702 F.3d 1050 (8th Cir. 2013), 12-1719, Owen v. Bristol Care, Inc.

Docket Nº:12-1719.
Citation:702 F.3d 1050
Opinion Judge:GRUENDER, Circuit Judge.
Party Name:Sharon OWEN, Plaintiff-Appellee, v. BRISTOL CARE, INC., doing business as Bristol Manor, doing business as Ashbury Heights, doing business as The Essex, Defendant-Appellant. Employee Rights Advocacy Institute for Law & Policy; National Employment Law Project; National Employment Lawyers Association, Amici on Behalf of Appellee.
Attorney:Brian N. Woolley, argued, Robert Kent Sellers, Shelley Ericsson, on the brief, Kansas City, MO, for appellant. Ryan A. Keane, argued and on the brief, John E. Campbell, on the brief, Saint Louis, MO, for appellee. National Employment Lawyers Association, The Employee Rights Advocacy Institute for...
Judge Panel:Before SMITH, BEAM, and GRUENDER, Circuit Judges.
Case Date:January 07, 2013
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

Page 1050

702 F.3d 1050 (8th Cir. 2013)

Sharon OWEN, Plaintiff-Appellee,

v.

BRISTOL CARE, INC., doing business as Bristol Manor, doing business as Ashbury Heights, doing business as The Essex, Defendant-Appellant.

Employee Rights Advocacy Institute for Law & Policy; National Employment Law Project; National Employment Lawyers Association, Amici on Behalf of Appellee.

No. 12-1719.

United States Court of Appeals, Eighth Circuit.

January 7, 2013

Submitted: Nov. 13, 2012.

Brian N. Woolley, argued, Robert Kent Sellers, Shelley Ericsson, on the brief, Kansas City, MO, for appellant.

Page 1051

Ryan A. Keane, argued and on the brief, John E. Campbell, on the brief, Saint Louis, MO, for appellee.

National Employment Lawyers Association, The Employee Rights Advocacy Institute for Law & Policy, and National Employment Law Project, Douglas Micko, Minneapolis, MN, Rebecca M. Harburg Cappy, San Francisco, CA, on the amicus brief in support of appellees.

Before SMITH, BEAM, and GRUENDER, Circuit Judges.

GRUENDER, Circuit Judge.

Bristol Care, Inc., (" Bristol Care" ) appeals the denial of its motion to compel arbitration in a suit initiated by its former employee Sharon Owen asserting claims under the Fair Labor Standards Act (" FLSA" ) and seeking class action certification on behalf of other similarly situated current and former employees. Bristol Care contends that the district court incorrectly held that the Mandatory Arbitration Agreement (" MAA" ) signed by Owen and Bristol Care was invalid because it contained a class action waiver provision that prohibits Owen from arbitrating claims subject to the agreement on behalf of a class. For the following reasons, we conclude that the MAA is valid and reverse the district court's order denying Bristol Care's motion to compel arbitration.

I. Background

Bristol Care, a company that operates residential care facilities for elderly residents, hired Owen as an administrator at its Cameron, Missouri facility in 2009. At the time of Owen's hiring, Owen and Bristol Care signed the MAA, which provides that Owen and Bristol Care agree " to the resolution by binding arbitration of all claims or controversies for which a federal or state court or other dispute-resolving body otherwise would be authorized to grant relief whether arising out of, relating to or associated with ... any ... legal theory that Employee may have against the Company or that the Company may have against the Employee." The MAA further provides that it applies to " claims for wages or other compensation," as well as " claims for violation of any federal ... statute ... including but not limited to ... the Fair Labor Standards Act...." The agreement also contains a waiver that prohibits the parties " from arbitrating claims subject to [the] Agreement as, or on behalf of, a class" (the " class waiver" ). The MAA, however, " does not waiv[e the] right to file a complaint with the U.S. Equal Employment Opportunity Commission ... or any other federal, state or local agency designated to investigate complaints of harassment, discrimination, other statutory violations, or similar claims."

In September 2011, Owen initiated this action against Bristol Care, alleging— on behalf of herself and other similarly situated current and former employees— that the company deliberately misclassified administrators like herself as " exempt" employees for the purposes of state and federal overtime laws, including the FLSA. Owen alleged that Bristol Care required these employees to work more than forty hours per week without overtime compensation. Bristol Care moved to stay district court proceedings and compel arbitration in accordance with the MAA and the Federal Arbitration Act (" FAA" ). See 9 U.S.C. §§ 3-4. The district court denied Bristol Care's motion, holding that, although Owen's allegations fell within the scope of the agreement, the MAA was nonetheless invalid because of the class waiver. In reaching this conclusion, the district court explained that the Supreme Court's decision in AT & T Mobility LLC v. Concepcion, 563 U.S. __, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011), upholding the enforceability of a class waiver in a consumer contract, was not controlling in

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the employment context. The district court instead relied on the recent National Labor Relations Board (" NLRB" ) decision, In re D.R. Horton, Inc., 357 NLRB No. 184, 2012 WL 36274 (Jan. 3, 2012), and a district court decision from the Southern District of New York, Chen-Oster v. Goldman, Sachs & Co., 785 F.Supp.2d 394 (S.D.N.Y.2011), and concluded that class waivers are invalid in FLSA cases because the FLSA provides for the right to bring a class action.

On appeal, Bristol Care contends that neither the language nor legislative history of the FLSA indicates that the class waiver is impermissible, that other courts have found that the FLSA does not prohibit the waiver of class actions in an arbitration agreement, and that allowing class waivers is consistent with pro-arbitration Supreme Court precedent. Bristol Care also argues that the district court erred in relying on D.R. Horton and Chen-Oster.

II. DISCUSSION

This court reviews a determination concerning the arbitrability of a dispute de novo. Faber v. Menard, Inc., 367 F.3d 1048, 1051 (8th Cir.2004). Section 2 of the FAA provides that " [a] written provision in any ... contract ... 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. The Supreme Court has stated repeatedly that this provision establishes a " liberal federal policy favoring arbitration agreements." CompuCredit Corp. v. Greenwood, 565 U.S. __, 132 S.Ct. 665, 669, 181 L.Ed.2d 586 (2012) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)); see also Concepcion, 131 S.Ct. at 1745; Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991).

Section 2 requires courts to enforce arbitration agreements according to their terms. Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). As a result, there must be a " contrary congressional command" for another statute to override the FAA's mandate. CompuCredit, 132 S.Ct. at 669 (quoting Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220, 226, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987)). " If such an intention exists, it will be discoverable in the text of the [statute], its legislative history, or an ‘ inherent conflict’ between arbitration and the [statute's] underlying purposes." Gilmer, 500 U.S. at 26, 111 S.Ct. 1647; see also CompuCredit, 132 S.Ct. at 672 (" When [Congress] has restricted the use of arbitration ... it has done so with clarity." ). The burden is on...

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