Irene Novosad, et al v. Broomall Operating Co LP, et al

Filing

NOT PRECEDENTIAL OPINION Coram: CHAGARES, SCIRICA and FISHER, Circuit Judges. Total Pages: 3. Judge: FISHER Authoring.

Case: 16-2089

Document: 003112587614

Page: 1

Date Filed: 04/10/2017

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 16-2089
____________
IRENE NOVOSAD;
KATHY MORRIS
v.
BROOMALL OPERATING COMPANY LP;
SAVASENIORCARE ADMINISTRATIVE SERVICES LLC,
Appellants
____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(E.D. Pa. No. 2-15-cv-06252)
District Judge: Honorable Juan R. Sanchez
____________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
April 6, 2017
Before: CHAGARES, SCIRICA and FISHER, Circuit Judges.
(Filed: April 10, 2017)
____________
OPINION *
____________
FISHER, Circuit Judge.

*

This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.

Case: 16-2089

Document: 003112587614

Page: 2

Date Filed: 04/10/2017

Does an arbitration clause stating that it “covers only claims by individuals and
does not cover class or collective actions” nonetheless require that a putative class and
collective action for overtime pay be sent to arbitration? The District Court thought not.
We will affirm.
I
Plaintiffs are Irene Novosad and Kathy Morris. Their former employers, Broomall
Operating Co., LP and SavaSeniorCare, LLC, are the defendants. Plaintiffs filed this
putative class and collective action against defendants under the Fair Labor Standards Act
and analogous Pennsylvania wage and hour statutes. They allege that defendants failed
to pay proper overtime compensation. Defendants moved to compel arbitration, pointing
to an arbitration clause in an Employment Dispute Resolution Program book that
plaintiffs agreed to as a condition of employment. The clause makes arbitration “the only
means of resolving employment related disputes.” 1 At the same time, however, the
clause also states that it “covers only claims by individuals and does not cover class or
collective actions.” 2 The District Court read this latter sentence as unambiguously
carving out class and collective actions from mandatory arbitration and accordingly
denied defendants’ motion. This appeal followed.
II

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2

J.A. 49a.
Id.
2

Case: 16-2089

Document: 003112587614

Page: 3

Date Filed: 04/10/2017

The District Court had jurisdiction under 28 U.S.C. §§ 1331 and 1367(a). We
have jurisdiction under 9 U.S.C. § 16(a)(1)(B). “We exercise plenary review over
questions regarding the validity and enforceability of an agreement to arbitrate.” 3
III
We agree with the District Court that the arbitration clause’s plain language
excludes class and collective actions from mandatory arbitration. Defendants’ contrary
argument renders that provision of the clause superfluous. It makes little sense for the
clause to state that it “covers only claims by individuals and does not cover class or
collective actions” only to require arbitration of such suits. We recognize, of course, that
there is a strong federal policy favoring arbitration. But that policy has its limits, and
courts apply the presumption of arbitrability “only where a validly formed and
enforceable arbitration agreement is ambiguous about whether it covers the dispute at
hand.” 4 Here, the text of the arbitration clause controls. That clause, we hold,
unmistakably provides that plaintiffs’ class and collective actions need not be subject to
arbitration.
IV
For the forgoing reasons, we will affirm the District Court’s order.

3

Puleo v. Chase Bank USA, N.A., 605 F.3d 172, 177 (3d Cir. 2010) (en banc).
Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 301 (2010); see
CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165, 173 (3d Cir. 2014).
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