RODGERS-ROUZIER v. AMERICAN QUEEN STEAMBOAT OPERATING COMPANY, LLC

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA

NEW ALBANY DIVISION

MARY RODGERS-ROUZIER, )

)

Plaintiff, )

)

v. ) No. 4:20-cv-00004-SEB-DML

)

AMERICAN QUEEN STEAMBOAT )

OPERATING COMPANY, LLC, et al. )

)

Defendants. )

ORDER DENYING PLAINTIFF'S MOTION FOR STEP ONE NOTICE

PURSUANT TO THE FAIR LABOR STANDARDS ACT

Now before the Court is Plaintiff's Motion for Step One Notice Pursuant to the

Fair Labor Standards Act [Dkt. 106] to which Defendants responded in opposition [Dkt.

117]. For the reasons set forth herein, Plaintiff's motion is DENIED WITHOUT

PREJUDICE.

I. Background

On June 8, 2020, Plaintiff Mary Rodgers-Rouzier, individually and on behalf of

those similarly situated, filed her Amended Complaint, alleging that Defendants violated

the Fair Labor Standards Act, 29 U.S.C. § 203 et seq. ("FLSA"), by failing to pay her for

the hours she worked in excess of forty per week. [Dkt. 1]. On June 30, 2020, Defendants

moved to dismiss Plaintiff's amended complaint and compel or refer Plaintiff's claims to

individual arbitration pursuant to the parties' arbitration employment agreement. [Dkt.

75]. Defendants assert that it has always been American Queen's policy and procedure to

require that all newly hired employees execute mutually binding arbitration agreements

which state, in pertinent part, that:

This Agreement and the applicability/construction of any arbitration

decision shall be governed by the Federal Arbitration Act. The provisions

of this Agreement shall be severable. If any portion of this Agreement is

held to be invalid or unenforceable, it shall not affect the remaining

portions of this Agreement. This Agreement may be modified by a court or

an arbitrator to render it enforceable.

[Dkt. 117-1 at 9]. 1 Defendants argued that the arbitration agreement mandated the

dismissal of Ms. Rodgers-Rouzier's claims under the Federal Arbitration Act ("FAA"),

but Ms. Rodger-Rouzier asserted that she qualified as a "seaman" under the FAA such

that she was exempt from the federal statute and may not be compelled to arbitrate her

claims.

We held that Ms. Rodgers-Rouzier qualifies a seaman for purposes of Section 1 of

the FAA and cannot be compelled to arbitrate under this statute. Dkt. 97 at 11.2 On

March 31, 2021, Ms. Rodgers-Rouzier moved for conditional certification of a proposed

1 As a result of the global Coronavirus pandemic, American Queen did not operate any of its

cruises between March 2020 and March 2021 but resumed limited operations in the spring of

2021. As a result, American Queen required that all employees being (re)hired execute an

arbitration agreement as a condition of employment which added a clarifying provision stating

that Indiana law will apply if the FAA is deemed not to apply. See dkt. 117 at 9–10.

2 In so ruling, we examined whether arbitration should be compelled under the FAA and we did

not consider Defendants' separate argument that Ms. Rodgers-Rouzier may be compelled to

arbitrate under state law if she is determined to be beyond the reach of the FAA because this

argument was not raised in Defendants' motion to dismiss or the corresponding briefing and was

addressed for the first time only in Defendants' subsequent request to submit additional authority.

See dkt. 97 at 11 n.6. Thus, our prior order focused on the narrow federal issue raised in

Defendants' motion to dismiss. However, Defendants' argument that the proposed collective

action members have signed arbitration agreements compelling arbitration under state law is now

properly before us.

collective and issue notice to the following group of "service employees," pursuant to 29

U.S.C. § 216(b):

All individuals who were paid a day rate and worked for American Queen

Steamboat Operating Company LLC and/or HMS Global Maritime LLC on

board the American Queen, the American Duchess, the American Empress,

or the American Countess at any time between March 30, 2017 and the

present in Service Employee job positions, including as housekeeping

attendants, laundry attendants, chefs, sous chefs, cooks, galley porters,

waiters, waiter assistants, bartenders, bar servers, relief bar managers, river

butlers, maître d's and other similar job positions. ("Putative Collective

Members").

[Dkt. 107 at 12]. In support of Plaintiff's motion for step one notice, twenty-five

employees (including Plaintiff) submitted declarations attesting to their shared status as

employees who were paid according to Defendants' day rate policy across river cruise

vessels and service employee job positions. Id. at 2. Defendants object to the conditional

certification and notice on the grounds that virtually all of its employees are subject to

mandatory arbitration agreements and, as a result, are contractually foreclosed from

participating in this lawsuit.

II. Analysis

As previously noted, we determined that Ms. Rodgers-Rouzier may not be

compelled to arbitrate under the FAA. However, that exemption of Ms. Rodgers-Rouzier

as an exempted "seaman" under the FAA does not preclude a determination that state law

may require Ms. Rodgers-Rouzier and other similarly situated employees to individually

arbitrate their claims pursuant to the parties' common arbitration agreements. See

Sherwood v. Marquette Transp. Co., LLC, 587 F.3d 841, 843 (7th Cir. 2009)

("[P]rovisions for alternative dispute resolution may be enforced as contracts under state

law, even if the provisions are outside the Federal Arbitration Act's scope.") (citing Omni

Tech Corp. v. MPC Sols. Sales, LLC, 432 F.3d 797 (7th Cir. 2005)). This is true "even

when the contract says that the Federal Arbitration Act applies and mentions no other

law—if the federal act doesn't apply, the agreement to arbitrate remains viable, and the

only question becomes what state's law applies to the contract to arbitrate." Atwood v.

Rent-A-Center E., Inc., No. 15-CV-1023-MJR-SCW, 2016 WL 2766656, at *3 (S.D. Ill.

May 13, 2016). Because statutory exemption questions relate "to the Court's ability to

employ the federal statute, and not to the underlying arbitration agreement's validity," we

next look to the applicable state law to determine whether the parties' arbitration

agreements are valid. Id. at *1.

Defendants claim that nearly all of the Putative Collective Members have entered

into mandatory arbitration agreements subject to Indiana law and thus should not be

included in the group who would otherwise receive Plaintiff's proposed step one notice.

See dkt. 117 at 6–9, 15–17.3 The Seventh Circuit has provided the appropriate analytical

framework where, as here, "a defendant opposes the issuance of notice by asserting that

proposed notice recipients entered mutual arbitration agreements." Bigger v. Facebook,

3 The parties dispute whether state or federal law governs the arbitration agreements at issue, but

the parties do not appear to contest that, if state law governs, Indiana law should apply to the

extent that federal law is inapplicable. See dkt. 117 at 19–20; dkt. 120 at 6. We agree that Indiana

law appears to apply here and that the application of Indiana law will extend to any potential

Putative Collective Members who were newly hired employees when Defendants recommenced

operations in 2021 and signed the 2021 Form Arbitration Agreement, which plainly provides that

Indiana law applies to the extent that federal law is deemed unavailable. See dkt. 117-1 at 13.

Inc., 947 F.3d 1043, 1050 (7th Cir. 2020). In such circumstances, the trial court is

directed to take specific steps:

First, the court must determine whether a plaintiff contests the defendant's

assertions about the existence of valid arbitration agreements entered by

proposed notice recipients.

If no plaintiff contests those assertions, then the court may not authorize

notice to the employees whom the defendant alleges entered valid

arbitration agreements.

But if a plaintiff contests the defendant's assertions, then—before

authorizing notice to the alleged "arbitration employees"—the court must

permit the parties to submit additional evidence on the agreements'

existence and validity.

Id. Ms. Rodgers-Rouzier clearly contests the validity of the arbitration agreements. Thus,

before FLSA notice can be approved and/or sent to the Putative Collective Members,

Bigger requires a determination of the arbitration agreements' application and validity

under Indiana law.

Defendants carry the evidentiary burden in this circumstance: "[t]he employer

seeking to exclude employees from receiving notice has the burden to show, by a

preponderance of the evidence, the existence of a valid arbitration agreement for each

employee it seeks to exclude from receiving notice." Id. Thus far, Defendants have

submitted only the declaration from American Queen Steamboat Operating Company

LLC's Vice President of Human Resources, Christina Hobbs, which states that "505 out

of 516 'service employees' (as defined by Plaintiff) that were employed in 2020 and all

but one of the individuals who have filed consents in this action signed an Arbitration

Agreement." [Dkt. 117-1 at ¶ 23]. Ms. Hobbs's declaration is insufficient under Bigger,

which requires more than a generalized, blanket statement that alleged arbitration

agreements exist for unidentified employees. See Bigger, 947 F.3d at 1051 (noting that

the liberal federal policy favoring arbitration agreements "does not require courts to

simply take an employer at its word when it says certain employees entered valid

arbitration agreements"). For each employee it seeks to exclude, Defendants must provide

evidence of the individual's signed arbitration agreement to establish both its existence

and validity, allowing the Court to determine whether each such agreement precludes

Plaintiff from notifying the respective employee of this pending litigation.

iI. Conclusion

Plaintiff's Motion for Step One Notice Pursuant to the Fair Labor Standards Act

[Dkt. 106] is DENIED WITHOUT PREJUDICE to refiling once the steps prescribed

herein have been accomplished.

IT IS SO ORDERED.

Date:

3/18/2022, Wud Gaus Bier

SARAH EVANS BARKER, JUDGE

United States District Court

Southern District of Indiana

Distribution:

Sarah Arendt

WERMAN SALAS P.C.

sarendt@flsalaw.com

Augustus S. Herbert

MIDDLETON REUTLINGER

aherbert@middletonlaw.com

Robert P. Herre

rpherre@aol.com

Bobby R. Miller, Jr.

MILLER HAHN, PLLC

bmiller@millerlaw-firm.com

Dennis D. Murrell

MIDDLETON & REUTLINGER

dmurrell@middletonlaw.com

Loren T. Prizant

MIDDLETON REUTLINGER

lprizant@middletonlaw.com

Maureen A. Salas

WERMAN SALAS P.C.

msalas@flsalaw.com

Michael Tresnowski

WERMAN SALAS P.C.

mtresnowski@flsalaw.com

Douglas M. Werman

WERMAN SALAS PC

dwerman@flsalaw.com