In Pacheco v. PCM Construction, No. 14-10193 (5th Cir. Feb. 19, 2015) (click here for a copy of the decision), the plaintiff employees filed an overtime wages/FLSA lawsuit against their employer. The district court ordered the plaintiff employees to arbitrate their claims based on an arbitration clause in their employment contracts.
On appeal, the Fifth Circuit addressed the issue of waiver. The defendant employer had filed a motion to compel arbitration thirteen months after the filing of the lawsuit. Before filing a motion to compel arbitration, the employer had filed motions to dismiss the plaintiffs’ claims against two officers of the defendant employer (since the officers were not an “employer” of the plaintiffs), opposed the plaintiffs’ motion for class certification, and prepared a joint status report for the court.
The Fifth Circuit held that the employer’s litigation activities did not constitute waiver of the right to arbitrate. The Fifth Circuit found it significant that the employer did not engage in or respond to discovery (despite the plaintiffs having propounded discovery requests). Also, in reaching its decision regarding no waiver, the Fifth Circuit pointed out that prior to the employer’s filing of the motion to compel arbitration, the district court had not issued rulings on class certification or the employer’s motions to dismiss.