Court Opinion

ID: 9407197
Source: CourtListenerOpinion
Date Created: 2023-07-06 00:00:40.656532+00
Date Added: 2024-06-11T17:20:35.841762
License: Public Domain

Case: 22-51018         Document: 00516809944            Page: 1      Date Filed: 07/05/2023

              United States Court of Appeals
                   for the Fifth Circuit
                                                                               United States Court of Appeals
                                                                                        Fifth Circuit
                                       No. 22-51018
                                     Summary Calendar                                 FILED
                                                                                   July 5, 2023
                                                Lyle W. Cayce
   John Lynch; Daxton Hartsfield; Shawn Sakhizada, Clerk

                                                                  Plaintiffs—Appellants,

                                             versus

   Tesla, Incorporated,

                                                                   Defendant—Appellee.

                      Appeal from the United States District Court
                           for the Western District of Texas
                              USDC No. 1:22-CV-597-RP

   Before Dennis, Elrod and Willett, Circuit Judges.
   Per Curiam:*
          Appellants John Lynch, Daxton Hartsfield, and Shawn Sakhizada
   (“Appellants”), former employees of Tesla, Inc. (“Tesla”), alleged that the
   company violated the Worker Adjustment and Retraining Notification
   (“WARN”) Act and its California analogue. After the magistrate court
   partially granted Appellants’ motion for a protective order requiring Tesla to

          *
              This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-51018      Document: 00516809944           Page: 2    Date Filed: 07/05/2023

                                     No. 22-10953

   issue notice of the lawsuit to potentially affected employees, the district court
   adopted the magistrate judge’s recommendation that this lawsuit be
   dismissed in favor of arbitration. Appellants now complain that the district
   court erred in dismissing the case prior to Tesla issuing notice to potential
   plaintiffs. Because the district court committed no error, we AFFIRM.
          Appellants allege that Tesla violated the WARN Act and its California
   analogue by failing to give 60-days’ notice to employees prior to terminating
   them as a part of a mass layoff and requiring employees who had been
   terminated to execute separation agreements fully releasing legal claims
   against Tesla. Tesla has arbitration agreements with all employees. Shortly
   after filing the present lawsuit, Appellants moved for a protective order and
   Tesla moved to dismiss to compel arbitration. The magistrate judge first
   granted Appellants’ motion in part, ordering Tesla to notify terminated
   employees “of the existence of [the] lawsuit.” Lynch v. Tesla, Inc., No. 1:22-
   CV-00597-RP, at *4 (W.D. Tex. Sept. 16, 2022). The magistrate court next
   recommended that the district court dismiss the lawsuit in favor of
   arbitration. Appellants did not object to the magistrate court’s
   recommendation, which the district court adopted. Appellants then filed a
   motion for reconsideration, arguing that the district court should have
   considered the magistrate judge’s intent to grant preliminary relief in the
   form of notice prior to dismissing the lawsuit. The district court denied the
   motion.
          Appellants argue that the district court erred in dismissing the lawsuit
   without first requiring Tesla to issue notice to all potential class members
   according to the magistrate’s judge’s order. Appellants’ challenges to the
   district court’s orders dismissing the lawsuit and denying the motion for
   reconsideration are reviewed for plain error. Longoria Next Friend of M.L. v.
   San Benito Indep. Consol. Sch. Dist., 942 F.3d 258, 270 (5th Cir. 2019);
   Martinez v. Crystal City Indep. Sch. Dist., 250 F.3d 744 (5th Cir. 2001).

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Case: 22-51018      Document: 00516809944           Page: 3    Date Filed: 07/05/2023

                                     No. 22-10953

   Appellants argue that their failure to object to the magistrate court’s
   recommendation is inconsequential because the district court should have
   considered the magistrate judge’s apparent intent to have Tesla issue notice
   to potential members in the class prior to dismissing the case. However, the
   district court was under no obligation to accept the magistrate judge’s
   proposed timeline for reviewing the motions pending in this case, especially
   since the magistrate judge’s recommendation for dismissal pertained to a
   dispositive motion where the magistrate court is limited to a
   recommendation, rather than an order. 28 U.S.C. § 636(b)(1)(B)
          Appellants also argue that it was improper for the district court to
   dismiss and compel arbitration because Tesla’s objection to the magistrate
   judge’s order to issue notice and emergency motion to stay the order were
   pending when the case was dismissed. Appellants rely on the Fifth Circuit’s
   assertion that dismissal in favor of arbitration is proper “when all of the
   issues raised in the district court must be submitted to arbitration.” Alford v.
   Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992) (citations
   omitted). However, Alford stands only for the general proposition that
   dismissal, rather than a stay, is proper when all issues of merit are arbitrable,
   not that a case cannot be dismissed to compel arbitration when there are
   objections or motions pending. Id. Here, the magistrate judge found that the
   entire case was subject to arbitration. The district court committed no error
   in adopting the magistrate judge’s recommendation prior to ruling on Tesla’s
   objection and emergency motion.
          AFFIRMED.

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