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Reynolds v. Cellular Sales of Knoxville, Inc.

United States District Court, S.D. Indiana, Terre Haute Division

October 29, 2014

WHITNEY S. REYNOLDS, et al., Plaintiffs,


WILLIAM T. LAWRENCE, District Judge.

Before the Court is the Defendants' motion for reconsideration and motion to vacate or, in the alternative, modify arbitration award (dkt. no. 60). The motion is fully briefed, and the Court, being duly advised, DENIES the motion for the following reasons.


On January 29, 2013, Reynolds filed a complaint against her former employer, Cellular Sales of Knoxville, Inc. and Cellular Sales of Indiana, LLC (collectively "Cellular Sales") for violations of the Fair Labor Standards Act ("FLSA") and the Indiana Wage Payment Act ("IWPA"). On July 18, 2013, the Court granted Cellular Sales' motion to compel arbitration, and the case was stayed pending arbitration. See dkt. no. 48. Reynolds initiated arbitration with the American Arbitration Association ("AAA"), and a hearing was scheduled for April 7, 2014.

On February 28, 2014, Reynolds submitted her amended specification of claims and damages to the arbitrator. See dkt. no. 61-4. Her "FLSA minimum wage damages" totaled $4, 343.82, which was premised on the allegation that she was not paid minimum wage for the first seven weeks of her employment with Cellular Sales. Id. On March 24, 2014, two weeks before the arbitration proceeding, Reynolds submitted a document titled "Alternate Calculation of FLSA-Only Liquidated Damages Based Upon Cellular Sales' Late Payment of Wages." See dkt. no. 63-1. It reads as follows:

In her Specification of Damages, Reynolds has proposed FLSA minimum wage damages for the period of time from February 13, 2012 to March 31, 2012 based upon a presumption that her damages under the Indiana Wage Payment Act for late payment of wages are greater than her FLSA late minimum wage payment damages and overlap her FLSA late minimum wage damages. If Reynolds were to present her calculation for her FLSA-only late payment of minimum wage damages, she would be entitled to the following:

Id. [1] A calculation for "late payment of minimum wage" for 39 weeks, the duration of Reynolds' employment, totaling $17, 672.07 followed.

The arbitrator granted summary judgment in favor of Cellular Sales on Reynolds claim under the IWPA, finding that the IWPA did not apply to her commissions; thus, only her FLSA claim proceeded to arbitration. On May 14, 2014, the arbitrator awarded $17, 672.07 to Reynolds finding that she "ha[d] proven her claims for late payment of FLSA minimum wages[.]" Dkt. No. 61-1 at 11. Both at the hearing and in post-hearing briefs, Cellular Sales objected to Reynold's 39-week FLSA claim.

On July 2, 2014, Reynolds file a motion for an order confirming the arbitration award (dkt. no. 56), which this Court granted (dkt. no. 57). Judgment was thus entered in favor of Reynolds and against Cellular Services on July 3, 2014, as follows: (1) a damage award of $17, 672.07 to Reynolds; (2) an award of Reynolds' attorney's fees in the sum of $55, 515.00; and (3) Reynolds' costs in the sum of $3, 108.43. Cellular Sales then filed the present motion on July 11, 2014.


Cellular Sales' motion is titled "Motion for Reconsideration and Motion to Vacate or, in the alternative, Modify Arbitration Award." The Court will construe the motion as a timely motion brought pursuant to Federal Rule of Civil Procedure 59. Rule 59(e) states that "[a] motion to alter or amend a judgment must be filed no later than 28 days after the entry of the judgment." Rule 59(e) provides the Court an opportunity to correct errors while the Court still has jurisdiction of the case. See Sosebee v. Astrue, 494 F.3d 583 (7th Cir. 2007). In general, to prevail on a Rule 59(e) motion, the challenging party must establish that there has been a manifest error of law or fact or that newly discovered evidence precludes entry of judgment. See Harrington v. City of Chicago, 433 F.3d 542, 546 (7th Cir. 2006).


Cellular Sales argues that the arbitrator exceeded his authority and granted relief on a matter not submitted to him in violation of the Federal Arbitration Act. See 9 U.S.C. ยงยง 11(b) and 10(a)(4). The Seventh Circuit has cautioned that "[i]t is tempting to think that courts are engaged in judicial review of arbitration awards under the Federal Arbitration Act, but they are not." Wise v. Wachovia Secs., LLC, 450 F.3d 265, 269 (7th Cir. 2006).

When parties agree to arbitrate their disputes they opt out of the court system, and when one of them challenges the resulting arbitration award he perforce does so not on the ground that one of the arbitrators made a mistake but that they violated the agreement to arbitrate, as by corruption, evident partiality, exceeding their powers, etc.-conduct to ...

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