David Opalinski v. Robert Half International Inc , 677 F. App'x 738 ( 2017 )

NOT PRECEDENTIAL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.
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