Collective Action-Overtime Wages-Arbitration

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7^th Circuit Court of Appeals

Case Name: Mary Rodgers-Rouzier v. American Queen Steamboat Operating Company, LLC

Case No.: 23-1812

Officials: Rovner, Brennan, and Pryor, Circuit Judges.

Focus: Collective Action-Overtime Wages-Arbitration

Plaintiff Mary Rodgers-Rouzier who worked as a bartender on steamboats operated by American Queen, alleged that she and her fellow employees were unlawfully denied overtime wages. Rodgers-Rouzier initiated a collective action lawsuit, which over 100 of her coworkers joined. American Queen sought to dismiss the case, arguing that Rodgers-Rouzier had agreed to arbitration. Initially, the district court denied this motion, however, American Queen renewed its motion based on an arbitration agreement, this time citing Indiana state law. The district court granted this second motion despite objections from Rodgers-Rouzier.

Previously, the district court had denied American Queen’s motion to dismiss on grounds of improper venue due to the arbitration agreement. Upon American Queen’s subsequent motion invoking Indiana law, the district court again ruled in favor of dismissal. It determined that the workers who had submitted consent forms were not considered parties to the action.

The Seventh Circuit overturned the district court’s decision. The appellate court acknowledged that American Queen had not waived its arguments and that the district court had the authority to enforce the arbitration agreement under Indiana law. However, it clarified that Indiana law required American Queen to adhere to its agreement that the arbitration was governed by the Federal Arbitration Act (FAA). As a result, Rodgers-Rouzier’s case was permitted to proceed in federal court. The Seventh Circuit did not address whether the case could proceed as a collective action, leaving that issue for future litigation.

Reversed and remanded

Decided 06/18/24

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