Adams v. Citicorp Credit Servs., Inc.

• Decision Date: 20 March 2015
• Docket Number: No. 1:12CV286.,1:12CV286.
• Citation: 93 F.Supp.3d 441
• Court: U.S. District Court — Middle District of North Carolina
• Parties: Henry Dennis ADAMS, et al., Plaintiffs, v. CITICORP CREDIT SERVICES, INC., Defendant.

93 F.Supp.3d 441

Henry Dennis ADAMS, et al., Plaintiffs

v.CITICORP CREDIT SERVICES, INC., Defendant.

No. 1:12CV286.

United States District Court, M.D. North Carolina.

Signed March 20, 2015.

Evan M. Janush, The Lanier Law Firm, PLLC, New York, NY, James Avery Roberts, III, Lewis & Roberts, PLLC, Raleigh, NC, Paul R. Dickinson, Jr. Lewis & Roberts, PLLC, Charlotte, NC, Franklin D. Azar, Keith R. Scranton, Franklin D. Azar & Associates, P.C., Aurora, CO, Paige Loralea Pahlke, Lewis & Roberts, PLLC, Charlotte, NC, for Plaintiffs.

Sari M. Alamuddin, Gregory P. Abrams, Matthew A. Russell, Morgan, Lewis & Bockius LLP, Chicago, IL, Gregory P. Mcguire, Ogletree Deakins Nash Smoak & Stewart, P.C., Raleigh, NC, for Defendant.

MEMORANDUM OPINION AND ORDER

L. PATRICK AULD, United States Magistrate Judge.

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 Kraemer) (collectively “Plaintiffs” or “Named Plaintiffs”) initiated this action against Citicorp Credit Services, Inc. (“Citi”) “on behalf of themselves and other similarly situated current and former hourly employees ... for engaging in a systematic scheme of wage abuses against its hourly-paid customer service telephone operator employees working at Citi's call center located in Greensboro, North Carolina.” (Docket Entry 23 at 1–2.)² Their Amended Complaint alleges that Citi:

(1) “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 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. MOTION TO COMPEL ARBITRATION

The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 –16, establishes “a liberal federal policy favoring arbitration agreements.” 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). Pursuant to the FAA, “agreements to arbitrate must be enforced....” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). 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 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. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In considering that issue, the Court must view 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, 106 S.Ct. 1348, 89 L.Ed.2d 538 (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, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995) ). Under North Carolina law, “[a] valid contract requires [1] offer, [2] acceptance, [3] consideration and [4] no defenses to formation.” 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 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].” (Docket Entry 30 at 2–3 (emphasis in original).)⁴ 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 its Employment Arbitration Policy (“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 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 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.” (Docket Entry 29–4 at 2; Docket Entry 29–5 at 2.) 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. Plaintiff Adams

Citi admits that Plaintiff Adams “did not execute an acknowledgement” of the 2011 Handbook. (See Docket Entry 30 at 5.) It contends, however, that he did acknowledge...