WILLIAMS et al v. SECURITAS SECURITY SERVICES USA INC.

Filing 34

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE HARVEY BARTLE, III ON 7/13/11. 7/13/11 ENTERED AND COPIES MAILED AND E-MAILED.(mbh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
FRANKIE WILLIAMS, et al.

:
:
:
:
:
:

v.
SECURITAS SECURITY SERVICES
USA, INC.

CIVIL ACTION

NO. 10-7181

MEMORANDUM
Bartle, J.

July 13, 2011
Plaintiffs Frankie Williams, Kimberly Ord, and Matthew

Devine on behalf of themselves and others similarly situated have
filed this action against defendant Securitas Security Services
USA, Inc. ("Securitas") under §§ 206 and 207 of the Fair Labor
Standards Act ("FLSA").

Securitas is a company which supplies

security guards to its clients.

Plaintiffs contend that they and

other putative class members in Pennsylvania were denied wages,
including overtime wages, in violation of the FLSA.

Before the

court is the emergency motion of plaintiffs for a protective
order and corrective mailing to address defendant's improper
communications with absent class members.1
I.
The pending motion alleges that Securitas distributed
to all its employees, including its Pennsylvania employees, a

1. Plaintiffs have moved to conditionally certify a collective
action under § 216(b) of the FLSA that would include all
Securitas employees in Pennsylvania. Securitas opposes that
motion, which remains pending.

document entitled "Securitas Security Services USA, Inc. Dispute
Resolution Agreement" (hereinafter "the Agreement").

The body of

the Agreement consists of ten paragraphs on four type-written,
single-spaced pages and is written in a small font.

A fifth page

provides a place for the employee to acknowledge receipt of the
document.
The Agreement purports to require all Securitas
employees to submit "any dispute arising out of or related to
Employee's employment with [Securitas] . . . or termination of
employment" to a binding arbitration conducted pursuant to the
Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq.

It states

in small boldface letters that "this Agreement requires all such
disputes to be resolved only by an arbitrator through final and
binding arbitration and not by way of court or jury trial."

The

Agreement specifies that any dispute arising from federal "wagehour law" and the FLSA must be arbitrated.

The Agreement states,

again in small bold font, "there will be no right or authority
for any dispute to be brought, heard or arbitrated as a class,
collective or representative action ("Class Action Waiver").”2
Paragraph 7 of the Agreement says that although the
Agreement is meant to apply "broadly," if an employee is "a named
party plaintiff, or ha[s] joined as a party plaintiff this
Agreement shall not apply to those Actions, and you may continue
to participate in them without regard to this Agreement," but

2. The Agreement requires that a court, not an arbitrator,
resolve any claim that the Class Action Waiver is unconscionable.
-2-

"shall apply to all Actions in which you are not a plaintiff or
part of a certified class."

The Agreement then lists five

representative or class action lawsuits in which Securitas is a
named defendant, including this lawsuit, "Frankie Williams and
Kimberly Ord, filed 12/10/2010, USDC, Eastern District of
Pennsylvania Case No. 2:10-CV-07181-HB."

The term "Actions" is

defined as "litigation on behalf of [Securitas] employees in
which those employees desire to represent claims of other
employees in class, collective or other representative actions."
Thus, the term "Actions" does not appear to be limited only to
the five lawsuits enumerated later in paragraph 7.

The nature of

the Williams action is not explained.
The Agreement further states that if the employee would
like to participate in one of the "Actions," he or she "may opt
out of this Agreement by following the procedure set forth in
Section 9, below."3

To opt out of the Agreement, the employee

must call a toll-free telephone number within 30 days of the date
the employee received the Agreement.

According to the Agreement,

"Should an Employee not opt out of this Agreement within 30 days
of the Employee's receipt of this Agreement, continuing the
Employee's employment constitutes mutual acceptance of the terms
of this Agreement by the Employee and [Securitas]."

The

Agreement declares that not opting out means an employee forfeits

3. Securitas acknowledges that the reference to paragraph 9 is
incorrect. The opt-out procedure referenced appears in paragraph
8. Securitas' opposition brief states that an amended notice was
distributed to employees.
-3-

the right to participate in any collective or representative
action.

Securitas adds that it will not retaliate against any

employee for opting out of the Agreement or for asserting claims
according to its terms.
The fifth page of the Agreement states as follows:
ACKNOWLEDGMENT OF RECEIPT OF THE SECURITAS SECURITY SERVICES USA,
INC. DISPUTE RESOLUTION AGREEMENT
BY SIGNING BELOW, I AM ACKNOWLEDGING RECEIPT OF THE SECURITAS
SECURITY SERVICES USA, INC. DISPUTE RESOLUTION AGREEMENT,
EFFECTIVE IMMEDIATELY.
Below this text is a place for the employee to sign and date the
Agreement.

There is also a place for a witness to sign his or

her name.
According to Securitas, as of July 7, 2011, some 1,549
employees have opted out using the dispute resolution procedure
described in the Agreement, including 64 employees in
Pennsylvania.

An additional 200 employees have called the

telephone number to request more information about the Agreement,
including nine in Pennsylvania.

The record does not indicate how

many people Securitas employs nationally or in Pennsylvania.
II.
In collective action cases brought under the FLSA, each
party plaintiff must consent in writing to become a plaintiff in
the case and the written consent must be filed with the court.
29 U.S.C. § 216(b).

As the Supreme Court has noted, actions

under § 216(b) "depend on employees receiving accurate and timely
notice concerning the pendency of the collective action, so that

-4-

they can make informed decisions about whether to participate."
Hoffman-La Rouche, Inc. v. Sperling, 493 U.S. 165, 171 (1989).
Accordingly, the court has the discretion to "facilitat[e] notice
to potential plaintiffs" and "broad authority . . . to enter
appropriate orders governing the conduct of counsel and the
parties" as it pertains to notices mailed to potential
plaintiffs.

Id. at 170-71.

We find that the Agreement Securitas circulated to its
employees is likely to cause confusion to potential class
members.

Although titled a "Dispute Resolution Agreement," it

does not require an employee to sign the document before it
becomes effective.

Instead, the employee is deemed to have

consented to it unless he or she affirmatively opts out within 30
days.

In our view, this provision in a writing called an

"agreement" is very misleading to lay persons such as the hourlypaid security guards who are its target.

Lay persons commonly

understand a document labeled an "agreement" which is presented
to them unsigned and not previously negotiated as not binding on
them until they agree to it by affixing their signatures.
Because of the label, they may not read the document carefully or
at all since they reasonably believe it will not affect them
without their affirmative approval.

Instead, Securitas intends

to bind its employees unless they opt out by calling a phone
number deeply embedded in the "agreement" within 30 days even
though the employee never signs the document.

Quite simply, this

Agreement stands the concept of fair dealing on its head and is
-5-

designed to thwart employees of Securitas from participating in
this lawsuit.
Further, confusion reigns at the end of the document.
It first states in capital letters, "ACKNOWLEDGMENT OF RECEIPT OF
THE SECURITAS SECURITY SERVICES USA, INC. DISPUTE RESOLUTION
AGREEMENT.

BY SIGNING BELOW, I AM ACKNOWLEDGING RECEIPT OF THE

[SECURITAS] DISPUTE RESOLUTION AGREEMENT, EFFECTIVE IMMEDIATELY."
If Securitas is requesting a signature simply to acknowledge
receipt, it makes absolutely no sense to add the words,
"effective immediately."
In addition, the agreement is written in single-spaced,
small type and crafted so as not to be easily understood by lay
persons.

The paragraphs and sentences are long and complex with

heavy use of legal jargon.

Plain English designed for easy

comprehension is totally lacking.

Finally, as noted above, while

the lawsuit pending here is identified by name in the Agreement,
the nature of the action is not explained.4
Under Hoffman-La Roche, this court has a responsibility
to prevent confusion and unfairness concerning this action in
which plaintiffs seek to have the matter proceed as a collective
action and to insure that all parties act fairly while the court
decides whether and how this action will move forward under the
FLSA.

In the meantime, to prevent confusion and unfairness, we

4. For these reasons, at least one other federal court has found
the Dispute Resolution Agreement confusing to putative class
members. See Molyneux v. Securitas Security Servs. USA, Inc.,
Case No. 4:10-588, slip op. at 5-6 (S.D. Iowa July 8, 2011).
-6-

will order Securitas to rescind the Agreement with respect to its
Pennsylvania employees as it relates to this litigation.

We will

require Securitas to set forth the nature of this action and
advise its Pennsylvania employees that the Agreement is not
binding with regard to those employees' right to participate in
this lawsuit, notwithstanding the fact that the employee may have
signed the Agreement or failed timely to opt out.
Securitas contends that any interference by this court
with its efforts to compel arbitration of disputes with its
employees will be contrary to the Supreme Court's recent decision
in AT&T Mobility LLC v. Concepcion, ___ U.S. ___, 131 S.Ct. 1740
(2011).

We disagree.

In Concepcion, the Supreme Court held

that, generally, states may not adopt rules of contract
interpretation that undermine the "overarching purpose" of the
FAA, which "is to ensure the enforcement of arbitration
agreements according to their terms so as to facilitate
streamlined proceedings."

Id. at 1748.

There, the Court

considered California contract law, which deemed unconscionable
certain contracts that disallowed class arbitration.

The Court

found the law impermissibly stood "as an obstacle to the
accomplishment of the FAA's objectives."
Securitas' reliance on Concepcion is inapposite because
plaintiffs' motion for a protective order does not rely on any
state-law ground to invalidate the Agreement.
quite different.

Here the issue is

This court has found the Agreement to be a

-7-

confusing and unfair communication with the class of possible
plaintiffs in this action under the FLSA.
Securitas argues that invalidating the Agreement merely
because this class action lawsuits is pending is equivalent to
preventing it from adopting any arbitration policy at all.
Whatever right Securitas may have to ask its employees to agree
to arbitrate, its current effort, which specifically references
this lawsuit, is confusing and misleading and clearly designed to
thwart unfairly the right of its employees to make an informed
choice as to whether to participate in this collective action
under the FLSA.

Since the Agreement by its terms will directly

affect this lawsuit, this court has authority to prevent abuse
and to enter appropriate orders governing the conduct of counsel
and the parties.

Hoffman-La Roche, 493 U.S. at 171-72.

Securitas did not act fairly when it gave notice through the
Agreement to potential class members concerning this lawsuit.
Defendant's proposal to resolve the plaintiffs' pending
motion for conditional class certification before resolving
issues related to the Agreement is insufficient to prevent
potential plaintiffs from misapprehending their rights.

The

confusing nature of the Agreement may cause Securitas employees
to misunderstand the nature of their rights to participate in
this litigation while the court determines whether to
conditionally certify a class, damage not easily undone.
Similarly, Securitas's proposal to allow its Pennsylvania
employees a second 30-day opt out period if the court
-8-

conditionally certifies a class is also insufficient because it
is for the court, not Securitas, to determine the amount of time
employees shall have to consider their right to join this action.
Immediate action by this court is necessary.
Securitas shall be required to implement the corrective
measures described in the accompanying order.

-9-