ADAMS, et al v. CITICORP CREDIT SERVICES, INC. (USA)
Filing
83
MEMORANDUM OPINION AND ORDER signed by MAG/JUDGE L. PATRICK AULD on 03/20/2015; that Defendant's Motion to Compel Arbitration for Plaintiffs Adams, Whitfield, and Kraemer and to Stay Proceedings (Docket Entry 29 ) is GRANTED IN PART, DEF ERRED IN PART, AND DENIED WITHOUT PREJUDICE IN PART, in that Plaintiffs Whitfield and Kraemer must submit to arbitration, that any determination as to Plaintiff Adams must proceed to trial on the issue of an agreement to arbitrate, and that no stay will issue at this time as to anyone other than Plaintiffs Whitfield and Kraemer. FURTHER ORDERED that Plaintiffs' Motion for Conditional Certification as a Collective Action pursuant to the Fair Labor Standards Act (Docket Entry 37 ) is GRANTED in that the Court will conditionally certify a class defined as "all customer service telephone operator employees who worked at Citi's Greensboro, North Carolina call center facility after March 22, 2009 and used the telephone system to record their time." FURTHER ORDERED that, on or before April 20, 2015, the Parties shall file a Joint Status Report regarding their efforts to agree on a notification plan, Notice of Conditional Certification, and Consent to Join Form, including their joint or individual proposals for such matters. (Garland, Leah)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
HENRY DENNIS ADAMS, et al.,
)
)
Plaintiffs,
)
)
v.
)
)
CITICORP CREDIT SERVICES, INC., )
)
Defendant.
)
1:12CV286
MEMORANDUM OPINION AND ORDER
This case comes before the Court on Defendant’s Motion to
Compel Arbitration for Plaintiffs Adams, Whitfield, and Kraemer and
to Stay Proceedings (Docket Entry 29) and Plaintiffs’ Motion for
Conditional Certification as a Collective Action pursuant to the
Fair Labor Standards Act (Docket Entry 37).1
For the reasons that
follow, the Court will grant in part, defer in part, and deny in
part Defendant’s Motion to Compel and will grant Plaintiffs’ Motion
for Conditional Certification.
I.
BACKGROUND
Four Plaintiffs (Henry Adams, Kelly Harrison, James Whitfield,
and
Katherine
Plaintiffs”)
Services,
Kraemer)
initiated
Inc.
(“Citi”)
(collectively
“Plaintiffs”
this
action
against
“on
behalf
of
or
“Named
Citicorp
Credit
themselves
and
other
similarly situated current and former hourly employees . . . for
engaging in a systematic scheme of wage abuses against its hourly1
The Parties consented to disposition of this case pursuant
to 28 U.S.C. § 636(c). (Docket Entry 67-1.)
paid customer service telephone operator employees working at
Citi’s call center located in Greensboro, North Carolina.” (Docket
Entry 23 at 1-2.)2
(1)
Their Amended Complaint alleges that Citi:
“fail[ed] to properly record and pay its hourly customer
service telephone operator employees for ‘off-the-clock’ work
and overtime” (id. at 2);
(2)
“encourag[ed],
requir[ed],
and/or
creat[ed]
circumstances
necessitating said employees to work off the clock” (id.);
(3)
“requir[ed] said employees to improperly record their time
records” (id.); and
(4)
“encourag[ed] or requir[ed] said employees to work off the
clock to conduct work-related activities, including time spent
logging
in
and
out
of
computer
and
telephone
systems,
attending mandatory meetings, and reading required materials
necessary for the performance of their jobs” (id.).
Plaintiffs allege that, as a result of this “scheme” of wage
abuses, Citi violated the federal Fair Labor Standards Act (“FLSA”)
and the North Carolina Wage and Hour Act (“NCWHA”).
(Id. at 1-2.)
Citi subsequently filed the instant Motion to Compel. (Docket
Entry 30.)3
Plaintiffs responded (Docket Entry 47) and Citi
2
Other putative plaintiffs since have opted into this action.
(See Docket Entries 41-45, 49-56, 59-60, 62, 64, 69, 72.)
3
Where page numbers in a document’s CM/ECF footer (created at
docketing) differ from the document’s original internal pagination,
pin cites refer to the page number(s) in the CM/ECF footer.
2
replied (Docket Entry 57).
In the same period, Plaintiffs filed
the instant Motion for Conditional Certification (Docket Entry 37),
as to which Citi responded (Docket Entry 63), Plaintiffs replied
(Docket Entry 66), and Citi sur-replied (Docket Entry 68-1).
II.
The
Federal
establishes
agreements.”
“a
MOTION TO COMPEL ARBITRATION
Arbitration
liberal
Act
federal
(“FAA”),
policy
9
U.S.C.
favoring
§§
1-16,
arbitration
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,
460 U.S. 1, 24 (1983).
Pursuant to the FAA, “agreements to
arbitrate must be enforced . . . .”
Byrd, 470 U.S. 213, 218 (1985).
Dean Witter Reynolds, Inc. v.
In determining whether to compel
arbitration, a court should consider:
“(1) the existence of a dispute between the parties,
(2) a written agreement that includes an arbitration
provision which purports to cover the dispute, (3) the
relationship of the transaction, which is evidenced by
the agreement, to interstate or foreign commerce, and
(4) the failure, neglect or refusal of [a party] to
arbitrate the dispute.”
Adkins v. Labor Ready, Inc., 303 F.3d 496, 500-01 (4th Cir. 2002)
(quoting Whiteside v. Teltech Corp., 940 F.2d 99, 102 (4th Cir.
1991)).
If a valid arbitration agreement covers the dispute at
issue, the Court must “stay the trial of the action until such
arbitration has been had in accordance with the terms of the
agreement . . . .”
9 U.S.C. § 3.
“‘In the context of motions to compel arbitration brought
under the [FAA] . . . courts apply a standard similar to that
3
applicable to a motion for summary judgment.’”
Minter v. Freeway
Food, Inc., No. 1:03CV00882, 2004 WL 735047, at *2 (M.D.N.C. Apr.
2, 2004) (unpublished) (quoting Bensadoun v. Jobe-Riat, 316 F.3d
171, 175 (2d Cir. 2003)).
Accordingly, the Court should compel
arbitration “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as
a matter of law.”
Fed. R. Civ. P. 56(a).
Such a dispute exists if
the evidence presented could lead a reasonable factfinder to return
a verdict for the non-moving party.
Inc., 477 U.S. 242, 255 (1986).
Court
must
view
the
Anderson v. Liberty Lobby,
In considering that issue, the
evidence
and
any
reasonable
inferences
therefrom in a light most favorable to the non-movant.
Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
To decide if a party agreed to arbitrate a dispute, “the
[C]ourt should apply ‘ordinary state-law principles that govern the
formation of contracts.’” Johnson v. Circuit City Stores, 148 F.3d
373, 377 (4th Cir. 1998) (quoting First Options of Chicago, Inc. v.
Kaplan, 514 U.S. 938, 944 (1995)).
valid
contract
requires
[1]
Under North Carolina law, “[a]
offer,
[2]
[3] consideration and [4] no defenses to formation.”
acceptance,
Koltis v.
North Carolina Dep’t of Human Res., 125 N.C. App. 268, 271, 480
S.E.2d 702, 704 (1997) (citing Copy Prods., Inc. v. Randolph, 62
N.C. App. 553, 555, 303 S.E.2d 87, 88 (1983)). “North Carolina has
a strong public policy favoring the settlement of disputes by
4
arbitration.
[Said] strong public policy requires that the courts
resolve any doubts concerning the scope of arbitrable issues in
favor of arbitration.”
Johnston Cnty. v. R.N. Rouse & Co., Inc.,
331 N.C. 88, 91, 414 S.E.2d 30, 32 (1992).
However, “North
Carolina law requires the party seeking to compel arbitration to
demonstrate that both parties mutually agreed to arbitrate their
disputes.”
Minter, 2004 WL 735047, at *3 (citing Routh v. Snap-On
Tools Corp., 108 N.C. App. 268, 271, 423 S.E.2d 791, 794 (1992)).
A.
2011 Arbitration Policy
Citi argues that Plaintiffs Adams, Whitfield, and Kraemer have
“agreed to individually arbitrate any claims relating to [their]
employment with [Citi].”
original).)4
(Docket Entry 30 at 2-3 (emphasis in
Furthermore, Citi alleges that, “[a]s part of their
arbitration agreements, . . . these Plaintiffs waived any right to
commence or participate in any class or collective action arising
from [their] employment.”
(Id. at 3.)
In January 2011, Citi promulgated an Employee Handbook (“2011
Handbook”)
which
included
(“Arbitration Policy”).
its
Employment
Arbitration
Policy
(Id. at 4 (citing Docket Entry 29-2, ¶ 7;
Docket Entry 29-3 at 2-6).)
The Arbitration Policy states:
The Policy makes arbitration the required and exclusive
forum for the resolution of all disputes (other than
4
Citi acknowledges that “Plaintiff Harrison, who took a leave
of absence effective May 2010 and did not return to [Citi,] . . .
is not bound by this agreement and therefore is not subject to this
Motion.” (Docket Entry 30 at 3 n.2 (internal citations omitted).)
5
disputes which by statute are not arbitrable) arising out
of or in any way related to employment based on legally
protected
rights
(i.e.,
statutory,
regulatory,
contractual, or common-law rights) that may arise between
an employee or former employee and Citi . . . including,
without limitation, claims, demands, or actions under
. . . the Fair Labor Standards Act of 1938 . . . .
(Docket Entry 29-3 at 2 (emphasis added).)
It goes on to say that,
except where expressly prohibited by law, arbitration on
an individual basis pursuant to this Policy is the
exclusive remedy for any employment-related claims which
might otherwise be brought on a class, collective or
representative action basis. Accordingly, employees may
not participate as a class or collective action
representative or as a member of any class, collective,
or representative action, and will not be entitled to any
recovery from a class, collective, or representative
action in any forum.
Any disputes concerning the
validity of this class, collective, and representative
action waiver will be decided by a court of competent
jurisdiction, not by the arbitrator.
In the event this waiver is found to be unenforceable,
then any claim brought as a class, collective, or
representative action basis must be filed in a court of
competent jurisdiction, and such court shall be the
exclusive forum for all such claims.
(Id. at 3 (emphasis added).)
Citi has tendered evidence that Plaintiffs Whitfield and
Kraemer executed electronic acknowledgments of the 2011 Handbook on
January 3, 2011, and February 17, 2011, respectively.
(Docket
Entry 29-2, ¶¶ 9-10 (citing Docket Entry 29-4 at 2 and Docket Entry
29-5 at 2).)
The acknowledgments not only specifically mention
that the “Arbitration Policy . . . require[s] [the employee] to
subject employment-related disputes to binding arbitration,” but
also indicates that the employee bears the “obligation to read
6
these documents carefully, and that no provision in [the] Handbook
or elsewhere is intended to constitute a waiver, nor be construed
to constitute a waiver, of Citi’s right to compel arbitration of
employment-related disputes.”
Entry 29-5 at 2.)
(Docket Entry 29-4 at 2; Docket
Finally, the acknowledgments state: “WITH THE
EXCEPTION OF THE EMPLOYMENT ARBITRATION POLICY, YOU UNDERSTAND THAT
NOTHING CONTAINED IN THIS HANDBOOK, NOR THE HANDBOOK ITSELF, IS
CONSIDERED A CONTRACT OF EMPLOYMENT.”
(Docket Entry 29-4 at 2;
Docket Entry 29-5 at 2 (emphasis in original).)
B.
Citi
admits
that
Plaintiff Adams
Plaintiff
Adams
“did
not
execute
an
acknowledgement” of the 2011 Handbook. (See Docket Entry 30 at 5.)
It contends, however, that he did acknowledge receipt of the 2009
Employee Handbook (“2009 Handbook”) (which contention Plaintiffs do
not dispute (see Docket Entry 47 at 19-20)) and that the 2009
Handbook “advised [him] of [Citi’s] right to amend the Arbitration
Policy
and
that
continuation
of
employment
would
be
deemed
acceptance of any such amendment, including the class action waiver
contained in the 2011 [] Handbook.”
(Docket Entry 30 at 5.)
provision of the 2009 Handbook referenced by Citi states:
Citi reserves the right to revise, amend, modify, or
discontinue the [Arbitration] Policy at any time in its
sole discretion with 30 days’ written notice.
Such
amendments may be made by publishing them in the Handbook
or by separate release to employees and shall be
effective 30 calendar days after such amendments are
provided to employees and will apply prospectively only.
Your continuation of employment after receiving such
7
The
amendments shall be deemed acceptance of the amended
terms.
(Docket Entry 29-8 at 6 (emphasis in original).) The 2009 Handbook
also includes this language:
“Except as otherwise required by
applicable law, this [Arbitration] Policy applies only to claims
brought on an individual basis. Consequently, neither Citi nor any
employee may submit a class action, collective action, or other
representative action for resolution under this Policy.”
(Id. at
2.) Citi does not argue that the Court could compel arbitration as
to Plaintiff Adams under the 2009 Arbitration Policy.
Entry 30 at 10-11; Docket Entry 57 at 11.)
that
“[Plaintiff]
Adams
acknowledged
(See Docket
Rather, it contends
receipt
of
the
2009
[]
Handbook and Arbitration Policy, which expressly permitted Citi to
amend the Policy’s terms” and that his “continued employment after
promulgation
of
the
2011
Arbitration
Policy
sufficiently
establishes his acceptance of its terms, including the collective
action waiver.”
(Docket Entry 30 at 12; Docket Entry 57 at 12.)
Under North Carolina law, “unilaterally promulgated employment
manuals or policies do not become part of the employment contract
unless expressly included in it.”
Walker v. Westinghouse Elec.
Corp., 77 N.C. App. 253, 259-60, 335 S.E.2d 79, 83-84 (1985)
(citations omitted).
Although a contract “may be supplemented by
additional agreements which are enforceable,” Martin v. Vance, 133
N.C. App. 116, 121, 514 S.E.2d 306, 309 (1999), before such
additions can become valid, “there must be a mutual agreement
8
between the parties as to the terms,” id.
Evidence that an
employee received notice of the agreement and thereafter continued
employment suffices.
See Hightower v. GMRI, Inc., 272 F.3d 239,
242 (4th Cir. 2001) (construing North Carolina law); see also
Robbins-Hutchens v. Liberty Hardware Mfg. Corp., No. 1:01CV46, 2001
WL 823495, at *3 (M.D.N.C. June 14, 2001) (unpublished) (“The North
Carolina Court of Appeals has found that an employee with notice of
a dispute resolution program assents to the program by continuing
in her employment.”); Howard v. Oakwood Homes Corp., 134 N.C. App.
116, 121, 516 S.E. 2d. 879, 882 (1999) (finding evidence sufficient
to show “[the] plaintiff knew that the terms of the [arbitration
agreement]
would
apply
to
her
should
she
continue
in
her
employment, and that by doing so, [the] plaintiff mutually assented
to the program”).
Citi asserts that it “promulgated the 2011 [] Handbook to all
of
its
active
employees
in
December
2010
and
January
2011.”
(Docket Entry 30 at 5 (citing Docket Entry 29-2, ¶ 8 (“[Citi]
provided access to the 2011 [] Handbook to all of its active
employees in the months of December 2010 and January 2011.”)).)
Notably, Citi does not describe such promulgation other than to say
that it occurred “in accordance with [Citi’s] usual practices and
procedures.”
(Id.
at
11.)
The
2009
Handbook
states
that
“amendments may be made by publishing them in the Handbook or by
separate release to employees . . . .”
9
(Docket Entry 29-8 at 6.)
Plaintiffs contend that Citi “has not produced any proof that
[Plaintiff] Adams ever received [the 2011 Handbook] or was in any
way informed of its contents” (Docket Entry 47 at 19), although
they do not explicitly deny that Plaintiff Adams received the 2011
Handbook (see id. at 19-20).
In support of its Motion to Compel,
Citi submitted a declaration by “a Human Resources Risk & Control
Director for [Citi].”
(Docket Entry 29-2, ¶ 1.)
That declaration
states: “Plaintiff Adams was employed by [Citi] at its Greensboro,
North Carolina call center from December 6, 2004 to January 15,
2011.”
(Id. ¶ 4 (emphasis added).)
The foregoing statement thus
concedes that Plaintiff Adams’s employment at Citi ended during the
period when Citi alleges it provided its employees with the 2011
Handbook (see Docket Entry 30 at 5 (“[Citi] promulgated the 2011 []
Handbook to all of its active employees in December 2010 and
January 2011.”); see also Docket Entry 29-2, ¶ 8 (“[Citi] provided
access to the 2011 [] Handbook to all of its active employees in
the months of December 2010 and January 2011.”)).
Viewing the evidence in a light most favorable Plaintiffs (as
required at this stage, see Matsushita, 475 U.S. at 587), a
reasonable fact-finder could determine that Plaintiff Adams did not
receive notice of the 2011 Handbook containing the amendment to the
Arbitration Policy implementing the collective action waiver before
his employment with Citi ended.
Accordingly, a material question
of fact exists concerning whether Plaintiff Adams agreed to waive
10
his right to collective action in favor of submitting this dispute
to individual arbitration, thus requiring resolution of that issue
by trial, see 9 U.S.C. § 4 (“If the making of the arbitration
agreement . . . be in issue, the court shall proceed summarily to
the trial thereof.”); Minter, 2004 WL 735047, at *2 (“[W]hen a
question of fact arises as to the presence of an agreement to
arbitrate, the issue may not be determined on the affidavits;
rather a trial . . . is required.”).5
C.
Waiver of Collective Action “Right”
Plaintiffs Kraemer and Whitfield do not contest the existence
of
an
agreement
to
arbitrate;
rather,
they
challenge
the
enforceability of the collective action waiver (see Docket Entry 47
at 8-19), which challenge, if successful, would require, according
to
the
2011
Handbook,
that
“any
claim
brought
on
a
class,
collective, or representative action basis must be filed in a court
of competent jurisdiction” (Docket Entry 29-3 at 3). In support of
this argument, Plaintiffs assert that “collective action is an
integral and fundamentally substantive element of the FLSA that
cannot be subject to waiver.”
original).)
(Docket Entry 47 at 8 (emphasis in
Citi responds that “collective action . . . is simply
5
“If no jury trial be demanded by the party alleged to be in
default, . . . the court shall hear and determine such issue.” 9
U.S.C. § 4. Because Plaintiff Adams did not timely demand a jury
trial on this issue (see Docket Entry 47), he waived any such
right, see Starr Elec. Co., Inc. v. Basic Const. Co., 586 F. Supp.
964, 967 (M.D.N.C. 1982).
11
a procedural mechanism that an employee may agree to forego”
(Docket
Entry
57
at
4)
and
that
“policy
concerns,
‘however
worthwhile, cannot undermine the FAA’” (id. at 7 (quoting Coneff v.
AT&T Corp., 673 F.3d 1155, 1159 (9th Cir. 2012))).
The United States Court of Appeals for the Fourth Circuit
previously addressed the question of the enforceability of a class
action waiver under the FLSA and ruled the waiver enforceable in
that case.
Adkins, 303 F.3d at 503.
However, Plaintiffs here
argue that the plaintiff in Adkins “failed to show a Congressional
intent to require courtroom resolution of FLSA [collective action]
claims” (Docket Entry 47 at 16 (citing Adkins, 303 F.3d at 506)),
whereas they (in contrast) “have presented textual and intent-based
arguments that were neither before the Adkins panel, nor considered
by that court” (id. (emphasis in original)).
Assuming that the
Court could reach a different conclusion than the one Adkins would
appear to dictate, Plaintiffs’ position nonetheless lacks merit.
In that regard, Plaintiffs cite the following language in the
FLSA as support for their challenge to the instant waiver:
“An action to recover the liability prescribed in either
of the preceding sentences [regarding failure to pay
minimum wage or overtime and liquidated damages] may be
maintained against any employer . . . by any one or more
employees for and in behalf of himself or themselves and
other employees similarly situated.”
(Docket Entry 47 at 8 n.2 (quoting 29 U.S.C. § 216(b)) (brackets in
original).)
Recently, the United States Court of Appeals for the
Eleventh Circuit exhaustively (and convincingly) analyzed this same
12
statutory
language
in
light
of
United
States
Supreme
Court
decisions from analogous contexts, Walthour v. Chipio Windshield
Repair,
LLC,
745
F.3d
1326,
1330-35
(11th
Cir.)
(discussing
American Express Co. v. Italian Colors Rest., 570 U.S. ___, 133 S.
Ct. 2304 (2013), CompuCredit Corp. v. Greenwood, 565 U.S. ___, 132
S. Ct. 665 (2012), and Gilmer v. Interstate/Johnson Lane Corp., 500
U.S. 20 (1991)), cert. denied, ___ U.S. ___, 134 S. Ct. 2886
(2014),
and,
“based
on
th[o]se
Supreme
Court
decisions
read
together, [] conclude[d] that the text of [the] FLSA [] does not
set forth a non-waivable substantive right to a collective action,”
id. at 1335.6
Other courts (nearly uniformly) have reached the
same conclusion.
See, e.g., D.R. Horton, Inc. v. National Labor
Relations Bd., 737 F.3d 344, 357-60 (5th Cir. 2013); Sutherland v.
Ernst & Young LLP, 726 F.3d 290, 295-97 (2d Cir. 2013); Owen v.
Bristol Care, Inc., 702 F.3d 1050, 1052 (8th Cir. 2013).7
6
Moreover, the Supreme Court has recognized that employees
cannot waive the FLSA’s guarantees of minimum wages, overtime, and
liquidated damages because such action “would nullify the purposes
of the Act.”
Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707
(1945). The Supreme Court, however, did not identify enforcement
through collective action as one of the nonwaivable “rights.” See
id.
“Additionally, [like the Eleventh Circuit, this Court]
agree[s] with the Eighth Circuit’s reasoning in [another recent
decision], that ‘even assuming Congress intended to create some
“right” to class actions, if an employee must affirmatively opt in
to any such class action, surely the employee has the power to
waive participation in a class action as well.’” Walthour, 745
F.3d at 1335 (quoting Owen v. Bristol Care, Inc., 702 F.3d 1050,
1052-53 (8th Cir. 2013)) (internal brackets omitted).
7
Plaintiffs relied on the textual analysis employed in the
(continued...)
13
In addition to their textual argument, Plaintiffs point to one
item in the Congressional Record, which states in relevant part:
“If there shall occur violations . . ., the employees can
themselves, or by designated agent or representatives,
maintain an action in any court to recover the wages due
them and . . . [the court] shall [] allow a reasonable
attorney’s fees and assess the court costs against the
violator of the law so that employees will not suffer the
burden of an expensive lawsuit. The provision has the
further virtue of minimizing the cost of enforcement by
the Government. It is both a common-sense and economical
method of regulation. . . . [T]he provision which I have
mentioned puts directly into the hands of the employees
who are affected by violation the means and ability to
assert and enforce their own rights, thus avoiding the
assumption by Government of the sole responsibility to
enforce the act.”
(Docket Entry 47 at 11-12 (quoting 83 Cong. Rec. 9264 (1938)).)
Although Plaintiffs argue that this statement shows that “the
right to collective action . . . was an indispensable aspect of the
enforcement provision Congress included in the FLSA” (id. at 12),
the statement actually highlights the importance of the private
right
of
action
individually
or
the
FLSA
grants
collectively)
(see
employees
id.).
(whether
Simply
brought
put,
the
legislative history cited by Plaintiffs does not establish that
Congress intended to preclude waiver of collective action under the
7
(...continued)
subsequently reversed decisions of Raniere v. Citigroup, Inc., 827
F. Supp. 2d 294 (S.D.N.Y. 2011), rev’d, 533 F. App’x 11 (2d Cir.
2013) (citing Sutherland, 726 F.3d at 296), and Owen v. Bristol
Care, Inc., No. 11-04258-CV-FJG, 2012 WL 1192005 (W.D. Mo. Feb. 28,
2012) (unpublished), rev’d, 702 F.3d 1050 (8th Cir. 2013). (See
Docket Entry 47 at 9.) As stated above, the Court adopts the wellreasoned view of those appellate courts, rather than the position
taken in the now-rejected district court decisions.
14
FLSA. See Torres v. United Healthcare Servs., 920 F. Supp. 2d 368,
376 (E.D.N.Y. 2013) (“This scant legislative history is not at all
persuasive that Congress intended the right to participate in an
FLSA collective action to be an unwaivable right. If anything, the
legislative history makes clear that Congress amended the FLSA for
the specific purpose of adding a requirement that an employee take
the affirmative step of opting-in before he can avail himself of
the right to participate in a collective action.”).
Plaintiffs focus most of their argument on the purpose of the
FLSA, asserting that “the ability to seek collective redress . . .
is an enforcement remedy necessary to effectuate the broader public
policy goals underlying the FLSA” (Docket Entry 47 at 11), namely
“‘protect[ion of] certain groups of the population from substandard
wages and excessive hours which endangered the national health and
well-being and the free flow of goods in interstate commerce’” (id.
at 10 (quoting Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 706
(1945))).
Collective action provisions certainly exist to promote
specific policy objectives:
“The policy at the very core of the class action
mechanism is to overcome the problem that small
recoveries do not provide the incentive for any
individual to bring a solo action prosecuting his or her
rights.
A class action solves this problem by
aggregating the relatively paltry potential recoveries
into something worth someone’s (usually an attorney’s)
labor.”
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997) (quoting
Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)).
15
However, the policy rationale for collective action does not trump
the “national policy favoring arbitration,” Buckeye Check Cashing,
Inc. v. Cardegna, 546 U.S. 440, 443 (2006).
See Adkins, 303 F.3d
at 503 (“[An] inability to bring a class action . . . cannot by
itself suffice to defeat the strong congressional preference for an
arbitral forum.”); see also Walthour, 745 F.3d at 1335 (“[A]fter
reviewing
the
purposes
of
the
FLSA,
we
conclude
that
the
enforcement of collective action waivers in arbitration agreements
is also not inconsistent with the FLSA.”).8
Put another way, “‘simply because judicial remedies are part
of a law does not mean that Congress meant to preclude parties from
bargaining around their availability.’”
Adkins, 303 F.3d at 503
(quoting Johnson v. West Suburban Bank, 225 F.3d 336, 377 (3d Cir.
2000)).
Plaintiffs Whitfield and Kraemer agreed to submit all
8
As noted above, Plaintiffs describe “the ability to seek
collective redress . . . [as] an enforcement remedy necessary to
effectuate the broader public policy goals underlying the FLSA.”
(Docket Entry 47 at 11 (emphasis added).)
Even accepting that
characterization, an “enforcement remedy” exists to vindicate a
litigant’s substantive statutory rights and, “so long as the
prospective litigant effectively may vindicate its statutory cause
of action in the arbitral forum, the statute will continue to serve
both its remedial and deterrent function.” Mitsubishi Motors Corp.
v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 637 (1985).
Plaintiffs have failed to offer any evidence that they could not
vindicate their rights in an individual arbitral forum.
(See
Docket Entry 47.)
That failure dooms their position.
See
generally Adkins, 303 F.3d at 503. Finally, the Supreme Court has
held “that the ‘effective vindication doctrine’ cannot be used to
invalidate class-action waiver provisions in circumstances where
the recovery sought is exceeded by the costs of individual
arbitration . . . .” Sutherland, 726 F.3d at 298 (citing American
Express, 570 U.S. at ___, 133 S. Ct. at 2310-11).
16
employment-related disputes to arbitration and to forego redress
via
collective-action
frustrates
the
procedures.
purpose
of
the
Nothing
FLSA;
in
however,
that
agreement
rendering
that
agreement unenforceable would frustrate the purpose of the FAA.
The Court thus declines to find the instant waiver unenforceable.9
D.
Prospective Application of Waiver
Next, Plaintiffs argue that the instant waiver does not apply
here because “much of the conduct forming the basis of this suit
occurred in 2010 before the waiver went into effect.”
Entry 47 at 4.)
Handbook,
which
They rely on language from the 2009 Employee
states
prospectively only.”
6).)
(Docket
that
“amendments
.
.
.
will
apply
(Id. at 4-5 (quoting Docket Entry 29-8 at
They further contend that, “[s]ince this case involves a
waiver
of
the
right
to
proceed
collectively,
the
rules
of
construction for arbitration agreements should not be applied
. . . .”
(Id. at 7.)
These arguments lack merit.
9
After briefing ended, Plaintiffs identified Brown v.
Citicorp Credit Servs., Inc., No. 1:12CV62BLW, 2013 WL 645942 (D.
Idaho Feb. 21, 2013) (unpublished), as support for their position
opposing arbitration (see Docket Entry 77); however, the Court does
not find that decision (which relied on the National Labor
Relations Board ruling rejected by the Fifth Circuit in the abovecited D.R. Horton case) persuasive and notes that, after the United
States Court of Appeals for the Ninth Circuit criticized the
foregoing Brown decision, see Richards v. Ernst & Young, LLP, 744
F.3d 1072, 1075 n.3 (9th Cir. 2013), cert. denied, ___ U.S. ___,
135 S. Ct. 355 (2014), the Brown Court agreed to reconsider it, see
Brown v. Citicorp Credit Servs., Inc., No. 1:12CV62BLW, 2014 WL
1795702 (D. Idaho May 6, 2014) (unpublished).
17
As to Plaintiffs’ latter point, the prohibition on collective
action lies in the section of the Arbitration Policy entitled
“Scope of Policy” (see Docket Entry 29-3 at 2-3) and states that
“arbitration on an individual basis pursuant to this Policy is the
exclusive remedy for any employment-related claims which might
otherwise be brought on a class, collective or representative
action basis” (id. at 3).
arbitration policy.
This waiver defines the scope of the
The Court thus will resolve “any doubts
concerning the scope of arbitrable issues . . . in favor of
arbitration . . . .”
Moses H. Cone, 460 U.S. at 24-25.
Regarding the issue of what claims fall under the Arbitration
Policy, its plain language “makes arbitration the required and
exclusive forum for the resolution of all disputes . . . arising
out of or in any way related to employment based on legally
protected rights . . . .”
(Docket Entry 29-3 at 2 (emphasis
added).)
is
“Th[is]
language
broad
enough
to
encompass all
agreements and any disputes, past and present, especially given
that the presumption in favor of arbitrability is particularly
applicable when the arbitration clause is broadly worded.”
Levin
v. Alms & Assocs., Inc., 634 F.3d 260, 267 (4th Cir. 2011) (bold
emphasis added) (italics in original) (citing AT&T Techs. v.
Communications Workers of Am., 475 U.S. 643, 650 (1986)).
Moreover, the Arbitration Policy calls for arbitration of
employment “disputes” (see Docket Entry 29-3 at 2) and the language
18
concerning collective action describes “claims” (id. at 3).
distinction
indicates
prospective
application
that
the
language
collective
refers
to
action
This
waiver’s
proceedings (i.e.,
claims) rather than to the underlying conduct (i.e., disputes).
The instant proceedings commenced well after Citi promulgated the
version of the Arbitration Policy that includes the collective
action waiver.
Accordingly, that waiver applies to this case.
In sum, the Court finds that the conduct at issue falls within
the scope of the Arbitration Policy and therefore will grant Citi’s
Motion to Compel as to Plaintiffs Kraemer and Whitfield.
E.
Stay
Citi requests that the Court stay the instant proceeding as to
all Plaintiffs (present and future) who are subject to the 2011
Arbitration Policy, although it “agrees . . . that this proceeding
should be
allowed
to
move
forward
with respect
to
Plaintiff
Harrison and any other opt-in plaintiffs who are not subject to the
2011 Policy.”
(Docket Entry 57 at 11.)
that
the
fashion,
Court
will
allow
Rather than proceed in
Citi
to
move
to
compel
arbitration as to any opt-in plaintiffs who (though subject to the
2011 Arbitration Policy) resist arbitration in the face of this
Order. The Court thus will deny without prejudice Citi’s Motion to
Stay as to any parties other than Plaintiffs Kraemer and Whitfield.
19
III.
MOTION FOR CONDITIONAL CERTIFICATION AS A COLLECTIVE ACTION
The FLSA permits an employee to bring an action for unpaid
minimum or overtime wages “on behalf of himself . . . and other
employees similarly situated.”
29 U.S.C. § 216(b).
It further
states that “[n]o employee shall be a party plaintiff to any such
action unless he gives his consent in writing to become such a
party and such consent is filed in the court in which such action
is brought.”
Id.
As a result, certification under the FLSA
requires: “(1) that the class be ‘similarly situated,’ and (2) that
the plaintiffs ‘opt in’ by filing with the court their consent to
suit.”
Yerger v. Liberty Mut. Grp., Inc., No. 5:11-CV-238-D, 2011
WL 5593151, at *3 (E.D.N.C. Nov. 15, 2011) (unpublished).
Courts generally address the “similarly situated” inquiry in
a two-step process:
First, the court determines whether the putative class
members’ claims are sufficiently similar to merit sending
notice of the action to possible members of the class.
If they are, notice is sent and new plaintiffs are
permitted to “opt in” to the lawsuit.
Second, after
discovery is largely complete and more information on the
case is available, the court makes a final determination
of whether all plaintiffs are sufficiently similarly
situated to proceed together in a single action.
Acevedo v. Allsup’s Convenience Stores, Inc., 600 F.3d 516, 519
(5th Cir. 2010) (internal citations omitted).
The Parties in this case dispute the standard the Court should
use in assessing the “similarly situated” element for purposes of
the initial conditional certification. (Compare Docket Entry 38 at
20
12-14, with Docket Entry 63 at 15-23.)
Plaintiffs argue that the
“threshold to obtain conditional certification is low” and that
they “need only make a modest factual showing” to obtain such
certification.
(Docket Entry 38 at 12 (internal citations and
quotation marks omitted).)
Plaintiffs’
proposed
Citi, on the other hand, challenges
standard
as
“toothless,”
as
well
as
inconsistent with “the policies underlying [the FLSA and thus asks]
the
Court
[to]
reject
it
in
favor
of
a
meaningful
standard
requiring evidence of a common, allegedly unlawful, policy or
practice susceptible to common proof.”
(Docket Entry 63 at 16.)
After reviewing the relevant case law, this Court concludes
that, at this stage, the “similarly situated” requirement, although
certainly not a “rubber-stamp approach,” remains relatively modest.
See, e.g., LaFleur v. Dollar Tree Stores, Inc., Civil Action No.
2:12-cv-00363, 2012 WL 4739534, at *3 (E.D. Va. Oct. 2, 2012)
(unpublished) (“[The conditional certification] determination is
made using a fairly lenient standard, because the court, and the
parties, have minimal evidence at this point in the proceedings.”
(internal citations and quotation marks omitted)); Yerger, 2011 WL
5593151, at *4 (“The standard for determining similarity at this
initial stage is not particularly stringent . . . .’” (quoting Hipp
v. Liberty Nat’l Life Ins. Co., 252 F.3d 1208, 1214 (11th Cir.
21
2001)).10
At the same time, courts in this Circuit have held that
“[m]ere allegations will not suffice; some factual evidence is
necessary.” Bernard v. Household Int’l, Inc., 231 F. Supp. 2d 433,
435 (E.D. Va. 2002).
However, even applying that standard,
plaintiffs generally need only make a relatively modest
factual showing that [] a common policy, scheme, or plan
[that violated the law] exists. To meet this burden and
to demonstrate that potential class members are similarly
situated, [p]laintiffs must set forth more than vague
allegations with meager factual support regarding a
common policy to violate the FLSA. Their evidence need
not, however, enable the court to determine conclusively
whether a class of similarly situated plaintiffs exists,
and it need not include evidence that the company has a
formal policy of refusing to pay overtime.
Mitchel v. Crosby Corp., Civil Action No. DKC 10-2349, 2012 WL
4005535, at *2-3 (D. Md. Sept. 10, 2012) (unpublished) (internal
citations and quotation marks omitted).
Furthermore, “[a]t this
first stage of [FLSA collective action] certification . . . the
Court does not resolve factual disputes, decide substantive issues
on the merits, or make credibility determinations.”
Fisher v.
Michigan Bell Tel. Co., 665 F. Supp. 2d 819, 826 (E.D. Mich. 2009).
10
Some courts undertake a more stringent “similarly situated”
inquiry (more in line with Citi’s proposal) at the conditional
certification stage, see, e.g., Bunyan v. Spectrum Brands, Inc.,
No. 07-CV-0089-MJR, 2008 WL 2959932, at *3-4 (S.D. Ill. July 31,
2008) (unpublished), or even collapse the two-step inquiry into
one, see, e.g., Basco v. Wal-Mart Stores, Inc., No. Civ.A. 00-3184,
2004 WL 1497709, at *4 (E.D. La. July 2, 2004) (unpublished), where
the parties have conducted at least some discovery. No discovery
has occurred yet in the instant case, thus the Court finds a
heightened or intermediate standard inappropriate.
22
Named Plaintiffs in this case have sufficiently shown that the
members of their proposed class are similarly situated for purposes
of conditional certification.
putative
class
of
“all
Generally, they have proposed a
customer
service
telephone
operator
employees who work or worked at Citi’s Greensboro, North Carolina
call center facility from March 22, 2009 through the present[.]”
(Docket Entry 38 at 5 (internal footnote omitted).)
conditional
certification,
Plaintiffs
In support of
submitted
their
own
declarations, each stating that Citi required them to track their
time using the phone system, which failed to record certain work
performed at the beginning and end of each shift.
Moreover, Plaintiff Adams asserted in his declaration that all
of the customer service telephone operators worked in adjoining
cubicles and all used the same equipment (including telephones and
computers/computer systems).
(Docket Entry 38-2 at 2-3.)
He
further stated that he was “‘on the clock’ based on when [he] was
logged in to Citi’s phone system . . . [and] was only paid for the
time that [he] was logged in to the phone system.”
(Id. at 3.)
He
averred that Citi “expected [him] to be ready to accept [incoming]
calls” when logged into the telephone system or he would “be
reprimanded for dereliction of duties.”
(Id. at 3-4.)
To meet
those demands, Plaintiff Adams had to go through a number of steps
prior to logging onto the telephone system at the beginning of his
23
shift and after he had logged off the telephone system at the end
of his shift, including:
(1)
getting his computer “up and running” at the beginning of his
shift (id. at 4);
(2)
“logg[ing] in to the computer network, and . . . open[ing]
various computer programs that contained the information and
resources [he] needed to properly respond to incoming calls”
(id.);
(3)
reading “numerous daily ‘alerts’ from Citi that were critical
to [] being able to respond to incoming calls” (id.); and
(4)
“closing [] open computer programs and logging out of the
network” at the end of his shift (id.).
Plaintiff Adams estimated he spent approximately fifteen minutes at
the beginning of each shift and five minutes at the end of each
shift (a total of twenty minutes per shift) “opening and closing
computer programs, logging in and out of the computer network and
reading alerts during time that was not recorded by Citi.” (Id. at
4-5.)
The
other
identical facts.
Plaintiffs’
declarations
set
forth
nearly
(See Docket Entries 38-3, 38-4, 38-5.)
Citi denies the existence of a common, allegedly unlawful
policy requiring employees to work off the clock without pay
(Docket Entry 63 at 23-31) and asserts that the putative class
members lack the capacity to establish their claims through common
proof (id. at 32-36).
As to the first argument and supporting
24
evidence, “the Court does not resolve factual disputes, decide
substantive
issues
on
the
merits,
or
make
credibility
determinations” at the conditional certification stage.
665 F. Supp. 2d at 826.
Fisher,
Furthermore, the fact that Citi had a
written policy requiring that employees record any overtime work
and prohibiting off-the-clock work does not defeat Plaintiffs’
claims, particularly at this stage.
See, e.g., Blakes v. Illinois
Bell Tel. Co., No. 11 CV 336, 2011 WL 2446598, at *5 (N.D. Ill.
June 15, 2011) (unpublished); Pereira v. Foot Locker, Inc., 261
F.R.D. 60, 67 (E.D. Pa. 2009). Plaintiffs have provided sufficient
evidence to support their contention that Citi had a practice of
requiring customer service representatives to perform work-related
tasks before and after they logged into and out of the time-keeping
system.
(See Docket Entry 38-2 at 3-4 (describing “expect[ations]
to be ready to accept [incoming] calls” once logged into the
telephone system, or face “reprimand[] for dereliction of duties”);
see also Docket Entry 38-3 at 3-4 (same); Docket Entry 38-4 at 3-4
(same); Docket Entry 38-5 at 3-4 (same).)
To support its claim that Plaintiffs will not be able to
establish
their
case
through
common
proof,
Citi
argues
that
“Plaintiffs’ claims [] would involve varying testimony depending on
the period of time in question; the particular department at issue;
the
relevant
timekeeping
system;
the
employee’s
individual
practices; and the relevant manager’s expectations.” (Docket Entry
25
63
at
32.)
A
large
part
of
this
argument
involves
Citi’s
contention that only some employees (namely “customer service
telephone operators”) at the call center tracked their time via a
telephone system.
(Id. at 10-14.)
Citi understandably focuses on
that point because, although (as noted above) Plaintiffs generally
refer to their putative class as “customer service telephone
operators” (see Docket Entry 38 at 20), at other points, they
appear to seek conditional certification for a class that includes
other types of call center employees (see Docket Entry 66 at 16
(“Named Plaintiffs rely on more than just the telephone being the
time clock to support conditional certification for all employees
at the Greensboro call center . . . .” (emphasis in original))).
Plaintiffs’ evidence, however, does not support any such
broader class.
Each Named Plaintiff declared that the telephone
system (which all customer service telephone operators shared)
recorded his or her time (Docket Entry 38-2 at 3; Docket Entry 38-3
at 3; Docket Entry 38-4 at 3; Docket Entry 38-5 at 3) and that said
time recording procedure excluded time spent performing workrelated activities (Docket Entry 38-2 at 3; Docket Entry 38-3 at 3;
Docket Entry 38-4 at 3; Docket Entry 38-5 at 3).
The broad
allegation that “[i]t is Citi’s policy and practice not to pay call
center employees for [preparatory] work time, and consequently call
center employees are consistently working ‘off the clock’ and
without pay” (Docket Entry 23 at 10), without factual support, does
26
not support conditional certification of a class that includes all
employees working in the Greensboro call center, regardless of
their time-keeping system.
The Court thus will limit the class to
those employees who used the telephone system to track their time,
thereby mooting the bulk of Citi’s challenge to Plaintiffs’ proof.
The
rest
of
Citi’s
argument
concerning
the
nature
of
Plaintiffs’ proof is “not meaningful to the [C]ourt at this stage
of its analysis in light of the minimal showing plaintiffs are
required to make at this stage.”
In re Bank of Am. Wage and Hour
Emp’t Litig., 286 F.R.D. 572, 586 (D. Kan. 2012) (citing Vargas v.
General Nutrition Ctrs., Inc., No. 2:10-cv-867, 2012 WL 3544733, at
*7-8 (W.D. Pa. Aug. 17, 2012) (unpublished), and Pereira, 261
F.R.D. at 66-67); see also Blakes, 2011 WL 2446598, at *5 (“[T]o
the extent there are individual variances in time worked or damage
computation, it is standard in FLSA cases for the claims to proceed
through representational discovery.”).
Plaintiffs have made a
sufficient showing to warrant conditional certification of a class
of employees defined as:
all customer service telephone operator
employees who worked at Citi’s Greensboro, North Carolina call
center facility after March 22, 2009, who used the telephone system
to record their time.11
11
The FLSA imposes a three-year limitation.
29 U.S.C.
§ 255(b). Therefore, the class may date back to March 22, 2009,
i.e., three years prior to the filing of this action.
27
IV.
NOTICE
The FLSA “manifests a preference that when collective action
certification is granted, a court-controlled notice be provided to
potential putative plaintiffs, rather than permitting unregulated
solicitation efforts to secure joinder by those individuals.”
Colozzi v. St. Joseph’s Hosp. Health Ctr., 595 F. Supp. 2d 200, 210
(N.D.N.Y. 2009). The Court thus holds a “managerial responsibility
to oversee the joinder of additional parties to assure that the
task is accomplished in an efficient and proper way.”
Hoffman-La
Roche Inc. v. Sperling, 493 U.S. 165, 170-71 (1989) (addressing
parallel provision of Age Discrimination in Employment Act, 29
U.S.C. § 216(b)).
Plaintiffs request that the Court “order[] Citi
to provide to Plaintiffs within thirty (30) days of the Court’s
Order [granting Plaintiffs’ Motion for Conditional Certification],
in an electronic format that can be utilized with a mail-merge
program [], the name, last known address, telephone numbers, and
email address of each [potential plaintiff].”
(Docket Entry 38 at
19.) They further ask that the Court approve their proposed Notice
of Conditional Certification (“Notice”) (Docket Entry 38-8) and
Consent to Join Form (“Consent Form”) (Docket Entry 38-9) “for
circulation to the proposed class” and “order Citi to publish [the
Notice
and
Form]
on
Citi’s
website[]
and
conspicuous locations at the call center.”
20.)
to
post
[them]
at
(Docket Entry 38 at
Citi contests Plaintiffs’ request for the telephone numbers
28
and email addresses of the proposed class members, asks that the
Court “impose a customary 60-day opt-in deadline,” and requests
that a third party administer notice once the Parties have had a
chance to discuss and amend Plaintiffs’ proposed Notice.
Entry 63 at 36.)
raised by Citi.
(Docket
Plaintiffs’s reply does not address these issues
(See Docket Entry 66 at 2-16.)
The Court will direct the Parties to attempt to reach an
accommodation regarding these matters.
V.
CONCLUSION
Plaintiffs Kraemer and Whitfield agreed to arbitrate all
claims against Citi and also agreed to waive their right to
participate in a collective action; therefore, they must proceed to
individual arbitration.
exists
as
to
whether
A material question of fact, however,
Plaintiff
Adams
so
agreed.
Finally,
Plaintiffs have met their burden for conditional certification as
to a particular class of employees.
IT IS THEREFORE ORDERED that Defendant’s Motion to Compel
Arbitration for Plaintiffs Adams, Whitfield, and Kraemer and to
Stay Proceedings (Docket Entry 29) is GRANTED IN PART, DEFERRED IN
PART, AND DENIED WITHOUT PREJUDICE IN PART, in that Plaintiffs
Whitfield
and
Kraemer
must
submit
to
arbitration,
that
any
determination as to Plaintiff Adams must proceed to trial on the
issue of an agreement to arbitrate, and that no stay will issue at
this time as to anyone other than Plaintiffs Whitfield and Kraemer.
29
IT IS FURTHER ORDERED that Plaintiffs’ Motion for Conditional
Certification as a Collective Action pursuant to the Fair Labor
Standards Act (Docket Entry 37) is GRANTED in that the Court will
conditionally certify a class defined as “all customer service
telephone operator employees who worked at Citi’s Greensboro, North
Carolina call center facility after March 22, 2009 and used the
telephone system to record their time.”
IT IS FURTHER ORDERED that, on or before April 20, 2015, the
Parties shall file a Joint Status Report regarding their efforts to
agree on a notification plan, Notice of Conditional Certification,
and Consent to Join Form, including their joint or individual
proposals for such matters.
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge
March 20, 2015
30
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