United States District Court

EASTERN DISTRICT OF TEXAS

SHERMAN DIVISION

AZANIA ABEBE,

Plaintiff,

v. 

YUM! BRANDS, INC. AND YUM! 

RESTAURANT SERVICES GROUP, 

LLC,

Defendants. 

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Civil Action No. 4:23-cv-682

Judge Mazzant

MEMORANDUM OPINION AND ORDER

Pending before the Court is Plaintiff’s Motion for Leave to Amend Complaint (Dkt. #52).

Having considered the Motion, the relevant pleadings, and the applicable law, the Court finds that 

the Motion should be DENIED.

Additionally, pending before the Court is Defendants’ Motion for Clarification on its 

Deadline for Filing its Responsive Pleading and Deadlines for Fed. R. Civ. P. Obligations (Dkt. 

#48). Having considered the Motion, the relevant pleadings, and the applicable law, the Court 

GRANTS the Motion and clarifies as set forth below.

BACKGROUND

Plaintiff Azania Abebe is a former employee of Yum! Restaurant Services Group, LLC

(Dkt. #13 at p. 2). This case arises out of Abebe’s termination from his employment on June 15, 

2023 (Dkt. #1 at ¶ 8). On July 26, 2023, Abebe filed a Complaint against Yum! Restaurant Services 

Group, LLC and Yum! Brands, Inc. (collectively “Yum!”) (Dkt. #1). In his Complaint, Abebe 

asserts that Yum! discriminated against him during his employment by “subjecting him to 

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disparate terms and conditions in the workplace as compared to Caucasian employees” (Dkt. #1 

at ¶¶ 84–119). Abebe contends that, in response to that treatment, he filed internal complaints

alleging race and national origin discrimination (Dkt. #1 at ¶ 5). According to Abebe, Yum! 

terminated him in retaliation for filing his internal complaints (Dkt. #1 at ¶ 6). Abebe brings claims 

for race and national origin discrimination and retaliation under 42 U.S.C. § 1981, Title VII, and 

Texas Labor Code Chapter 21 (Dkt. #1 at ¶ 10).

The present dispute, however, concerns the validity of an arbitration agreement that Abebe 

allegedly executed with Yum! on October 15, 2015 (Dkt. #13 at p. 2). Yum! insists that the 

agreement is valid and, thus, Abebe is required to pursue his claims through arbitration (Dkt. #13 

at p. 2). Therefore, in lieu of filing an answer, Yum! filed a Motion to Compel Arbitration on 

September 12, 2023 (Dkt. #13). To date, Yum! has not answered Abebe’s Complaint. While the 

Motion to Compel was pending, on November 17, 2023, the Court granted a Joint Motion to Stay 

Obligations of Fed. R. Civ. P. 26 Pending a Ruling on Defendants’ Motion to Compel Arbitration 

(Dkt. #40). On August 21, 2024, the Court entered an Order denying Yum!’s Motion to Compel 

Arbitration and ordering arbitral discovery and a jury trial regarding the validity of the arbitration 

agreement (Dkt. #46).

Separately, on October 14, 2024, Abebe filed his Motion for Leave to Amend Complaint

(Dkt. #52). Abebe seeks to amend his Original Complaint to “add the factual allegation[s] and legal 

claims arising from” a second charge of discrimination that he filed with the Equal Employment 

Opportunity Commission (“EEOC”) (Dkt. #52 at p. 2). Abebe informed the Court of the 

pendency of the second EEOC charge in his Original Complaint (Dkt. #1 at ¶¶ 9, 82). On October 

28, 2024, Yum! filed a Response in Opposition to Abebe’s Motion to Amend Complaint (Dkt.

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#54). On November 4, 2024, Abebe filed his Reply (Dkt. #55). The Court has not yet entered a 

Scheduling Order setting the deadline for the parties’ final amended pleadings.

LEGAL STANDARD

“When a trial court imposes a scheduling order, Federal Rules of Civil Procedure 15 and 

16 operate together to govern the amendment of pleadings.” Tex. Indigenous Council v. Simpkins, 

544 F. App’x. 418, 420 (5th Cir. 2013). Rule 15(a) governs a party’s request to amend its pleading 

before a scheduling order’s deadline to amend passes. See id. Rule 16(b)(4) governs a party’s 

request to amend its pleading after the deadline to amend passes. Sapp v. Mem’l Hermann 

Healthcare Sys., 406 F. App’x. 866, 868 (5th Cir. 2010) (citing S&W Enters., L.L.C. v. SouthTrust 

Bank of Ala., NA, 315 F.3d 533, 536 (5th Cir. 2003)). 

Rule 15(a) provides that a party may amend its pleading once without seeking leave of court 

or the consent of the adverse party at any time before a responsive pleading is served. FED.R.CIV.

P. 15(a).After a responsive pleading is served, “a party may amend only with the opposing party’s 

written consent or the court’s leave.” Id. Rule 15(a) instructs the Court to “freely give leave when 

justice so requires.” Id. The rule “‘evinces a bias in favor of granting leave to amend.’” Jones v. 

Robinson Prop. Grp., L.P., 427 F.3d 987, 994 (5th Cir. 2005) (quoting Lyn–Lea Travel Corp. v. Am. 

Airlines, Inc., 283 F.3d 282, 286 (5th Cir. 2002)). But leave to amend “is not automatic.” 

Matagorda Ventures, Inc. v. Travelers Lloyds Ins. Co., 203 F. Supp. 2d 704, 718 (S.D. Tex. 2000) 

(citing Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 598 (5th Cir. 1981)). Whether to grant leave 

to amend “lies within the sound discretion of the district court.” Little v. Liquid Air Corp., 952 

F.2d 841, 845–46 (5th Cir. 1992). A district court reviewing a motion to amend pleadings under 

Rule 15(a) considers five factors: (1) undue delay; (2) bad faith or dilatory motive; (3) repeated 

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failure to cure deficiencies by previous amendments; (4) undue prejudice to the opposing party; 

and (5) futility of amendment. Smith v. EMC, 393 F.3d 590, 595 (5th Cir. 2004) (citing Foman v. 

Davis, 371 U.S. 178, 182 (1962)).

Rule 16(b)(4) provides that a scheduling order issued by the Court “may be modified only 

for good cause and with the judge’s consent.” See Agredano v. State Farm Lloyds, No. 5:15-CV1067-DAE, 2017 WL 5203046, at *1 (W.D. Tex. July 26, 2017) (citing E.E.O.C. v. Serv. Temps Inc., 

679 F.3d 323, 333–34 (5th Cir. 2012) (“a party seeking leave to amend its pleadings after a deadline 

has passed must demonstrate good cause for needing an extension.”)). “The good cause standard 

requires the ‘party seeking relief to show that the deadlines cannot reasonably be met despite the 

diligence of the party needing the extension.’” S&W Enters., L.L.C., 315 F.3d at 535 (quoting 6A

CHARLES ALAN WRIGHT & ARTHUR R.MILLER,FEDERAL PRACTICE AND PROCEDURE § 1522.1 (2d

ed. 1990)). In determining whether good cause exists, courts consider a four-part test: “(1) the 

explanation for the failure to [timely move for leave to amend]; (2) the importance of the 

[amendment]; (3) potential prejudice in allowing the [amendment]; and (4) the availability of a 

continuance to cure such prejudice.” Id. (quoting Reliance Ins. Co. v. La. Land & Expl.Co., 110 F.3d 

253, 257 (5th Cir. 1997)). Only after the movant demonstrates good cause under Rule 16(b)(4) does 

“the more liberal standard of Rule 15(a)” apply to a party’s request for leave to amend. Id.

ANALYSIS

The procedural history of this case that prompted the Motion at baris complex. In deciding 

the instant Motion, the Court must answer two questions. First, the Court must determine 

whether a plaintiff may amend its complaint after a defendant moves to compel arbitration instead 

of filing an answer. Second, the Court must assess whether its previous Order that a jury should 

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determine the validity of an arbitration agreement constitutes a decision on the merits triggering 

other litigation deadlines. The Court analyzes both issues in turn. In short, as Section I 

demonstrates, the answer to the first question posed is yes. See infra Section I. As set forth in 

Section II, the answer to the latter question is no. See infra Section II. 

I. Motion for Leave to Amend Complaint

Abebe requests leave to amend his Complaint “to add the facts and legal allegations 

relevant to his second Charge of Discrimination” after exhausting his administrative remedies with 

the EEOC (Dkt. # 52 at p. 3). Abebe contends that leave is proper because none of the Smith factors 

justify denial of leave (Dkt. #52 at p. 4). While the Court agrees that Abebe can properly amend 

his Complaint, the Court need not address the Smith factors because the Federal Rules of Civil 

Procedure do not require Abebe to seek leave in the first place.

In his Original Complaint, Abebe notified the Court that he had brought a second charge of 

discrimination that was pending before the EEOC (Dkt. #1 at ¶ 82). In doing so, he informed the 

Court that he would ask for the right to sue on the second charge after the EEOC issued its decision

(Dkt. #1 at ¶ 82). The EEOC issued a Dismissal and Notice of Rights on September 13, 2024, 

giving Abebe ninety days from that date to sue on the claims related to the second charge (Dkt. 

#52-2). Noncompliance with the ninety-day requirement forfeits the right to sue based on the 

charge (Dkt. #52-2). Accordingly, Abebe filed this Motion on October 14, 2024—well within the 

ninety-day period required by the EEOC (Dkt. #52-2).

Yum! challenges Abebe’s ability to amend his Complaint by repeating the same arguments 

it made in its Motion to Compel Arbitration (Dkt. #13; Dkt. #54). Namely, Yum! argues that it 

“must oppose the addition of any new claims covered by the parties’ Arbitration Agreement”

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(Dkt. #54 at p. 2). Whether this matter properly belongs in arbitration is a question for another day.

It is also not a question for the Court, but one for the jury (Dkt. #46 at p. 16) (ordering a jury trial 

on the validity of the arbitration agreement). But if the Court denies Abebe leave to amend on that 

basis, he will have no other choice than to file a second lawsuit on the second discrimination claim 

before the ninety-day deadline expires (See Dkt. #55 at p. 2). In turn, Yum! would undoubtedly 

respond to that later-filed lawsuit with another motion to compel arbitration, forcing the Court to 

order a second jury trial on the validity of the arbitration agreement. Thus, vast judicial resources 

and litigation expenses would be spent just to return the parties to the same position in which they 

now find themselves. And if the sixteen months that this case has been pending without any 

progress are any indication, those expenses would be substantial. The Court declines to delay this 

case any longer by requiring Abebe to file a separate lawsuit on his second discrimination claim.

Because the Court has not entered a Scheduling Order to govern the applicable deadlines

in this action, Abebe’s amendment is governed by Rule 15(a). See Tex. Indigenous Council, 544 F. 

App’x. at 420. Rule 15(a) permits a party to freely amend once without leave of court at any time 

before a responsive pleading is served. FED. R. CIV. P. 15(a). Here, Yum! elected to file a motion 

to compel arbitration instead of answering Abebe’s complaint (Dkt. #13). “The Federal Rules 

make clear, however, that [a] Motion to Compel Arbitration does not constitute a responsive 

pleading for purposes of Rule 15(a).” Stockade Cos., LLC v. Kelly Rest. Grp., LLC, No. 1:17-CV143-RP, 2017 WL 2635285, at *1 (W.D. Tex. June 19, 2017) (internal citations omitted). Indeed, 

“a motion is not a ‘pleading’ as defined in Rule 7.” FED.R.CIV. P. 15 Cmte. Notes. Consequently, 

Abebe can freely amend without leave of Court because Yum! has not yet responded to his Original 

Complaint.

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II. Motion for Clarification

Following the Court’s Order denying Yum!’s Motion to Compel Arbitration (Dkt. #46), 

Yum! requests clarification on the following three issues:

(1) Whether the Court’s Order Denying Yum!’s Motion to Compel Arbitration

(Dkt. #46) constituted a judgment on the merits;

(2) Whether Yum! is required to file a responsive pleading under Federal Rule of 

Civil Procedure 12;

(3) Whether the Court’s Order Denying Yum!’s Motion to Compel Arbitration 

(Dkt. #46) triggered the deadlines outlined in the Court’s previous Order (Dkt. 

#40) as they relate to Abebe’s substantive allegations.

(Dkt. #48 at pp. 5–6).

A. Did the Court deny Yum!’s Motion to Compel Arbitration on the merits?

Yum!’s first question should need no clarification as its answer is readily apparent from the 

Court’s prior Order (See Dkt. #46). But Defendant sought clarification from the Court, and for its 

convenience, the Court will clarify and can do so easily. The Court denied Yum!’s Motion to 

Compel Arbitration because “Abebe has raised a genuine issue of material fact as to the validity of 

the Arbitration Agreement” (Dkt. #46 at p. 14). In doing so, the Court ordered a jury trial on the

issue of whether the arbitration agreement is valid (Dkt. #46 at pp. 14–16). Thus, the Court has yet 

to (and will not) reach the merits. The jury will decide the merits, not the Court.

B. Is Yum! required to file a responsive pleading?

Yum!’s second request for clarification requires more analysis. The issue is whether the 

Court’s denial of Yum!’s Motion to Compel Arbitration (Dkt. #46) requires Yum! to file a 

responsive pleading (Dkt. #48 at pp. 5–6). The answer is no. 

The right to arbitrate a dispute is subject to waiver. Nicholas v. KBR, Inc., 565 F.3d 904, 

907–08 (5th Cir. 2009) (citing Miller Brewing Co. v. Fort Worth Distrib. Co., 781 F.2d 494, 497 (5th 

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Cir. 1986)). Though courts generally presume that a party has not waived its right to arbitrate a 

dispute, “[w]aiver will be found when the party seeking arbitration substantially invokes the 

judicial process to the detriment or prejudice of the other party.” Miller, 781 F.2d at 497. A party 

may waive their right to arbitrate when it takes “some overt act in Court that evinces a desire to 

resolve the arbitrable dispute through litigation rather than arbitration.” Gulf Guar. Life Ins. Co. v. 

Conn. Gen. Life Ins. Co., 304 F.3d 476, 484 (5th Cir. 2002).

Out of a well-founded concern that it might take some “overt act” that would indicate an 

intent to “substantially invoke the judicial process to the detriment or prejudice of [Abebe]” and 

thereby waive its right to arbitrate, Yum! seeks to avoid filing an answer (See Dkt. #48 at pp. 4–5). 

At least, it wishes to avoid answering unless and until the jury returns a verdict on the validity of 

the arbitration agreement(See Dkt. #48 at pp. 4–5). That position makes sense, as most courts hold 

that filing an answer constitutes a waiver because, by answering, a party avails itself of the litigation 

process. See, e.g., HTC Corp v. Telefonaktiebolaget LM Ericsson, No. 6:18-CV-00243-JRG, 2019 WL 

277479, at *3 (E.D. Tex. Jan. 22, 2019) (citing Janvey v. Alguire, 847 F.3d 231, 243 (5th Cir. 2017)

(noting that “invoking the judicial process” includes “filing an answer and counterclaims”)). 

Thus, Yum!’s position is rooted in precedent, and its point is well-taken. But Yum! has preserved 

its right to arbitrate by filing a motion to compel arbitration and, based on its conduct thus far, the 

Court does not believe that Yum! has waived its right to arbitrate. Accordingly, the Court agrees 

with Yum!’s position and concludes that it need not file an answer at this stage. 

Any other conclusion also does not make logical sense and would erode the utility of 

alternative dispute resolution, which federal courts encourage. “One of the primary goals of 

arbitration is to avoid the expense of litigation.” Nicholas, 565 F.3d at 907 (citing Price v. Drexel 

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Burnham Lambert, Inc., 791 F.2d 1156, 1158 (5th Cir. 1986)). Requiring Yum! to file a responsive 

pleading at this stage—before determining whether the case needs to be litigated at all—would 

undermine that goal. It does not follow for the Court to put the proverbial cart before the horse by 

requiring Yum! to engage in the merits of the litigation until the jury determines the validity of the 

arbitration agreement. Hence, Yum! need not file a responsive pleading unless and until the jury

determines that the arbitration agreement is invalid.

C. Have the deadlines outlined in the Court’s order staying obligations of Fed. R. 

Civ. P. 26 (Dkt. #40) been triggered?

Finally, Yum! asks the Court to clarify how the Court’s Order denying Yum!’s Motion to 

Compel Arbitration (Dkt. #46) affects the deadlines outlined in the Court’s Order Granting Joint 

Motion to Stay Obligations of Fed. R. Civ. P. 26 Pending a Ruling on Defendants’ Motion to 

Compel Arbitration (Dkt. #40). In its Order, the Court set the following deadlines to apply in the 

event Yum!’s Motion to Compel Arbitration was denied:

• Rule 26(f) Conference: To be held within 21 days of the Court’s Order;

• Filing of the Proposed Discovery Plan: Within 14 days of the Rule 26(f) 

Conference;

• Initial Disclosures: Within 14 days of the Rule 26(f) Conference.

(Dkt. #40).

Yum! maintains that the foregoing deadlines “are not triggered unless and until the Court 

denies Yum!’s resubmitted Motion to Compel Arbitration [] on the merits,” following the jury trial 

on the validity of the arbitration agreement (Dkt. #48 at p. 5) (emphasis added). The Court agrees.

As explained in the previous Section, see supra Section II.B, the Court has not addressed the merits 

of Yum!’s Motion to Compel Arbitration. Indeed, the Court determined that question is properly 

resolved by a jury trial (See Dkt. #46). Accordingly, just as the Court made Yum!’s obligation to 

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answer Abebe’s Complaint contingent on a jury finding that the arbitration agreement is invalid, 

the Court will do the same with these deadlines. Thus, in the event that the jury determines that 

the arbitration agreement is unenforceable, the following deadlines apply:

• Rule 26(f) Conference: To be held within 21 days of the Court’s entry of 

judgment on the jury’s verdict regarding the validity of the arbitration 

agreement;

• Filing of the Proposed Discovery Plan: Within 14 days of the Rule 26(f) 

Conference;

• Initial Disclosures: Within 14 days of the Rule 26(f) Conference.

Any deadlines the Court previously ordered the parties to comply with remain unaltered by this 

Order. This Order only concerns the foregoing deadlines. 

CONCLUSION

Abebe’s Motion for Leave to Amend Complaint (Dkt. #52) is DENIED to the extent it 

seeks leave of Court, because leave is not necessary. Rule 15(a)(1)(B) permitted Abebe to freely 

amend his Complaint without seeking leave of Court. Therefore, Abebe’s First Amended 

Complaint (Dkt. #53) is deemed filed.

Additionally, Defendants’ Motion for Clarification on its Deadline for Filing its Responsive 

Pleading and Deadlines for Fed. R. Civ. P. Obligations (Dkt. #48) is GRANTED. The Court 

orders that, should the jury return a verdict that the arbitration agreement is not enforceable, the 

above-referenced deadlines shall apply.

IT IS SO ORDERED.

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