Pruitt et al v. Act Fast Delivery, Inc. et al

Western District of Texas, txwd-5:2019-cv-00049

ORDER GRANTING [36] Second Motion to Compel Arbitration. The Clerks office is DIRECTED to ADMINISTRATIVELY CLOSE this case pending further order of the Court. The parties are ORDERED to file a status update on the outcome of arbitration within 21 days of the date of the completion of arbitration proceedings. Signed by Judge David A. Ezra.

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1 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION SANDRA PRUITT, et al., Individually § NO. 5:19-CV-49-DAE and On Behalf of All Others Similarly § Situated, § § Plaintiffs, § § vs. § § ACT FAST DELIVERY, INC.; ACT § FAST COURIER OF TEXAS, INC.; § ACT FAST DELIVERY OF § HOUSTON, INC.; ACT FAST OF § COASTAL BEND, INC.; ACT FAST § DELIVERY OF S.A., INC.; ACT FAST § DELIVERY OF TYLER, INC.; ACT § FAST DELIVERY OF TRAVIS § COUNTY, INC.; and MIKE D. § MILLER, § § Defendants. § ________________________________ § ORDER GRANTING SECOND MOTION TO COMPEL ARBITRATION The matter before the Court is Defendants Act Fast Delivery, Inc. et. al's (Defendants all collectively, "Act Fast") Second Motion to Compel Arbitration of the claims of all Plaintiffs in this case: Sandra Pruitt, Yuvannda Watson, Karen Lawson, Ayan Nur, Charmane Nash, Fernando Cabrera, Sheila Chew, Denetria Penfield, Keith Green, and Jasmine Huntsberry. (Dkt. # 36.) Pursuant to Local Rule CV-7(h), the Court finds this matter suitable for disposition 1 without a hearing. After careful consideration of the memoranda filed in support of and in opposition to the motion, the Court, for the reasons that follow, GRANTS the second motion to compel arbitration. BACKGROUND On January 17, 2019, Plaintiffs, individually and on behalf of all others similarly situated, brought this collective action suit in this Court by filing a complaint against Defendants for violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et. seq. (Dkt. # 1.) Act Fast is a medical courier service that does business in the territorial jurisdiction of this Court. (Id. at 7.) According to Act Fast, Defendants are all affiliated entities which focus primarily on making medical deliveries from pharmacies to senior homes and hospices. (Dkt. # 36 at 7.) Occasionally, however, Act Fast also delivers other goods including paint and auto parts. (Id.) Act Fast contends that it outsources the actual delivery of the goods to independent contractors under an arrangement whereby the contractors perform their services in exchange for forty percent of the gross revenue for the delivery, less any rental charges. (Id.) Act Fast asserts that Plaintiffs were hired as independent contractors to make deliveries on behalf of Act Fast. (Id.) Act Fast contends that at least two of the Plaintiffs' primary duties are to supervise or manage other independent contractors making local deliveries. (Id. at 8.) 2 1 In their suit, Plaintiffs allege that Act Fast paid them and others similarly situated an hourly wage based on their route or job as couriers but did not pay any overtime compensation at the required rate of time and one-half for all hours worked in excess of forty hours per week. (Dkt. # 1 at 9–10.) Plaintiffs contend that they and the others similarly situated were not exempt from overtime, and thus were denied overtime compensation as required under FLSA. (Id. at 10.) On September 12, 2019, the Court denied without prejudice Act Fast's first motion to compel arbitration due to the parties' overall lack in briefing and evidence. (Dkt. # 35.) On October 3, 2019, Defendants filed a second motion to compel arbitration of all Plaintiffs. (Dkt. # 36.) Plaintiffs filed a response in opposition on October 17, 2019 (Dkt. # 38); Defendants filed a reply on October 24, 2019 (Dkt. # 34). This motion is discussed below. LEGAL STANDARD Under the Federal Arbitration Act ("FAA"), "[a] written provision in. . . a contract to settle by arbitration a controversy thereafter arising out of such contract. . . shall be valid, irrevocable, and enforceable, save upon such grounds exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. The FAA "expresses a strong national policy favoring arbitration of disputes, and all doubts concerning the arbitrability of claims should be resolved in favor of arbitration." Primerica Life Ins. Co. v. Brown, 304 F.3d 469, 471 (5th Cir. 2002). 3 1 The Fifth Circuit employs a two-step analysis to determine whether the parties have agreed to arbitrate a dispute. Sherer v. Green Tree Servicing LLC, 548 F.3d 379, 381 (5th Cir. 2008) (citations omitted). First, a court must ask if the parties specifically agreed to arbitrate the dispute. Webb v. Instacorp., Inc., 89 F.3d 252, 258 (5th Cir. 1996). This determination requires consideration of whether a valid agreement to arbitrate exists among the parties and whether the dispute is within the scope of the arbitration agreement. Id. In making this determination, courts should generally apply "ordinary state-law principles that govern the formation of contracts," but must give due regard to the federal policy favoring arbitration and resolve any ambiguities as to the scope of the arbitration clause itself in favor of arbitration. Id. Once a court determines that the parties agreed to arbitrate, the court must assess whether any legal restraints external to the agreement foreclose arbitration of the dispute. OPE Int'l L.P. v. Chet Morrison Contractors, Inc., 258 F.3d 443, 445–46 (5th Cir. 2001). DISCUSSION Defendants move to compel arbitration of the claims made by Plaintiffs on the basis that they entered into valid arbitration agreements with Act Fast. (Dkt. # 36.) As evidence, Defendants have produced the signed arbitration agreements of each of the Plaintiffs. (Dkt. # 36-1.) Defendants contend that the arbitration agreements expressly provide that they cover all disputes arising from 4 1 unpaid compensation, including FLSA claims; thus, Defendants argue that Plaintiffs' claims fall squarely within the plain language of the arbitration agreements and their FLSA claims in this case must be arbitrated. (Dkt. # 36 at 9.) Plaintiffs, in response, assert that Defendants' motion must be denied for three reasons: (1) even if valid arbitration agreements exist, the FAA does not apply to contracts of transportation workers such as themselves; (2) no valid arbitration agreements exist between Plaintiffs and Act Fast; and (3) Plaintiffs' claims do not arise under the arbitration agreements because they have asserted claims under the FLSA and not under their independent contractor agreements. (Dkt. # 38.) A. Whether the FAA Applies to Plaintiffs' Claims Plaintiffs focus their argument on section one of the FAA which contains exemptions from coverage. (Dkt. # 38 at 6.) That section states that the FAA shall not apply "to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 9 U.S.C. § 1. The Supreme Court has construed this section as exempting "from the FAA only contracts of employment of transportation workers." Circuit City Stores v. Adams, 532 U.S. 105, 111 (2001). Recently, the Supreme Court has determined that a "contract of employment," as used in section one of the FAA, "referred to agreements to perform work," regardless of whether the relationship was 5 1 characterized as a master-servant relationship or an independent contractor relationship. New Prime, Inc. v. Oliveira, 586 U.S. ___, 139 S. Ct. 532, 542, 202 L.Ed.2d 536 (2019). Thus, an agreement where the parties agree to provide transportation services on an interstate basis falls under section one of the FAA whether or not the agreement is to provide the services as an employee or as an independent contractor. Id. Relying on the Supreme Court's decision in New Prime, Plaintiffs contend that they are transportation workers who were misclassified as independent contractors and denied overtime wages. (Dkt. # 38 at 6–7.) Because transportation workers are excluded from the FAA, Plaintiffs maintain that they cannot be compelled to arbitrate their claims under the FAA. (Id.) Act Fast disagrees with Plaintiffs' position, asserting that Plaintiffs do not meet all of the factors to be exempt from the FAA's provisions. (Dkt. # 36 at 11.) In order to be considered a transportation worker, an employee must actually be employed in the transportation industry, that is, an industry directly involved in the movement of goods. Lenz v. Yellow Transp., Inc., 431 F.3d 348, 351 (8th Cir. 2005) ("The emphasis [of the § 1 exclusion, therefore,] was on a class of workers in the transportation industry. . .") (citation and quotation marks omitted) (brackets in original); Hill v. Rent–A–Center, Inc., 398 F.3d 1286, 1289– 90 (11th Cir. 2005) ("[I]t is apparent Congress was concerned only with giving the 6 1 arbitration exemption to 'classes' of transportation workers within the transportation industry."); Tran v. Texan Lincoln Mercury, Inc., Civ Action No. H–07–1815, 2007 WL 2471616 (S.D. Tex. Aug. 29, 2007) ("[A] transportation worker is someone who works in the transportation industry—an industry whose mission it is to move goods."). Still, employment in the transportation industry is not in itself sufficient; the employee's responsibilities within the transportation industry must be closely related to interstate commerce. Lenz, 431 F.3d at 352. However, the employee need not actually transport the goods himself for the exemption to apply. See id. at 351–52; Palcko v. Airborne Express, 372 F.3d 588, 593 (3rd Cir. 2004) (cert. denied); see also Bacashishua v. United States Postal Serv., 859 F.2d 402, 405 (6th Cir. 1988) (a pre-Circuit City opinion holding that a United States Postal Service parcel post distributor, who processed packages that moved interstate, was engaged in interstate commerce for purposes of the FAA). In Lenz, the Eighth Circuit set out an eight-factor test in order to determine whether a transportation industry employee is a "transportation worker" under the FAA. Lenz, 431 F.3d at 352. The Lenz court's non-exclusive factors include: 1) whether the employee works in the transportation industry; 2) whether the employee is directly responsible for transporting goods in interstate commerce; 3) whether the employee handles goods that travel interstate; 4) whether the 7 1 employee supervises employees who are themselves transportation workers; 5) whether like seamen or railroad employees, the employee is within a class of employees for which special arbitration already existed when Congress enacted the FAA; 6) whether the vehicle itself is vital to the commercial enterprise of the employer; 7) whether a strike by the employee would disrupt interstate commerce; and 8) the nexus that exists between the employee's job duties and the vehicle the employee uses in carrying out his duties. Id. At least one district court within the Fifth Circuit has applied the Lenz test. Barker v. Halliburton Co., Civ. Action No. H–07–2677, 2008 WL 1883880, at *1–2 (S.D. Tex. April 25, 2008). To determine whether the exclusion applies here, the Court must determine whether Plaintiffs are "transportation workers" under § 1 of the FAA. If they are, they will be exempt from the FAA. In order to determine whether Plaintiffs are among "the class of workers engaged in foreign or interstate commerce" under § 1 of the FAA, and whether they did so in the same way that railroad employees and seamen do, this Court will follow the test that the Eighth Circuit set out in Lenz. Applying the eight Lenz factors to this case, the Court finds that Plaintiffs are not transportation worker under the FAA. 8 1 1. Whether Plaintiffs Work in Transportation Industry Act Fast does not generally dispute that Plaintiffs work in the transportation industry, as Act Fast provides next day and same day delivery services to various businesses in their local communities. (Dkt. # 36 at 11.) The first factor weighs in favor of Plaintiffs. 2. Plaintiffs' Responsibility for Transporting Goods in Interstate Commerce Regarding this factor, Act Fast argues that none of the Plaintiffs were directly responsible for transporting goods in interstate commerce. (Dkt. # 36 at 11–12.) Delivery drivers, such as Plaintiffs, may fall within the exemption for "transportation workers" even if they make interstate deliveries only "occasionally." See International Broth. Of Teamsters Local Union No. 50 v. Kienstra Precast, LLC, 702 F.3d 954, 957 (7th Cir. 2012). In International Brotherhood, the Seventh Circuit concluded that even where interstate deliveries were a small proportion of trucker drivers' total workload, the drivers engaged in interstate commerce. Id. at 958. There, the truckers estimated making a few dozen interstate deliveries out of 1500 to 1750 deliveries each year. Id. In this case, however, there is no evidence that any of the Plaintiffs made interstate deliveries even occasionally. Plaintiffs' complaint fails to allege such (see Dkt. # 1), and Plaintiffs' only evidence offered in support of this assertion is their signed Arbitration Agreements which reference only generally 9 1 "the Interstate Commerce Commission" but do not otherwise affirmatively demonstrate that Plaintiffs made interstate deliveries. (See Dkt. # 36-1.) Instead, the record in this case points to evidence which suggests that Plaintiffs made deliveries only in local communities within the state of Texas.1 (See id. at 2 ("[A]ll of Plaintiffs deliveries were in Texas and none of the Plaintiffs crossed state 1 Plaintiffs object to the declaration of John Jackson, the General Counsel for Act Fast, made in his capacity as a corporate representative of Act Fast. (Dkt. # 36-1 at 1.) Plaintiffs object that Jackson lacks firsthand knowledge about the nature and duties of Plaintiffs work. (Dkt. # 38 at 4.) Plaintiffs also object that Jackson's declaration was not timely disclosed. (Id.) The Court finds no merit to either objection. First, Jackson, in his role as corporate representative, declares that he is the "custodian of records" for Act Fast and that the facts as stated within the declaration are within his "personal knowledge." (Id. at 1–2.) He further declares that he has "reviewed the contents of the Records, and [he has] determined that they are accurate and there is nothing about the source of the information or method or circumstances of their preparation that indicates any lack of trustworthiness." (Id.) Given this, the Court overrules Plaintiffs' objection on this basis. It is not necessary that Jackson have direct, personal knowledge of each and every fact discussed in his declaration. When a corporation offers the testimony of a representative, "the corporation appears vicariously through that agent." Resolution Trust Corporation v. Southern Union Company, Inc., 985 F.2d 196, 197 (5th Cir. 1993). The authority of a corporate representative extends not only to facts, but also to the subjective beliefs and opinions of the corporation. Brazos River Authority v. GE Ionics, Inc., 469 F.3d 416, 433 (5th Cir. 2006). Furthermore, the Court also overrules Plaintiffs' objection to Jackson's declaration on the basis of its timeliness. Act Fast has met the requirements for disclosure in Rule 26(a)(1) of the Federal Rules of Civil Procedure. Jackson was disclosed as a witness in this case on August 9, 2019, in Act Fast's Initial Disclosures. Furthermore, Jackson's declaration in this case was executed on October 2, 2019, and Act Fast produced it to Plaintiffs shortly thereafter when the instant motion was filed. (See Dkt # 36.) Accordingly, the Court also overrules the objection on this basis. 10 1 lines while delivering goods for Defendants."). Accordingly, this factor weighs in favor of Act Fast. 3. Whether Plaintiffs Handle Goods that Travel Interstate Act Fast admits that some of the goods delivered by Plaintiffs may have originated from places outside of Texas, although Plaintiffs themselves never made interstate deliveries. (Dkt. # 36 at 12.) As such, this factor weighs in favor of Plaintiffs. 4. Whether Plaintiffs Supervise Employees Who are Themselves Transportation Workers Act Fast concedes that two Plaintiffs, Yuvannda Watson and Karen Lawson, supervised couriers who made deliveries. (Dkt. # 36 at 12.) This factor also weighs in favor of Plaintiffs. 5. Whether, like Seamen or Railroad Employees, Plaintiffs are Within a Class of Employees for Which Special Arbitration Already Existed When Congress Enacted the FAA For this factor, Plaintiffs concede they do not belong to a class of employees for which special arbitration existed when Congress enacted the FAA. (Dkt. # 38 at 10.) Accordingly, this factor weighs in favor of Act Fast. 11 1 6. Whether the Vehicle Itself is Vital to the Commercial Enterprise of the Employer Here, the Court finds this factor weighs in favor of Act Fast. Although Plaintiffs' vehicles are vital to the operation of Act Fast, the Court has already determined that Plaintiffs did not use their vehicles to deliver goods in interstate commerce, which was a dispositive consideration in Lenz. See Lenz, 431 F.3d at 353 ("Lenz did not operate any vehicle in interstate commerce."). 7. Whether a Strike by Plaintiffs Would Disrupt Interstate Commerce While a strike by Plaintiffs would possibly be inconvenient for Act Fast, such a strike would not disrupt interstate commerce as Plaintiffs did not deliver goods in such a capacity. Accordingly, this factor also weighs in favor of Act Fast. 8. Nexus that Exists Between the Employee's Job Duties and the Vehicle the Plaintiffs Use in Carrying Out Their Duties Although Plaintiffs acted as couriers in delivering goods while using vehicles, they did not use them to deliver "packages moving in interstate commerce." Lenz, 431 F.3d at 353. This factor favors Act Fast. 12 1 9. Weighing the Factors Upon balance, the Court finds that the weight of the factors favors Act Fast, and that while it is true that Plaintiffs work in the transportation industry and some of the good they deliver may have originated from interstate commerce, they are not transportation workers who are exempt from § 1 of the FAA. As such, the Court finds that they are subject to the FAA. B. TGAA Arguing in the alternative, Act Fast also asserts that even if Plaintiffs would have been exempt from the FAA, they are still subject to the Texas General Arbitration Act ("TGAA"), Texas Civil Practices and Remedies Code § 171.001, et seq., which requires that their claims be compelled to arbitration. (Dkt. # 36 at 16.) Given the Court's analysis above, the Court finds no need to consider the merits of this argument as the Court has already determined that Plaintiffs are not exempt from the FAA's provisions and that the FAA is applicable in this case.2 2 Plaintiffs, in their response, argue that since the FAA only applies to contracts involving interstate commerce, then Act Fast cannot maintain on the one hand that they are not transportation workers because they did not travel in interstate commerce, and on the other hand argue that the FAA still applies. (Dkt. # 38 at 11.) Plaintiffs are mistaken in this argument. In Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56 (2003), the Supreme Court held that contracts executed in Alabama by Alabama residents were nonetheless contracts "involving commerce." "Because the statute provides for the 'enforcement of arbitration agreements within the full reach of the Commerce Clause,' it is perfectly clear that the FAA encompasses a wider range of transactions than those actually 'in commerce'—that is, 'within the flow of interstate commerce.'" Id. (citations omitted). As 13 1 The Court will now consider whether the parties should be compelled to arbitrate their dispute. C. Whether There is a Valid Agreement to Arbitrate In analyzing whether there is a valid arbitration agreement between the parties, courts apply state contract law, looking at general contract principles to determine validity. Banc One Acceptance Corp. v. Hill, 367 F.3d 426, 431 (5th Cir. 2004). There is a "strong presumption in favor of arbitration," and the burden is on the party challenging the arbitration agreement to show it is invalid. Carter v. Countrywide Credit Indus., Inc., 362 F.3d 294, 297 (5th Cir. 2004). Although a party may argue a contract was never formed, by signing a contract, he or she is presumed to have read it and grasped its contents and legal effects. In re Prudential Co. of Am., 148 S.W.3d 124, 134 (Tex. 2004); Delfingen US–Texas, L.P. v. Valenzuela, 407 S.W.3d 791, 801 (Tex. App.—El Paso 2013, no pet.). Act Fast has submitted to the Court signed Arbitration Agreements executed by each of the Plaintiffs. (Dkt. # 38-1.) These Agreements memorialize, among other terms, the parties' agreements to arbitrate "[a]ny and all claims or controversies arising out of or relating to. . . employment, termination thereof or discussed, there is no dispute that some of the goods delivered by Plaintiffs in this case originated in interstate commerce, although Plaintiffs themselves did not make interstate deliveries. 14 1 otherwise," including claims "based on tort, contract (express or implied), statute, . . . unpaid compensation of any kind, whether they be based on applicable state law or federal law, [and] the Fair Labor Standards Act. . . . (Dkt. # 36-1 at 4–33.) Plaintiffs contend that the Arbitration Agreements are not valid because Plaintiffs each signed separate "Independent Contractor" agreements which contain no mention of arbitration, but do contain merger clauses stating that: (See, e.g., Dkt. # 36-1 at 43.) Given this merger clause, Plaintiffs argue that their Independent Contractor agreements represent the entire agreement among the parties and therefore foreclose enforcement of the Arbitration Agreements. (Dkt. # 38 at 12.) In response, Act Fast argues that the Arbitration Agreements are valid and that the merger clause within the Independent Contractor agreements do not foreclose the Arbitration Agreements. (Dkt. # 36 at 17.) Act Fast contends that: (1) the Independent Contractor agreements are not fully integrated because they do not discuss arbitration; (2) even if the Independent Contractor agreements are fully integrated, the Arbitration Agreements are not superseded because they are 15 1 "collateral agreements"; (3) the Arbitration Agreements were signed at the same time or after the Independent Contractor agreements and should be construed together; and (4) the Independent Contractor agreements do not constitute a signed writing specifically stating an intent to revoke the Arbitration Agreements which themselves contain a clause that provides that they can only be modified by an express written intent to revoke or modify. (Id.) The Court agrees with Act Fast's first argument—the Independent Contractor agreements are not fully integrated. "An agreement is [fully] integrated if the parties intended [the] writing to be a final and complete expression of agreed terms;" and "[a] fully integrated written agreement is a final and complete expression of all the terms agreed upon by the parties." Morgan Bldgs. & Spas, Inc. v. Humane Soc'y of Se. Tex., 249 S.W.3d 480, 486 (Tex. App.—Beaumont 2008, no pet.) (emphasis added). In contrast, "[a] partially integrated agreement is a final and complete expression of all the terms addressed in that written agreement[] but is not a final and complete expression of all the terms the parties have agreed upon." Id. (emphasis added). Moreover, the inclusion of a merger clause, as here, "does not conclusively establish the written contract [containing the clause] is fully integrated." Id. Here, the texts of the Independent Contractor agreements and the Arbitration Agreements, as well as the circumstances surrounding their execution 16 1 demonstrate that the Independent Contractor agreements were not intended to be the fully integrated contract of the parties. Specifically, all but two of the Plaintiffs signed both the Independent Contractor agreements and the Arbitration Agreements at the same, as well as signed "Onboarding Packages" at the same time. (Dkt. # 36-1 at 2, 4–112.) As for the other two Plaintiffs, they executed the Arbitration Agreement a few years after signing the Independent Contractor agreement. (Dkt. # 36-1 at 2, 4–112.) Indeed, the fact that the merger clause provides that it "constitutes the entire agreement and understanding between the parties" does not prevent the Arbitration Agreements from being part of the Independent Contractor agreements. The Arbitration Agreements were not previous agreements, as they were executed contemporaneously with the Independent Contractor agreements, or at a later date, and intended to be construed together with that document to form the parties' complete and final agreement. Additionally, the terms of the Arbitration Agreements and the Independent Contractor agreements do not contradict each other, and the Independent Contractor agreements do not indicate that they were the final and complete expression of all the terms of the parties' intent. The Court must review all the documents together to ascertain the parties' agreement rather than voiding essential parts of the contracts whole cloth. See El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 805 (Tex. 17 1 2012) ("[W]e must examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless." (citations and internal quotation marks omitted)). In doing so, the Court finds that the plain language of the Independent Contractor Agreements did not express an intent to exclude the Arbitration Agreements. Thus, the Court concludes there are valid agreements to arbitrate. D. The Dispute Falls Within the Scope of that Arbitration Agreement Having found that a valid agreement exists, the question remains whether the dispute at issue falls within the scope of the Arbitration Agreement. Jones v. Halliburton Co., 583 F.3d 228, 234 (5th Cir. 2009), cert. denied, 559 U.S. 998 (2010); Sherer v. Green Tree Servicing LLC, 548 F.3d 379, 381 (5th Cir. 2008). Once a court determines that a valid agreement exists, which it has here, the court must resolve any doubts concerning the scope of an arbitration agreement in favor of arbitration. Banc One Acceptance Corp., 367 F.3d 426 at 429. Therefore, "a motion to compel arbitration under an arbitration clause '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.'" Brandom v. Gulf Coast Bank and Trust Co, 253 F.3d 706, 1 (5th Cir. 2001) (per curiam) (quoting United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582–83 (1960)). When 18 1 determining whether the parties' claims fall within the scope of an arbitration agreement, courts focus on the factual allegations underlying the parties' claims rather than the parties' characterization of them. Harvey v. Joyce, 199 F.3d 790, 794–95 (5th Cir. 2000). Here, as quoted above, each arbitration agreement states that Act Fast and the employee agree to arbitrate "[a]ny and all claims or controversies arising out of or relating to. . . employment, termination thereof or otherwise," including claims "based on tort, contract (express or implied), statute, . . . unpaid compensation of any kind, whether they be based on applicable state law or federal law, [and] the Fair Labor Standards Act. . . ." (Dkt. # 36-1 at 4–33.) Given this, the Court finds that Plaintiffs' FLSA claims against Act Fast for overtime pay owed as a result of their employment with Act Fast fall clearly within the Arbitration Agreement. Accordingly, the Court finds that Plaintiffs agreed to arbitrate their FLSA claims. E. Are There Legal Restraints to Enforcement of the Agreement? After determining an arbitration agreement is valid, a court must consider whether any federal policy or statute renders those claims nonarbitrable. JP Morgan Chase & Co. v. Conegie ex rel. Lee, 492 F.3d 596, 598 (5th Cir. 2007). Here, Plaintiffs have not argued that a federal policy or statute renders their FLSA claims nonarbitrable. However, to the extent that they could raise that issue, the 19 1 Fifth Circuit has held that FLSA claims are subject to arbitration. See Carter v. Countrywide Credit Industries, Inc., 362 F.3d 294, 298 (5th Cir. 2004). Thus, Plaintiffs have not met their burden to show that the FLSA claims are nonarbitrable. Accordingly, the Court finds that the parties agreed to arbitrate, the FLSA claims fall within the scope of that agreement, and there is no federal statute or policy rendering these claims nonarbitrable. Thus, the agreement is enforceable and the parties should be compelled to arbitrate. See JP Morgan Chase & Co., 492 F.3d at 598. The FAA provides that when a court properly and mandatorily refers claims to arbitration it shall stay the case until arbitration is complete. Rather than a stay, the Court finds that an administrative closure of the case is appropriate at this time. An administrative closure is "a postponement of proceedings," rather than "a termination." S. La. Cement, Inc. v. Van Aalst Bulk Handling, B.V., 383 F.3d 297, 302 (5th Cir. 2004). A case that is administratively closed "may be reopened upon request of the parties or on the court's own motion." Mire v. Full Spectrum Landing, Inc., 389 F.3d 163, 167 (5th Cir. 2004). CONCLUSION Based on the foregoing, the Court GRANTS Plaintiffs' Second Motion to Compel Arbitration of the claims of all Plaintiffs in this case: Sandra 20 1 Pruitt, Yuvannda Watson, Karen Lawson, Ayan Nur, Charmane Nash, Fernando Cabrera, Sheila Chew, Denetria Penfield, Keith Green, and Jasmine Huntsberry. (Dkt. # 36.) Given this ruling, the Clerk's office is DIRECTED to ADMINISTRATIVELY CLOSE this case pending further order of the Court. Though administratively closed, this case will remain on the docket of this Court and may be reopened upon request of any party or on the Court's own motion. The parties are ORDERED to file a status update on the outcome of arbitration within 21 days of the date of the completion of arbitration proceedings. IT IS SO ORDERED. DATED: San Antonio, Texas, January 2, 2020. _____________________________________ David Alan Ezra Senior United States Distict Judge 21