A federal court in Michigan recently granted Domino’s motion to compel arbitration of a collective action relating to wage claims but denied Domino’s motion for sanctions and motion to dismiss, instead staying the case pending results of the arbitration proceedings. Sypniewski v. Domino’s Pizza, Inc., 2024 WL 4571403 (E.D. Mich. Oct. 23, 2024). This case came after an initial proceeding brought by a different collective, which was dismissed after the named plaintiff was compelled to arbitrate her claims and the proposed collective was unable to name a representative not subject to an arbitration agreement. The agreements between the parties contained a delegation provision, requiring all questions of scope, validity, or enforceability to be resolved in arbitration. However, the dismissal was “without prejudice to a future collective action with named plaintiffs who are not required to arbitrate their claim.” Based on the dismissal without prejudice, plaintiffs brought a new action of collective claims challenging Domino’s compensation for delivery drivers under the Fair Labor Standards Act. The collective alleged that Domino’s does not properly reimburse delivery drivers for the maintenance of their vehicles, and as a result, pays them less than the federal minimum wage. Domino’s then filed a motion seeking to compel arbitration, dismiss the case, and sanction plaintiff’s counsel.
The court granted the motion to compel arbitration since three of the four plaintiffs agreed to arbitrate, and the court found the fourth likely subject to arbitration since Domino’s later produced an arbitration agreement containing a similar arbitration clause. Domino’s asked that the court dismiss the claims, but plaintiffs opposed this motion, requesting a stay of proceedings instead. The court granted the stay, explaining that although a valid arbitration agreement is grounds for dismissal, if a party requests a stay of the case pending the outcome of the arbitration proceedings, the court must stay the case. Domino’s also asked the court to sanction plaintiff’s counsel for failing to voluntarily dismiss the case after being provided arbitration agreements for the collective. The court did not impose sanctions since it could see reasons for plaintiffs to not voluntarily dismiss, such as the court staying the action and being able to address any issues that could arise out of arbitration, and because Domino’s had not yet produced an arbitration agreement for one of the plaintiffs at the time of filing.