: (1) whether the 

arbitration agreement provides for classwide arbitration; and (2) whether the court 

or arbitrator must decide the issue of classwide arbitrability. See Reed Elsevier, 

Inc. v. Crockett, 734 F.3d 594 (6th Cir. 2013). As to the latter issue, the Sixth 

Circuit has held “that the question whether an arbitration agreement permits 

classwide arbitration is a gateway matter, which is reserved ‘for judicial 

determination unless the parties clearly and unmistakably provide otherwise.’ ” Id. 

at 599. Where the agreement does not mention classwide arbitration at all, the 

Reed Elsevier court held that the determination of classwide arbitrability lies with 

the court. Id. According to the court, silence with respect to classwide arbitration 

also means that classwide arbitration is not authorized. Id. (“The principle reason 

to conclude that this arbitration clause does not authorize classwide arbitration is 

that the clause nowhere mentions it.”); see also Huffman v. The Hilltop Co., 747 

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F.3d 391, 398-99 (6th Cir. 2014) (finding Reed Elsevier controlling such that an 

agreement’s silence as to classwide arbitration is construed as not authorizing 

classwide arbitration). The arbitration clause in the Subcontractor Agreements 

does not mention classwide arbitration. As such, the Court makes the 

determination that Plaintiffs may not seek classwide relief with respect to their 

FLSA claims arising from work performed under the Subcontractor Agreement 

(i.e., work performed as of December 16, 2013). 

The remaining question is whether the Court should stay the proceedings 

with respect to Plaintiffs’ FLSA claims related to work performed prior to 

December 16, 2013, pending arbitration. The Federal Arbitration Act allows 

piecemeal, concurrent litigation where only some of the relevant issues are 

arbitrable. Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221 (1985). 

Nevertheless, the Supreme Court has determined that “[i]n some cases . . . it may 

be advisable to stay litigation among the nonarbitrating parties pending the 

outcome of the arbitration. That decision is one left to the district court . . . as a 

matter of its discretion to control its docket.” Moses H. Cone Mem’l Hosp., 460 

U.S. at 20 n. 23. Exercising that discretion, several district courts within the Sixth 

Circuit have stayed the litigation of non-arbitrable claims pending the outcome of 

an arbitration. See, e.g., Stacy v. H & R Block Tax Servs., Inc., No. 07-13327, 

2008 WL 321300 (E.D. Mich. Feb. 4, 2008); Vaughn v. Marshall, No. 2:09 CV 

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00097, 2009 WL 3260382, at *4 (S.D. Ohio Oct. 8, 2009); DRS Precision Echo, 

Inc. v. Michigan Magnetics, Inc., No. 1:02-cv-161, 2003 WL 1141900, at *5 (W.D. 

Mich. Jan. 7, 2003). 

Citing a Sixth Circuit case as precedent, one district judge in this Circuit 

held that “where some claims are non-arbitrable, they can simultaneously proceed 

in [the district c]ourt only if they can be separated out; in other words, if their 

resolution has no effect on the arbitrable issues.” DRS Precision Echo, Inc., 2003 

WL 1141900, *5 (emphasis in original) (citing Lipskey v. Oppenheimer & Co., 717 

F. 2d 314, 319-20 (6th Cir. 1983)). As stated by another district judge, a court 

should stay litigation of non-arbitrable claims “where a decision in one forum 

could affect the resolution of claims in the other.” Spartech CMD, LLC v. Int’l 

Auto. Components Grp., N.A., No. 08-13234, 2009 WL 440905, at *13 (E.D. Mich. 

Feb. 23, 2009). Courts have found a stay appropriate where “a lawsuit against a 

nonsignatory [to an arbitration agreement] depends upon the same facts and is 

inherently inseparable from the arbitrable claims,” Patnik v. Citicorp Bank Trust 

FSB, 412 F. Supp. 2d 753, 762 (N.D. Ohio 2005), where the arbitration may 

resolve issues in the lawsuit, Sierra Rutile Ltd. v. Katz, 937 F.2d 743, 750 (2d Cir. 

1991), or where staying the litigation would promote the federal policy in favor of 

arbitration, AgGrow Oils, LLC v. Nat’l Union Fire Ins. Co., 242 F.3d 777, 782 (8th 

Cir. 2001). In comparison, courts have found a stay unnecessary after finding the 

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non-arbitrable issues insufficiently intertwined with arbitrable issues, such as 

where the claims are “ based on separate and distinct projects. . ..” Yamasaki Korea 

Architects, Inc. v. Yamasaki Assoc., Inc., No. 08-10342, 2008 WL 4940590, at *5 

(E.D. Mich. Nov. 17, 2008); see also Spartech CMD, 2009 WL 440905, at *14 

(declining to stay non-arbitrable claims which were based on a contract distinct 

from those requiring arbitration and involved an independent transaction). 

In the instant case, Plaintiffs’ arbitrable and non-arbitrable claims are 

inseparable, as a resolution of both depends upon the determination of whether 

Plaintiffs were employees or independent contractors when they worked as drivers 

for Defendants. There is no suggestion that the manner in which Plaintiffs 

performed this work changed over time and thus it appears that they retained the 

same status (employer or independent contractor) before and after the 

Subcontractor Agreements’ effective date. A decision in one forum with respect to 

this issue clearly has an effect on the resolution of Plaintiffs’ FLSA claims in the 

other forum. Efficiency concerns also favor a stay. If the arbitrator determines 

that Plaintiffs were independent contractors, that finding would be dispositive of 

their non-arbitrable FLSA claims. As such, the Court is staying Plaintiffs’ nonarbitrable FLSA claims pending the outcome of arbitration.

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Conclusion

In summary, the Court finds no basis to dismiss Plaintiffs’ claims against 

any defendant at this time. The Court also finds that Plaintiffs and Right Choice 

agreed to arbitrate disputes arising under the Subcontractor Agreements, effective 

December 16, 2013, and that the scope of the arbitration clause in those 

agreements extends to the issue of whether Plaintiffs were independent contractors 

or employees when they worked as drivers. Alternative estoppel requires Plaintiffs 

to arbitrate their FLSA claims against all Defendants with respect to this issue. 

The plain language of the Subcontractor Agreements does not extend the scope of 

the arbitration clause to Plaintiffs’ request for relief under the FLSA for work 

performed prior to December 16, 2013. The Court is staying proceedings with 

respect to whether Plaintiffs are entitled to relief for work performed prior to 

December 16, 2013, pending the outcome of arbitration. 

Accordingly, 

IT IS ORDERED, that Defendants’ Motion to Compel Arbitration and Stay 

or Dismiss Proceedings is GRANTED IN PART AND DENIED IN PART in 

that Plaintiffs must arbitrate their FLSA claims with respect to work performed 

after December 16, 2013. Defendants fail to establish that any defendant must be 

dismissed at this time; 

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IT IS FURTHER ORDERED, that this matter is STAYED pending 

arbitration. 

 s/ Linda V. Parker 

 LINDA V. PARKER 

 U.S. DISTRICT JUDGE 

Dated: July 6, 2015 

I hereby certify that a copy of the foregoing document was mailed to counsel of 

record and/or pro se parties on this date, July 6, 2015, by electronic and/or U.S. 

First Class mail. 

 s/ Richard Loury 

 Case Manager 

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