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International Bancshares Corp. v. Ochoa

United States District Court, S.D. Texas, Laredo Division

December 3, 2019

INTERNATIONAL BANCSHARES CORPORATION, Movant,
v.
PAOLA OCHOA, Respondent.

          REPORT & RECOMMENDATION

          JOHN A. KAZEN, UNITED STATES MAGISTRATE JUDGE

         Before the Court is the parties' Joint Motion to Reinstate Case. (Dkt. No. 7). On October 1, 2019, the parties' motion was referred to the undersigned for findings of fact and recommendations of law. (Dkt. No. 10). Having considered the motion, the parties' supplemental briefing (Dkt. No. 9), and the applicable law, the Court recommends that the parties' joint motion to reinstate the case (Dkt. No. 7) be GRANTED.

         I. Factual Background

         This case involves a dispute over the amount of compensation owed by Movant, International Bancshares Corporation (“IBC”), to its employee, Respondent, Paola Ochoa. (Dkt. No. 1 at 1). Per the terms of IBC's dispute resolution policy, IBC and Ochoa submitted the dispute to arbitration. (See Dkt. No. 9-1). After reaching a settlement, the parties filed a motion in the United States District Court for the Southern District of Texas to have the settlement approved under the Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq. (“FLSA”). (Dkt. No. 1).

         On May 9, 2019, this Court ordered the parties to file briefing on the Court's jurisdiction to grant the relief requested and whether a justiciable dispute existed. (Dkt. No. 4). Instead, the parties responded with a request to stay the case for thirty days; acknowledging that the parties had filed the request for settlement approval prior to obtaining a final award from the arbitrator. (Dkt. No. 5 at 2). The parties' motion was denied, and the case was dismissed without prejudice for lack of jurisdiction. (Dkt. No. 6). The parties now represent to the Court that they have secured a final arbitration award and jointly move to reopen the case. (Dkt. No. 7). In support of their motion, the parties submit that the award may be confirmed under the Federal Arbitration Act (“FAA”) and is subject to approval under the FLSA. (See Dkt. No. 9).

         II. Legal Standard

         A. FAA

         9 U.S.C. § 9 provides in relevant part:

If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration . . . then at any time within one year after the award is made any party to the arbitration may apply . . . for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title. If no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the district within which such award was made. Notice of the application shall be served upon the adverse party, and thereupon the court shall have jurisdiction of such party as though he had appeared generally in the proceeding.

(emphasis added). A party does not need to contest the arbitration award to trigger the Court's jurisdiction to confirm the award. See Decapolis Group, LLC v. Mangesh Energy, Ltd, No. 3:13-cv-1547-M, 2014 U.S. Dist. LEXIS 23131, at *1-2 (N.D. Tex. Feb. 24, 2014) (citing McVay v. Halliburton Energy Servs., Inc., 688 F.Supp.2d 556, 564 (N.D. Tex. 2010) (“[T]here is no requirement that a party refuse to honor the arbitration award before a court can confirm the award”); Variable Annuity Life Ins. Co. v. Bencor, Inc., No. H-05-1843, 2006 WL 1492249, at *3-4 (S.D. Tex. May 30, 2006) (denying a motion to dismiss and confirming an arbitration award where the party objecting to confirmation did not contest the award, had paid it in full, and did not seek to vacate or modify the award)).

         B. FLSA

         FLSA claims brought by an employee may properly be subjected to binding arbitration. See Epic Sys. Corp. v. Lewis, 138 S.Ct. 1612 (2018); D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir.2013). “Because ‘the provisions of the FLSA are mandatory, and not subject to negotiation and bargaining between employers and employees,' any agreement to settle claims under the FLSA must receive court approval.” Shaw v. CAS, Inc., No. 5:17-CV-142, 2018 WL 3621050, at *1 (S.D. Tex. Jan. 31, 2018) (citations omitted).

         III. Analysis

         A court's obligation to confirm certain arbitration awards is found in 9 U.S.C. § 9. The plain language of the statue provides that if the parties express in their arbitration agreement that a judgement shall be entered on the arbitration award, and if the application for confirmation is made within one year, the court shall confirm the award. Id. Here, the parties ...


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