The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
BRET PASCHE, on his own behalf and
on behalf of those similarly situated,
Plaintiffs,
v. Case No: 8:23-cv-01812-MSS-JSS
TOTAL QUALITY LOGISTICS,
LLC,
Defendant.
ORDER
THIS CAUSE comes before the Court for consideration of Defendant’s motion
and renewed motion to compel arbitration and stay proceedings. (Dkts. 16, 23) On
April 24, 2024, United States Magistrate Judge Amanda A. Sansone issued a Report
and Recommendation, recommending that Defendant’s motion and renewed motion
to compel arbitration be granted and that the case be stayed and administratively
closed pending arbitration. (Dkt. 36) Plaintiffs filed Objections, (Dkt. 39), and
Defendant filed its response thereto. (Dkt. 41) Upon consideration of all relevant
filings, case law, and being otherwise fully advised, the Court SUSTAINS IN PART
Plaintiffs’ Objections, (Dkt. 39), but nonetheless ADOPTS the Magistrate Judge’s
Report and Recommendation to compel arbitration. (Dkt. 36) Specifically, the Court
adopts Judge Sansone’s conclusion that Defendant’s motion and renewed motion to
compel arbitration should be granted and that the case should be stayed and
administratively closed pending arbitration. However, the Court finds that it must first
determine whether the transportation worker exemption under § 1 of the Federal
Arbitration Act (“FAA”) applies before compelling arbitration. The Court finds
Plaintiffs do not fall within the exemption.
I. BACKGROUND
On April 24, 2024, Judge Sansone entered a Report and Recommendation,
(Dkt. 36), recommending Defendant’s motion and renewed motion to compel
arbitration and stay proceedings be granted. (Dkts. 16, 23) Judge Sansone found that
Plaintiffs’ arguments concern the enforceability of the arbitration agreements and not
the agreements’ validity.1 (Dkt. 36 at 6) For this reason, Judge Sansone determined
that the only remaining issue for the Court to determine is whether the arbitration
agreements delegate these enforceability issues to an arbitrator. (Id.) Here, Judge
Sansone found that, because Plaintiffs challenge the confidentiality clause and attempt
to apply the transportation worker exemption to the arbitration agreements but make
no specific challenges to the delegation provision, Plaintiffs’ arguments must be
decided by an arbitrator. (Id. at 8)
Plaintiffs object to Judge Sansone’s Report and Recommendation on two
grounds. First, Plaintiffs reiterate that the applicability of the transportation worker
1 Each of the plaintiffs signed an arbitration agreement prior to beginning their employment at Total Quality
Logistics, LLC. (Dkt. 23-1) The Parties agree that the arbitration agreements signed individually by each class
member are “materially and substantively identical to each other.” (Dkt. 23 at 2; Dkt. 26 at 7)
exemption under § 1 of the FAA constitutes a threshold issue for the Court’s
determination. (Dkt. 39 at 3—5) In support, Plaintiffs assert that the Magistrate Judge
overlooked the Supreme Court’s decision in New Prime, Inc. v. Oliveira, 586 U.S. 105
(2019), which they contend is directly on point. (Id. at 3—4) Second, Plaintiffs argue
that the validity of the confidentiality provision in the arbitration agreements, which
they challenge as void against public policy, also raises a threshold issue for the Court’s
determination. (Id. at 5-7) In this regard, Plaintiffs argue that the Magistrate Judge
overlooked a key holding in Lichtman v. Bar Educ., Inc., 2021 U.S. Dist. LEXIS
187429, at *8 (M.D. Fla. Sept. 30, 2021) (finding that a “void-as-against-public-policy
argument implicates the arbitration agreement’s validity, a threshold issue for the court
to determine.”). (Dkt. 39 at 5—6) Plaintiffs contend that, at a minimum, the Court
should strike the confidentiality provision as contrary to public policy before
compelling arbitration. (Id. at 7)
Defendant filed a response to Plaintiffs’ objections. (Dkt. 41) Defendant argues
that Plaintiffs continue to confuse the issue of the arbitration agreements’ validity with
their enforceability. (Id. at 1—3) Defendant contends that the express language of the
arbitration provision delegates any dispute about the arbitrability of an issue under the
provision to an arbitrator. (Id. at 3—5) Therefore, Defendant maintains that it is the
arbitrator’s role to determine whether Plaintiffs’ claims are subject to arbitration. (Id.
at 4—5) In the alternative, should the Court find the validity of the arbitration
agreements to be at issue, Defendant asserts that the outcome would remain the same
for the following reasons. (Id. at 2) First, Defendant argues that Plaintiffs do not
qualify as “transportation workers” exempt from the FAA under § 1. (Id. at 5—6)
Second, Defendant contends that the inclusion of a confidentiality provision does not
constitute a basis to void the arbitration agreements. (Id. at 6—7)
II. STANDARD OF REVIEW
After conducting a careful and complete review of the findings and
recommendations, a district judge may accept, reject, or modify the Magistrate Judge's
report and recommendation. 28 U.S.C. § 636(b)(1); Williams v. Wainwright, 681 F.2d
732, 732 (11th Cir. 1982), cert. denied, 459 U.S. 1112 (1983). A district judge “shall
make a de novo determination of those portions of the report or specified proposed
findings or recommendations to which objection is made.” 28 U.S.C. § 636(b)(1)(C).
This requires that the district judge “give fresh consideration to those issues to which
specific objection has been made by a party.” Jeffrey S. v. State Bd. of Educ., 896 F.2d
507, 512 (11th Cir. 1990) (quoting H.R. 1609, 94th Cong. § 2 (1976)). In the absence
of specific objections, there is no requirement that a district judge review factual
findings de novo and the court may accept, reject, or modify, in whole or in part, the
findings and recommendations. 28 U.S.C. § 636(b)(1)(C); see Garvey v. Vaughn, 993
F.2d 776, 779 n.9 (11th Cir. 1993). The district judge reviews legal conclusions de novo,
even in the absence of an objection. See Cooper-Houston v. Southern Ry., 37 F.3d
603, 604 (11th Cir. 1994).
III. DISCUSSION
Upon consideration of the Report and Recommendation, in conjunction with
an independent examination of the file, the Court finds that, pursuant to applicable
case law, it must first determine whether the § 1 exemption for transportation workers
applies before compelling arbitration. In New Prime, the Supreme Court held that
even when an arbitration agreement delegates issues of arbitrability to an arbitrator, a
court must first determine whether the arbitration agreement falls within the scope of
the FAA as outlined in §§ 1 and 2. Id. at 112 (“[A] court may use §§3 and 4 to enforce
a delegation clause only if the clause appears in a ‘written provision in . . . a contract
evidencing a transaction involving commerce’ consistent with §2. And only if the
contract in which the clause appears doesn’t trigger § 1’s . . . exception.”). Accordingly,
the Court OVERRULES the Report and Recommendation to the extent it finds that
the Court can compel arbitration without first addressing whether § 1 applies.
In Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022), the Supreme Court
found that the transportation worker exemption applies to a “class of workers” that is
“actively ‘engaged in transportation’ of . . . goods across borders via the channels of
foreign or interstate commerce.” Id. at 456, 458. The court held that a ramp supervisor
who frequently loaded and unloaded cargo on airplanes travelling in interstate
commerce fell within the transportation worker exemption, even though the supervisor
did not physically cross state lines. Saxon, 596 U.S. at 450. The court explained that
the term “‘workers’ directs the interpreter’s attention to the ‘performance of work’”
and “the word ‘engaged’ . . . similarly emphasizes the actual work that the members
of the class, as a whole, typically carry out.” Id. at 456. See New Prime, 586 U.S. at
116 (emphasizing that the language of § 1 refers to “any . . . class of workers engaged
in foreign or interstate commerce.”).
In Hamrick v. Partsfleet, LLC, 1 F.4th 1337 (11th Cir. 2021), the Eleventh
Circuit held that “[t]he transportation worker exemption applies if the employee is part
of a class of workers: (1) employed in the transportation industry; and (2) that, in the
main, actually engages in foreign or interstate commerce.” Id. at 1349 (remanding the
case to the district court to determine whether “final-mile delivery drivers” – making
local deliveries of goods that had travelled interstate – were a class of workers
employed in the transportation and whether the class, in general, actually engaged in
foreign or interstate commerce). Id. at 1351. The Eleventh Circuit’s test focuses on the
nature of the work performed rather than the movement of the goods themselves. See
Carrion v. Mia. Lakes AM., LLC, 2023 U.S. Dist. LEXIS 198443, at *6—7 (S.D. Fla.
Nov. 2, 2023) (finding that salespersons engaged in moving goods that at some point
pass through interstate commerce did not establish that the salespersons themselves
engaged in interstate commerce); See Nunes v. Lasership, Inc., 2023 U.S. Dist. LEXIS
174412, at *7—8 (N.D. Ga. Sep. 28, 2023) (finding that workers employed in the
transportation industry who sorted and loaded packages for local delivery were far too
removed from interstate commerce to fall within § 1’s exemption).
Plaintiffs argue that Logistics Account Executive Trainees (“LAETs”) and
Logistics Accountant Executives (“LAEs”) at Total Quality Logistics, LLC, provide
truckload brokerage services to facilitate the transportation of goods across state lines
in interstate commerce and are, therefore, exempt from arbitration under § 1. (Dkt. 26
at 2—4) In support, Plaintiffs submit the declaration of Bret Pasche, which details the
job responsibilities of LAETs and LAEs. (Dkt. 26-1) Pasche explains, for example,
that LAEs and LAETs “gather information from the customer regarding the load . . .
input the data gathered from the customer into [a] database, which populates a list of
carriers pre-approved by TQL.” (Dkt. 26-1 at ¶¶ 14—15) The LAEs and LAETs then
“make calls” to locate carriers and “negotiate with potential carriers to garner a price
that will earn TQL ‘brokerage revenue.’” (Dkt. 26-1 at ¶ 15) Once a carrier is secured,
the LAEs and LAETs “oversee[] the transportation of the load which includes making
‘check calls’ . . . to confirm the on-time delivery.” (Dkt. 26-1 at ¶¶ 16, 18)
The Court finds on these facts that Plaintiffs do not fall within the transportation
worker exemption under § 1, as defined in both Saxon and Hamrick. In Saxon, the
Supreme Court held that the transportation worker exemption applies to a “class of
workers engaged in foreign or interstate commerce.” Id. at 455. This standard requires
workers to be sufficiently adjacent to the actual channels of commerce. Plaintiffs, as
described in Pasche’s declaration, perform logistical and administrative tasks such as
gathering load information, inputting data into a database, coordinating with carriers,
negotiating pricing, and overseeing the transportation process through “check calls.”
(Dkt. 26-1 at ¶¶ 14—15, 16, 18) While these functions support the transportation
process, they are too attenuated to support the conclusion that the LAEs and LAETs
are “actively ‘engaged in transportation’ of . . . goods across borders via the channels
of foreign or interstate commerce.” Saxon, 596 U.S. at 458.
Plaintiffs have not cited to any case law that specifically supports their
contention that workers providing logistical support in the movement of goods that
flow through interstate commerce fall within the transportation worker exemption.
Likewise, the Court’s independent review has uncovered no authority to support this
proposition. Accordingly, the Court finds that Plaintiffs do not fall within the
transportation worker exemption.
The Court also REJECTS Plaintiffs’ contentions that the confidentiality
provision invalidates the arbitration agreements and that this issue is for the Court to
decide. Plaintiffs’ reliance on Lichtman is misplaced. Unlike the arbitration agreement
at issue in this case, the arbitration agreement in Lichtman did not contain a specific
delegation provision. Id. at 5. Moreover, the court applied Henry Schein, Inc. v.
Archer & White Sales, Inc., 139 S. Ct. 524 (2019), and found that “[p]arties may
delegate threshold arbitrability issues to the arbitrator, so long as the parties’ agreement
does so by ‘clear and unmistakable evidence.’” Lichtman, 2021 U.S. Dist. LEXIS
187429, at *15.
The Eleventh Circuit has reaffirmed that a party must directly challenge the
delegation provision to contest its enforceability. Attix v. Carrington Mort. Servs.,
LLC, 35 F.4th 1284, 1302 (11th Cir. 2022) (citing Parnell v. CashCall, Inc., 804 F.3d
1142, 1146-47 (11th Cir. 2015)) (“[A]bsent a challenge to the delegation provision
itself, the federal courts must treat the delegation provision as valid . . . and must
enforce it . . ., leaving any challenge to the validity of the [a]greement as a whole for
the arbitrator.”) (quotation omitted). The court further explained that a delegation
provision is severable from the underlying arbitration agreement and must be
challenged separately. Attix, 35 F.4th at 1303. See New Prime, at 586 U.S. at 112
(stating that, “under the severability principle, we treat a challenge to the validity of .
. . a delegation clause . . . separately from a challenge to the validity of the entire
contract in which it appears.”). Furthermore, the court in Attix addressed different
types of arbitrability issues, including those concerning validity and enforceability. Id.
at 1299. The court clarified that “validity” concerns whether the parties “entered into
a legally operative arbitration agreement,” while “enforceability” pertains to whether
the agreement is “enforceable under law.” Id. (citing Kindred Nursing Ctrs. Ltd.
P’ship v. Clark, 581 U.S. 246, (2017)).
The delegation provision in the arbitration agreements clearly states that “[t]he
arbitrator shall have authority to resolve disputes about discovery and how this
Agreement was formed, applied, interpreted, or enforced.” (Dkt. 23-1 at ¶ 4) This
language unmistakably delegates all disputes concerning arbitrability, including those
related to the confidentiality provision, to the arbitrator. As Plaintiffs have not
challenged the delegation provision itself, the Court finds that issues of arbitrability,
including those concerning the confidentiality clause, must be resolved by an
arbitrator. Accordingly, the Court SUSTAINS the Report and Recommendation to
the extent it finds that Plaintiffs’ challenge to the confidentiality provision does not
serve as a basis to deny Defendant’s motion to compel arbitration.
Accordingly, it is ORDERED that:
1. The Report and Recommendation, (Dkt. 36), is AFFIRMED and
ADOPTED IN PART, for the reasons set forth in this Order.
2. Defendant’s motion and renewed motion to compel arbitration and stay
proceedings, (Dkts. 16, 23), are GRANTED. Plaintiffs will advance their
claims asserted in this lawsuit via binding arbitration as provided for in
the arbitration agreements.
3. Plaintiffs’ Objections to the Report and Recommendation on
Defendant’s Renewed Motion to Stay and Compel Arbitration, (Dkt.
39), ace OVERRULED IN PART AND SUSTAINED IN PART.
4. The proceeding is STAYED pending arbitration as to the claims between
Plaintiffs and Defendant.
5. The CLERK is directed to TERMINATE all motions pending before the
Court and ADMINISTRATIVELY CLOSE this case.
6. The Parties shall have fourteen (14) days after the completion of
arbitration to file a notice or appropriate motion advising the Court how
and whether this case should proceed.
DONE and ORDERED in Tampa, Florida, this 19th day of September 2024.
Ui pe |
Copies furnished to: UNITED STATES DISTRICT JUDGE
Counsel of Record
Any Unrepresented Person