Summary
Res judicata (claim preclusion) barred former employees' FLSA overtime claims against their employer because they arose from the same employment relationship as a prior state-court non-compete suit, could have been raised as counterclaims, and the parties stipulated to dismiss "all claims … which could have been raised." Applying Michigan's transactional test, the Sixth Circuit held that the employees' duties and compensation were intertwined with the non-compete agreement, making the two suits a convenient trial unit. The dissent argued the overtime claims (based on conduct during employment) and the non-compete claims (based on post-employment conduct) involved separate transactions.
Holdings
- Res judicata bars the overtime claims because they arise from the same transaction as the non-compete claims under Michigan's transactional test.
Questions Presented
- Whether res judicata bars Etherton and Fuller from bringing their overtime claims after they settled a prior state court action brought by Service First for non-compete violations.
Disposition
affirmed
Cases Cited (29)
- San Remo Hotel, L.P. v. City & Cty. of San Francisco, 545 U.S. 323 (2005)(cited for general principle)
- Allen v. McCurry, 449 U.S. 90 (1980)(cited for general principle)
- AuSable River Trading Post, LLC v. Dovetail Sols., Inc., 874 F.3d 271 (6th Cir. 2017)(followed)
- Adair v. State, 680 N.W.2d 386 (Mich. 2004)(followed)
- Sewell v. Clean Cut Mgmt., Inc., 621 N.W.2d 222 (Mich. 2001)(cited for elements)
- Limbach v. Oakland Cty. Bd. of Cty. Rd. Comm'rs, 573 N.W.2d 336 (Mich. Ct. App. 1997)(cited for proposition)
- Gose v. Monroe Auto Equip. Co., 294 N.W.2d 165 (Mich. 1980)(cited for historical test)
- Leslie v. Mollica, 211 N.W. 267 (Mich. 1926)(cited for narrower rule)
- Ternes Steel Co. v. Ladney, 111 N.W.2d 859 (Mich. 1961)(cited for narrower rule)
- Stanton v. Auto Owners Ins. Co., 2016 WL 6269614 (Mich. Ct. App. 2016)(cited as applying transactional test to counterclaims)
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Cited In (0)
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