Tenth Circuit Finds Equitable Estoppel Theories Allowed Non-Signatory to Rely on Arbitration Clause, Reverses Order Denying Motion to Compel Arbitration

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Plaintiffs Darrell Reeves and James King worked at Enterprise Products Partners through separate third-party staffing companies. Each plaintiff had a separate employment contract with his respective staffing company, which required the employee to individually arbitrate any claim arising out of the employment with the relevant staffing company. Reeves commenced a collective action claim against Enterprise to collect unpaid overtime wages. King later joined the putative collective action. Enterprise moved to compel arbitration of the action based on the arbitration clauses in the plaintiffs’ individual employment agreements. The district court denied the motion, finding that Enterprise was not a signatory to the employment agreements in which the arbitration clauses were contained.

The issue on appeal was whether certain equitable estoppel theories allowed Enterprise to assert the arbitration clauses in the plaintiffs’ employment agreements, even as a non-signatory to those agreements. Enterprise argued that Oklahoma law required the district court to apply a “concerted misconduct” or “intertwined claims” theory of equitable estoppel. The Tenth Circuit Court of Appeals agreed, finding two Oklahoma appellate courts had already adopted the concerted misconduct theory and that the Oklahoma Supreme Court appeared to approve of the intertwined claims theory. The Tenth Circuit also agreed with Enterprise that these theories are put in use for precisely the circumstances presented here. The court explained that the plaintiffs’ claims alleged substantially interdependent and concerted misconduct by both Enterprise and the respective staffing companies, which were the companies that actually paid the plaintiffs, not Enterprise. The Tenth Circuit therefore reversed and remanded the district court’s order denying Enterprise’s motion to compel arbitration.

Reeves v. Enterprise Products Partners, LP, No. 20-5020 (10th Cir. Nov. 9, 2021).

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