Thirty-one former employees of Geneva Enterprises, LLC and AV Automotive, LLC initiated mass arbitration proceedings with the American Arbitration Association in February 2024, alleging wage violations under the Virginia Wage Payment Act and the Fair Labor Standards Act. The employers refused to pay the initiation fees and filed a civil action in state court seeking an injunction against the arbitration, which the employees then removed to federal court. In June 2024, the district court denied the employers' request to enjoin the arbitration and granted a stay of the federal proceedings pending the resolution of the claims in arbitration. The employees later returned to the district court in March 2025, filing a motion to lift the stay and compel the employers to pay the arbitration fees. The district court denied this request, stating that the case had already been referred to arbitration and stayed. The employees appealed, arguing they were entitled to a court order directing the employers to pay the fees, but the Fourth Circuit found it lacked the authority to hear the case.
The Fourth Circuit focused first on whether it possessed appellate jurisdiction under Section 16 of the Federal Arbitration Act. The court explained that while it can review orders denying a petition to compel arbitration under Section 16(a)(1)(B), it cannot review interlocutory orders granting a stay of action or directing arbitration to proceed under Section 16(b). The court determined that the district court's March 2025 Order was functionally an order directing the parties to proceed with arbitration, as it merely reiterated the June 2024 stay rather than issuing a new, final decision. The court rejected the employees' argument that the order was appealable because it denied their motion to compel. The opinion noted that the employees' motion sought relief beyond the scope of the FAA, specifically requesting an order for the employers to pay initiation fees. Because the motion sought relief not provided for by the FAA, the employees forfeited their right to interlocutory review under Section 16(a). The court emphasized that it has an independent obligation to ensure appellate jurisdiction exists before addressing any other issues, including the district court's subject-matter jurisdiction. Since the appeal was improvidently filed, the court could not proceed to evaluate the underlying jurisdictional questions.
The former employees must await the conclusion of the arbitration proceedings before seeking further judicial intervention regarding the arbitration initiation fees. The dismissal leaves the district court's stay in place and resolves no substantive issues regarding the employers' obligation to pay fees or the scope of the arbitration agreements. The decision reinforces the strict limitations on interlocutory appeals in arbitration cases, preventing parties from bypassing the arbitration process through piecemeal litigation.