Rose Lorenzo v. Prime Communications, L.P.

Filing

PUBLISHED AUTHORED OPINION filed. Motion disposition in opinion granting Motion to strike [999381910-2] in 14-1622. Originating case number: 5:12-cv-00069-H. [999705867]. [14-1622, 14-1727]

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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1622

ROSE LORENZO,
Plaintiff - Appellee,
v.
PRIME COMMUNICATIONS, L.P., a Texas General Partnership,
Defendant - Appellant.

No. 14-1727

ROSE LORENZO,
Plaintiff - Appellee,
v.
PRIME COMMUNICATIONS, L.P., a Texas General Partnership,
Defendant - Appellant.

Appeals from the United States District Court for the Eastern
District of North Carolina, at Raleigh.
Malcolm J. Howard,
Senior District Judge; Kimberly Anne Swank, Magistrate Judge.
(5:12-cv-00069-H)

Argued:

October 27, 2015

Decided:

November 24, 2015

Before NIEMEYER, KING, and SHEDD, Circuit Judges.

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No. 14-1622 dismissed; No. 14-1727 affirmed by published
opinion. Judge Niemeyer wrote the opinion, in which Judge King
and Judge Shedd joined.

ARGUED: William Wayne Pollock, RAGSDALE LIGGETT, PLLC, Raleigh,
North Carolina, for Appellant.
Harris D. Butler III, BUTLER
ROYALS, PLC, Richmond, Virginia, for Appellee.
ON BRIEF: John
B. Walker, RAGSDALE LIGGETT, PLLC, Raleigh, North Carolina, for
Appellant.
Zev H. Antell, BUTLER ROYALS, PLC, Richmond,
Virginia; Stephen A. Dunn, EMANUEL & DUNN, Raleigh, North
Carolina, for Appellee.

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NIEMEYER, Circuit Judge:
Rose
employer,

Lorenzo
Prime

commenced

this

Communications,

action
L.P.,

against

under

the

her

former

Fair

Labor

Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the North
Carolina Wage and Hour Act, N.C. Gen. Stat. § 95-25.1 et seq.,
alleging that she was unlawfully deprived of wages earned as
commissions and overtime pay earned from work of more than 40
hours per week.
The district court conditionally certified her FLSA claim
as a collective action under 29 U.S.C. § 216(b) and certified
her North Carolina Wage and Hour Act claims as a class action
under Federal Rule of Civil Procedure 23.
Communications’

motion

Lorenzo

agreed

never

Communications

to

compel

to

arbitration,

arbitrate

separately

It also denied Prime

appealed

such
both

concluding
claims.

rulings,

that
Prime

and

we

consolidated the two appeals.
We

now

affirm

Communications’
Prime

the

motion

Communications

district
to

compel

failed

to

court’s

order

arbitration,

produce

denying

Prime

concluding

that

evidence

demonstrating

that Lorenzo agreed to arbitrate any of her claims.
dismiss

Prime

Communications’

appeal

from

the

class

We also
action

certification order, concluding that its petition for permission
to appeal the district court’s order was untimely filed.

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I
Lorenzo

began

employment

with

Prime

Communications,

an

authorized retailer of AT&T wireless communication devices and
services,

in

October

2009

as

a

“solutions

specialist”

retail store in Fuquay-Varina, North Carolina.
specialist,

Lorenzo

sold

merchandise

plans, among other things.

and

in

a

As a solutions

cell-phone

service

In February 2010, she was promoted

to store manager of a retail store in Raleigh, North Carolina.
As a solutions specialist, Lorenzo received hourly wages,
paid biweekly, plus a variable commission based on the gross
profit of individual sales that she made.

As a store manager

she received a salary, paid biweekly, plus a variable commission
based on the gross profits of the store, which was sometimes
referred to as a bonus.

All commissions and bonuses were paid

separately from wages and salaries with a monthly check.
Lorenzo commenced this action in February 2012 under the
FLSA and the North Carolina Wage and Hour Act, alleging that
Prime Communications deprived her of lawful wages, in violation
of

those

acts.

Communications

More

particularly,

incorrectly

calculated

she

alleged

her

that

commissions

Prime
and

bonuses and failed to pay her overtime pay, even though she
worked for more than 40 hours per week.
The district court conditionally certified the FLSA claim
as a collective action under 29 U.S.C. § 216(b) and certified
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the state wage and hour claims as a class action under Federal
Rule of Civil Procedure 23.
Relying

on

an

arbitration

provision

contained

in

its

Employee Handbook, which had been provided to Lorenzo when she
began her employment, Prime Communications filed a motion to
compel

arbitration.

The

district

court

denied

the

motion,

concluding that Prime Communications did not provide sufficient
evidence that Lorenzo had agreed to arbitration.

The court held

that mere receipt of the Employee Handbook and continued work
for Prime Communications after receiving it were insufficient
evidence of Lorenzo’s agreement to the Handbook’s arbitration
provision.
“its

In response to Prime Communications’ argument that

routine

acknowledgment
agreement,”

the

requirement
form

[was]

court

for

employees

sufficient

noted

that

to

evidence

Prime

of

execute

an

[Lorenzo’s]

Communications

“ha[d]

been unable to produce any signed acknowledgment form signed by
[Lorenzo],” and thus found the argument “untenable.”
When, about two months later, Prime Communications located
a copy of the acknowledgment form that Lorenzo had signed and
asked

the

district

court

to

reconsider

its

ruling

denying

arbitration, the court refused to change its position because
“the acknowledgment [form] explicitly state[d] that the handbook
does not create a contract.”

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Relying on the Federal Arbitration Act (“FAA”), 9 U.S.C.
§ 16(a), Prime
challenging

the

Communications
district

filed

court’s

this
order

interlocutory
denying

its

appeal
renewed

motion to compel arbitration, and relying on Federal Rule of
Civil

Procedure

23(f),

Prime

Communications

filed

a

separate

petition for permission to appeal the district court’s order
certifying the state wage and hour claims as a class action. *
Lorenzo filed a motion to strike the petition for permission to
appeal

the

class

action

certification

order

because

Prime

Communications did not file its petition within 14 days of the
district court’s order, as required by Rule 23(f).
By order dated June 24, 2014, we deferred Lorenzo’s motion
to strike the petition for permission to appeal, pending oral
argument, and by order dated July 25, 2014, we consolidated the
two appeals.

II
The facts critical to Prime Communications’ renewed motion
to compel arbitration are not disputed.

Lorenzo acknowledged

that she received Prime Communications’ 2010 Employee Handbook
when beginning her employment and that the Handbook committed

*

The district court’s order also conditionally certified
Lorenzo’s FLSA claim as a collective action, but Prime
Communications does not seek permission to appeal that aspect of
the order.
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“all employment issues” first to an internal dispute resolution
process,

then

to

mediation,

and

finally

to

arbitration.

It

provided that employees “waived all rights to bring a lawsuit
and to a jury trial regarding any dispute,” including claims
under the FLSA.

After receiving the Handbook, Lorenzo continued

her employment with Prime Communications.
Lorenzo also signed a form on October 20, 2009, explicitly
acknowledging receipt of the Handbook.

That form provided in

relevant part:
I understand that I am responsible for reviewing the
Prime Communications Employee Handbook.
* * *
I understand that the Prime Communications’ Employee
Handbook is not a contract of employment and does not
change the employment-at-will status of employees.
Moreover, no provision should be construed to create
any bindery [sic] promises or contractual obligations
between the Company and the employees (management or
non-management).
* * *
By my signature below, I acknowledge, understand,
accept, and agree to comply with the information
contained in the Employment Handbook.
I acknowledge
that I will review and read the Company Handbook and
that I have the opportunity to ask my Manager
questions about the Handbook.
I further acknowledge
that I fully understand or will make sure that I do
understand the contents there of, as they relate to my
employment with Prime Communications.
I understand
that the information contained in the Handbook are
guidelines only and are in no way to be interpreted as
a contract.
(Emphasis added).
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The district court concluded that Lorenzo’s receipt of the
Handbook

and

her

continued

employment

were

insufficient

to

create an agreement to arbitrate and that, in any event, the
arbitration

provision

acknowledgment

form,

in

the

which

Handbook

conflicted

with

the

state[d]

that

the

“explicitly

handbook does not create a contract.”

The court accordingly

denied Prime Communications’ motions to compel arbitration.
Prime Communications contends that the district court erred
in refusing to compel arbitration because “Lorenzo agreed to
arbitrate

all

disputes

relating

to

her

employment

by

affirmatively assenting to the provisions of Prime’s Employee
Handbook,

which

include[d]

requiring

arbitration.”

a

dispute

It

argues

resolution
that

the

provision
arbitration

provision of the Employee Handbook is binding and severable from
the rest of the Handbook, “regardless of whether [the] employee
handbook as a whole constitute[d] an employment contract.”

It

notes

be

that,

under

existing

case

law,

arbitration

should

favored and therefore “any doubts must be resolved in favor of
arbitration as a matter of federal law.”
Lorenzo responds by pointing to the express language of her
signed acknowledgment form, which denied that any provisions in
the Employee Handbook created a contract.

She asserts that,

“where a signed acknowledgment page repeatedly states that no
provisions in the Handbook are contractual,” the Handbook cannot
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be found to have created a contract.
some

cases

form

at

cited

issue

arbitration

by

here

provision

Prime
did

Communications,

not

from

She argues that unlike

exempt

the

the

the

acknowledgment

Employee

acknowledgment

Handbook’s

form’s

explicit

statements disclaiming that the Handbook established any binding
obligations.
The parties correctly presume that resolution of this issue
requires the determination of whether the parties entered into a
contract to commit employment disputes to arbitration.

The FAA

so provides unambiguously:
A written provision in . . . a contract evidencing a
transaction
involving
commerce
to
settle
by
arbitration a controversy thereafter arising out of
such contract . . . shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or
in equity for the revocation of any contract.
9 U.S.C. § 2 (emphasis added).
acknowledged

a

“liberal

federal

While the Supreme Court has
policy

favoring

arbitration,”

AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1745 (2011)
(quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 24 (1983)), it has also consistently held that § 2 of
the FAA reflects the “fundamental principle that arbitration is
a matter of contract,” id. (quoting Rent-A-Center, West, Inc. v.
Jackson, 561 U.S. 63, 67 (2010)).

Thus, a court may order

arbitration only when it “is satisfied that the parties agreed
to arbitrate.”

Granite Rock Co. v. Int’l Bhd. of Teamsters, 561

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U.S. 287, 297 (2010).

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And the question of whether the parties

agreed to arbitrate is resolved by application of state contract
law.

See Johnson v. Circuit City Stores, Inc., 148 F.3d 373,

377 (4th Cir. 1998).
North

Carolina

contract

law,

like

that

of

most

states,

requires that the parties “assent to the same thing in the same
sense, and their minds meet.”
15

(N.C.

1985)

(internal

Normile v. Miller, 326 S.E.2d 11,

quotation

marks

omitted)

(quoting

Goeckel v. Stokely, 73 S.E.2d 618, 620 (N.C. 1952)).
In this case, Lorenzo’s acknowledgment that she received
the

Handbook

and

her

continued

work

after

reviewing

its

arbitration terms could have created implied assent under North
Carolina law.

See Hightower v. GMRI, Inc., 272 F.3d 239, 242-43

(4th Cir. 2001) (reviewing North Carolina case law holding that
“continuing employment after learning of the existence of [a
company’s

dispute

resolution

procedure]

constitutes

an

employee’s agreement to be bound by an arbitration agreement”).
To the extent that the district court in this case failed to
recognize that principle, it erred.

Nonetheless, there is, in

this case, the additional fact that around the time that Lorenzo
received

the

Employee

Handbook,

she

also

signed

an

acknowledgment form providing that the terms of the Employee
Handbook, including its arbitration provision, were “guidelines

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only”

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that

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did

not

create

any

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binding

commitments.

As

the

signed form stated unambiguously:
I understand that the Prime Communications’ Employee
Handbook is not a contract of employment and . . . no
provision should be construed to create any bindery
[sic] promises or contractual obligations between the
Company
and
the
employees
(management
or
nonmanagement).
* * *
I understand that the information contained in the
Handbook are guidelines only and are in no way to be
interpreted as a contract.
The

district

acknowledgment

court

form

that

correctly
Prime

recognized

Communications

that
drafted

the
and

Lorenzo signed expressly disclaimed any implied agreement to be
contractually bound by any terms in the Employee Handbook.

Any

implied assent that might have been created by Lorenzo’s receipt
and review of the Handbook and by her continued employment was
nullified by the express agreement of the parties not to be
bound by any of the Handbook’s terms.

Cf. Snyder v. Freeman,

266

(explaining

S.E.2d

593,

Carolina

legal

contract

between

602-03

(N.C.

1980)

principle

“that

where

parties,

there

can

be

there
no

is

the
an

implied

North
express

contract

between them covering the same subject matter dealt with in the
express agreement”).
Accordingly, we affirm the district court’s order denying
Prime Communications’ renewed motion to compel arbitration.

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III
Prime

Communications

also

seeks

permission

under

Federal

Rule of Civil Procedure 23(f) to appeal the district court’s
order certifying Lorenzo’s state wage and hour claims as a class
action under Rule 23.

Lorenzo filed a motion to strike Prime

Communications’ petition as untimely filed.

We now grant that

motion and dismiss Prime Communications’ petition.
The district court entered its class certification order on
March 24, 2014.

Relying on Rule 23(f), Prime Communications

filed a petition for permission to file an interlocutory appeal
from that order on April 10, 2014.

Rule 23(f) authorizes review

of interlocutory orders granting or denying class certification
if a court of appeals grants permission.

But the Rule provides

that any petition for permission must be “filed with the circuit
clerk within 14 days after the order is entered.”

As Lorenzo

noted, Prime Communications filed its petition for permission to
appeal

17

days

after

the

district

court

entered

its

order

granting certification, which fails to satisfy Rule 23(f)’s 14day deadline.
Although it is unclear whether Rule 23(f)’s deadline is
jurisdictional, see Eberhart v. United States, 546 U.S. 12, 1719 (2005) (casting doubt on the notion that the timeliness of
notices of appeal generally is jurisdictional), this court and
others

have

nonetheless

consistently
12

interpreted

Rule

23(f)’s

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14-day time limit to be “rigid and inflexible,” Nucor Corp. v.
Brown, 760 F.3d 341, 343 (4th Cir. 2014) (quoting Fleischman v.
Albany Med. Ctr., 639 F.3d 28, 31 (2d Cir. 2011)); see also
Pashby

v.

Delia,

709

F.3d

307,

318

(4th

Cir.

2013)

(“[A]n

appellant must file a petition to appeal within fourteen days
after

the

district

certification”
Johnson,
23(f)’s

court

(emphasis

523

F.3d
limit

time

187,
as

enters

its

added));
192

(3d

“strict

Gutierrez

Cir.

and

order

2008)

regarding
v.

class

Johnson

(describing

mandatory”);

&

Rule

Carpenter

v.

Boeing Co., 456 F.3d 1183, 1190 n.1 (10th Cir. 2006) (“Even if
[Rule

23(f)]

is

not

jurisdictional,

however,

it

is

unquestionably ‘mandatory’ if properly raised by the opposing
party”).
Prime

Communications

argues

that

its

filing

was

timely

because three days must be added to the Rule 23(f) deadline by
reason of Federal Rule of Civil Procedure 6(d) and Federal Rule
of Appellate Procedure 26(c).

Rule 6(d) provides, “When a party

may or must act within a specified time after service . . . , 3
days are added after the period would otherwise expire under
Rule 6(a).”

Fed. R. Civ. P. 6(d) (emphasis added).

And Rule

26(c) provides similarly, “When a party may or must act within a
specified time after service, 3 days are added after the period
would otherwise expire under Rule 26(a).”
(emphasis added).

Fed. R. App. P. 26(c)

These Rules extend deadlines following the
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service

of

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documents

by

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an

opposing

party

in

specified

circumstances to accommodate time needed to effect service; they
do

not

apply

to

filing

deadlines

following

entry

orders, as Prime Communications mistakenly contends.
provides

for

a

14-day

filing

deadline

which

original order on certification is entered.”
F.3d

at

343

(emphasis

added).

Because

of

court

Rule 23(f)

“runs

once

the

Nucor Corp., 760

Prime

Communications

filed its petition for permission to appeal 17 days after the
district court entered its order, we dismiss the petition as
untimely filed under Rule 23(f).

Accord Eastman v. First Data

Corp., 736 F.3d 675, 677 (3d Cir. 2013) (explaining that “[t]he
time to file a Rule 23(f) petition runs from entry of the order,
not service of a document,” and therefore dismissing as untimely
a Rule 23(f) petition filed 3 days after Rule 23(f)’s 14-day
deadline).

IV
In

sum,

in

appeal

No.

14-1727,

we

affirm

the

district

court’s order denying Prime Communications’ renewed motion to
compel arbitration, and in appeal No. 14-1622, we dismiss as
untimely Prime Communications’ petition for permission to appeal
under Rule 23(f).

In view of these rulings, we do not reach

Lorenzo’s claims that Prime Communications waived its right to
arbitrate by continuing its participation in the litigation in

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court and that the arbitration program at issue is substantively
defective.
that

the

We also do not reach Prime Communications’ claim
district

court

abused

its

discretion

in

certifying

Lorenzo’s state claims as a class action.
No. 14-1622 DISMISSED;
No. 14-1727 AFFIRMED

15