Court Opinion

ID: 4120880
Source: CourtListenerOpinion
Date Created: 2017-01-30 18:00:42.227835+00
Date Added: 2024-06-11T07:46:20.844610
License: Public Domain

NOT PRECEDENTIAL

                        UNITED STATES COURT OF APPEALS
                             FOR THE THIRD CIRCUIT
                                  _____________

                                       No. 15-4001
                                      _____________

    DAVID OPALINSKI; JAMES MCCABE, on behalf of themselves and all others
                           similarly situated,

                                                   Appellants

                                             v.

     ROBERT HALF INTERNATIONAL INC; ROBERT HALF CORPORATION;
                       STEPHEN SONNENBERG
                           _____________

     On Appeal from the United States District Court for the District of New Jersey
                       (D.C. Civil Action No. 2-10-cv-02069)
                    District Judge: Honorable Madeline C. Arleo
                                  ______________

                      Submitted under Third Circuit L.A.R. 34.1(a)
                                  September 15, 2016

      Before: CHAGARES, GREENAWAY, JR., and RESTREPO, Circuit Judges.

                                 (Filed: January 30, 2017)

                                     ______________

                                        OPINION *
                                     ______________

       *
        This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7,
does not constitute binding precedent.
RESTREPO, Circuit Judge.

       Plaintiffs David Opalinski and James McCabe challenge the District Court’s

dismissal of their collective action complaint brought pursuant to the Fair Labor

Standards Act. We agree with the District Court’s finding that Plaintiffs’ employment

agreements do not provide for class 1 arbitration, and, therefore, we will affirm.

                                              I

       Defendants Robert Half International, Inc. and Robert Half Corp. (“Defendants”)

are collectively an international staffing agency that employs managers who sell job

placement services. Plaintiffs David Opalinski and James McCabe (“Plaintiffs”) are two

former staffing managers who worked for Defendants in New Jersey. Plaintiffs filed

their original lawsuit against Defendants in the District of New Jersey in 2010, claiming

that Defendants misclassified them as overtime-exempt employees in violation of the Fair

Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., and that they should be

classified as non-exempt employees entitled to overtime pay. Plaintiffs sought to pursue

individual claims as well as collective action claims on behalf of thousands of Robert

Half staffing managers.

       Plaintiffs had signed employment agreements with Defendants, which contained

arbitration clauses. McCabe’s agreement, which he signed in August 2001, provided in

relevant part:

       1
         The term “class,” as used throughout this opinion and the parties’ briefing, is
intended to encompass groups of plaintiffs organized as either class actions or collective
actions.
                                              2
              Any dispute or claim arising out of or relating to Employee’s
              employment, termination of employment or any provision of
              this Agreement, whether based on contract or tort or
              otherwise (except for any dispute involving alleged breach of
              the obligations contained in Sections 8, 9, 10, 11, or 13
              hereof) shall be submitted to arbitration pursuant to the
              commercial arbitration rules of the American Arbitration
              Association.

JA89. Opalinski’s agreement, which he signed in February 2002, provided in relevant

part:

              Employer and Employee agree that, to the fullest extent
              permitted by law, any dispute or claim arising out of or
              relating to Employee’s employment, termination of
              employment or any provision of this Agreement, whether
              based on contract or tort or otherwise (except for any dispute
              involving alleged breach of the obligations contained in
              Sections 8, 9, 10, 11 or 13 hereof) shall be submitted to
              arbitration pursuant to the commercial arbitration rules of the
              American Arbitration Association. Claims subject to
              arbitration shall include contract claims, tort claims, or claims
              related to compensation, as well as claims based on any
              federal, state or local law, statute, or regulation, including but
              not limited to claims arising under the Age Discrimination in
              Employment Act, Title VII of the Civil Rights Act of 1964,
              The Americans with Disabilities Act, the California Fair
              Employment and Housing Act (for California Employees),
              and comparable equal opportunity statutes for employees in
              other states. However, claims for unemployment
              compensation, workers’ compensation, and claims under the
              National Labor Relations Act shall not be subject to
              arbitration.

JA81.

        After filing an Answer to the Complaint in May 2010, Defendants moved the

District Court in July 2011 to compel arbitration, pursuant to the arbitration clauses

above, and dismiss the case. In their motion, Defendants asked the District Court to

                                              3
compel arbitration on an individual basis. The District Court granted the motion in part,

compelling arbitration and dismissing the case, but not compelling individual arbitrations.

Instead, the District Court held that the arbitrator, rather than the court, should be the one

to decide whether the case would proceed on an individual or class basis, because the

parties’ agreements did not expressly address the issue. Plaintiffs then filed a Demand

for Arbitration with the American Arbitration Association.

       The assigned arbitrator first considered the threshold issue of whether the parties’

employment agreements authorized class arbitration, and concluded in May 2012 that

they did. In June 2012, Defendants moved the District Court, pursuant to the Federal

Arbitration Act (“FAA”), 9 U.S.C. § 10(a)(4), to vacate the arbitrator’s decision. 2 In

December 2012, the District Court denied the motion to vacate. Defendants timely

appealed that denial to this Court.

       In July 2014, this Court held in a precedential opinion that the availability of class

arbitration was an issue for the court, rather than an arbitrator, to decide. A petition for

rehearing en banc was denied, as was a petition for certiorari with the Supreme Court. So

the case was remanded back to the District Court for a determination of whether the

parties’ employment agreements authorized class arbitration.

       After the case was remanded, Defendants moved the District Court to dismiss the

action on the grounds that the agreements did not authorize class arbitration. In

       2
          The FAA provides that upon a party’s motion, a district court situated in the
district where an arbitration award was made “may make an order vacating the award” if
it finds that an arbitrator “exceeded [his or her] powers.” 9 U.S.C. § 10(a)(4).

                                              4
November 2015, the District Court granted Defendants’ motion with prejudice, deciding

that the agreements did not allow Plaintiffs to arbitrate their claims on a class-wide basis.

Plaintiffs then filed this timely appeal.

       The District Court had jurisdiction pursuant to 28 U.S.C. § 1331. This Court has

jurisdiction over the District Court’s final decision pursuant to 9 U.S.C. § 16, because it

concerned an arbitration that is subject to the FAA. See Green Tree Fin. Corp.-Ala. v.

Randolph, 531 U.S. 79, 86 (2000). “We exercise plenary review over questions

regarding the . . . enforceability of an agreement to arbitrate” and over the District

Court’s legal determinations regarding arbitrability. Quilloin v. Tenet HealthSystem

Philadelphia, Inc., 673 F.3d 221, 228 (3d Cir. 2012).

                                              II

       Plaintiffs present two issues on appeal: (A) whether the availability of class

arbitration is for the court or the arbitrator to decide; and (B) whether the District Court

erred in determining that the parties’ agreements do not permit class arbitration. We

address each in turn below.

                                              A

       As to the first issue, this Court has already explicitly decided, in a precedential

opinion in this same case, that the question of arbitrability of class claims is for the court,

not the arbitrator, to decide. Opalinski v. Robert Half Int’l Inc., 761 F.3d 326, 335–36

(3d Cir. 2014), cert. denied, 135 S. Ct. 1530 (2015). We cannot revisit this issue,

consistent with our well-established Internal Operating Procedures, which prohibit a

                                               5
panel of this Court from overruling an earlier binding panel decision. See Third Circuit

Internal Operating Procedure 9.1. 3

                                              B

       Turning to the second issue – whether the parties’ agreements permit class

arbitration – the Supreme Court has made clear that “a party may not be compelled . . . to

submit to class arbitration unless there is a contractual basis for concluding that the party

agreed to do so.” Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 684

(2010). The parties do not dispute that the employment agreements at issue here were

“silent” as to class arbitration. Instead, the parties’ dispute centers on whether,

notwithstanding this “silence,” the arbitration clauses can still be read to “agree” to class

arbitration.

       Defendants argue that where there is no explicit mention of class arbitration in an

employment contract, courts typically hold that there has been no agreement to class

arbitration. Indeed, Defendants find support for their argument in Quilloin, in which this

Court noted that “[s]ilence regarding class arbitration generally indicates a prohibition.”
673 F.3d at 232. Several other Circuits, including the Fifth, Sixth, Seventh, Eighth, and

Ninth, have likewise stated that “silence” in an agreement regarding class arbitration

generally indicates that it is not authorized by the agreement. See, e.g., Eshagh v.

Terminix Int’l Co., 588 F. App’x 703, 704 (9th Cir. 2014) (affirming the district court’s

       3
        “It is the tradition of this court that the holding of a panel in a precedential
opinion is binding on subsequent panels. Thus, no subsequent panel overrules the
holding in a precedential opinion of a previous panel. Court en banc consideration is
required to do so.” Third Circuit Internal Operating Procedure 9.1.

                                              6
grant of a motion to strike class allegations, where the arbitration agreement did not

mention class arbitration); Reed Elsevier, Inc. ex rel. LexisNexis Div. v. Crockett, 734
F.3d 594, 599 (6th Cir. 2013) (“The principal reason to conclude that this arbitration

clause does not authorize classwide arbitration is that the clause nowhere mentions it.”);

Reed v. Fla. Metro. Univ., Inc., 681 F.3d 630, 643−44 (5th Cir. 2012) (finding that

silence in an agreement does not “constitute[] consent to class arbitration” (internal

quotation marks omitted)), abrogated on other grounds by Oxford Health Plans LLC v.

Sutter, 133 S. Ct. 2064 (2013); Dominium Austin Partners, L.L.C. v. Emerson, 248 F.3d
720, 728−29 (8th Cir. 2001) (holding that the district court did not err by compelling

individual, rather than class, arbitration because the relevant agreements were silent as to

class arbitration); Champ v. Siegel Trading Co., 55 F.3d 269, 275 (7th Cir. 1995) (stating

“the FAA forbids federal judges from ordering class arbitration where the parties’

arbitration agreement is silent on the matter”).

       Plaintiffs contend, however, that the absence of explicit language authorizing class

arbitration in an employment agreement is not fatal to class claims, because authorization

can be implicit in nature. Put differently, if an arbitration clause reflects the parties’

intent to agree to class arbitration, then it should be permitted, even where class

arbitration is not explicitly mentioned anywhere in the contract. According to Plaintiffs,

                                               7
this implicit authorization can be found in their employment agreements by applying

New Jersey contract law, which follows the ordinary rules of contract interpretation. 4

       The District Court agreed with Defendants that the absence of any explicit

mention of class arbitration in the employment agreements weighed against a finding that

it was authorized by the agreements. The District Court then went on to consider whether

consent to class arbitration could be inferred from the agreements, in the absence of

express authorization, and found that it could not. We agree with the reasoned decision

of the District Court. Even assuming arguendo that class arbitration may be permitted

without express authorization in an arbitration clause, Plaintiffs have set forth nothing

suggestive of any implicit intent to permit class arbitration here.

       Plaintiffs offer several textual arguments in support of their position that their

agreements reflect the parties’ intent to arbitrate class claims. First, Plaintiffs argue that

the clause “‘[a]ny dispute or claim arising out of or relating to Employee’s employment’

shall be submitted to binding arbitration” is intentionally broad and designed to

encompass class or collective actions. Br. of Appellants 19 (quoting JA81, 89). But

Plaintiffs’ argument misses a critical point: the agreement specifies that the dispute or

claim must arise out of or relate to the particular employee’s employment, not any

employee’s employment. Further, the Supreme Court was clear in Stolt-Nielsen that

“[a]n implicit agreement to authorize class-action arbitration” cannot be inferred “solely

       4
        Plaintiffs do not argue that either federal law or New Jersey law contains a
“default” class arbitration rule to be applied in the absence of an agreement. See Stolt-
Nielsen, 559 U.S. at 676−77.

                                               8
from the fact of the parties’ agreement to arbitrate.” Stolt-Nielsen, 559 U.S. at 685; see

also Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064, 2071−72 (2013) (Alito, J.,

concurring) (suggesting, without deciding, that an arbitrator had “improperly inferred

‘[a]n implicit agreement to authorize class-action arbitration’” from an agreement’s “any

dispute” language, which was nothing more than “the parties’ agreement to arbitrate”

(quoting Stolt-Nielson, 559 U.S. at 685)). On its face, the “any dispute” language in

Plaintiffs’ agreements shows only the parties’ general intent to arbitrate their disputes.

We cannot infer an intent to arbitrate class claims on this basis.

       Second, Plaintiffs point to the following language in Mr. Opalinski’s agreement as

evidence of an intent to arbitrate class claims:

              [C]laims related to compensation, as well as claims based on
              any federal, state or local law, statute, or regulation, including
              but not limited to claims arising under the Age Discrimination
              in Employment Act, Title VII of the Civil Rights Act of 1964,
              The Americans with Disabilities Act, the California Fair
              Employment and Housing Act (for California employees),
              and comparable equal opportunity statutes for employees in
              other states.

Br. of Appellants 21 (quoting JA81). Plaintiffs argue that because all of the specific

statutes listed in this sentence allow for class litigation, and litigants often bring class

claims under these statutes, the inclusion of this sentence suggests that the parties

intended to permit class arbitration. We find this argument unavailing. The statutes

listed – like many statutes and common law causes of action – allow for both class and

individual claims, so the agreement’s reference to them sheds no more light on the

                                               9
parties’ intent to arbitrate class claims than the “any dispute” language discussed above. 5

Likewise, the exclusion of certain other substantive claims – which presumably could

take the form of individual or class claims – from the arbitration requirement adds

nothing to our understanding of the parties’ intent to allow class arbitration. 6

       We are equally unpersuaded by Plaintiffs’ remaining arguments. Plaintiffs

contend that the agreements incorporated the American Arbitration Association (“AAA”)

rules, and a supplement to the rules provides that the AAA will administer class

arbitrations; therefore, according to Plaintiffs, the agreements contemplate class

arbitration. But these rules did not exist in 2001 and 2002, when the parties signed the

employment agreements, so they cannot be used as evidence of the parties’ intent. For

the same reason, evidence that class arbitration was customary after 2003 in the context

       5
        It is likely that the parties referenced these “equal opportunity statutes” by name
because certain jurisdictions will not uphold an agreement to arbitrate statutory
employment discrimination claims unless they are specifically and unambiguously
included in an arbitration clause. See, e.g., Garfinkel v. Morristown Obstetrics &
Gynecology Assoc., 773 A.2d 665, 672 (N.J. 2001) (stating that New Jersey courts should
“not assume that employees intend to waive [their rights to sue under the New Jersey
Law Against Discrimination] unless their agreements so provide in unambiguous terms”).
       6
         The arbitration clauses in both agreements specify that “any dispute or claim
arising out of or relating to Employee’s employment” shall be submitted to arbitration . .
. (except for any dispute involving alleged breach of the obligations contained in Sections
8, 9, 10, 11 or 13 hereof).” JA81, 89 (emphasis added). The “Sections” noted refer to a
confidentiality clause, a non-compete clause, internal and external non-solicitation
clauses, and a clause pertaining to the post-termination use of the employer’s name. Mr.
Opalinski’s employment agreement also states that claims for unemployment
compensation, worker’s compensation, and claims under the National Labor Relations
Act were exempt from the arbitration requirement. JA81. At least some of these claims
may be expressly excluded from the arbitration requirement because they cannot be
arbitrated as a matter of law in many jurisdictions. See, e.g., N.J. Stat. Ann. § 34:15-49
(giving the Division of Worker’s Compensation “exclusive original jurisdiction [over] all
claims for worker’s compensation benefits”).
                                              10
of wage claims is irrelevant to the parties’ intent here. See Stolt-Nielsen, 559 U.S. at 673

n.4 (suggesting that class arbitration was uncommon before 2003, when the AAA

adopted its Class Rules).

       Plaintiffs contend next that under New Jersey law, the rule of contra proferentem

dictates that ambiguous terms of adhesion contracts, like the employment agreements,

should be construed against the drafter. But as Defendants point out, this doctrine of

contract interpretation should only be employed as a “last resort,” after a court has

already examined the contract’s terms, exhausted other accepted methods of contract

construction, and it still cannot determine the meaning of an ambiguous term. See

Pacifico v. Pacifico, 920 A.2d 73, 78 (N.J. 2007). That is not the case here, where there

is no textual support in the employment agreements for Plaintiffs’ suggested

interpretation and there is ample case law suggesting class arbitration is inappropriate in

these circumstances.

       Finally, Plaintiffs urge this Court to hold that class action waivers in arbitration

agreements, which have the effect of barring class actions, are unconscionable and

invalid under New Jersey law and the National Labor Relations Act. Plaintiffs did not

raise these arguments before the District Court, so they have waived the opportunity to

raise them on appeal. 7 Birdman v. Office of the Governor, 677 F.3d 167, 173 (3d Cir.

2012) (“It is axiomatic that ‘arguments asserted for the first time on appeal are deemed to

       7
        We cannot agree with Plaintiffs’ suggestion that footnotes 3 and 4 of their
response brief to Defendants’ Motion to Vacate the arbitration award put the District
Court on notice of these arguments.
                                              11
be waived and consequently are not susceptible to review in this Court absent exceptional

circumstances.’” (quoting Tri-M Grp., LLC v. Sharp, 638 F.3d 406, 416 (3d Cir. 2011))).

                                                 III

       For the foregoing reasons, we will affirm the District Court’s dismissal of this

action with prejudice.

                                            12