Silverman Thompson Receives Favorable Ruling for National Mortgage Lender

A judge in the United States District Court for the District of Maryland has ruled in favor of firm client NFM, Inc. represented by Bill Sinclair and Todd Hesel in a Fair Labor Standards Act (FLSA) action. The action revolved around payments due under an employment agreement.  At the outset of the case, Silverman Thompson moved to compel arbitration and dismiss for improper venue, arguing that the claims were subject to the employment agreement’s binding arbitration provision.

As a result of Silverman Thompson’s motions practice, the court found that the at-issue arbitration provision “clearly and unmistakably” requires arbitration for these claims. Ultimately, the court granted the motion, enforced the arbitration provision, and dismissed the case, securing a significant victory for our client.

Silverman Thompson Compels Arbitration of Putative Class Action Filed in the United States District Court for the District of Maryland

In Wood v. NFM, Inc., Civil No. GJR-24-02207, Chief Judge Russell of the United States District Court for the District of Maryland recently granted Silverman Thompson’s client NFM, Inc.’s motion to compel arbitration.  A copy of the opinion can be found here.

Plaintiff William Wood sought to bring a collective action, or in the alternative, a class action, suit against NFM under the Fair Labor Standards Act (FLSA), claiming that he and other non-exempt, hourly employees who had worked for NFM as loan originators, loan officers, or loan officer assistances, had not properly been paid overtime, amongst other purported federal wage and hour violations. The action revolved around employment agreements that contained a binding arbitration provision that required disputes between the parties to be brought in arbitration.

At the outset of the case, Silverman Thompson moved to compel arbitration and dismiss for improper venue arguing that the plaintiff’s claims were subject to the agreement’s binding arbitration provision, including its fee shifting provision that would allow NFM to recover its fees for having to compel arbitration, should it prove successful on its motion. Plaintiff amended his complaint in the hope of being able to avoid arbitration, limiting his claims to those arising out of an earlier agreement he executed with NFM that purportedly contained a one-sided arbitration provision that would have allowed NFM to litigate any dispute with him in federal or state court but would have required him to proceed through arbitration only.    

Silverman Thompson again filed a motion to compel, arguing that a later-signed employment agreement controlled.  That motion was briefed in full (as is custom, the Court did not hold a hearing on the motion).  After carefully considering the briefing, the Court sided with NFM, finding that the later-signed agreement did control and that the binding arbitration provision at issue “clearly and unmistakably” requires arbitration for the plaintiff’s claims.

Ultimately, the court granted the motion, enforced the binding arbitration provision, dismissed the case, and gave NFM an opportunity to seek its fees and costs for having to file the motion in the first place, securing a significant victory for Silverman Thompson’s client.

The Importance of Arbitration in Resolving Business Disputes

Binding arbitration provisions serve as a crucial tool for businesses and individuals to efficiently resolve disputes while avoiding the costs and uncertainties of prolonged litigation and, oftentimes, a jury being the ultimate decision-maker rather than a judge or lawyer, trained in the law. Courts consistently recognize and enforce arbitration agreements when properly drafted, reinforcing the principle that parties must honor their contractual commitments.

By securing a dismissal in this case, Silverman Thompson reaffirmed the strength of arbitration clauses and the protection they offer against forum shopping and unnecessary litigation. This outcome underscores the importance of well-structured employment agreements and demonstrates Silverman Thompson’s commitment to and experience with drafting sound employment agreement and defending businesses and individuals against unwarranted legal claims.

Contact Silverman Thompson’s Business Counseling, Litigation & Transactions Team

The business and civil lawyers at Silverman Thompson are well versed in defending putative wage and hour class actions in both federal and state court, here in Maryland and elsewhere. 

Please contact Bill Sinclair, department head, at bsinclair@silvermanthompson.com or at (410) 385-2225 to discuss this case or how Silverman Thompson may be able to help you.