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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
Summary of this case from Rogers v. Tug Hill Operating, LLCOpinion
Case No. 19-CV-00241-ABJ
04-13-2020
Mike SNOW, Individually and for Others Similarly Situated, Plaintiffs, v. SILVER CREEK MIDSTREAM HOLDINGS, LLC and Silver Creek Midstream Services, LLC, Defendants, Applied Consultants, Inc., Intervenor-Defendant.
Michael A. Josephson, Pro Hac Vice, Richard M. Schreiber, Pro Hac Vice, Josephson Dunlap LLP, Richard J. Burch, Pro Hac Vice, Bruckner Burch PLLC, Houston, TX, Richard J. Gage, Cheyenne, WY, for Plaintiffs. Anna G. Rotman, Pro Hac Vice, Kenneth A. Young, Pro Hac Vice, Kirkland & Ellis LLP, Houston, TX, Scott P. Klosterman, Williams Porter Day & Neville, Casper, WY, for Defendants Silver Creek Midstream Holdings LLC, Silver Creek Midstream Services LLC. Erin Elizabeth Berry, Kara Lorraine Ellsbury, Hirst Applegate LLP, Cheyenne, WY, Joseph Mulherin, Pro Hac Vice, Rachel B. Cowen, Pro Hac Vice, McDermott Will & Emery LLP, Chicago, IL, for Intervenor-Defendant.
Michael A. Josephson, Pro Hac Vice, Richard M. Schreiber, Pro Hac Vice, Josephson Dunlap LLP, Richard J. Burch, Pro Hac Vice, Bruckner Burch PLLC, Houston, TX, Richard J. Gage, Cheyenne, WY, for Plaintiffs.
Anna G. Rotman, Pro Hac Vice, Kenneth A. Young, Pro Hac Vice, Kirkland & Ellis LLP, Houston, TX, Scott P. Klosterman, Williams Porter Day & Neville, Casper, WY, for Defendants Silver Creek Midstream Holdings LLC, Silver Creek Midstream Services LLC.
Erin Elizabeth Berry, Kara Lorraine Ellsbury, Hirst Applegate LLP, Cheyenne, WY, Joseph Mulherin, Pro Hac Vice, Rachel B. Cowen, Pro Hac Vice, McDermott Will & Emery LLP, Chicago, IL, for Intervenor-Defendant.
ORDER GRANTING MOTION TO COMPEL ARBITRATION
Alan B. Johnson, United States District Judge This matter comes before the Court on Applied Consultants, Inc.’s Motion to Compel Arbitration and Supporting Brief (ECF No. 31) (Motion), Snow's Opposition to Applied's Motion to Compel Arbitration (ECF No. 35) (Response), and Applied Consultants Inc.’s Reply in Support of its Motion to Compel (ECF No. 37) (Reply). Having considered the filings, applicable law, and being otherwise fully advised, the Court hereby finds the Motion should be GRANTED .
Defendants Silver Creek Midstream Holdings, LLC and Silver Creek Midstream Services, LLC also filed a motion to compel arbitration. ECF No. 14.
Background
Plaintiff Mike Snow (Mr. Snow) brings this Fair Labor Standards Act (FLSA) lawsuit seeking to recover unpaid overtime wages and other damages he claims are owed to him by Silver Creek Midstream Holdings, LLC and Silver Creek Midstream Services, LLC (collectively, Silver Creek). Complaint at 1, ECF No. 1. He argues he was an employee of Silver Creek and regularly worked unpaid overtime. See id. at 1-2. Mr. Snow brings his case on behalf of himself and all other similarly situated workers. Id. at 2. The putative class is defined as follows:
All inspectors of Silver Creek Midstream, LLC who were paid a day-rate with no overtime in the past 3 years[.]
Id. Mr. Snow alleges that Silver Creek treated the putative class members as employees and uniformly dictated the pay practices. Id. at 3. Under Silver Creek's day-rate pay practice, Mr. Snow and the putative class members received a flat sum for each day worked, regardless of the number of hours they worked in a day or workweek. Id. at 4. The pay policy violates the FLSA because Snow and the other workers are non-exempt under the FLSA. Id. at 5.
Discussion
1. Applied's Arguments
Applied Consultants, Inc. (Applied) moves the Court for an order compelling arbitration. Motion at 2. Mr. Snow committed "to arbitrate all claims that have arisen or will arise out of [his] employment." Id. (citing ECF No. 31-1, Ex. A, App'x 3 Arbitration Agreement at ¶ 2). Mr. Snow's claim that Silver Creek violated the FLSA by denying him overtime pay falls within the scope of the agreement. Id. However, he did not sue his employer Applied but sued Applied's customer Silver Creek. Id. Applied argues the Court should estop Mr. Snow from avoiding his arbitration agreement through his pleading artifice. Id.
Applied, as Mr. Snow's employer, determined his exemption status under the FLSA and bargained with Mr. Snow to arbitrate any claims challenging that determination. Id. Permitting Mr. Snow to sue in this Court against Silver Creek would allow him to avoid the arbitration agreement, depriving Applied of the benefit of its bargain. Id. Mr. Snow should be required to arbitrate his claims.
Applied employs inspection personnel to provide services to its customers. Id. at 3 (citing ECF No. 31-1, Ex. A Declaration of Jennifer Lacy at ¶ 3). Silver Creek is one of Applied's customers. Id. (citing ECF No. 31-2, Ex. B Declaration of Mark Evans at ¶¶ 3-4, 6, 8). Pursuant to a Master Service Agreement (MSA), Silver Creek issues work orders to Applied when it is seeking inspection services. Id. (citing ECF No. 31-2, Ex. B, App'x 1 MSA at ¶ 2a). Applied's employees provide the requested service, and Silver Creek pays Applied a flat rate. Id. (citing MSA at ¶¶ 2b-c and 3a). The MSA clarified that Applied and its employees were not employees of Silver Creek:
INDEPENDENT CONTRACTOR RELATIONSHIP . In the performance of any work by Contractor [Applied Consultants] for Company [Silver Creek], Contractor shall be deemed to be an independent contractor with the authority and right to direct and control all of the details of the work. However, all work contemplated shall meet the approval of Company and shall be subjected to the general right of inspection. Contractor's employees, agents or representatives shall at all times be under the direct and sole supervision and control of Contractor. It is the understanding and intention of the parties hereto that no relationship of master and servant or principal and agent shall exist between Company and the employees, agents, or representatives of Contractor, and that all work and services covered hereby shall be performed at the sole risk of Contractor.
Id. (citing MSA at ¶ 5). Applied directed and controlled its own employees. Id.
On March 11, 2019, Applied hired Mr. Snow as a welding inspector to provide inspection services on a project it was completing for Silver Creek. Id. at 4 (citing Lacy Declaration at ¶ 10). Applied set Mr. Snow's salary and determined he would be exempt under the FLSA. Id. (citing Lacy Declaration at ¶¶ 15-16). When hired, Mr. Snow signed sixteen separate documents identifying him as an employee of Applied. Id. (Citing Lacy Declaration at ¶ 13). Included among the documents was an IRS W-4 form where Mr. Snow affirmed under penalty of perjury that he would be paid and taxed as an employee of Applied. Id. (citing ECF No. 31-1, Ex. A, App'x 18). Snow submitted his timesheets to Applied. Id. at 5 (citing Lacy Declaration at ¶ 14).
As a condition of employment, Mr. Snow signed the arbitration agreement committing to arbitrate "all claims that have arisen or will arise out of [his] employment with or termination from [Applied Consultants] regardless of whether those are claims under common law or statutory law." Id. (citing Arbitration Agreement at ¶ 2). He also agreed that "there shall be no class actions, collective actions, or multiple employee claims of any kind." Id. (citing Arbitration Agreement at ¶ 2).
Mr. Snow's lawsuit claims he was denied overtime pay. Id. The determinative issue will be whether he was exempt from overtime under the FLSA. Id. Instead of suing his employer that hired him, paid him, and determined he was FLSA exempt, he sues Applied's only customer he worked for, Silver Creek. Id. His Complaint identifies Silver Creek as his employer without directly mentioning Applied at all. Id. Mr. Snow's selective pleading was drafted to avoid the arbitration agreement. Id. at 6.
Applied argues that Mr. Snow is bound by the arbitration agreement. Id. Allowing him to avoid it through artful pleading would be fundamentally unfair. Id. Mr. Snow agreed to arbitrate all claims arising out of his employment, regardless of whether those claims were against Applied or Silver Creek. Id. In hiring Mr. Snow, Applied relied on his commitment to arbitrate and limit his claims to his personal claims. Id. at 8. Under the bargain, Mr. Snow was highly compensated, while Applied assured itself of lower costs in arbitration should a dispute arise. Id. Due to an indemnity clause under the MSA, Applied may have to indemnify and defend Silver Creek in a forum Mr. Snow agreed not to sue in and on a class wide basis that he waived. Id. ; MSA at ¶ 7. Mr. Snow's action deprived Applied of the benefit of its bargain. Motion at 8-9.
Courts have estopped parties from avoiding arbitration by suing a non-signatory where a signatory to a contract with an arbitration clause raises allegations of substantially interdependent and concerted misconduct by both a signatory and the non-signatory. Id. at 6. Mr. Snow's claim against Silver Creek patently alleges interdependent misconduct with Applied. Id. at 7. The only way Silver Creek could be liable would be if it was a joint employer with Applied. Id. As outlined above, the main issue is Mr. Snow's status under the FLSA. Id. This question cannot be resolved without looking at Applied's conduct in paying his salary and determining he was exempt. Id. Mr. Snow's claims clearly fall within the scope of the arbitration agreement. Id. at 8.
2. Mr. Snow's Arguments
Mr. Snow begins by arguing that the arbitration agreement requires him to arbitrate any employment claims he has against Applied, not Silver Creek. Response at 1. Mr. Snow contends that Applied is trying to rewrite the agreement because it is unhappy with the bargain it made. Id. Applied wants the Court to rewrite the arbitration agreement to cover claims against Silver Creek. Id. Arbitration is a matter of contract, and Mr. Snow never agreed to arbitrate with Silver Creek. Id. The arbitration agreement was specific about what it covered. Id. Mr. Snow proceeds to argue that Silver Creek is not an agent or affiliate of Snow (an argument Silver Creek made but Applied did not, see ECF No. 14) and that it does not matter whether both Silver Creek and Applied could be Mr. Snow's joint employers. Id. at 2-3.
Mr. Snow then asserts it is undisputed that he did not enter into an employment agreement with Silver Creek. Id. at 3. While Mr. Snow signed an arbitration agreement with Applied, there is no underlying employment agreement between Mr. Snow and Applied in the record that defines the scope of Mr. Snow's employment relationship with Applied. Id. Mr. Snow notes that the arbitration agreement "covers all claims by the Employee against the Company and the Company against the Employee." Id. at 4 (citing Arbitration Agreement at ¶ 1). The agreement further states that:
The Employee and the Company agree to arbitrate all claims that have arisen or will arise out of the Employee's employment or termination from the Company regardless of whether those are claims under common law or under statutory law.
Id. (citing Arbitration Agreement at ¶ 2). The agreement shows Mr. Snow and Applied only agreed to arbitrate with each other those claims arising out of Mr. Snow's employment or termination with Applied. Id. The arbitration agreement does not extend coverage to third parties. Id. at 5.
Applied and Mr. Snow have no claims against each other. Id. at 9. The express terms of the agreement end the matter there. Id. It is irrelevant whether Applied and Silver Creek could be Mr. Snow's joint employers. Id. Mr. Snow does not bring claims against Silver Creek as his joint employer but as his employer. Id. The economic realities of his working relationship with Silver Creek will determine if Mr. Snow was Silver Creek's employee. Id. (citing Acosta v. Jani-King of Oklahoma, Inc. , 905 F.3d 1156, 1159 (10th Cir. 2018) ). Even if Silver Creek and Applied were Mr. Snow's joint employers, each would be evaluated independently to see if it qualifies as an employer under the FLSA. Id. at 10 (citing Romero v. Clean Harbors Surface Rentals USA, Inc. , 368 F.Supp.3d 152, 159 (D. Mass. 2019) ). This case only looks at the economic realities between Mr. Snow and Silver Creek. Id. Because Mr. Snow brings no claims against Applied, there is no reason to assess whether Applied and Silver Creek are his joint employers. Id.
Mr. Snow also argues that Applied cannot compel him to arbitrate through equitable estoppel. Id. Applied and Mr. Snow are both signatories to the arbitration agreement, and Mr. Snow notes he is unaware of any Wyoming case law where one signatory compels another signatory to arbitrate by means of equitable estoppel. Id. The fact that Applied could become liable does not entitle it to invoke equitable estoppel. Id. at 11.
Additionally, it is not artful pleading for a party to choose to sue a non-signatory to an arbitration agreement provided it has valid claims against the non-signatory. Id. (citing Janvey v. Alguire , 847 F.3d 231, 240-41 (5th Cir. 2017) ). The law does not prevent Mr. Snow from recovering from only one potential joint employer. Id. (citing Tapia v. DIRECTV, Inc. , Civ. No. 14-939 JCH/GBW, 2016 WL 9777179, at *8 (D. N.M. June 22, 2016) ; Romero , 368 F.Supp.3d at 160 ). Mr. Snow concludes that even though Applied (and any other staffing agency that supplied workers to Silver Creek) could theoretically be a joint employer of workers supplied to Silver Creek, he can satisfy his claims against Silver Creek alone such that Applied is not a necessary party. Id. at 12. Where a party alleges no misconduct on the part of the staffing agency, there can be no interdependent misconduct. Id. (citing Reeves v. Enter. Prod. Partners, LP , No. 19-CV-570-JED-FHM, 2020 WL 616166, at *6 (N.D. Okla. Feb. 10, 2020) ). Further, Applied does not identify any interdependent misconduct that would link Applied and Silver Creek in a joint employer situation. Id. at 13.
Wyoming law has not adopted interdependent misconduct estoppel. Id. Applied fails to show equitable estoppel because it has not demonstrated how it, in good faith, relied on the arbitration agreement that it wrote, and could have wrote more broadly, to its detriment. Id. at 13-14. Finally, Mr. Snow is not relying on an employment contract that contained an arbitration agreement in bringing his claims; instead his claims are based on federal law. Id. at 14-15.
3. Applied's Reply
Mr. Snow does not contest he was employed by Applied, that he had a binding arbitration agreement with Applied, and that the agreement covered FLSA claims. Reply at 2. He only argues that the agreement cannot force him to arbitrate claims against Silver Creek. Id. at 2. Mr. Snow cannot claim joint employment to hold Silver Creek liable for his FLSA claim yet deny Silver Creek is his employer for purposes of enforcing the arbitration agreement. Id. Equitable estoppel is used to prevent unjust results. Id. In silence, Mr. Snow has conceded Applied employed him, that he committed to arbitrate, and that he is only able to bring claims against Silver Creek as a joint employer. Id. Alternative equitable estoppel prevents a plaintiff from avoiding arbitration by bringing claims only against a non-signatory joint employer. Id. at 3 (citing Ragone v. Atl. Video at Manhattan Ctr. , 595 F.3d 115 (2d Cir. 2010) ; Noye v. Johnson & Johnson Servs. Inc. , 765 F. App'x 742, 745 (3d Cir. 2019) (unpublished)). Additionally, while Mr. Snow notes that there is no Wyoming case law on alternative equitable estoppel, he provides no argument for why the state would not adopt it if presented with the issue. Id.
4. Court's Analysis
As a preliminary matter, the Court acknowledges that Mr. Snow objects to Applied being allowed to intervene in the case. ECF No. 34. However, Mr. Snow did not actually appeal the Chief Magistrate Judge's order allowing Applied to intervene. See id. Because he did not appeal, the Court will not address the matter. Furthermore, the opinion was thorough and well-reasoned.
The Court determines this case can be resolved on the arbitration agreement itself, without addressing matters of joint employment, equitable estoppel, or third-party beneficiaries. Mr. Snow does not contest that he signed the arbitration agreement or that it covers the type of dispute he brings now before the Court. He does not deny that he signed the sixteen documents Applied states he signed during his hiring process. He does not deny that Applied issued his paychecks. He does not deny that Applied was his employer, nor could he reasonably deny that fact, given the number of documents he signed. He refuses to confirm that Applied was his employer by ignoring this issue in his briefings and drafting his arguments as if Silver Creek was his only employer. He does not agree that Silver was his joint employer with Applied. He refers to Applied as a staffing agency without explaining why he believes Applied is a staffing agency. He claims that he only sued Silver Creek and that Silver Creek was his employer, so the arbitration agreement with Applied is irrelevant. How he is going to explain away the fact that Applied issued his paychecks and was his employer in the eyes of the IRS on his W-4 is unclear. Mr. Snow does not believe that Applied should be a party to this case. Although Applied has already been permitted to intervene and is a party in this case, Mr. Snow has failed to adjust the case caption on his filings since the Court permitted intervention, even on the documents he directed at Applied. See ECF Nos. 32, 34, 35, 36, and 40.
See ECF Nos. 14-15, 25.
Both Silver Creek and Applied seek to compel Mr. Snow to arbitrate his claim against Silver Creek. ECF Nos. 15, 31. Applied and Mr. Snow are signatories to the arbitration agreement. Silver Creek is not. Mr. Snow argues that there is no Wyoming estoppel case of a signatory compelling another signatory to arbitration. Perhaps that is because no such case ever needed to reach the Wyoming Supreme Court because when a motion to compel was by one signatory to another, the parties just went to arbitration. The Court finds that the arbitration agreement is broad enough to cover the claim against Silver Creek as a matter of contract law. Therefore, if Mr. Snow wants to proceed with his case, he must do so in arbitration.
A. General Federal Arbitration Law
Arbitration is a matter of contract. First Options of Chicago, Inc. v. Kaplan , 514 U.S. 938, 943, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). It is a way to resolve disputes – and only those disputes – the parties have agreed to submit to arbitration. Id. The Federal Arbitration Act (FAA) requires courts to enforce arbitration agreements according to their terms. Lamps Plus, Inc. v. Varela , ––– U.S. ––––, 139 S. Ct. 1407, 1412, 203 L.Ed.2d 636 (2019). Parties may generally shape such agreements to their liking by specifying with whom they will arbitrate, what issues they will arbitrate, which rules they will follow in arbitration, and who the arbitrators will be. Id. at 1416.
The Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).
While ambiguities in the language of the agreement should be resolved in favor of arbitration, we do not override the clear intent of the parties, or reach a result inconsistent with the plain text of the contract, simply because the policy favoring arbitration is implicated. Arbitration under the [FAA] is a matter of consent, not coercion.
E.E.O.C. v. Waffle House, Inc. , 534 U.S. 279, 294, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002) (internal citations and quotation marks omitted) (alteration in original).
The Tenth Circuit has stated the same:
The FAA manifests a liberal federal policy favoring arbitration. Nonetheless, arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. Absent some ambiguity in the arbitration agreement, it is the language of the contract that defines the scope of disputes subject to arbitration. As with any other contract, the parties’ intentions control, but those intentions are generously construed as to issues of arbitrability.
1mage Software, Inc. v. Reynolds & Reynolds Co. , 459 F.3d 1044, 1055 (10th Cir. 2006) (internal citations and quotation marks omitted) (alterations removed). When the parties disagree on whether an arbitration clause applies to a particular controversy, it is a question of law for the court. Sanchez v. Nitro-Lift Techs., L.L.C. , 762 F.3d 1139, 1145 (10th Cir. 2014). The FAA and common law have a presumption in favor of arbitration. Id.
The Tenth Circuit has held:
We have previously explained that the framework for analyzing this issue is similar to summary judgment practice: the party moving to compel arbitration bears the initial burden of presenting evidence sufficient to demonstrate the existence of an enforceable agreement; if it does so, the burden shifts to the nonmoving party to raise a genuine dispute of material fact regarding the existence of an agreement. As noted above, if a genuine dispute of material fact exists, the Federal Arbitration Act ("FAA") calls for a summary trial. Only when it's clear no material disputes of fact exist and only legal questions remain may a court resolve the arbitration question by ruling on a motion to compel, rather than conducting a summary trial.
Bellman v. i3Carbon, LLC , 563 F. App'x 608, 612 (10th Cir. 2014) (unpublished) (internal citations and quotation marks omitted). Applied has presented the arbitration agreement. Mr. Snow has objected to its application, saying it only covers claims between him and Applied, which he has not brought. However, as the Court will explain below, it finds that the plain language of the arbitration agreement covers Mr. Snow's claim against Silver Creek.
The Tenth Circuit follows a three-part test to determine whether an issue falls within the scope of an arbitration clause:
First, recognizing there is some range in the breadth of arbitration clauses, a
court should classify the particular clause as either broad or narrow. Next, if reviewing a narrow clause, the court must determine whether the dispute is over an issue that is on its face within the purview of the clause, or over a collateral issue that is somehow connected to the main agreement that contains the arbitration clause. Where the arbitration clause is narrow, a collateral matter will generally be ruled beyond its purview. Where the arbitration clause is broad, there arises a presumption of arbitrability and arbitration of even a collateral matter will be ordered if the claim alleged implicates issues of contract construction or the parties’ rights and obligations under it.
Sanchez , 762 F.3d at 1146 (emphasis removed) (quoting Cummings v. FedEx Ground Package System, Inc. , 404 F.3d 1258, 1261 (10th Cir. 2005) ). Arbitration agreements applying to disputes "arising under," "in connection with," or "relating to" the arbitration agreement are broad clauses. Id. at 1147. The strong presumption in favor of arbitrability applies when the arbitration clause is broad. Id. However, a contract must be considered as a whole without focusing too strongly on any one provision or taking language out of context. Id.
The agreement here provides in relevant part:
MUTUAL ARBITRATION AGREEMENT
Both Applied Consultants, Inc. ("Company") and you ("Employee") agree to the terms and conditions of this Mutual Arbitration Agreement ("Agreement") as an efficient, impartial and cost-effective dispute resolution procedure.
1. Mutual Agreement
This Agreement covers all claims by the Employee against the Company or by Company against the Employee.
...
2. Claims Covered
The Employee and the Company agree to arbitrate all claims that have arisen or will arise out of Employee's employment with or termination from the Company regardless of whether those are claims under common law or under statutory law.
...
Arbitration Agreement, ECF No. 31-1, Ex. A, App'x 3. The provision under paragraph one is broad but only to claims Mr. Snow and Applied have against each other. Paragraph two is broader. This paragraph is not limited to claims Mr. Snow and Applied have against each other but covers all the claims the parties have arising from Mr. Snow's employment. In other words, Applied agrees to arbitrate all claims that will arise out of Mr. Snow's employment with it; Mr. Snow agrees to arbitrate all claims that arise out of his employment with Applied. The present case involves a claim that arises out of Mr. Snow's employment with Applied. It is over whether he was improperly denied overtime pay. Applied issued his paychecks. Furthermore, the broad provision under paragraph two provides a presumption in favor of arbitration.
The Tenth Circuit has held that acknowledging an arbitration provision is ambiguous answers the question of arbitrability because all ambiguities are resolved in favor of arbitration. Sanchez , 762 F.3d at 1146. An order to arbitrate 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." Id. at 1147-48 (quoting Local 5–857 Paper, Allied–Industrial, Chemical & Energy Workers International Union v. Conoco, Inc. , 320 F.3d 1123, 1126 (10th Cir. 2003) ).
[I]n the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail.
Id. at 1148 (emphasis removed) (quoting Local 5–857 , 320 F.3d at 1126 ).
The Court does not find the agreement ambiguous. However, if it is ambiguous, it is a broad provision, so it is interpreted in favor of arbitration. In this case, there is no dispute that the arbitration agreement is valid. The dispute is whether it covers Mr. Snow's claim. It does. He agreed to arbitrate any disputes arising out of his employment with Applied. He does not deny, nor could he, that he was employed by Applied. He sidesteps the issue altogether.
When deciding whether the parties agreed to arbitrate a certain matter, courts look to state contract law. Granite Rock Co. v. Int'l Bhd. of Teamsters , 561 U.S. 287, 296, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010) ; see also Dish Network L.L.C. v. Ray , 900 F.3d 1240, 1246 (10th Cir. 2018).
B. Wyoming Law
Arbitration provides a means to settle disputes in an inexpensive and expeditious manner without resorting to the courts and conducted without the strict rules and rigid formality of a tribunal. T & M Properties v. ZVFK Architects & Planners , 661 P.2d 1040, 1043 (Wyo. 1983). Arbitration is embedded in Wyoming public policy and favored by the Wyoming Supreme Court. Id. However, under Wyoming law, no party is required to arbitrate disputes unless it has agreed to arbitrate that dispute. Hot Springs Cty. Sch. Dist. No. 1 v. Strube Const. Co. , 715 P.2d 540, 545 (Wyo. 1986).
In interpreting a contract, the parties’ intent becomes the main focus. Jackson State Bank v. Homar , 837 P.2d 1081, 1089 (Wyo. 1992). If a written agreement to arbitrate is clear and unambiguous, "the intention is to be secured from the words of the agreement." Id. "When contractual language is clear and unambiguous, the interpretation and construction of contracts is a matter of law for the courts." Thorkildsen v. Belden , 247 P.3d 60, 62 (Wyo. 2011). As the Court noted above, it holds the arbitration agreement is unambiguous and finds as a matter of law that it covers Mr. Snow's claim against Silver Creek.
Contracts are interpreted as a whole with each provision read in light of the other provisions and in a way that does not render other provisions inconsistent or meaningless. Mem'l Hosp. of Sweetwater Cty. v. Menapace , 404 P.3d 1179, 1182 (Wyo. 2017) ; Bear Peak Res., LLC v. Peak Powder River Res., LLC , 403 P.3d 1033, 1041-1042 (Wyo. 2017). Contracts are interpreted using an objective approach. Menapace , 404 P.3d at 1182. Contract review begins by looking at the plain language of the contract and the words used in the contract are afforded the plain meaning a reasonable person would give to them. Bear Peak , 403 P.3d at 1040-1041.
When a party makes application to arbitrate and shows an agreement to arbitrate, the court must order the parties to proceed with arbitration. If any action involving an issue subject to arbitration is pending, the district court will then stay the action.
Panhandle E. Pipe Line Co. v. Smith , 637 P.2d 1020, 1024 (Wyo. 1981).
(a) On application of a party showing an arbitration agreement and the opposing party's refusal to arbitrate, the court shall order the parties to proceed with arbitration. If the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily
to determine the issue raised and shall order or deny arbitration accordingly.
Again, the agreement provides:
MUTUAL ARBITRATION AGREEMENT
Both Applied Consultants, Inc. ("Company") and you ("Employee") agree to the terms and conditions of this Mutual Arbitration Agreement ("Agreement") as an efficient, impartial and cost-effective dispute resolution procedure.
1. Mutual Agreement
This Agreement covers all claims by the Employee against the Company or by Company against the Employee.
...
2. Claims Covered
The Employee and the Company agree to arbitrate all claims that have arisen or will arise out of Employee's employment with or termination from the Company regardless of whether those are claims under common law or under statutory law.
...
Arbitration Agreement, ECF No. 31-1, Ex. A, App'x 3. Interpreting this agreement as a whole, there is a separate section (paragraph two) specifying which claims are covered. It provides more detail to paragraph one. If paragraph two only included claims Mr. Snow and Applied had against each other, it would be superfluous to paragraph one and mean nothing. Paragraph one specifies that any claims the parties have against each other will go to arbitration. Paragraph two says that any claims the parties have regarding Mr. Snow's employment will proceed to arbitration. These provisions read consistently. It is clear the intent was to cover any claims the parties had against each other and claims they had regarding Mr. Snow's employment. Mr. Snow's claim against Silver Creek falls within the scope of the arbitration agreement.
Conclusion
It is HEREBY ORDERED that Applied Consultants, Inc.’s Motion to Compel Arbitration and Supporting Brief (ECF No. 31) is GRANTED.
It is FURTHER ORDERED that Defendants’ Motion to Dismiss and to Compel Arbitration Under the Federal Arbitration Act (ECF No. 14) is DENIED as MOOT.
The parties are ORDERED to submit their dispute to binding arbitration. All decisions regarding the costs and expenses incurred by Applied in bringing this motion (ECF No. 31) and Silver Creek in bringing its motion to compel (ECF No. 14) should be decided in arbitration as well.
It is FURTHER ORDERED the case is stayed pursuant to 9 U.S.C. § 3, pending the outcome of arbitration proceedings.
If a court concludes that parties agreed to arbitrate an issue, the court must stay litigation in favor of arbitration. Belnap v. Iasis Healthcare , 844 F.3d 1272, 1288 (10th Cir. 2017).
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It is FURTHER ORDERED that the parties shall submit a joint status report to the Court every ninety days, beginning ninety-days from the date this order is entered.