Petition for Writ of Certiorari — Tug Hill Operating, LLC, Petitioner v. Lastephen Rogers
Supreme Court briefDec 15, 2023
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APPENDIX
TABLE OF APPENDICES
Appendix A
Opinion, United States Court of Appeals
for the Fourth Circuit, Rogers. v. Tug Hill
Operating, LLC, No. 22-1480 (Aug. 7,
2023)............................................................. App-1
Appendix B
Memorandum Opinion and Order
Granting Motion to Intervene and
Granting Motion to Dismiss, United
States District Court for the Northern
District of West Virginia, Rogers v. Tug
Hill Operating, LLC, No. 5:21-CV-199
(Apr. 12, 2022) ........................................... App-24
Appendix C
Independent Contractor Agreement (Jan.
25, 2019)..................................................... App-64
Appendix D
Excerpts From Terms of Service (Feb. 20,
2019)........................................................... App-75
App-1
Appendix A
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
________________
No. 22-1480
________________
LASTEPHEN ROGERS, Individually and for others
similarly situated,
v.
Plaintiff-Appellant,
TUG HILL OPERATING, LLC; RUSCO OPERATING, LLC,
Defendants-Appellees.
________________
Appeal from the United States District Court for the
Northern District of West Virginia, at Wheeling.
John Preston Bailey, District Judge. (5:21-cv-00199JPB)
________________
Argued: May 3, 2023
Decided: August 7, 2023
________________
Before NIEMEYER, KING, and HARRIS, Circuit
Judges.
________________
Reversed and remanded by published opinion.
Judge Niemeyer wrote the opinion, in which Judge
King and Judge Harris joined.
________________
App-2
ARGUED:
Richard
Jennings
Burch,
BRUCKNER BURCH PLLC, Houston, Texas, for
Appellant. John Barrick Bollman, MCDERMOTT
WILL & EMERY, LLP, Chicago, Illinois; Christian
Charles Antkowiak, BUCHANAN INGERSOLL &
ROONEY PC, Pittsburgh, Pennsylvania, for
Appellees. ON BRIEF: Anthony J. Majestro,
POWELL & MAJESTRO PLLC, Charleston, West
Virginia, for Appellant. Erin J. McLaughlin,
BUCHANAN INGERSOLL & ROONEY PC,
Pittsburgh, Pennsylvania, for Appellee Tug Hill
Operating, LLC. Rachel B. Cowen, MCDERMOTT
WILL & EMERY, LLP, Chicago, Illinois, for Appellee
RUSCO Operating, LLC.
________________
OPINION
________________
NIEMEYER, Circuit Judge:
Lastephen Rogers worked for Tug Hill Operating,
LLC, a Texas-based oil and natural gas exploration
and production company, for approximately a year
and a half at rig sites in West Virginia. He commenced
this action against Tug Hill under the Fair Labor
Standards Act (“FLSA”), alleging that while Tug Hill
formally classified him as an independent contractor,
he actually qualified as an employee for purposes of
the FLSA based on the degree of control that Tug Hill
exercised over his work. He therefore claimed that Tug
Hill was required to pay him overtime for those weeks
in which he worked more than 40 hours.
Tug Hill filed a motion to dismiss Rogers’ action
on the ground that Rogers was contractually required
App-3
to arbitrate his claim against it. The arbitration
clause, however, was not in any contract between
Rogers and Tug Hill, but rather in a contract between
Rogers and RigUp, Inc., 1 a third-party company that
had helped Rogers find the position with Tug Hill.
RigUp was in the business of connecting skilled
workers with oil and gas companies for a fee.
In addition, RigUp itself filed a motion to
intervene in order to seek the action’s dismissal in
favor of arbitration, despite language in RigUp’s
contract with Rogers that the arbitration specified in
their contract related only to disputes between Rogers
and RigUp and that “RigUp will not be a party to
disputes . . . between [Rogers] and [Tug Hill].”
The district court granted both motions —
allowing RigUp to intervene as a defendant and
granting Tug Hill’s motion to dismiss Rogers’ action
and compel arbitration. For the reasons that follow,
we reverse both rulings and remand for further
proceedings between Rogers and Tug Hill.
I
Rogers had experience working as a foreman at oil
rig sites — a position referred to in the oil and gas
industry as a “company man” — and he sought to find
work with oil and gas companies through RigUp, a
company in the business of connecting skilled workers
in the industry with companies looking for such
workers. To engage RigUp’s services, Rogers executed
1 RigUp, Inc., changed its name to Workrise Technologies, Inc.,
in 2021. That company, as well as its wholly owned subsidiary,
RUSCO Operating, LLC, are referred to herein as “RigUp.”
App-4
an agreement with RigUp in January 2019 that
governed their relationship, entitled “Agreement
Between Independent Professional & RigUp For Use
Of RigUp Service” (hereafter, “the Agreement”). The
Agreement stated that it was “a binding agreement
between [Rogers], an independent professional (‘you’)
and RUSCO Operating, LLC, a wholly owned
subsidiary of RigUp, Inc. . . . governing [Rogers’] use
of the Service (as defined in the RigUp Terms of
Service . . .) to provide freelance services to third party
companies (each a ‘Company’ or collectively the
‘Companies’).”
In signing the Agreement, Rogers represented to
RigUp that he was “an independent professional and
entrepreneur” who wanted to “be introduced to new
clients by RigUp . . . to provide [them] services . . . as
an independent professional, and not as an employee.”
The Agreement explained to Rogers, however, that
after RigUp helped match Rogers with a company, he
and that company would “solely negotiate and
determine . . . when and where [he would] perform
[p]rojects” and that “[a]ny interactions or disputes
between [him] and a Company [would be] solely
between [him] and that Company.” The Agreement
provided further that “RigUp . . . shall have no
liability, obligation or responsibility for any
interaction between you and any Company.” And it
expressly stated that “RIGUP WILL NOT BE A
PARTY TO DISPUTES OR NEGOTIATIONS OF
DISPUTES, BETWEEN YOU AND COMPANIES.”
The Agreement did provide, however, that Rogers
would “indemnify and hold the RigUp Parties and
Company harmless from and against all losses,
damages, liabilities, . . . actions, [and] judgments . . .
App-5
arising out of or resulting from” several occurrences,
one of which was “a determination by a court or agency
that [Rogers] [was] an employee of RigUp or a
Company.”
The Agreement incorporated RigUp’s Terms of
Service, and in a paragraph entitled “Dispute
Resolution,” it also specifically incorporated “Section
24 of the Terms.” That section contained an
arbitration provision, which stated:
In the interest of resolving disputes between
you and RigUp in the most expedient and cost
effective manner, you and RigUp agree that
every dispute arising in connection with these
Terms will be resolved by binding arbitration.
. . . This agreement to arbitrate disputes
includes all claims arising out of or relating to
any aspect of these Terms, whether based in
contract,
tort,
statute,
fraud,
misrepresentation, or any other legal theory,
and regardless of whether a claim arises
during or after the termination of these
Terms. YOU UNDERSTAND AND AGREE
THAT, BY ENTERING INTO THESE
TERMS, YOU AND RIGUP ARE EACH
WAIVING THE RIGHT TO A TRIAL BY
JURY OR TO PARTICIPATE IN A CLASS
ACTION.
(Emphasis added). Section 24 also provided that “[a]ny
arbitration between you and RigUp will be settled
under the Federal Arbitration Act” and “administered
by the [American Arbitration Association]” and that
“[t]he arbitrator has exclusive authority to resolve any
dispute relating to the interpretation, applicability, or
App-6
enforceability of this binding arbitration agreement.”
(Emphasis added).
In January 2019, pursuant to RigUp’s
matchmaking, Rogers began work as a “company
man” at a rig site operated by Tug Hill in West
Virginia. Tug Hill classified Rogers as an independent
contractor and assigned him to “oversee the rig site
and make sure the operations were being performed
in accordance with Tug Hill’s procedures and
instructions.” Rogers continued work for Tug Hill
through July 2020. According to Rogers, during that
year and a half, he worked exclusively for Tug Hill and
was paid a daily rate for his work.
In 2021, Rogers commenced this action against
Tug Hill, alleging that it had violated the FLSA by
failing to pay him any overtime even though he
“typically worked more than 80 hours a week.” He
alleged that he had been “misclassified as an
independent contractor by Tug Hill” when he actually
performed his work as an employee, based on the
degree of control that “Tug Hill exercised . . . over all
aspects of his job.” He brought the action on behalf of
himself and all other similarly situated workers, a
class he defined as “[a]ll company men employed by or
performing work on behalf of Tug Hill classified as
independent contractors and paid a day-rate without
overtime during the past three years.”
RigUp filed a motion to intervene in the action “as
of right” pursuant to Federal Rule of Civil Procedure
24(a)(2), or “by permission” pursuant to Rule
24(b)(1)(B), arguing that it was “in the business of
facilitating
relationships
between
oil-and-gas
operators and independent contractors who contract
App-7
to provide freelance services for those operators” and
that it had facilitated such a relationship between Tug
Hill and Rogers. RigUp argued that intervention was
warranted so that it could “represent . . . [its] unique
interest in preserving its business model by protecting
the independent-contractor status of the workers it
serves.” It also alleged that if Rogers’ action succeeded,
it might have some liability to Tug Hill “as a potential
indemnitor” under a contract it had with Tug Hill.
RigUp indicated that if its motion to intervene were
granted, it would thereafter file a motion to compel
arbitration and dismiss or stay the action.
After RigUp filed its motion to intervene, Tug Hill
filed a motion to dismiss Rogers’ action under Federal
Rules of Civil Procedure 12(b)(1), 12(b)(6), and
12(b)(7), contending that “this action should be
dismissed and [Rogers] should be compelled to
individual arbitration pursuant to the arbitration
clause to which he is contractually bound” in his
contract with RigUp. Tug Hill claimed that in the
Agreement between Rogers and RigUp, Rogers had
“entered into a valid and enforceable” agreement to
arbitrate “every dispute arising in connection with
these Terms,” including “all claims arising out of or
relating to any aspect of these Terms,” and it
maintained that this language covered Rogers’ FLSA
claim against it. Tug Hill asserted that the fact that it
was “not a signatory to the . . . Agreement” between
Rogers and RigUp was “a red herring” because the
arbitration clause delegated to the arbitrator the
“exclusive authority” to decide questions of
arbitrability. It argued alternatively that it could
enforce the arbitration agreement either “as a third-
App-8
party beneficiary . . . or pursuant to estoppel
principles.”
In response to RigUp’s motion to intervene,
Rogers pointed to specific language in his contract
with RigUp and argued that “RigUp contractually
disclaimed any right to be [a] party to . . . disputes”
between workers and operators and that his FLSA
suit against Tug Hill was such a dispute. And with
respect to Tug Hill’s motion to dismiss, Rogers argued
(1) that he never “agree[d] to arbitrate his claims
against Tug Hill”; (2) that the court, not an arbitrator,
“decides existence, validity, and enforceability of
arbitration agreements”; and (3) that “Tug Hill cannot
compel arbitration under the agreement” based on
either third-party beneficiary or estoppel principles.
In a memorandum opinion and order dated April
12, 2022, the district court granted RigUp’s motion to
intervene, concluding that RigUp was “entitled to
intervene in this matter by right” under Rule 24(a)
because it had “significantly protectible” interests in
the litigation that “could potentially [be] impair[ed]”
absent intervention. Rogers v. Tug Hill Operating,
LLC, 598 F. Supp. 3d 404, 417, 421 (N.D. W. Va. 2022).
It identified (1) RigUp’s “purely economic interest[]” in
its “business model,” (2) RigUp’s interest in “seeking
to enforce [its] arbitration agreement,” and (3) RigUp’s
“potential liability” to Tug Hill under an indemnity
provision in the contract between RigUp and Tug Hill.
Id. at 417–19, 421. The court concluded alternatively
that RigUp “would be entitled to permissive
intervention” under Rule 24(b). Id. at 421.
The court also granted Tug Hill’s motion to
dismiss and compel arbitration, concluding that the
App-9
language in Rogers’ arbitration agreement with RigUp
— providing that “all claims arising out of or relating
to any aspect of these Terms [of Service]” were subject
to arbitration — was broad enough to cover Rogers’
FLSA claim against Tug Hill. The district court
further concluded that “the fact [that] defendant Tug
Hill [was] not a signatory” to the RigUp Agreement
was “of no moment” because any question of
arbitrability had to be decided by the arbitrator based
on the “delegation clause” in the arbitration
agreement. Rogers, 598 F. Supp. 3d at 425.
Alternatively, the court concluded that Tug Hill was
“a third-party beneficiary” that was “permitted to
enforce” Rogers’ arbitration agreement with RigUp. 2
Id. at 427.
From the district court’s judgment, Rogers filed
this appeal, challenging both of the district court’s
rulings.
II
With respect to the district court’s dismissal
order, Rogers contends that he never agreed to
arbitrate anything with Tug Hill and that, as a result,
the district court erred in dismissing his action and
ordering him to arbitrate with Tug Hill on the ground
that his arbitration agreement with RigUp contained
a delegation clause authorizing the arbitrator to
2 Because the district court concluded that Tug Hill was a thirdparty beneficiary, it did not address Tug Hill’s alternative
argument that it was entitled to enforce the RigUp arbitration
agreement under estoppel principles. See Rogers, 598 F. Supp. 3d
at 427 n.7. Tug Hill has not raised estoppel on appeal, and the
issue therefore is not before us.
App-10
determine arbitrability. It cannot be, he maintains,
that a person like him who has “execut[ed] an
arbitration agreement containing a delegation clause”
with one party (RigUp) is required to arbitrate
whether he must arbitrate with a different party (Tug
Hill).
In defending the district court’s ruling, Tug Hill
contends that Rogers’ contract with RigUp contained
“a valid arbitration agreement”; that Rogers’ FLSA
claim against Tug Hill falls within the scope of that
arbitration agreement because Rogers agreed to serve
“as an independent professional, and not as an
employee”; and that the arbitration agreement
contained a delegation clause giving the arbitrator
“exclusive authority” over arbitrability issues, a
category that should be understood to include whether
the arbitration agreement is enforceable by a third
party. In other words, according to Tug Hill, because
Rogers and RigUp delegated “threshold questions to
the arbitrator (not a court),” the arbitrator is the one
“who must decide whether Rogers must arbitrate his
[FLSA] claim[] against Tug Hill.”
The parties’ positions thus present us with the
issue of whether a court or an arbitrator must decide
whether Tug Hill can enforce the arbitration clause in
the contract between Rogers and RigUp given that the
arbitration clause has a delegation provision.
As a foundational principle, the Federal
Arbitration Act (“FAA”) provides for the enforcement
of agreements to arbitrate when they are created by
contract, and such contracts must be treated like any
other contract under applicable state law. Thus, as
relevant to the issue presented in this case, the
App-11
Supreme Court has held that “[b]ecause ‘traditional
principles’ of state law allow a contract to be enforced
by or against nonparties to the contract through
‘assumption, piercing the corporate veil, alter ego,
incorporation by reference, third-party beneficiary
theories, waiver and estoppel,’” “those who are not
parties to a written arbitration agreement” may be
eligible for relief under the FAA. Arthur Andersen LLP
v. Carlisle, 556 U.S. 624, 629, 631 (2009) (quoting 21
Richard A. Lord, Williston on Contracts § 57:19, at 183
(4th ed. 2001)). What Arthur Andersen also makes
clear, however, is that it is a court, not an arbitrator,
that must initially decide whether a nonparty to an
arbitration agreement is entitled to enforce it. See id.
at 630–32. This emanates from the requirements of
the FAA.
The FAA grounds arbitration obligations in
contract law, as § 2 provides:
A written provision in . . . a contract
evidencing a transaction involving commerce
to settle by arbitration a controversy
thereafter arising out of such contract or
transaction . . . shall be valid, irrevocable, and
enforceable, save upon such grounds as exist
at law or in equity for the revocation of any
contract . . . .
9 U.S.C. § 2. And consistent with that proposition, § 4
provides that a party “aggrieved” by the failure “of
another to arbitrate under a written agreement for
arbitration may petition” a federal court “for an order
directing that such arbitration proceed in the manner
provided for in such agreement.” Id. § 4 (emphasis
added). That section adds that the court “shall” order
App-12
arbitration “upon being satisfied that the making of
the agreement for arbitration or the failure to comply
therewith is not in issue.” Id. (emphasis added); see
also id. § 3 (directing a court to stay a civil action if the
claim is “referable to arbitration under an agreement
in writing for such arbitration” (emphasis added)).
The Supreme Court has recognized explicitly and
repeatedly that arbitration obligations are grounded
in contract law, including by emphasizing recently
that under the FAA, “arbitration agreements [are] as
enforceable as other contracts, but not more so.”
Morgan v. Sundance, Inc., 142 S. Ct. 1708, 1713 (2022)
(cleaned up); see id. (explaining that the Court’s prior
recognition of a federal “policy favoring arbitration”
was “merely an acknowledgment of the FAA’s
commitment to overrule the judiciary’s longstanding
refusal to enforce agreements to arbitrate” and that
“the federal policy is about treating arbitration
contracts like all others, not about fostering
arbitration” (cleaned up)). Moreover, it is well
established that when a challenge to the existence of
a contractual obligation is properly raised, “the court
determines whether a valid arbitration agreement
exists” “before referring a dispute to an arbitrator.”
Henry Schein, Inc. v. Archer & White Sales, Inc., 139
S. Ct. 524, 530 (2019) (emphasis added); see also RentA-Center, West, Inc. v. Jackson, 561 U.S. 63, 71 (2010)
(“If a party challenges the validity under § 2 of the
precise agreement to arbitrate at issue, the federal
court must consider the challenge before ordering
compliance with that agreement under § 4” (emphasis
added)).
App-13
Thus, as a general matter, the relevant threshold
question that a court must address when being asked
to compel arbitration is whether “an arbitration
agreement exists between the parties.” Hightower v.
GMRI, Inc., 272 F.3d 239, 242 (4th Cir. 2001)
(emphasis added). But, as noted, there are
circumstances in which a nonparty to a contract may
nonetheless be entitled to enforce it under standard
contract principles, such as “through assumption,
piercing the corporate veil, alter ego, incorporation by
reference, third-party beneficiary theories, waiver and
estoppel.” Arthur Andersen, 556 U.S. at 631 (cleaned
up). Therefore, when an objection is properly raised
that the party seeking to enforce an arbitration
agreement is not itself a party to that agreement, the
district court must determine — as a condition
precedent to the entry of any § 3 stay or § 4 order
compelling arbitration — whether that party is
entitled to enforce the arbitration agreement under
state contract law. Otherwise, a party with no
contractual right to compel arbitration might be
permitted to do just that. And nothing in the FAA, or
the Supreme Court’s jurisprudence interpreting it,
allows such a counterintuitive result — a result that
would undermine the contractual foundation of the
order compelling arbitration.
This principle finds direct support in the Supreme
Court’s decision in Arthur Andersen. In that case, after
an accounting firm and others were sued by a group of
former clients, those defendants “moved to stay the
action, invoking § 3 of the FAA and arguing that the
principles of equitable estoppel demanded that [the
plaintiffs] arbitrate their claims” based on an
arbitration agreement the plaintiffs had entered into
App-14
with another defendant. Arthur Andersen, 556 U.S. at
626–27. While the Sixth Circuit had determined “that
those who are not parties to a written arbitration
agreement are categorically ineligible for relief” under
the FAA, the Supreme Court concluded that that
holding was incorrect. Id. at 629, 631 (emphasis
added). It reasoned that while § 2 “creates substantive
federal law regarding the enforceability of arbitration
agreements, requiring courts to place such
agreements upon the same footing as other contracts,”
neither it nor § 3 “purports to alter background
principles of state contract law regarding the scope of
agreements” — including the questions of “who is
bound by them” and who can enforce them. Id. at 630
(cleaned up). Thus, “a litigant who was not a party to
the relevant arbitration agreement may invoke § 3” to
obtain a stay from the district court “if the relevant
state contract law allows him to enforce the
agreement.” Id. at 632 (emphasis added). The Court
explained that this was so because “[i]f a written
arbitration provision is made enforceable against (or
for the benefit of) a third party under state contract
law, [§3’s] terms are fulfilled,” such that the court
would then be “require[d]” to grant a § 3 stay to the
third party. Id. at 631–32 (emphasis added).
Arthur Andersen thus stands for the principle
that if state contract law allows a person who was not
a party to an arbitration agreement to nonetheless
enforce it, then that nonparty is entitled to invoke the
FAA’s enforcement mechanisms in federal court. See
556 U.S. at 631–32; see also GE Energy Power
Conversion France SAS, Corp. v. Outokumpu
Stainless USA, LLC, 140 S. Ct. 1637, 1644 (2020). And
the necessary corollary to this principle is that when a
App-15
nonparty to an arbitration agreement seeks to enforce
it with a stay under § 3 or an order to compel
arbitration under § 4, it is the court that must first
determine that “the relevant state contract law allows
[that nonparty] to enforce the agreement” so as to
assure itself that the FAA’s “terms are fulfilled.”
Arthur Andersen, 556 U.S. at 631–32; see also GE
Energy Power, 140 S. Ct. at 1643 (recognizing that
“Chapter 1 of the [FAA] permits courts to apply statelaw doctrines related to the enforcement of arbitration
agreements,” including “doctrines that authorize the
enforcement of a contract by a nonsignatory”
(emphasis added)).
In this case, Tug Hill nonetheless contends that
under the terms of the arbitration clause —
particularly its delegation provision — the arbitrator,
not the court, must be the one to decide whether Tug
Hill can enforce the arbitration clause, even though it
is in a contract between Rogers and RigUp. It notes
that under the language of the delegation provision,
“[t]he arbitrator has exclusive authority to resolve any
dispute relating to the interpretation, applicability, or
enforceability” of the arbitration agreement. In
making that argument, however, Tug Hill fails to
address the contractual source of the arbitrator’s
authority. When the delegation provision is read in the
context of the arbitration clause as a whole, it is plain
that Rogers agreed to arbitrate issues — including
threshold issues — arising between him and RigUp.
But he did not enter into any agreement that allows
an arbitrator to decide whether a third party like Tug
Hill has rights under the arbitration agreement. See
Rent-A-Center, 561 U.S. at 68–70 (recognizing that a
delegation provision is simply “an agreement to
App-16
arbitrate threshold issues concerning the arbitration
agreement” and that “the FAA operates on this
additional[,] [antecedent] agreement just as it does on
any other”).
Of course, the fact that Tug Hill was not itself a
party to the arbitration agreement does not
categorically mean that Tug Hill is ineligible to obtain
relief from the district court under the FAA. See
Arthur Andersen, 556 U.S. at 629–32. But it does
mean that, as a precondition to granting Tug Hill the
right to enforce any portion of an arbitration clause to
which it was not a party, the district court was
required, when that right was challenged, to
determine whether “the relevant state contract law
allow[ed] [Tug Hill] to enforce [that] agreement,” so as
to ensure that the FAA’s terms “are fulfilled.” Id. at
631–32; cf. New Prime Inc. v. Oliveira, 139 S. Ct. 532,
536–38 (2019) (holding that even “[w]hen a contract
delegates questions of arbitrability to an arbitrator,”
“a court should decide for itself whether [the FAA’s]
‘contracts of employment’ exclusion applies before
ordering arbitration” because “to invoke its statutory
powers under §§ 3 and 4 to stay litigation and compel
arbitration according to a contract’s terms, a court
must first” resolve that “necessarily antecedent
statutory inquiry”).
Accordingly, we conclude that the district court
erred in ruling that it could use its statutory powers
under the FAA to grant Tug Hill’s motion to compel
arbitration without first resolving whether, as a
matter of state contract law, Tug Hill was authorized
to enforce the arbitration agreement between RigUp
and Rogers. Accord Newman v. Plains All Am.
App-17
Pipeline, L.P., 23 F.4th 393, 398–99 (5th Cir. 2022)
(holding that it is for the court, not an arbitrator, to
decide whether a litigant can enforce an arbitration
agreement between two other parties); see also CCC
Intelligent Solutions Inc. v. Tractable Inc., 36 F.4th
721, 723–24 (7th Cir. 2022) (affirming the district
court’s application of “the rule that a judge must
decide whether the parties have agreed to arbitrate”
and concluding that an exception to the “dominant
rule” that generally “C [cannot] claim rights under a
contract that has only A and B as parties” was not
applicable). But see, e.g., Becker v. Delek US Energy,
Inc., 39 F.4th 351, 355–56 (6th Cir. 2022) (holding that
the question of whether a third party could enforce a
delegation provision in an arbitration clause was for
the arbitrator, not the court).
III
While the district court simply allowed Tug Hill to
enforce the RigUp-Rogers arbitration agreement
without determining Tug Hill’s contractual authority
to do so, it also concluded alternatively that it would
apply West Virginia law and find that the RigUp
Agreement “demonstrates an intent to make . . . Tug
Hill a third-party beneficiary” by “provid[ing] specific
— and significant — benefits to . . . Tug Hill.” Rogers,
598 F. Supp. 3d at 427. Based on this, the court
concluded that “Tug Hill should be permitted to
enforce [Rogers’] agreement” to arbitrate “every
dispute” arising in connection with the Agreement. Id.
The court also explained that while it had found that
West Virginia law governed, it would reach the same
result under Texas law. Id. at 427 n.5.
App-18
While the parties dispute whether West Virginia
or Texas law applies, they agree that with respect to
the third-party beneficiary issue, the law in the two
states does not materially differ. Consequently, we
need not decide which law applies in resolving
whether Tug Hill may enforce the RigUp arbitration
agreement as a third-party beneficiary.
Both Texas and West Virginia apply a
presumption against finding that a contract confers
third-party beneficiary status. See First Bank v.
Brumitt, 519 S.W.3d 95, 103 (Tex. 2017) (“We must
begin with the presumption that the parties
contracted solely for themselves, and only a clear
expression of the intent to create a third-party
beneficiary can overcome that presumption” (cleaned
up)); Eastern Steel Constructors, Inc. v. City of Salem,
549 S.E.2d 266, 278 (W. Va. 2001) (“In the absence of
a provision in a contract specifically stating that such
contract shall inure to the benefit of a third person,
there is a presumption that the contracting parties did
not so intend and in order to overcome such
presumption the implication from the contract as a
whole and the surrounding circumstances must be so
strong as to be tantamount to an express declaration”
(quoting Syl. pt. 2, Ison v. Daniel Crisp Corp., 122
S.E.2d 553, 553–54 (W. Va. 1961))). And both Texas
and West Virginia law similarly include a requirement
that the parties must have intended to secure a benefit
to a third party. Under West Virginia law, “[a] thirdparty beneficiary may enforce a contract only if it is
made for its sole benefit.” Donna S. v. Travis S., 874
S.E.2d 746, 755 (W. Va. 2022) (emphasis added) (citing
W. Va. Code § 55-8-12). And Texas law provides that
“a person seeking to establish third-party-beneficiary
App-19
status must demonstrate” not only “that the
contracting parties intended to secure a benefit to that
third party” but also that they “entered into the
contract directly for the third party’s benefit.” First
Bank, 519 S.W.3d at 102 (emphasis added) (cleaned
up).
In this case, the Agreement between Rogers and
RigUp contains no provision stating specifically that it
was entered into for the sole benefit of Tug Hill or
directly for its benefit. Indeed, the language of the
Agreement indicates to the contrary. The Agreement
provides that its purpose was to govern only the legal
relationship between RigUp and Rogers. While
RigUp’s matchmaking service enabled Rogers to
connect with Tug Hill, the Agreement anticipated that
Rogers and Tug Hill would have to separately
“negotiate and determine . . . when and where [Rogers
would] perform Projects” for Tug Hill, as well as how
much Tug Hill would pay Rogers. Moreover, the
Agreement expressly disclaimed any “responsibility
for any interaction between [Rogers] and [Tug Hill]”
and distanced itself from any arrangement that
Rogers might reach with Tug Hill by providing that
“[a]ny interactions or disputes between [Rogers] and
[Tug Hill] are solely between [Rogers] and [Tug Hill].”
The Agreement also provided that “RigUp is not
responsible or liable for the actions or inactions of [Tug
Hill] or other third party in relation to Projects as
completed by [Rogers]” and that RigUp “will not be a
party to disputes or negotiations of disputes, between
[Rogers] and [Tug Hill].”
Finally, and perhaps most tellingly, the
arbitration clause itself limits its applicability to
App-20
disputes between Rogers and RigUp. It provides that
“[i]n the interest of resolving disputes between
[Rogers] and RigUp in the most expedient and cost
effective manner, [Rogers] and RigUp agree” to
arbitrate disputes, such that “by entering into these
terms, [Rogers] and RigUp are each waiving the right
to a trial by jury.” (Emphasis added). The remaining
provisions of the arbitration clause similarly
contemplate arbitration only between Rogers and
RigUp, not between Rogers and any company for
whom Rogers performed projects (here, Tug Hill).
Thus, it provided that “[a]ny arbitration between
[Rogers] and RigUp will be settled under the Federal
Arbitration Act,” and it included additional details of
how arbitration would proceed between “[Rogers] and
RigUp.” (Emphasis added).
These numerous provisions in the Agreement
preclude any conclusion that the Agreement was
entered into solely or directly for the benefit of Tug
Hill, such that Tug Hill could enforce it as a thirdparty beneficiary. Accordingly, the district court erred
in granting Tug Hill’s motion to dismiss and
compelling Rogers, under the arbitration agreement
between him and RigUp, to proceed to arbitration with
respect to his FLSA claim against Tug Hill.
IV
Rogers also contends that the district court
abused its discretion in granting RigUp’s motion to
intervene under Federal Rule of Civil Procedure 24.
We agree.
Rogers’ suit against Tug Hill is a claim for
overtime wages under the FLSA, which brings to issue
App-21
the terms and conditions under which Rogers actually
worked for Tug Hill over a period of some 18 months.
While RigUp acted as matchmaker in initially
connecting Rogers with Tug Hill, their subsequent
arrangement, as stated in the Agreement, was
independent of Rogers’ contract with RigUp. Indeed,
the Rogers-RigUp Agreement went to great lengths to
distance RigUp’s matchmaking service from the work
that Rogers would thereafter perform for the company
with which he was matched. And in its motion to
intervene, RigUp only claimed that its interest in
Rogers’ suit against Tug Hill was to protect its own
business model and to avoid or mitigate liability to
Tug Hill under the agreement governing their
business relationship. We might well question, simply
on that basis, whether RigUp has articulated a
sufficient interest under Rule 24 to justify
intervention in Rogers’ FLSA action.
Instead, however, we conclude that the district
court abused its discretion in allowing RigUp’s
intervention because it failed to recognize, as Rogers
had specifically argued, that “RigUp contractually
disclaimed any right to be [a] party to . . . disputes”
like this one.
In several specific provisions of the Agreement,
Rogers and RigUp agreed that RigUp would not be a
party to disputes between Rogers and the oil and gas
operator for whom he would work, which ended up
being Tug Hill. For example, the Agreement stated
broadly that “[a]ny interactions or disputes between
[Rogers] and [Tug Hill] [were] solely between [Rogers]
and [Tug Hill]” and that “RigUp and its licensors shall
have no liability, obligation or responsibility for any
App-22
interaction between [Rogers] and [Tug Hill].”
Elsewhere, the Agreement stated that “RigUp [was]
not responsible or liable for the actions or inactions of
[Tug Hill],” and Rogers agreed to “waive and release
RigUp from any and all liability, claims or damages
arising from or in any way related to projects or
companies.” The Agreement then provided, “RIGUP
WILL NOT BE A PARTY TO DISPUTES OR
NEGOTIATIONS OF DISPUTES, BETWEEN
[ROGERS] AND COMPANIES.”
RigUp thus expressly agreed with Rogers that it
would “not be a party to disputes” between Rogers and
any third-party company, such as Tug Hill. By doing
so, RigUp waived whatever right it might otherwise
have had to be a party to Rogers’ action against Tug
Hill, thus precluding its intervention under Rule 24.
Indeed, one of the requirements for intervention as of
right under Rule 24(a)(2) is that the would-be
intervenor be “situated [such] that disposing of the
action may as a practical matter impair or impede the
movant’s ability to protect its interest.” Fed. R. Civ. P.
24(a)(2). Because RigUp’s agreement with Rogers
expressly disclaimed any interest in any litigation
Rogers might have with a company in Tug Hill’s
position, making clear that RigUp would not be
involved in such disputes as a third party, RigUp
cannot now opportunistically claim that intervention
is necessary to protect its interest. Similarly, before
permitting a party to intervene under Rule 24(b), a
district court is required to “consider whether the
intervention will unduly delay or prejudice the
adjudication of the original parties’ rights,” Fed. R.
Civ. P. 24(b)(3), an inquiry that here required
consideration of the Agreement’s provision that
App-23
Rogers would litigate any dispute he had with a
company like Tug Hill without RigUp’s being “a party
to [that] dispute[].”
The district court accordingly abused its
discretion by allowing RigUp’s intervention
notwithstanding the Agreement’s plain terms.
*
*
*
The judgment of the district court is reversed, and
the case is remanded for further proceedings between
Rogers and Tug Hill, consistent with this opinion.
REVERSED AND REMANDED
App-24
Appendix B
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF
WEST VIRGINIA
Wheeling
________________
Civil Action No. 5:21-CV-199
Judge Bailey
________________
LASTEPHEN ROGERS, Individually and for Others
Similarly Situated,
v.
Plaintiff,
TUG HILL OPERATING, LLC,
Defendant.
________________
Filed: Apr. 12, 2022
________________
MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AND
GRANTING MOTION TO DISMISS
________________
Pending before this Court is a Motion to Intervene
[Doc. 15] filed by RUSCO Operating, LLC on January
27, 2022. Following a deadline extension, Defendant
Tug Hill Operating, LLC filed a Response to Motion to
Intervene [Doc. 23] on February 24, 2022. That same
day, plaintiff filed a Memorandum in Opposition to
Motion to Intervene [Doc. 24]. On March 10, 2022,
RUSCO Operating, LLC filed a Reply [Doc. 30].
App-25
Additionally, pending before this Court is
defendant Tug Hill Operating, LLC’s Motion to
Dismiss Plaintiff’s Complaint Pursuant to Federal
Rules of Civil Procedure 12(b)(1), (6), and (7) [Doc. 21]
and accompanying Memorandum in Support [Doc. 22],
filed on February 24, 2022. Following a deadline
extension, plaintiff filed a Response in Opposition
[Doc. 31] on March 17, 2022. Defendant Tug Hill
Operating, LLC filed a Reply [Doc. 32] on March 24,
2022.
Based on the extensive briefing on both Motions,
each is ripe for adjudication. For the reasons contained
herein, the Motion to Intervene will be granted, and
the Motion to Dismiss will be granted.
BACKGROUND
Plaintiff Lastephen Rogers (“plaintiff”) filed his
complaint [Doc. 1] on December 3, 2021, seeking to
recover alleged unpaid overtime wages and other
damages under the Fair Labor Standards Act
(“FLSA”) against defendant Tug Hill Operating, LLC
(“defendant Tug Hill”). [Id. at ¶ 1]. Plaintiff brings this
action on behalf of himself and all other similarly
situated workers paid by defendant Tug Hill’s dayrate system. [Id. at ¶ 9].
According to plaintiff, defendant Tug Hill
operates an oil and natural gas exploration and
production company operating in West Virginia and
Texas. [Id. at 17]. Plaintiff contends that while
working for defendant Tug Hill as a drilling and
completions consultant, he, along with similarly
situated workers, was paid a flat amount for each day
worked with no overtime for hours worked in excess of
App-26
40 hours in a workweek in violation of the FLSA. [Id.
at 9–13].
Non-party RUSCO Operating, LLC (“RUSCO”)
operates an online platform (“the application” or “the
app”), which is used by oil and gas operators and
independent contractors who provide freelance
services for those operators. [Doc. 15-1 at 1–2].
According to RUSCO, its app is used to facilitate and
connect independent contractors to particular projects
run by oil and gas operators nationwide. [Id.]. Beyond
the matchmaking function between operators and
independent contractors, RUSCO’s app also provides
independent
contractors
with
administrative
functions like payment, insurance, and recordkeeping. [Id. at 4]. After a contractor, like plaintiff,
performs work, RUSCO then pays the contractor in
accordance with an invoice submitted by the
contractor, less a percentage known as the “split” that
compensates RUSCO for its service. [Id.]. Operators
like defendant then pay RUSCO the balance invoiced.
[Id.].
Underlying the foregoing relationship between
plaintiff and RUSCO is an independent contractor
agreement, which states that the agreement between
RUSCO and plaintiff “constitutes a binding
agreement between you, an independent professional
. . . and [RUSCO] . . . governing your use of the Service
. . . to provide freelance services to third party
companies.” See [Doc. 15-4]. Throughout the
independent contractor agreement, plaintiff confers
several benefits on defendant and RUSCO, including:
•
Rights regarding the work to be performed: “You
and [Tug Hill] solely negotiate and determine (x)
App-27
when and where you perform Projects, (y) what you
wear while performing projects, and (z) any
additional bonuses or gratuities arising out of such
Projects.”
•
Waiver of workers compensation: “As an
independent professional, you are assuming the
responsibilities of an employer for the purpose of a
Project, and you hereby affirm you are not entitled
to, and are hereby waiving, any claim for workers
compensation benefits under either [RUSCO]’s or
[Tug Hill’s] workers’ compensation insurance
policy.”
•
Confidentiality: “You must keep [RUSCO]’s
confidential information absolutely confidential,
except as required or provided by law, including
but not limited to information about other [Tug
Hill] Projects . . .”
[Id.]. Plaintiff also agreed to abide by certain terms of
service, which contain a dispute resolution provision;
importantly, RUSCO’s dispute resolution provision
reads as follows:
Generally, in the interest of resolving
disputes between you and [RUSCO] in the
most expedient and cost effective manner,
you and [RUSCO] agree that every dispute
arising in connection with these Terms will be
resolved by binding arbitration. . . . This
agreement to arbitrate disputes includes all
claims arising out of or relating to any aspect
of these Terms, whether based in contract,
tort, statute, fraud, misrepresentation, or any
App-28
other legal theory, and regardless of whether
a claim arises during or after the termination
of these Terms. YOU UNDERSTAND AND
AGREE THAT, BY ENTERING INTO
THESE TERMS, YOU AND [RUSCO] ARE
EACH WAIVING THE RIGHT TO A TRIAL
BY JURY OR TO PARTICIPATE IN A
CLASS ACTION.
[Doc. 15-6]. Further, the terms state that claims will
be administered by and in accordance with the Rules
of the American Arbitration Association, and that
“[t]he arbitrator [shall have] exclusive authority to
resolve any dispute relating to the interpretation,
applicability, or enforceability of this binding
arbitration agreement.” [Id.].
LEGAL STANDARDS
I.
Intervention
“The Fourth Circuit favors ‘liberal intervention’
and preventing the ‘problem of absent interested
parties.’” Deutsche Bank v. Mountain West
Hospitality, LLC, 2017 WL 6420280, at *2 (N.D.
W.Va. Dec. 15, 2017) (Keeley, J.) (citing Friend v.
REMAC Am., Inc., 2014 WL 2440438, at *1 (N.D.
W.Va. May 30, 2014) (Groh, J.) (quoting Feller v.
Brock, 802 F.2d 722, 729 (4th Cir. 1986))).
“Prospective intervenors bear the burden of
demonstrating their right to intervene.” Deutsche
Bank, 2017 WL 6420280, at *2 (citing In re
Monitronics Int’l, Inc., 2015 WL 12748330, at *1
(N.D. W.Va. June 3, 2015) (Keeley, J.) (citing
Richman v. First Woman’s Bank, 104 F.3d 654, 658
(4th Cir. 1997))). Under Fed. R. Civ. Pro. 24, this Court
has discretion to allow intervention either as a matter
App-29
of right or on a permissive basis. Stuart v. Huff, 706
F.3d 345, 349 (4th Cir. 2013).
A. Intervention by Right
In the Fourth Circuit, “liberal intervention is
desirable to dispose of as much of a controversy
‘involving as many apparently concerned persons as is
compatible with efficiency and due process.’” Feller,
802 F.2d at 729 (4th Cir. 1986) (quoting Nuesse v.
Camp, 385 F.2d 694, 700 (D.C. Cir. 1967)).
This Court must grant a timely motion to
intervene if the movant “claims an interest relating to
the property or transaction that is the subject of the
action and is so situated that disposing of the action
may as a practical matter impair or impede the
movant’s ability to protect its interests, unless
existing parties adequately represent that interest.”
Fed. R. Civ. Pro. 24(a). The Fourth Circuit recognizes
that, to intervene as a matter of right, the movant
must satisfy four requirements:
(1) the application must be timely; (2) the
applicant must have an interest in the subject
matter sufficient to merit intervention; (3) the
denial of intervention would impair or impede
the applicant’s ability to protect its interest;
and (4) the applicant’s interest is not
adequately represented by the existing
parties to the litigation.
Scardelletti v. Debarr, 265 F.3d 195, 202 (4th Cir.
2001).
1.
Timeliness
Under either Rule 24(a) or 24(b), the application
for intervention must be timely. See Fed. R. Civ. Pro.
App-30
24(a) & 24(b) (requiring “timely application”); Gould
v. Alleco, Inc., 883 F.2d 281, 286 (4th Cir. 1989)
(“Both intervention of right and permissive
intervention require timely application.”). Although
Rule 24 “requires that the motion to intervene be
‘timely,’ it does not attempt to define the term or
specify rigid time limits.” United States v. South
Bend Community Sch. Corp., 710 F.2d 394, 396 (7th
Cir. 1983); see Black v. Central Motor Lines Inc.,
500 F.2d 407, 408 (4th Cir. 1974) (noting that “Rule 24
is silent as to what constitutes a timely application
and the question must therefore be answered in each
case by the exercise of the sound discretion of the
court”). “The purpose of the requirement is to prevent
a tardy intervenor from derailing a lawsuit within
sight of the terminal.” South Bend, 710 F.2d at 396.
“To determine whether an application for intervention
is timely, we examine the following factors: how far
the suit has progressed, the prejudice that delay might
cause other parties, and the reason for the tardiness
in moving to intervene.” Gould, 883 F.2d at 286.
Where intervention is of right, “the timeliness
requirement of Rule 24 should not be as strictly
enforced as in a case where intervention is only
permissive.” Brink v. DaLesio, 667 F.2d 420, 428
(4th Cir. 1981).
2.
Interest in Subject Matter
A potential intervenor’s interest in the subject
matter of the litigation must be “a significantly
protectable interest.” Teague v. Bakker, 931 F.2d
259, 261 (4th Cir. 1991) (citations omitted). An
interest is a “significantly protectable interest in an
action if [a party] ‘stand[s] to gain or lose by the direct
App-31
legal operation’ of a judgment in that action.”
Oplaihio Valley Envtl. Coal., Inc. v. McCarthy,
313 F.R.D. 10, 18 (S.D. W.Va. 2015) (Chambers, C.J.)
(quoting Teague, 931 F.2d at 261). But “[s]tanding to
gain or lose by direct operation of a judgment may not
be a necessary condition for an interest to be
significantly protectable.” Id. This Court has observed
that “it requires only that [the movant] show that the
disposition of the action ‘may as a practical matter’
impair their interests.” United States v.
Exxonmobil Corp., 264 F.R.D. 242, 245 (N.D. W.Va.
2010) (Keeley, J.) (quoting Little Rock Sch. Dist. v.
Pulaski Cty. Special Sch. Dist., 738 F.2d 82, 84 (8th
Cir. 1984)).
3.
Impaired Ability to Protect Interests
Courts in the context of this sort of litigation have
recognized that a signatory to an arbitration
agreement should have an ability to protect its
interests in the enforcement of the agreement
warranting intervention as of right. See, e.g., Nesser
v. MAC Acquisitions, LLC, 2021 WL 2636743, at *4
(W.D. N.C. 2021) (Whitney, J.) (“[T]his Court finds
[intervenor] as a contracting party with a significantly
protectable
interest
at
risk–the
arbitration
agreement–should be allowed to intervene to protect
said interest.”); Becker v. Delek US Energy, Inc.,
2020 WL 4604544, at *8 (M.D. Tenn. 2020) (Trauger,
J.) (staffing company permitted to intervene based on
“its interest in resolving the question of whether the
arbitration clause . . . extend[s] to [worker’s] claims
against [operator]”); Bock v. Salt Creek Midstream
LLC, 2020 WL 3989646, at *4 (D.N.M. July 15, 2020)
(“[S]eeking to vindicate it’s A[rbitration] A[greement]
App-32
with [workers] is a legitimate interest for [staffing
company] to protect.”); Altenhofen v. S. Star
Central Gas Pipeline, Inc., 2020 WL 3547947, at *4
(W.D. Ky. June 30, 2020) (same); Ferrell v.
SemGroup Corp., 2020 WL 4281302, at *3 (N.D.
Okla. June 12, 2020) (same).
4.
Adequacy of
Named Party
Representation
by
A potential intervenor’s burden to show that its
interests will not adequately be represented by a
named party is “‘minimal,’ and it is enough to show
that the representation ‘may be’ inadequate.” Kane
County, Utah v. United States, 928 F.3d 877,892
(10th Cir. 2019). “The possibility of divergence need
not be great in order to satisfy th[is] burden. An
intervenor need only show the possibility of
inadequate representation. Only when the objective of
the applicant for intervention is identical to that of one
of the parties is representation considered to be
adequate.” Barnes v. Security Life of Denver Ins.
Co., 945 F.3d 1112, 1124 (10th Cir. 2019).
B. Permissive Intervention
Fed. R. Civ. Pro. 24(b)(1) provides that, “[o]n
timely motion, the court may permit anyone to
intervene who . . . has a claim or defense that shares
with the main action a common question of law or
fact.” Although whether to allow permissive
intervention is within the sound discretion of the
district court, it must “consider whether the
intervention will unduly delay or prejudice the
adjudication of the original parties’ rights.” See Smith
v. Pennington, 352 F.3d 884, 892 (4th Cir. 2003);
Fed. R. Civ. Pro. 24(b)(3).
App-33
II. Motion to Dismiss
A. 12(b)(1)
A party may move to dismiss an action for lack of
subject matter jurisdiction under Federal Rule of Civil
Procedure 12(b)(1). The burden of proving subject
matter jurisdiction on a Rule 12(b)(1) motion to
dismiss is on the party asserting federal jurisdiction.
A trial court may consider evidence by affidavit,
deposition, or live testimony without converting the
proceeding to one for summary judgment. Adams v.
Bain, 697 F.2d 1213, 1219 (4th Cir. 1982); Mims v.
Kemp, 516 F.2d 21 (4th Cir. 1975). Because the court’s
very power to hear the case is at issue in a Rule
12(b)(1) motion, the trial court is free to weigh the
evidence to determine the existence of its jurisdiction.
No presumptive truthfulness attaches to the plaintiff’s
allegations, and the existence of disputed material
facts will not preclude the trial court from evaluating
for itself the merits of jurisdictional claims. See
Materson v. Stokes, 166 F.R.D. 368, 371 (E.D. Va.
1996). Whenever it appears by suggestion of the
parties or otherwise that the court lacks jurisdiction of
the subject matter, the court shall dismiss the action.
See Fed. R. Civ. P. 12(h)(3).
B. 12(b)(6)
A complaint must be dismissed if it does not allege
“enough facts to state a claim to relief that is plausible
on its face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007); see also Giarratano v. Johnson, 521
F.3d 298, 302 (4th Cir. 2008) (applying the Twombly
standard and emphasizing the necessity of
plausibility). When reviewing a motion to dismiss
pursuant to Rule 12(b)(6) of the Federal Rules of Civil
App-34
Procedure, the Court must assume all of the
allegations to be true, must resolve all doubts and
inferences in favor of the plaintiff, and must view the
allegations in a light most favorable to the plaintiff.
Edwards v. City of Goldsboro, 178 F.3d 231, 243–
44 (4th Cir. 1999).
When rendering its decision, the Court should
consider only the allegations contained in the
Complaint, the exhibits to the Complaint, matters of
public record, and other similar materials that are
subject to judicial notice. Anheuser-Busch, Inc. v.
Schmoke, 63 F.3d 1305, 1312 (4th Cir. 1995). In
Twombly, the Supreme Court, noted that “a plaintiff’s
obligation to provide the ‘grounds’ of his ‘entitle[ment]
to relief’ requires more than labels and conclusions,
and a formulaic recitation of the elements of a cause
of action will not do. . . .” Twombly, 550 U.S. at 555,
570 (upholding the dismissal of a complaint where the
plaintiffs did not “nudge[ ] their claims across the line
from conceivable to plausible.”).
This Court is well aware that “[M]atters outside
of the pleadings are generally not considered in ruling
on a Rule 12 Motion.” Williams v. Branker, 462 F.
App’x 348, 352 (4th Cir. 2012). “Ordinarily, a court
may not consider any documents that are outside of
the Complaint, or not expressly incorporated therein,
unless the motion is converted into one for summary
judgment.” Witthohn v. Fed. Ins. Co., 164 F. App’x
395, 396 (4th Cir. 2006). However, the Court may rely
on extrinsic evidence if the documents are central to a
plaintiff’s claim or are sufficiently referred to in the
Complaint. Id. at 396–97.
App-35
C. 12(b) and Arbitration
A motion to compel arbitration may be pursued
pursuant to Rule 12(b)(1) or 12(b)(6) of the Federal
Rules of Civil Procedure. In either instance, courts
should apply the dismissal (rather than summary
judgment standard) if the challenge is a facial attack
to the allegations of the complaint. Price v. West
Virginia Air National Guard, 130TH Airlift
Wing, 2016 WL 3094010, at *2 (S.D. W.Va. June 1,
2016) (Johnston, J.) (stating that a motion to dismiss
under Rule 12(b)(1) can be either facial or factual, with
the former challenging whether the allegations of the
complaint are facially sufficient to sustain the court’s
jurisdiction).
Where the challenge is facial, the court must
accept the allegations as true and proceed to consider
the motion as it would a motion to dismiss for failure
to state a claim under Rule 12(b)(6). Id. A challenge
can be facial and thus subject to the motion to dismiss
standard even if the defendants attach the arbitration
agreement to their filing. See Salmons v. CMH of
Ky., Inc., 2019 WL 3884038 (S.D. W.Va. Aug. 16,
2019) (Copenhaver, J.).
D. 12(b)(7)
A court may dismiss an action for failure to join a
party. See Fed. R. Civ. Pro. 12(b)(7) (stating that “a
party may assert the following defenses by motion . . .
failure to join a party under Rule 19”). The movant
bears the burden of demonstrating that dismissal for
non-joinder is appropriate.
In analyzing a motion to dismiss under Rule
12(b)(7), courts conduct a two-step inquiry. See West
Virginia Advocates, Inc. v. Mitchell, 2007 WL
App-36
1088850, at *3 (N.D. W.Va. Mar. 30, 2007) (Stamp, J.).
First, a court must determine whether a party is
necessary within the meaning of Rule 19(a). Id. Under
Rule 19(a)(1), a party is necessary where:
(A) in that person’s absence, the court cannot
accord complete relief among existing parties;
or
(B) that person claims an interest relating to
the subject of the action and is so situated
that disposing of the action in the person’s
absence may: (i) as a practical matter impair
or impede the person’s ability to protect the
interest; or (ii) leave an existing party subject
toa substantial risk of incurring double,
multiple,
or
otherwise
inconsistent
obligations because of the interest.
If the party is necessary but cannot feasibly be joined,
the court proceeds to the second prong of the inquiry,
which asks whether the action can continue absent the
party, or whether the party is “indispensable” under
Rule 19(b). Id.
In deciding whether a party is indispensable, the
court considers four factors: (1) the extent to which a
judgment rendered in the party’s absence might
prejudice that party or the other parties; (2) the extent
to which any prejudice could be ameliorated; (3)
whether a judgment rendered in the party’s absence
would be inadequate; and (4) whether the plaintiff
would have an adequate remedy if the action were
dismissed for non-joinder. Fed. R. Civ. Pro. 19(b). If
the absent party is both necessary and indispensable,
then the litigation should be dismissed. Fed. R. Civ. P.
12(b)(7).
App-37
DISCUSSION
As noted above, there are two pending Motions,
which have been briefed extensively by the parties.
Accordingly, this Court will first address the Motion
to Intervene before turning to a discussion of the
Motion to Dismiss.
I.
RUSCO’s Motion to Intervene
RUSCO argues that plaintiff has improperly
excluded it from the pending litigation through
selective pleading despite the fact that plaintiff had an
actual agreement concerning his independent
contractor status with RUSCO. [Doc. 15-1 at 1].
According to RUSCO, plaintiff signed this contract
including the aforementioned arbitration agreement
in which plaintiff promised to arbitrate claims like the
ones asserted here. [Id.]. RUSCO avers that
intervention is warranted as a right because RUSCO’s
contractual right to arbitration cannot be fully
protected if it is absent from this litigation. [Id. at 2].
Absent intervention, RUSCO states that it could
potentially be liable to defendant Tug Hill based on
the outcome of the case. [Id.]. Alternatively, RUSCO
argues it should be granted permissive intervention
because the enforcement of its contractual rights
share common questions of law and fact raised herein,
and an inability to participate in this lawsuit could
impair its business model and subject it to liability.
[Id.].
Defendant Tug Hill filed a Response to the Motion
to Intervene. See [Doc. 23]. Therein, defendant Tug
Hill joins in RUSCO’s request, and further argues that
RUSCO must be joined in the ongoing litigation based
App-38
on, inter alia, the language of the aforementioned
arbitration clause. [Id. at 1–2].
Plaintiff filed a Memorandum in Opposition to
Motion to Intervene [Doc. 24] advancing several
arguments against RUSCO’s intervention 1. First,
plaintiff contends that RUSCO does not have a
significantly protectible interest in this lawsuit
against defendant Tug Hill. [Id. at 8]. In support of
this position, plaintiff asserts that RUSCO’s business
model is not at issue, its interest in arbitration alone
is not significantly protectible, and it cannot be liable
for the result of this lawsuit either as a joint employer
or a potential indemnitor to defendant Tug Hill. [Id. at
8–14]. Further, plaintiff argues that resolving his
claims against defendant Tug Hill will not impair or
impede RUSCO’s alleged interests. [Id. at 16].
Further, plaintiff avers that defendant Tug Hill
adequately represents RUSCO’s alleged interest in
this matter. [Id. at 17]. As a final, alternative
argument, plaintiff contends that permissive
intervention is also inappropriate. [Id. at 18].
RUSCO filed a Reply in which it reasserts its
arguments for both intervention by right and
permissive intervention. [Doc. 30].
1 Plaintiff identifies that RUSCO is a wholly owned subsidiary
of Workrise Technologies, Inc. f/k/a RigUp, Inc., and uses the two
interchangeably. For the sake of clarity, this Court will identify
the entity as “RUSCO.”
App-39
A. RUSCO is entitled to intervention as a
matter of right.
Based on consideration of the arguments asserted
by the parties, this Court concludes that RUSCO is
entitled to intervene in this matter by right.
1.
The Motion is timely.
Turning to the first factor under the Fourth
Circuit’s analysis, the subject Motion is clearly timely.
In fact, plaintiff does not assert an argument that the
Motion is somehow untimely in his Response. Here,
plaintiff filed his original complaint on December 3,
2021. See [Doc. 1]. Defendant Tug Hill has not even
filed a responsive pleading to the complaint pending
the resolution of its Motion to Dismiss. Further, no
discovery has taken place, and this Court has yet to
issue even an initial scheduling order. Accordingly,
there can be no question that RUSCO’s motion is
timely considering these facts, and it therefore
satisfies the first prong to intervene by right.
2.
RUSCO’s Interest in this Litigation
is Significantly Protectible.
RUSCO argues that its interest in this litigation
is significantly protectible because it has a legitimate
interest in the enforcement of its arbitration
agreement with plaintiff. [Doc. 15-1 at 10]. Plaintiff
concedes that RUSCO identified at least three
interests it seeks to protect by intervening, but
plaintiff contends that none of these three interests
are “significantly protectible.” This Court disagrees.
a. The Business Model
First, and as previously mentioned, RUSCO
contends that its business model is directly challenged
App-40
by the potential outcome of this litigation. [Id. at 10–
11]. In Response, plaintiff raises virtually identical
arguments to those raised in New Mexico litigation
involving RUSCO, which were rejected by that Court.
See Martin v. Tap Rock Resources, LLC, 2022 WL
278874, at *2 (D.N.M. Jan. 31, 2022) (granting
RUSCO’s motion to intervene and rejecting the same
arguments raised by the same plaintiff’s counsel
here). 2 As the Martin court noted, “no matter how
Plaintiffs’ characterize the situation, they cannot
reasonably argue that an adverse decision would not
adversely impact RUSCO’s business model.” 2022 WL
278874, at *7. Looking at the economic realities of the
case, the Martin court recognized the significance of
2 ln fact, the Martin court noted in footnote 4:
As the Court previously recognized in Bock v. Salt Creek
Midstream LLC, “there is a growing body of intervention
jurisprudence among district courts in similar cases, with the
trend decidedly in favor of granting intervention.” 2020 WL
3989646, at *7 (D.N.M. July 15, 2020) (same Plaintiff’s counsel
as instant action) (listing several additional cases with same
Plaintiff’s counsel), adopted by 2020 WL 5640669 (D.N.M. Sept.
22, 2020); see also Becker v. Delek US Energy, Inc., 2020 WL
4604544 (M.D. Tenn. Aug. 11, 2020); Altenhofen v. S. Star
Cent. Gas Pipeline, Inc., No. 4:20CV-00030-JHM, 2020 WL
3547947, at *1 (W.D. Ky. June 30, 2020) (intervention granted to
staffing agency that employed plaintiffs pursuant to arbitration
agreements, but which was not named in FLSA class action)
(plaintiff’s counsel included Plaintiffs’ counsel in instant action);
Ferrell v. SemGroup Corporation, et al., 485 F.Supp.3d 1334
(N.D. Ok. 2020) (same) (counsel again overlap), overruled on
other grounds at 2021 WL 5576677 (10th Cir. Nov. 30, 2021);
Robertson v. Enbridge (U.S.) Inc., 2020 WL 2104911, at *1
(W.D. Pa. May 1, 2020) (same) (counsel again overlap); Snow v.
Silver Creek Midstream Holdings, LLC, 467 F.Supp.3d 1168
(D. Wyo. 2020) (same) (counsel again overlap).
App-41
RUSCO’s interest and noted “[a] determination
against Tap Rock classifying Plaintiffs as ‘employees’
and not ‘independent contractors’ would turn that
same business model on its head and arguably
threaten RUSCO’s financial security. From its
standpoint, RUSCO has asserted a financial interest
worth protecting.” Id.
Again, plaintiff makes the same rejected
arguments here. Plaintiff minimizes, but never
particularly disputes, the ongoing relationship
between himself and RUSCO, which continues after
an independent contractor accepts a project. This is
especially critical here, where defendant Tug Hill
indicated the possibility of seeking indemnification
from RUSCO based on plaintiff’s claims. See [Doc. 151 at 6].
The only law relied upon by plaintiff in his
argument against RUSCO’s interest in the litigation
is that “Tug Hill has an independent duty, separate
and apart from the duty owed by [RUSCO].” [Doc. 24
at 11]. But this contention, while correct, is not
relevant to the inquiry on the pending Motion, i.e.
whether RUSCO has a significant interest in this
dispute. Though its conclusions are broad, plaintiff’s
Response fails to demonstrate plaintiff’s claims do not
impact the contractual relationship between RUSCO
and defendant Tug Hill. In fact, defendant Tug Hill
has affirmatively confirmed RUSCO’s possible
liability based on the alleged failure of RUSCO’s
representations as to plaintiff’s independent
contractor status. See [Doc. 22].
As identified by RUSCO, the Fourth Circuit
permits intervention where, as here, the prospective
App-42
intervenor has advocated purely economic interests in
ongoing litigation. See, e.g., Feller v. Brock, 802 F.2d
722, 729–30 (4th Cir. 1986) (potential for increased
wages was sufficient interest to allow apple pickers
intervention of right in case seeking to compel United
States Department of Labor to issue permits for
foreign workers); JLS, Inc. v. Public Service
Comm’n of West Virginia, et al., 321 F.App’x 286,
289–90 (4th Cir. 2009) (potential for increased
competition was sufficient interest to support
intervention by motor transport companies in suit to
determine proper regulator for the transportation of
railroad employees.).
Plaintiff’s Response seeks to divert this Court
from this conclusion by citing two cases for the
proposition that a “vague” or “remote” possibility that
an interest may be affected is not sufficient to warrant
intervention. See [Doc. 24 at 12–13]. First, plaintiff
cites Ohio Valley Env’t Coalition v. McCarthy, 313
F.R.D. 10, 22 (S.D. W.Va. 2015) (Chambers, C.J.). In
McCarthy, the court denied the West Virginia Coal
Association’s request to intervene in an environmental
advocacy group’s litigation against the Environmental
Protection Agency because there were “too many steps
involving nebulous goals and discretion of EPA and
state agency between potential judgment in
organizations’ favor and any possible adverse
consequence to association members’ interests in
property, coal reserves, or water treatment costs from
potentially more stringent effluent limitations on
members’ national pollution discharge elimination
system (NPDES) permits.” Id. at 20. The McCarthy
court noted that “[i]n ruling on motions for
intervention of rights, courts could not function
App-43
properly if they were required to find significantly
protectable interests based on multiple layers of
contingency.” Id. at 25. This case is inopposite to the
subject analysis because there are no layers of
contingency here. Both defendant Tug Hill and
RUSCO have detailed specific and direct possible
consequence they may face as a result of the outcome
of litigation.
Plaintiff also cites Talbot 2002 Underwriting
Cap. Ld. v. Old White Charities, Inc. 2015 WL
6680892 (S.D. W.Va. Oct. 30, 2015) (Berger, J.) for the
proposition that RUSCO’s interest is too vague. [Doc.
24 at 13]. This Court is not persuaded by plaintiff’s
argument based on Talbot, where Judge Berger
granted intervention by finding the economic interest
asserted sufficient for purposes of intervention by
right. More specifically, the Talbot court found that
“if the Plaintiff succeeds in obtaining a declaratory
judgment, [intervenor] will face a greater likelihood of
claims for indemnification, and findings of the Court
in this case may limit the ability of [intervenor] to
defend such claims.” Id., at *2.
b. Arbitration
In addition to the possible effects on its business
model, RUSCO argues, throughout its briefing, that
its interest in arbitration constitutes a significantly
protectible interest. See [Doc. 15-1]. In Response,
plaintiff contends that arbitration alone is not a
significantly protectible interest and relies on a
variety of cases in support. [Doc. 24 at 13–16]. This
Court is not persuaded by plaintiff’s argument in this
regard.
App-44
Initially, and as previously discussed, arbitration
is but one of RUSCO’s asserted interests in this case.
Next, as noted in the “Legal Standards” section of this
Order, various courts in this context have found that
seeking to enforce an arbitration agreement
constitutes a significantly protectible interest thereby
warranting intervention.
Further, this Court finds the legal support offered
by plaintiff to deviate from the aforementioned
opinions to be unpersuasive. First, plaintiff cites to
Field v. Anadarko Petro. Corp., 2022 WL 203256
(S.D. Tex. Jan. 24, 2022) against intervention. There,
the Court ultimately denied RUSCO’s motion to
intervene; however, the decision in Field was based
on circumstances different from the case at bar,
because
[RUSCO did] not argue that it faces potential
liability under either a joint-employer theory
or an agreement to indemnify Anadarko.
Hinkle v. Phillips 66 Co., No. PE:20-CV00022-DC-DF, 2020 WL 10352346, at (4
(W.D. Tex. Nov. 13, 2020) (granting
intervention as a of right under similar
circumstances because, inter alia, “the
specter of joint and several liability hanging
over” the intervenor’s relationship with the
defendant warranted a “place at the table
because any liability assessed to Defendant
may have a direct impact on intervenor).”
Field, at *4. The situation here is exactly opposite,
where defendant Tug Hill has demanded indemnity
fro RUSCO, thus making the potential for RUSCO’s
liability clear.
App-45
Similarly, plaintiff cites Hiser v. Nzone
Guidance, LLC, 799 F.App’x 247 (5th Cir. 2020) in
support of its argument against intervention based on
arbitration. [Doc 24 at 8]. However, in Hiser, RUSCO
did not attempt to intervene; rather, RUSCO’s
customer attempted to enforce the arbitration
agreement as a third-party beneficiary. Id. at 248.
Here, RUSCO is seeking to intervene and enforce its
own agreement. As Hiser demonstrates, intervention
is a proper avenue for RUSCO to protect its interest in
arbitration.
c. Liability
Plaintiff argues that RUSCO cannot intervene on
the basis that it might be liable as his joint employer.
[Doc. 24 at 16]. However, defendant Tug Hill’s demand
for indemnity provides RUSCO an interest in this
litigation sufficient to intervene. See Ferrell v.
SemGroup Corp., 2020 WL 4281302, at *4 (N.D.
Okla. June 12, 2020) (granting intervention as of
right; “[Intervenor’s] potential obligation constitutes a
direct financial interest in this litigation, which may
be impaired if [intervenor] is not permitted to
intervene and defend itself”); Altenhofen v.
Southern Star Cent. Gas Pipeline, Inc., 2020 WL
3547947, at *4 (W.D. Ky. June 30, 2020) (granting
intervention as of right; “Courts agree that an
intervenor has a sufficient interest in the litigation
where it may be required to indemnify a customer”);
Bock v. Salt Creek Midstream LLC, 2020 WL
3989646 (D.N.M. July 15, 2020) (granting
intervention as of right; “[B]ecause of the specter of
potential indemnification . . . this Court finds that
[intervenor] has a sufficiently direct economic interest
App-46
in this case and impairment of its interest is possible
if intervention is denied”); Becker v. Delek US
Energy, 2020 WL 4604544, at *10 (M.D. Tenn. Aug.
11, 2020) (granting intervention as of right; find an
indemnity demand “amplified” the propriety of
intervention); Hinkle v. Phillips 66 Co., 2020 WL
10352346, at *4 (W.D. Tex. Nov. 13, 2020) (granting
intervention as of right and holding “the undersigned
finds [intervenor] has adequately stated an interest in
this suit based on potential indemnity to Defendant”).
Despite this persuasive authority, plaintiff goes
on to argue against defendant Tug Hill’s potential
indemnity case and declares “[c]ourts around the
Country (including this Court) have rejected
employers’ attempts to seek contractual contribution
or indemnification for FLSA claims.” [Doc. 24 at 17].
This argument is misplaced.
First, plaintiff cites to Gustafson v. Bell
Atlantic, 171 F.Supp. 2d 311 (S.D. N.Y. 2001). In
Gustafson, the district court, relying on Herman v.
RSR Security Services, 172 F.3d 132, 143 (2d Cir.
1999), held that even in a joint employment situation,
a claim for contractual indemnification underthe
FLSA is “still absent.” Id. at 328. However, in
Herman, the Second Circuit held only that no
common law right to indemnification or contribution
exists under the FLSA absent a contract. Herman,
172 F.3d at 144. Here, a contract exists giving rise to
the indemnification claim and defendant Tug Hill is
not claiming a common law right.
Notably, plaintiff’s citations to Fourth Circuit
precedence fair no better for his argument. In Lyle v.
Food Lion, 954 F.2d 984 (4th Cir. 1992), defendant
App-47
Food Lion filed a third-party complaint against its own
employee on the grounds that he breached his contract
with defendant Food Lion and his fiduciary duty to the
company by himself violating and allowing plaintiff
Lyle to violate company policy while under
supervision. Id. Essentially, defendant Food Lion
sought to indemnify itself for its own violation of the
FLSA by shifting the blame to its employee, which is
distinguishable from the allegations here.
Similarly, McDougal v. G & S Tobacco
Dealers, L.L.C., 712 F.Supp.2d 488 (N.D. W.Va.
2010) (Kaull, M.J.) is not persuasive. In McDougal,
the issue before the court was whether the prior
employer owed a duty to the successor employer to
defend against FLSA claims made concerning wages
paid before the business changed hands. Ultimately,
the court in McDougal granted the successor
employer’s motion for summary judgment, finding
that the original employer owed a duty of indemnity
for FLSA claims prior to the sale of the business. Id.
at 500–01.
Plaintiff’s recitation of McDougal comes from an
earlier part of the decision where the court determined
the original employer was not liable to indemnify
damages after the date of closing. In any event, this
Court is not persuaded by McDougal because RUSCO
does not need to try its case to support intervention.
Accordingly, this Court finds that RUSCO’s
potential liability in this matter weighs in favor of
intervention by right.
App-48
3.
RUSCO’s Interest Will be Impaired
Absent intervention.
As identified, a nonparty seeking intervention as
of right must establish that the instant lawsuit could
potentially impair its interests. Having found that the
litigation affects RUSCO’s interests (namely, its
business model, interest in arbitration, and potential
liability), RUSCO clearly satisfies this prong in favor
of intervention by right.
4.
Defendant
adequately
interests.
Tug
Hill
cannot
represent
RUSCO’s
Having found at least three potential interests in
this matter, this Court too finds that Defendant Tug
Hill cannot adequately represent RUSCO’s interests
in the event this Court were to disallow intervention
by right. Plaintiff argues that allowing RUSCO to
intervene would effectively render the “adequate
representation” element of the prerequisite threshold
to intervene superfluous. [Doc. 24 at 20]. Plaintiff
further states that defendant Tug Hill and RUSCO’s
interests are fundamentally aligned. [Id.]. This Court
cannot agree.
As articulated by RUSCO, a finding of liability
against defendant Tug Hill alone would implicate
RUSCO in several ways. For example, if plaintiff were
to establish liability, RUSCO could be required to
indemnify defendant Tug Hill on plaintiff’s
substantive claims. Further, if plaintiff were to
succeed on his substantive claims against defendant
Tug Hill, plaintiff could theoretically pursue RUSCO
for damages as a joint employer. In this circumstance,
plaintiff would undoubtedly make every attempt to
App-49
leverage findings of fact in this litigation in the
hypothetical RUSCO litigation, even though RUSCO
would not have had an opportunity to contest those
facts here. Moreover, if plaintiff is ultimately
unsuccessful in this litigation against Tug Hill absent
RUSCO as a party, plaintiff could theoretically pursue
virtually the same claims against RUSCO in a second
stage of litigation. Additionally, and as a practical
matter, discovery in this matter would necessarily
require disclosure of facts and circumstances surround
the signing of the independent contractor agreement
between plaintiff and RUSCO, the terms of the
agreement, the negotiations and/or discussions
between the parties, and evidence of the parties’
intent. It would also require the disclosure of the hours
work by plaintiff and the fee remitted to him, both of
which are matters known exclusively to RUSCO.
Based on the foregoing, this Court finds that
RUSCO is entitled to intervention as a matter of right
pursuant to Fed. R. Civ. Pro. 24(a).
B. Even
assuming
arguendo
that
intervention by right is improper,
RUSCO would be entitled to permissive
intervention.
The parties agree that in order to permissibly
intervene, a non-party must timely show either that it
has a conditional right to intervene by a federal
statute, or that it has a claim or defense that shares a
common question of law or fact with the main action.
See Fed. R. Civ. Pro. 24(b). In exercising its discretion
to permit a party to intervene, “the court must
consider whether the intervention will unduly delay or
prejudice the adjudication of the original parties’
App-50
rights.” Fed. R. Civ. Pro. 24(b)(3). “[A] challenge to the
court’s discretionary decision to deny leave to
intervene must demonstrate a clear abuse of
discretion in denying the motion.” N. Carolina State
Conf. of NAACP v. Berger, 999 F.3d 915, 938 (4th
Cir. 2021) (quoting McHenry v. Comm’r, 677 F.3d
214, 219 (4th Cir. 2012)).
Here, RUSCO does not claim it has a conditional
right to intervene by federal statute. See [Doc. 15-1 at
15–16]. Instead, RUSCO’s timely motion asserts,
correctly, that intervention in this matter will not
prejudice either party, and that the matter involves
common questions of fact and law–namely, whether
plaintiff is an independent contractor under the FLSA.
Plaintiff and Rusco have a written contractual
agreement on this very issue, and finds on that
question could potentially subject RUSCO to liability
as either a joint employer or indemnitor. Accordingly,
and in addition to intervention by right, RUSCO is
entitled to permissive intervention.
II. Defendant Tug Hill’s Motion to Dismiss
Defendant Tug Hill asserts this matter should be
dismissed based on Fed. R. Civ. P. 12(b)(1), 12(b)(6),
and 12(b)(7). This Court will examine each basis for
dismissal in turn.
A. Dismissal pursuant to Fed. R. 12(b)(1) is
warranted because plaintiff entered into
a valid and enforceable arbitration
agreement covering the claims at issue
in this case.
Defendant Tug Hill begins its argument by
asserting that plaintiff voluntarily agreed to pursue
any disputes in arbitration arising out of his
App-51
relationship with RUSCO or the work performed for
the benefit of defendant Tug Hill. [Doc. 22 at 12–13].
Plaintiff counters by asserting that plaintiff never
agreed to arbitrate his claims against defendant Tug
Hill when he entered into the subject agreement with
RUSCO concerning arbitration. [Doc. 31 at 6–7].
Moreover, plaintiff contends that the language in
RUSCO’s arbitration agree does not confer upon
defendant Tug Hill the right to compel arbitration. [Id.
at 7].
1.
Arbitration in the Fourth Circuit
This Court notes that arbitration, for better or
worse, is highly favored by federal courts. Adkins v.
Labor Ready, Inc., 303 F.3d 496, 500 (4th Cir. 2002)
(citing Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 24 (1983). “Motions to
compel arbitration . . . should not be denied unless it
may be said with positive assurance that the
arbitration clause is not susceptible of an
interpretation that covers the asserted dispute.
Doubts should be resolved in favor of coverage.”
Zandford v. Prudential-Bache Sec., Inc., 112 F.3d
723, 727 (4th Cir. 1997) (citations omitted). Unless the
“scope of the arbitration clause is open to question, a
court must decide the question in favor of arbitration.”
Peoples Sec. Life. Ins. Co. v. Monumental Life Ins.
Co., 867 F.2d 809, 812 (4th Cir. 1989) (citing United
Steelworkers of Am. v. Warrior & Gulf
Navigation Co., 363 U.S. 574, 582 (1960)). The
“liberal
federal
policy
favoring
arbitration
agreements” applies equally in the employment
context. Cf. Shadahan v. Macy’s Corp. Servs., LLC,
App-52
2021 WL 4304698, at *2 (N.D. W.Va. Sept. 21, 2021)
(Groh, C.J.).
Courts in the Fourth Circuit look to see if the
party seeking to compel arbitration can satisfy each of
the following four factors: (1) whether there is a
dispute between the parties; (2) whether there exists
a written agreement that includes an arbitration
provision which purports to cover the dispute; (3) the
relationship of the transaction, which is evidence by
the agreement, to interstate or foreign commerce; and
(4) the failure, neglect or refusal of [a party] to
arbitrate the dispute. Id., at *2 3. When a court
considers these factors, it must be “mindful of the
‘clear federal directive in support of arbitration.’” See
Hightower v. GMRI, Inc., 272 F.3d 239, 241 (4th Cir.
2001).
2.
The Claims at Issue
Plaintiff’s agreement to arbitrate with RUSCO
expressly states that “every dispute arising in
connection with these Terms will be resolved by
binding arbitration. . . . This agreement to arbitrate
disputes includes all claims arising out of or relating
to any aspect of these Terms. . . .” See [Doc. 15-6].
Courts have found the use of these key phrases–
“every dispute” and “arising out of”–evidences the
parties’ intent to give their arbitration clause an
expansive reach. See Polyflow, LLC v. Specialty
RTP, LLC, 993 F.3d 295, 303–04 (5th Cir. 2021)
3 This Order does not address the first and fourth factor, as the
satisfaction of these considerations is evidenced by the simple
fact that plaintiff has filed a complaint against defendant Tug
Hill.
App-53
(finding that “arising out of” demonstrated that the
arbitration clause had expansive reach); Altenhofen
v. Southern Star Central Gas Pipeline, Inc., 2020
WL 6877575, at *6 (W.D. Ky. Nov. 23, 2020) (finding
that an agreement to arbitrate “all claims that have
arisen or will arise out of Employee’s employment with
or termination from [his employer]” encompassed
FLSA claims that were later prused not against the
employer but against its customer); Snow v. Silver
Creek Midstream Holdings, LLC, 467 F.Supp.3d
1168, 1170 (D. Wyo. 2020) (same).
Here, without entering into the independent
contractor agreement, which expressly incorporates
the terms of service including the arbitration
provision, plaintiff would not have performed work on
defendant Tug Hill’s projects through RUSCO. This
agreement not only services as the condition precedent
to work with customers, like defendant Tug Hill, who
contract with RUSCO; it also defines all of the parties’
respective commitments, rights, and obligations
related to the performance of that work. For example,
with regard to his classification, the agreement
provides: “[RUSCO] and you intend for you to provide
services to [defendant Tug Hill] strictly as an
independent professional and not as an employee,
worker, agent, joint venture, partner, or franchisee of
[RUSCO] or [Tug Hill].” See [Doc. 15-4]. With regard
to his compensation for services rendered, “[t]he fee
charged to [defendant Tug Hill] on your behalf shall
be the fee described in the Project Details unless you
and [defendant Tug Hill] notify [RUSCO] in writing
prior to the completion of the Project that you and
[defendant Tug Hill] have negotiated a different fee. .
. . [RUSCO’s] role in the payment process is solely
App-54
limited to payment processing and transmission
between you and [defendant Tug Hill]. [Id.]. Plaintiff
even agreed to indemnify defendant Tug Hill if a court
were to find that he was–as he now alleges–an
employee. [Id.]. Most notably, the terms of service
provided a mechanism to resolve disputes over these
commitments, rights, and obligations–plaintiff agreed
that every dispute arising in connection with these
terms would be resolved by binding arbitration.
According to the Supreme Court of the United
States, even if there is ambiguity as to the scope of the
arbitration provision, the ambiguity must be resolved
in favor of arbitration. See Moses H. Cone Mem’l
Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25
(1983) (explaining that “[a]ny doubts concerning the
scope of arbitrable issues should be resolved in favor
of arbitration,” including questions about the
“construction of the contract language itself”).
Here, plaintiff’s claim arises out of work
performed through RUSCO on defendant Tug Hill’s
projects. Plaintiff’s agreement to the aforementioned
terms, including the arbitration provision, was a
precondition to the performance of work on defendant
Tug Hill’s projects. Thus, the claims that relate or
refer to the work that plaintiff performed or the terms
under which he agreed to perform such work are
subject to arbitration.
3.
Interstate Commerce
The arbitration agreement here also evidences a
transaction involving interstate commerce. The
Supreme Court of the United States has broadly
interpreted the Federal Arbitration Act’s requirement
that, to fall within its purview, a contract must
App-55
“evidence a transaction involving commerce.” 9 U.S.C.
§ 2. “The word ‘involving,’ the Supreme Court said, is
indeed the functional equivalent of ‘affecting.’” See
King v. IBEX Glob., 2015 WL 6159492 (S.D. W.Va.
Oct. 20, 2015) (Goodwin, J.) (citing Allied-Bruce
Terminix Cos. v. Dobson, 513 U.S. 265, 274 (1995)).
Congress thus intended to “provide for the
enforcement of arbitration agreements within the full
reach of the Commerce Clause.” Perry v. Thomas,
482 U.S. 483, 490 (1987).
Here, plaintiff has indisputably alleged a link to
interstate commerce by averring that he worked for
defendant Tug Hill in Marshall and Wetzel Counties
in West Virginia, that defendant Tug Hill is a “Texas
company,” and that plaintiff was engaged in commerce
or in the production of goods for commerce. Here, it
would seem, that defendant Tug Hill has clearly
satisfied the aforementioned factors to warrant
compelled arbitration.
B. Plaintiff’s
valid
and
enforceable
arbitration
agreement
delegates
threshold questions of arbitrability to
the arbitrator.
The Supreme Court of the United States instructs
that “if a valid agreement exists, and if the agreement
delegates the arbitrability issue to an arbitrator, a
court may not decide the arbitrability issue.” Henry
Schein, Inc. v. Archer and White Sales, Inc., 139
S.Ct. 524, 530 (2019). This is so even in extreme cases
where “the court thinks that the argument that the
arbitration agreement applies to a particular dispute
is wholly groundless.” Id. at 529.
App-56
Here, the arbitration provision found in the terms
of service contains an express delegation clause,
stating “[t]he arbitrator has exclusive authority to
resolve any dispute relating to the interpretation,
applicability, or enforceability of this binding
agreement.” [Doc. 15-6]. This Court declines to usurp
the parties’ delegation of authority in this respect.
In support of this conclusion, this Court finds the
opinion of Judge Volk highly persuasive. “Our Court
of Appeals and a majority of its colleague tribunals
have held that the incorporation of the American
Arbitration Association Rules or similar” constitutes
the “clear and unmistakable” evidence required to
conclude that the parties agreed to have an arbitrator
decide issues of arbitrability. Brown v. Equitrans
Midstream Corp., 2020 WL 7409533, at *7 (S.D. W.
Va. Dec. 17, 2020) (Volk, J.) (citations omitted).
According to Judge Volk, a clause providing that the
arbitration panel “shall have exclusive authority to
resolve disputes of any kind or nature, including
enforcement of this Arbitration Agreement” is an
“explicit directive reserving questions of arbitrability
to the arbitrator.” Id. at 11.
Here, because the parties have expressly
delegated threshold questions to the arbitrator, this
Court is of the opinion to grant defendant Tug Hill’s
Motion to Dismiss and to compel arbitration.
C. Defendant Tug Hill does not need to be a
signatory for the threshold question of
arbitrability to be delegated.
In consideration of the arguments asserted by the
parties and the respective authorities associated
therewith, this Court finds that the fact defendant
App-57
Tug Hill is not a signatory to the independent
contractor agreement to be of no moment. “[T]he
question of whether a purported nonsignatory can
enforce an arbitration agreement concerns a question
of arbitrability and, thus, must be decided by the
arbitrator.” Grabowski v. PlatePass, LLC, 2021 WL
1962379, at *4 (N.D. Ill. May 17, 2021) (citing Swiger
v. Rosette, 989 F.3d 501, 507 (6th Cir. 2021);
Eckert/Wrodell Architects v. FJM Props. of
Willmar, LLC, 756 F.3d 1098, 1110 (8th Cir. 2014)).
To be clear, numerous courts have had
opportunity to consider whether a delegation clause
applies to non-signatories. In Robertson v. Enbridge
(U.S.) Inc., 2020 WL 5751641, at *5 (W.D. Pa. July
31, 2020), report and recommendation adopted, 2020
WL 5702419 (Sept. 24, 2020), the court emphatically
rejected the assertion to the contrary:
This Court is unpersuaded by Plaintiff’s
arguments which would necessarily require
the Court to do an end run around their
agreements with [the inspection company]
and deprive the [inspection company] of the
benefit of its bargain. Instead of initially
suing [the inspection company], Plaintiffs sue
[the customer of the inspection company].
Plaintiff may only recover against [the
customer] if they can show that it acted as the
Plaintiffs’ ‘joint employer’ under the FLSA
and was responsible for [the inspection
company]’s alleged failure to pay overtime.
Yet, Plaintiffs attempt to downplay their
relationship with [the inspection company] in
an apparent effort to avoid their agreement to
App-58
arbitrate. In light of Henry Schein and the
clear language of the Arbitration Agreement,
whether [the customer] may enforce the
Arbitration Agreement against Plaintiffs is a
question for the arbitrator.
See also Doucet v. Boardwalk Pipelines, L.P., 2021
WL 3674975 (S.D. Tex. Mar. 18, 2021) (finding that
the question of whether a non-signatory could enforce
the arbitration agreement was one of arbitrability
which had been delegated to the arbitrator);
Altenhofen v. Energy Transfer Partners, LP, 2020
WL 7336082, at *1 (W.D. Pa. Dec. 14, 2020) (holding,
in FLSA case where plaintiffs sued non-signatory
client of their employer: “[w]hether [client defendant]
may enforce the agreements, as a non-signatory, is a
question reserved for arbitration,” and that “Plaintiffs
cannot avoid their arbitration agreements by omitting
claims against CIS, CEM-TIR or any like ‘staffing’
company”); Snow v. Silver Creek Midstream
Holdings, LLC, 467 F.Supp. 3d 1168, 1170 (D. Wyo.
2020) (holding that the worker’s arbitration
agreement “as a matter of law . . . covers [the worker’s]
claim against [defendant],” even though defendant
was a non-signatory, because the claim arose out of his
employment).
In determining that defendant Tug Hill can
enforce the independent contractor agreement and the
arbitration provision therein, this Court is required to
examine state law contract principles. 4 First Options
4 Courts should “apply ordinary state law principles that
govern the formation of contracts . . . and the federal substantive
law of arbitrability.” Int’l Paper Co. v. Schwabedissen
Maschinen & Anlagen GMBH, 206 F.3d 411, 417 n.4 (4th Cir.
App-59
of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995);
Hightower v. GMRI, Inc., 272 F.3d 239, 242 (4th Cir.
2001); Hightower v. GMRI, Inc., 272 F.3d 239, 242
(4th Cir. 2001).
Here, the independent contractor agreement does
not contain a choice of law or venue provision.
Accordingly, this Court must determine which law
applies to the contract enforcement question, just as it
would if this Court’s jurisdiction was based on
diversity of citizenship. Since the case was filed in
federal court in West Virginia, West Virginia’s choice
of law principles for contracts dictate which state law
applies. See Klaxon Co. v. Stentor Elec. Mfg. Co.,
313 U.S. 487, 496 (1941), superseded by statute on
other grounds.
The Supreme Court of Appeals of West Virginia
states that in contract cases: “[o]ur traditional
contract conflict rule gives substantial deference to the
state where the contract is made and where it is to be
performed, assuming both incidents occurred in the
same state.” Joy v. Chessie Employees Fed. Credit
Union, 186 W.Va. 118, 411 S.E.2d 261 (1991). The
rule is subject to two qualifications: (1) that the parties
have not made a choice of applicable law in the
contract itself; and (2) the law of the other state does
not offend West Virginia’s public policy. Id.
Here, plaintiff electronically signed the
arbitration agreement and subsequently performed
work in West Virginia. When the subject dispute
2000). In other words, federal substantive law applies to
questions of arbitrability, while state law governs questions of
contract formation.
App-60
emerged, he sought relief in federal court in West
Virginia. Therefore, West Virginia law should govern
whether defendant Tug Hill, a non-signatory, can
enforce the arbitration agreement.
1.
Defendant Tug Hill is a third-party
beneficiary to the underlying
agreement.
Third-party beneficiaries have standing to recover
under a contract clearly intended for their benefit.
West Virginia law provides that if a “covenant or
promise be made for the sole benefit of a person with
whom it is not made . . . such person may maintain, in
his own name, any action thereon which he might
maintain in case it had been made with him only, and
the consideration had moved from him to the party
making such covenant or promise.” W.Va. Code § 558-12. See Ohio Cty. Dev. Auth. v. Pederson &
Pederson, Inc., 2010 WL 391616 (N.D. W.Va. Jan. 26,
2010) (Stamp, J.) (refusing to dismiss on standing
grounds where it was alleged that the defendant
contractor would provide services and materials to
another contractor for the benefit of plaintiff-owner).
Even if a contract is not made specifically for the
benefit of a non-party, the non-party may enforce it
where the surrounding circumstances suggest that
there was no other reason for the contract to have been
made. Hatfield v. Wilson, 2012 WL 2888686, at *3
(S.D. W.Va. July 13, 2012) (Chambers, J.).
Furthermore, the contract does not need to be
made only for the benefit of the third-party
beneficiary; rather, a party may be a third-party
beneficiary to a contract if the contract was made and
intended to be for the benefit of a class of persons
App-61
definitely and clearly shown to come within the terms
of the contract and the third-party beneficiary party is
a member of that class. Slone v. State Auto Prop. &
Cas. Ins. Co., 2021 WL 190938 (S.D. W.Va. Jan. 19,
2021) (Copenhaver, J.) (finding that a provision in an
insurance contract allowing for recovery of medical
expenses in the event of injury on property owner’s
premises benefitted the non-policy holding guest
injured on the property). 5
Here, the independent contractor agreement
demonstrates an intent to make defendant Tug Hill a
third-party beneficiary. 6 The very first sentence in the
independent contractor agreement establishes as
much. “This Agreement . . . constitutes a binding
agreement . . . to provide freelance services to third
party companies (each a ‘Company’ or collectively the
‘Companies’)” with whom RUSCO contracted. [Doc.
15-4]. Moreover, defendant Tug Hill is provided
numerous rights and benefits by virtue of the
5 The parties, as well as RUSCO, are engaged in a quibble as to
whether West Virginia law or Texas law should apply on this
point. While this Court has found that West Virginia law governs,
the same result would be reached in the event this Court were to
apply Texas law. See First Bank v. Brumitt, 519 S.W.3d 95, 102
(Tex. 2017) (finding where the signatories intended to secure a
benefit to a third party and entered into a contract for the third
party’s benefit, the third party may enforce the agreement as a
third-party beneficiary).
This Court finds plaintiff’s reliance on Hiser v. Nzone
Guidance, LLC, 799 F.App’x 247 (5th Cir. 2020) in an attempt
to refute this finding to be unpersuasive. Notably, that case is
distinguishable because RUSCO did not attempt to intervene and
the client there, Nzone Guidance, LLC, raised different
arguents–most notably, the issue of arbitrability was not even
before the court.
6
App-62
agreement, which only defendant Tug Hill could
enforce, including work performance, indemnification
rights, and rights related to confidentiality. [Id.].
Because the independent contractor agreement
provides
specific–and
significant–benefits
to
defendant Tug Hill, it is a third-party beneficiary
under West Virginia law. Accordingly, defendant Tug
Hill should be permitted to enforce plaintiff’s
agreement to resolve “every dispute” arising out of his
work on defendant Tug Hill projects, through RUSCO,
in binding arbitration. 7 8
CONCLUSION
For the foregoing reasons, the Motion to Intervene
[Doc. 15] is GRANTED. The Clerk is instructed to
note RUSCO Operating, LLC as a defendant party in
this matter. Additionally, defendant Tug Hill
Operating, LLC’s Motion to Dismiss Plaintiff’s
Complaint Pursuant to Federal Rules of Civil
Procedure 12(b)(1), (6), and (7) [Doc. 21] is
GRANTED. Accordingly, this matter is hereby
DISMISSED, and the parties are hereby
7 Defendant Tug Hill also raises the argument that the doctrine
of estoppel prevents plaintiff from circumventing his obligation
to arbitrate wage and hour claims. See [Doc. 22 at 24]. Having
found arbitration required and appropriate on the other grounds
addressed herein, this Court need not evaluate the propriety of
this argument.
8 Defendant Tug Hill argues that the above-captioned matter
should be subject to dismissal for plaintiff’s failure to join an
indispensable party pursuant to Fed. R. Civ. Pro. 12(b)(7).
Having granted RUSCO’s Motion to Intervene, this argument is
moot.
App-63
COMPELLED TO ARBITRATION for resolution of
the subject claims.
It is so ORDERED.
The Clerk is directed to transmit copies of this
Order to all counsel of record in this matter.
DATED: April 12, 2022.
/s/ John Preston Bailey
John Preston Bailey
United States District Judge
App-64
Appendix C
AGREEMENT BETWEEN INDEPENDENT
PROFESSIONAL & RIGUP FOR USE OF
RIGUP SERVICE
This
Agreement
Between
Independent
Professional & RigUp For Use Of RigUp Service (the
“Agreement”) constitutes a binding agreement
between you, an independent professional (“you”) and
RUSCO Operating, LLC, a wholly owned subsidiary of
RigUp, Inc. (“RigUp” “us” or “we”) governing your use
of the Service (as defined in the RigUp Terms of
Service at https://www.rigup.com/tos) to provide
freelance services to third party companies (each a
“Company” or collectively the “Companies”). You
hereby agree: (a) to comply with this Agreement; and
(b) that you have read, understand, and agree to (i) the
RigUp
Terms
of
Service
located
at
https://www.rigup.com/tos (“Terms”), (ii) the RigUp
Privacy
Policy
located
at
https://www.rigup.com/privacy (the “Privacy Policy”),
each of which are incorporated into this Agreement by
reference. If there is a conflict between this Agreement
and the Terms or Privacy Policy, then this Agreement
will govern with respect to the conflicting terms only.
Capitalized terms used but not defined in this
Agreement have the meaning specified in the Terms.
The parties hereby agree as follows:
1. Independent Professional. By signing this
Agreement, you are asserting that you are an
independent professional and entrepreneur
who wishes to: (a) digitize and modernize your
business; (b) be introduced to new clients by
App-65
RigUp; and (c) engage RigUp for its Service to
accomplish these entrepreneurial goals.
2. General. RigUp provides the Service to digitize
and market your business, including connecting
you with Companies. RigUp does not provide
professional services. RigUp offers information
and a method for Companies to obtain, and you
to provide, services, but does not and does not
intend to provide such services. RigUp and you
intend for you to provide services to Companies
strictly as an independent professional, and not
as an employee, worker, agent, joint venture,
partner or franchisee of RigUp or any Company
for any purpose.
3. Project.
1. From time to time, Companies will post
proposed projects via the Service, setting
forth the nature of the services required (the
“Project”). A Project proposed may include
desired skills, location, date, start time (as
applicable), project length (as applicable),
proposed pay rate, invoicing terms and any
required certifications (“Project Details”). If
a Project becomes available in the location
you have indicated on the Service, then you
may be notified of the availability of the
Project via the Service. You may express
interest in such Project and if the Company
accepts your expression of interest, then you
will be notified via the Service and you will
be responsible for completing the Project at
App-66
the time, on the date, and at the place
specified in the Project Details, unless
otherwise agreed between you and the
Company. RigUp does not guarantee any
minimum number of Projects will be
available to you at any time during the term
of this Agreement.
2. You agree that your name, phone number,
and other contact information will be made
available to Company by RigUp after the
Project is confirmed. Projects may not last
for as long as originally set forth in the
Project Details.
3. RigUp is here to serve you – not vice-versa.
Accordingly, RigUp has no control or any
right to determine (a) when you use the
Service, (b) if and when you log into the
Service, (c) for which Projects you express
interest or accept, if any, (d) what you
charge for Projects (unless you fail to
designate a fee, in which case the default fee
is used), and (e) the manner or means by
which you complete Projects. You and the
Company solely negotiate and determine (x)
when and where you perform Projects, (y)
what you wear while performing projects,
and (z) any additional bonuses or gratuities
arising out of such Projects. You are solely
responsible for costs or expenses incurred by
you in connection with the performance of
Projects.
App-67
4. Fees. The fee charged to a Company on your
behalf shall be the fee described in the Project
Details unless you and the Company notify
RigUp in writing prior to the completion of the
Project that you and the Company have
negotiated a different fee (“Professional Fee”).
Separate from, or in addition to, the
Professional Fee, RigUp may also charge a fee
for using the Services. You are responsible for
the costs of any background checks, drug tests,
or other similar expense items required by
Companies in order for you to work on a Project,
and such fees shall be deducted from any
amounts owed to you. Unless otherwise
directed by you in writing, RigUp will invoice
the Company on your behalf for the
Professional Fee according to the terms agreed
to in the Project Details. RigUp will forward you
the Professional Fee minus RigUp’s service
charge for your use of the Service (the “Service
Fee”). The Service Fee shall be a percentage of
the invoice amount. The applicable percentage
can be found in your onboarding packet for the
applicable project, unless you and RigUp
negotiate and memorialize in a signed writing a
different service charge. RigUp’s role in the
payment process is solely limited to payment
processing and transmission between you and
the Company. Accordingly, you accept the sole
risk that a Company will not pay the
Professional Fee for Projects completed.
5. Interactions
with
Companies.
Any
interactions or disputes between you and a
App-68
Company are solely between you and that
Company. RigUp and its licensors shall have no
liability, obligation or responsibility for any
interaction between you and any Company.
6. License. You grant RigUp a license to use your
name, image, voice and/or likeness in
connection with RigUp’s Services to advertise
and promote the Service, in order to identify
you to Companies, and for any other purpose
deemed appropriate by RigUp in its reasonable
discretion (except to the extent prohibited by
law).
7. Text Messaging. You agree to RigUp’s sending
SMS text messages directly to you in order to
facilitate the performance of Projects. Standard
call or message charges or other charges from
your phone carrier may apply to calls or text
(SMS) messages RigUp sends to you. You may
opt-out of receiving text (SMS) messages from
RigUp by replying with the word "STOP" to a
text message from RigUp, but you acknowledge
that opting out of text (SMS) messages may
impact your ability to use the Service.
8. Relationship. Neither this Agreement, nor
your completion of Projects will create an
association, partnership, joint venture, or
relationship of principal and agent, master and
servant, or employer and employee, between
you and RigUp. Without limiting the generality
of the foregoing, you are not authorized to bind
RigUp to any liability or obligation or to
App-69
represent that you have any such authority.
You acknowledge and agree that you are
obligated to report as income all compensation
received by you from Companies arising out of
or related to the Service. You agree to and
acknowledge the obligation to pay all selfemployment and other taxes on such income.
9. Representations and Warranties. You
represent and warrant to RigUp that (a) you
have the legal right to perform Projects as
contemplated by this Agreement in the United
States, (b) you are fully-licensed and/or certified
(to the extent required by law) and authorized
to complete Projects within the jurisdiction in
which you intend to work, and have the
required skill, experience, and qualifications to
complete Projects, (c) you will perform Projects
in a professional and diligent manner in
accordance with best industry standards for
similar services, and (d) you will perform
Projects in accordance with all applicable laws,
rules, and regulations. You affirm under
penalty of perjury that you are an incorporated
entity or sole proprietorship that operates an
independent business performing work the
same as or similar to the Projects offered via the
Service and, prior to engaging RigUp for the
Service, you had multiple clients for which you
performed projects the same as or similar to the
Projects offered via the Service. As an
independent professional, you are assuming the
responsibilities of an employer for the
performance of a Project, and you hereby affirm
App-70
you are not entitled to, and are hereby waiving,
any claim for workers compensation benefits
under either RigUp’s or a Company’s workers’
compensation insurance policy.
10. Indemnification. You will indemnify and hold
the RigUp Parties and Company harmless from
and against all losses, damages, liabilities,
deficiencies, actions, judgments, interest,
awards, penalties, fines, costs or expenses
(including reasonable legal fees) arising out of
or resulting from (a) bodily injury, death of any
person, theft or damage to real or tangible,
personal property resulting from your acts or
omissions, (b) bodily injury, death or property
damage suffered by you or your employees, (c)
your breach of any representation or warranty
in this Agreement, (d) any negligent, reckless or
intentionally wrongful act by you or your
assistants, employees, contractors or agents, (e)
a determination by a court or agency that you
are an employee of RigUp or a Company, or (f)
any claim by a Company arising from or related
to you or your assistants, employees,
contractors or agents services for such
Company.
11. Disclaimer. You are solely responsible for
completing Projects. RigUp is not responsible or
liable for the actions or inactions of a Company
or other third party in relation to Projects as
completed by you. You understand, therefore,
that by using the Service, you will be introduced
to third parties for whom RigUp has not
App-71
conducted any background check, that may be
potentially dangerous, and that you use the
Service at your own risk. RIGUP HAS BEEN
ENGAGED
BY
COMPANIES
TO
INTRODUCE YOU TO THEM FOR THE
PURPOSES OF COMPLETING PROJECTS.
RIGUP
WILL
NOT
ASSESS
THE
SUITABILITY, LEGALITY OR ABILITY OF
ANY PROJECTS OR COMPANIES AND YOU
EXPRESSLY WAIVE AND RELEASE RIGUP
FROM ANY AND ALL LIABILITY, CLAIMS
OR DAMAGES ARISING FROM OR IN ANY
WAY
RELATED
TO
PROJECTS
OR
COMPANIES. RIGUP WILL NOT BE A
PARTY TO DISPUTES OR NEGOTIATIONS
OF DISPUTES, BETWEEN YOU AND
COMPANIES. RESPONSIBILITY FOR THE
DECISIONS YOU MAKE REGARDING
PROJECTS OFFERED VIA THE SERVICE
(WITH ALL THEIR IMPLICATIONS) RESTS
SOLELY WITH YOU. RIGUP WILL NOT
ASSESS THE SUITABILITY, LEGALITY OR
ABILITY OF ANY SUCH THIRD PARTIES
AND YOU EXPRESSLY WAIVE AND
RELEASES RIGUP FROM ANY AND ALL
LIABILITY, CLAIMS, CAUSES OF ACTION,
OR DAMAGES ARISING FROM YOUR USE
OF THE SERVICE, OR IN ANY WAY
RELATED TO THE THIRD PARTIES
INTRODUCED TO YOU BY THE SERVICE.
12. Term; Termination. This Agreement will be
effective as of the date you indicate your
acceptance by clicking “I AGREE”, and will
App-72
remain in effect until terminated as set forth in
this Section. You or RigUp may terminate this
Agreement by deleting your account on the
Service, with or without notice. Sections 1, 2,
and 8 – 16 will survive termination of this
Agreement.
13. Assignment. You may not assign this
Agreement without RigUp’s prior, written
consent. RigUp may assign its rights and
obligations under this Agreement at any time.
14. Dispute Resolution. You acknowledge and
agree that the terms of this Agreement are
subject to Section 24 of the Terms.
15. Confidential Information. You must keep
RigUp’s confidential information absolutely
confidential, except as required or provided by
law, including but not limited to information
about other Companies, Projects, Project
Details and RigUp’s business model. This
section does not apply to information that: (a)
was publicly known and made generally
available in the public domain prior to the time
of disclosure by RigUp; (b) becomes publicly
known and made generally available after
disclosure by RigUp to you through no action or
inaction on your part, (c) is already in your
possession at the time of disclosure, as shown
by your files and records; or (d) is obtained by
you from a third party without a breach of the
third party’s obligations of confidentiality.
App-73
16. Miscellaneous. If any provision of the
Agreement is held to be invalid or
unenforceable, such provision shall be struck
and the remaining provisions will be enforced to
the fullest extent under law. RigUp’s failure to
enforce any right or provision in this Agreement
will not constitute a waiver of such right or
provision unless acknowledged and agreed to by
RigUp in writing. This Agreement, with the
Terms and the Privacy Policy, comprises the
entire agreement between you and RigUp and
supersedes all prior or contemporaneous
negotiations, discussions or agreements,
whether written or oral, between the parties
regarding the subject matter contained in this
Agreement.
App-74
Workrise™
Digital Record of Independent Professional
Agreement Acceptance
Name
Lastephen
stevodrillingconsultant93@yahoo.com
Sign Up
January 25, 2019
On January 25, 2019, Lastephen C. Rogers reviewed
and agreed to the Workrise Independent Professional
Agreement (Version 2) through the Workrise platform.
App-75
Appendix D
EXCERPTS FROM TERMS OF SERVICE
*
*
*
24. Dispute Resolution and Arbitration
a. Generally. In the interest of resolving disputes
between you and RigUp in the most expedient and cost
effective manner, you and RigUp agree that every
dispute arising in connection with these Terms will be
resolved by binding arbitration. Arbitration is less
formal than a lawsuit in court. Arbitration uses a
neutral arbitrator instead of a judge or jury, may allow
for more limited discovery than in court, and can be
subject to very limited review by courts. Arbitrators
can award the same damages and relief that a court
can award. This agreement to arbitrate disputes
includes all claims arising out of or relating to any
aspect of these Terms, whether based in contract, tort,
statute, fraud, misrepresentation, or any other legal
theory, and regardless of whether a claim arises
during or after the termination of these Terms. YOU
UNDERSTAND AND AGREE THAT, BY ENTERING
INTO THESE TERMS, YOU AND RIGUP ARE EACH
WAIVING THE RIGHT TO A TRIAL BY JURY OR
TO PARTICIPATE IN A CLASS ACTION.
*
*
*
h. Enforceability. The arbitrator has exclusive
authority to resolve any dispute relating to the
interpretation, applicability, or enforceability of this
binding arbitration agreement. If Section 24.f. is found
to be unenforceable or if the entirety of this Section 24
is found to be unenforceable, then the entirety of this
Section 24 will be null and void, the remaining
App-76
provisions of these Terms will remain in effect in
accordance with Section 26, and the exclusive
jurisdiction and venue described in Section 23 will
govern any action arising out of or related to these
Terms.
*
*
*
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.