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Hudgins v. Total Quality Logistics LLC

United States District Court, N.D. Illinois, Eastern Division

February 8, 2017

BRIAN HUDGINS and JONATHAN RONDENO, on their own behalf and on behalf of those similarly situated, Plaintiffs,
v.
TOTAL QUALITY LOGISTICS, LLC Defendant.

          MEMORANDUM OPINION AND ORDER

          MATTHEW F. KENNELLY United States District Judge.

         In this decision, the Court considers issues left open in its previous order, Hudgins v. Total Quality Logistics, LLC, No. 16 C 7331, 2016 WL 7426135 (N.D. Ill.Dec. 23, 2016). The Court assumes familiarity with the factual and procedural background set out in that order.

         In brief summary, Brian Hudgins and Jonathan Rondeno are two former employees of Total Quality Logistics, Inc. (TQL) who have filed a class action complaint alleging that TQL failed to pay them overtime in violation of the Fair Labor Standards Act (FLSA). Plaintiffs moved for conditional certification of two classes and asked the Court to authorize giving notice to potential class members. At the time of that motion, twenty-six additional former TQL employees had joined as plaintiffs. TQL then moved to compel arbitration of the claims brought by nine of these plaintiffs.

         The Court conditionally certified plaintiffs' class and authorized notice to potential class members. See generally id. The Court also ordered supplemental briefing by both parties on TQL's motion to compel arbitration. In a status conference on January 5, 2017, the Court requested additional briefing regarding whether it should send notice only to those potential class members who have not signed arbitration agreements. Since the Court's approval of conditional certification of the classes, over forty-five more former TQL employees have joined as plaintiffs. Because these employees were not named plaintiffs at the time that the parties briefed the motion to compel arbitration, their claims are unaffected by the ruling in this order.

         For the reasons stated below, the Court strikes the class action waiver found in the arbitration agreements of nine plaintiffs and grants TQL's request to dismiss their claims. The Court also concludes that the authorization to send notice extends only to those members of the previously approved classes who have not signed arbitration agreements with TQL.

         Discussion

         I. Motion to compel

         TQL moved to compel arbitration for nine of the plaintiffs who joined this action. In its previous order, the Court held that a court-and not an arbitrator-had the authority to rule on the enforceability of the arbitration agreements. Id. at *7. The Court also ruled, however, that even if it determined that the arbitration agreements were unenforceable, it lacked the authority to compel arbitration because all of the arbitration agreements at issue provided for arbitration outside of this district. The Court therefore requested supplemental briefing on three issues:

1. Whether the arbitration agreements are enforceable;
2. If the agreements are enforceable, what courses of action-including dismissal-are available to the Court, and which should the Court select?
3a. If the Court determines to dismiss the claims, does it have the authority to rule on the validity of the class action waiver contained in the arbitration agreements?
3b. If the Court determines to stay the claims, does it have the authority to rule on the validity of the class action waiver contained in the arbitration agreements?

Id. at *8. The Court now concludes that 1) it has the authority to rule on the enforceability of the nine plaintiffs' arbitration agreements, including the class action waivers; 2) the class action waivers are invalid as a matter of law; and 3) the class action waivers must be stricken from the arbitration ...


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