Nereim v. Premara Financial, Inc.

Filing 26

ORDER granting in part and denying in part 14 MOTION to Dismiss or, in the Alternative, Stay and Compel Arbitration. Defendants Motion to Compel Arbitration is GRANTED, Defendants alternative request for a STAY pending arbitration is GRANTED, and Defendants request for dismissal is DENIED. Signed by Chief Judge Frank D. Whitney on 6/24/2014. (eef)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
DOCKET NO. 3:14-cv-00096-FDW-DSC
MELISSA NEREIM, individually and on )
behalf of all similarly situated individuals,
)
)
Plaintiff,
)
)
vs.
)
)
PREMARA FINANCIAL, INC., d/b/a )
Carolina Premier Bank, and CAROLINA )
PREMIER BANK,
)
)
Defendants.
)
)

ORDER

THIS MATTER is before the Court on Defendants’ Motion to Dismiss or, In the
Alternative, Stay and Compel Arbitration (Doc. No. 14). This motion has been fully briefed
(Docs. Nos. 14, 15, 18, 19), and it is now ripe for review. Having carefully considered the
parties’ briefs and exhibits thereto, the Court GRANTS IN PART and DENIES IN PART
Defendants’ Motion.
Plaintiff filed this action against Defendants arising out of the Fair Labor Standards Act.
Plaintiff’s Complaint asserts claims on behalf of herself and similarly-situated individuals
employed as loan officers or similar job titles at Defendants’ branches in North Carolina, South
Carolina and Washington, DC. (Doc. No. 1). Defendants move to dismiss, or in the alternative
to compel arbitration, citing an employment agreement signed by Plaintiff that contains an
express arbitration clause. (Doc. No. 19-1, p. 5). That document provides in pertinent part:1

1

Plaintiff signed this agreement in conjunction with a transition of her employment relationship to Strategic
Outsourcing, Inc. (“SOI”), a Professional Employer Organization or “PEO.” Previous to her relationship with SOI,
Plaintiff had provided services to Defendants through another PEO. The express terms of the agreement signed by
Plaintiff clearly state at the outset, “The organization for which you perform services (Company) has contracted for

If arbitration agreements are forbidden by law with respect to my employment
(for example, if I am employed on a federal contract) the agreement to arbitrate
below will not apply, and if I am represented by a union and my collective
bargaining agreement (CBA) is inconsistent with my agreement to arbitrate in a
given case then the agreement to arbitrate will not apply. The waiver of trial by
jury below will continue to apply in all cases. I and SOI agree that any legal
dispute involving SOI, Company, or any benefit plan, insurer, employee, officer,
or director of SOI or Company (all of which are beneficiaries of this agreement to
arbitrate and waiver of jury trial) arising from or relating to my employment,
wages, leave, employee benefits, application for employment, or termination from
employment will be resolved exclusively through binding arbitration before a
neutral arbitrator in the capital or largest city of the state in which I work or
another mutually agreed location (SOI may appear by phone), and that I will
participate only in my individual capacity, not as a member or representative of a
class or part of a class action or in a consolidated case, provided this will not
impair my right to engage in collective action under Section 7 of the National
Labor Relations Act. Arbitration will use the rules of a neutral, mutually
agreeable arbitration service, may grant the same remedies that would be
available in a court of law (and no more) including applying statutes of limitations
to any claims, and use the same rules of evidence as a federal court. Unless
prohibited by law costs of arbitration will be shared equally by the parties. If
applicable law requires provisions in an arbitration agreement which are not
included here or are different from what is included here, they will be deemed
incorporated to the minimum extent necessary to validate this arbitration
agreement. Disputes will be resolved solely upon applicable law, evidence
adduced at trial, and defenses raised, granting relief on no other basis, and the
arbitrator may grant summary disposition or disposition on the pleadings. The
arbitrator will render a reasoned written decision. No failure to strictly enforce
this agreement to arbitrate will constitute a waiver or create any future waivers
and no-one other than counsel for SOI (in writing) may waive this agreement for
SOI. If for any reason a matter is not resolved through arbitration I AND SOI
MUTUALLY WAIVE ANY RIGHT TO A JURY TRIAL. I am not prohibited
from complaining to government agencies or cooperating with their
investigations. My agreements to arbitrate and waive jury trials are contracts
under the Federal Arbitration Act and any other laws validating such agreements
and waivers. If any part is unenforceable, the rest will still be enforceable.
Under the Federal Arbitration Act (“FAA”), federal courts must stay “any suit or
proceeding” pending arbitration of “any issue referable to arbitration under an agreement in
writing for such arbitration.” 9 U.S.C. § 3. The FAA also authorizes a federal district court to

SOI to provide services under which you will be paid through SOI for work you perform for and under the direction
of Company . . . .” (Doc. No. 19-1, p. 5).

issue an order compelling arbitration if there has been a failure to comply with an arbitration
agreement. See 9 U.S.C. § 4. The FAA reflects a strong policy in favor of arbitration, and the
Supreme Court has held that agreements that waive class claims and provide for only individual
arbitration are also fully enforceable. See AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740
(2011).
Under North Carolina law, “[a]n agreement contained in a record to submit to arbitration
any existing or subsequent controversy arising between the parties to the agreement is valid,
enforceable, and irrevocable except upon a ground that exists at law or in equity for revoking a
contract.” N.C. Gen. Stat. § 1-569.6(a) (2007).
When an enforceable arbitration agreement exists, and the issues in the dispute fall within
its scope, a federal district court must stay the proceedings on a party’s motion to compel when
the other has “failed, neglected, or refused to comply with an arbitration agreement.” Gilmer v.
Interstate /Johnson Lane Corp., 500 U.S. 20, 25 (1991) (citing 9 U.S.C. §§ 3, 4); see also Adkins
v. Labor Ready, Inc., 303 F.3d 496, 500 (4th Cir. 2002) (“A district court therefore has no choice
but to grant a motion to compel arbitration where a valid arbitration agreement exists and the
issues in a case fall within its purview.”)
It appears to the Court that the arbitration agreement at issue is valid and enforceable
under general principles of North Carolina contract law.

Plaintiff read and signed the

unambiguous employment agreement, including the clause, representing she agreed to and
understood the terms. Plaintiff neither contests that she signed the agreement, nor has she
provided any legal reason why the arbitration clause is unenforceable. “It is well established
under North Carolina law that a party does not have to be positively identified for a contract to
exist or for the previously unknown party to enforce the contract.” Habitat Architectural Group,

P.A. v. Capitol Lodging Corp., 28 Fed. App’x 242, 245 (4th Cir. 2002) (citations omitted).
Moreover, “absent normal defenses to contract formation, an agreement to arbitrate cannot be
defeated by one party’s assertion that it did not know the precise identity of the party with whom
it contracted.” Id. Here, the employment agreement makes clear that the arbitration provision
applies to legal disputes against SOI or the Company (Defendants) arising out of Plaintiff’s
employment. (Doc. No. 19-1, p. 5). Even if this Court were to presume, contrary to the express
terms of the agreement, that no agency relationship exists between SOI and Defendants,
Defendants may enforce the Arbitration Agreement as a third-party beneficiary. See Stewart v.
Legal Helpers Debt Resolution, LLC, Civil Case No. 2:11cv26, 2012 WL 1969624 * 4
(W.D.N.C. June 1, 2012) (holding the defendant was entitled to enforce arbitration agreement
where the signatories’ intent was to provide a benefit to the defendant under the agreement).
Here, Plaintiff’s Complaint contains allegations that specifically relate to Plaintiff’s
employment, including wages. Consequently, the specific issues in the dispute clearly fall within
the scope of the arbitration clause. Further, Plaintiff would not be prejudiced by the clause’s
enforcement because the litigation is only in its beginning stages, and neither party has yet
expended significant amounts of time or money.
Plaintiff’s clear, written, and signed agreement to resolve employment-related disputes
through binding arbitration fully satisfies the requirements of the FAA and North Carolina law
for enforceable arbitration agreements.

To the extent other parties have “opted-in” to this

lawsuit, the Court hereby provides them with two options: (1) participate in arbitration as
ordered for the named Plaintiff in this case, presuming similar arbitration agreements exist for
the opted-in parties; or (2) if no such arbitration agreement exists, the opted-in parties may file a
separate lawsuit.

IT IS THEREFORE ORDERED that for the reasons stated herein as well as those stated
in Defendants’ briefs in support of their motion, Defendant’s Motion to Compel Arbitration is
GRANTED, Defendant’s alternative request for a STAY pending arbitration is GRANTED, and
Defendant’s request for dismissal is DENIED.

The parties are ORDERED to proceed to

arbitration and submit reports to the Court every ninety (90) days. The dispute must be resolved
within twelve (12) months from the date of this Order. 2 Failure to do so will result in Court
action.
IT IS SO ORDERED.
Signed: June 24, 2014

2

Under this Court’s standing orders, the Court’s timeline sets trial in civil cases approximately twelve (12) months
from the filing of the complaint. Standing Order Governing Civil Case Management Before the Honorable Frank D.
Whitney, Misc. No. 3:07-MC-47. The time limit is put in place to protect all parties’ interests and promote judicial
efficiency.