BHC Pinnacle Pointe Hosp., LLC v. Nelson

• Decision Date: 20 February 2020
• Docket Number: No. CV-19-151,CV-19-151
• Citation: 2020 Ark. 70,594 S.W.3d 62
• Parties: BHC PINNACLE POINTE HOSPITAL, LLC, Appellant v. Debra NELSON and Henry Anderson, Jr., Individually, and on Behalf of All Others Similarly Situated, Appellees
• Court: Arkansas Supreme Court

2020 Ark. 70

594 S.W.3d 62

BHC PINNACLE POINTE HOSPITAL, LLC, Appellant

v.Debra NELSON and Henry Anderson, Jr., Individually, and on Behalf of All Others Similarly Situated, Appellees

No. CV-19-151

Supreme Court of Arkansas.

Opinion Delivered: February 20, 2020

Daniel L. Herrington, Joshua C. Ashley, Allison C. Pearson, Little Rock, Friday, Eldredge & Clark, LLP, for Appellant.

John Holleman, Timothy A. Steadman, Jerry Garner, Little Rock, Holleman & Associates, P.A., for Appellees

KAREN R. BAKER, Associate Justice

In this interlocutory appeal, appellant BHC Pinnacle Pointe Hospital, LLC ("Pinnacle Pointe"), appeals the Pulaski County Circuit Court’s order denying its motion to compel arbitration of a class-action complaint filed by appellees Debra Nelson and Henry Anderson, Jr., individually and on behalf of all others similarly situated (collectively "employees"). On appeal, Pinnacle Pointe argues that the circuit court erred in denying its motion to compel arbitration. We reverse and remand.

On October 8, 2018, the employees filed a class action complaint against Pinnacle Pointe for its violations of the Arkansas Minimum Wage Act ("AMWA"), Arkansas Code Annotated sections 11–4–201 et seq. (Repl. 2012 & Supp. 2019). Pinnacle Pointe owns and operates a behavioral inpatient facility for children and adolescents struggling with emotional and behavioral issues. The employees worked for Pinnacle Pointe as hourly registered nurses and mental-health technicians. They alleged that Pinnacle Pointe has a common policy and practice of requiring its employees to clock out for a thirty-minute break each shift, regardless of whether the employees were able to take the break. The employees alleged that due to patient care and low staffing levels, they routinely worked through their breaks and were unpaid for the work they performed during that time. The employees further alleged that Pinnacle Pointe’s break policy violates the minimum wage and overtime provisions of the AMWA. As relevant to the present appeal, the employees requested that the circuit court certify their case as a class action pursuant to Rule 23 of the Arkansas Rules of Civil Procedure ; enter a declaratory judgment that the practices complained of are unlawful; enter judgment against Pinnacle Pointe for an amount equal to the unpaid back wages of the employees at the applicable minimum wage and overtime rates; and enter judgment against Pinnacle Pointe for liquidated damages equal to the amount of unpaid back wages under the AMWA.

On November 13, 2018, Pinnacle Pointe filed its motion to dismiss the complaint and compel arbitration, or in the alternative, to stay litigation and discovery pending arbitration. Pinnacle Pointe explained that it routinely executes voluntary arbitration agreements, called Alternative Resolution for Conflicts ("ARC") Agreements with its employees. The ARC Agreements are governed by the Federal Arbitration Act ("FAA"). Pinnacle Pointe contended that the employees voluntarily entered into the valid and binding arbitration agreements and that their claims fall squarely within the scope of the ARC Agreement.

With regard to the ARC Program, Pinnacle Pointe attached as an exhibit an affidavit of Bill Lightfoot, the assistant vice president of Clinical Training and Education for the Behavioral Health Division of UHS of Delaware, Inc. Mr. Lightfoot stated that the ARC Program provides a comprehensive mechanism for resolving disputes in "Tiers." The ARC Summary set forth the ARC Tiers as follows:

Tier 1

In the first of three Tiers, you will continue to bring any workplace concerns directly to us by following the procedures in the Dispute Resolution Policy-Problem Solving Procedure as outlined in your Employee Handbook. This is considered Tier 1, and most concerns will be resolved at this level.

Tier 2

If Tier 1 doesn't result in a resolution, you may choose to proceed to Tier 2: Mediation. Mediation is a voluntary process where procedures and conversations are facilitated by a neutral third party whose purpose is to help you and your employer reach an agreeable resolution. There are guidelines to help begin the process online at the American Arbitration Association website: www.adr.org.

Tier 3

If a solution to your concerns is not resolved at Tier 2, then you can proceed with Tier 3, Arbitration. Arbitration is a hearing and an alternative to court. Arbitration is overseen by an arbitrator who is a professional, independent, and impartial third party who listens to both sides, reviews evidence, and renders a final, binding decision.

In short, Tier 1 provides you with an opportunity to directly resolve concerns with your employer. If necessary, Tier 2 provides an opportunity for both parties to tell their stories with a listener who provides an objective view of the grievance and offers options to resolve the dispute. Finally, Tier 3 provides both parties with a neutral decision maker who is empowered to end the dispute.

Mr. Lightfoot explained that the employees receive education through HealthStream, an online-learning management system. The employees review and electronically acknowledge the ARC Program and the ARC Agreement by participating in an online learning activity called the ARC Course. The ARC Course requires the employees to complete four distinct steps: (1) open and review the ARC Summary, (2) open and review the ARC Agreement, (3) open and review the ARC Acknowledgment Form, and (4) complete the ARC Attestation. ARC Attestation is the final mandatory step in the ARC Course. This final step cannot be completed until the employee completes the three prior steps. It requires the employee to select one of two options. The first option states, "I acknowledge this course contains the ARC Program materials, and I have had an opportunity to review them." If an employee selects this option, it will register as a "100%" on his or her transcript, which means that the employee has completed the ARC Program materials. The second option states, "I acknowledge this course contains the ARC Program materials, but have difficulty understanding or accessing the information." An employee who selects this option receives a notification stating, "Please go back and review steps 1, 2, and 3. If you are still having difficulty accessing or understanding the information, please contact your Human Resources Department immediately as you only have 30 days to decide whether to opt out of the ARC Program." Mr. Lightfoot explained that participation in the ARC Program is not a mandatory requirement for employment at Pinnacle Pointe. The employees have the option of completing an ARC Agreement Opt Out Form, which must be returned to the human resources department within thirty days of the employee’s receipt of the ARC Agreement.

Anderson’s November 30, 2013 certificate of completion reflected that he completed the ARC Course and received a score of "100%." The ARC Agreement reviewed by Anderson provided in pertinent part:

This Agreement is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. and evidences a transaction involving commerce. This Agreement applies to any dispute arising out of or related to Employee’s employment with Company or one of its affiliates, subsidiaries or parent companies ("Company") or termination of employment and survives after the employment relationship terminates. Nothing contained in this Agreement be construed to prevent or excuse Employee from utilizing the Company’s existing internal procedures for resolution of complaints, and this Agreement is not intended to be a substitute for the utilization of such procedures.

....

Except as it otherwise provides, this Agreement also applies, without limitation, to disputes regarding the employment relationship, compensation, breaks and rest periods[.]

Pinnacle Pointe also attached the affidavit of its human resources director, James Howe. Mr. Howe explained that the ARC Program can be completed online through HealthStream or reviewed in paper format. Any ARC documents that are submitted in paper format are maintained as part of the employee’s personnel file. Mr. Howe stated that Nelson signed her ARC Acknowledgment Form and ARC Agreement on August 29, 2017.¹ Mr. Howe stated that Nelson nor Anderson submitted the ARC Opt Out Form. Further, Pinnacle Pointe asserted that Nelson and Anderson intended to be bound by the arbitration agreements pursuant to the FAA because they did not submit Opt Out Forms; they voluntarily entered into valid arbitration agreements; and the employees’ claims are within the scope of the arbitration agreement.

On December 3, 2018, the employees filed their response to Pinnacle Pointe’s motion to dismiss complaint and compel arbitration. First, the employees argued that the arbitration agreements are unenforceable because they are predispute jury trial waivers that violate the right to a jury trial under the Arkansas Constitution. The employees specifically relied on Tilley v. Malvern National Bank , 2017 Ark. 343, 532 S.W.3d 570, to support their position. Second, the employees argued that the arbitration agreements are unenforceable because the ARC process violates the AMWA’s express prohibition on implementing additional procedural requirements before an employee can assert his or her rights under the Act.

On December 10, 2018, Pinnacle Pointe filed its reply to the employees’ response. Pinnacle Pointe argued that the employees’ interpretation of Tilley was overbroad. Pinnacle Pointe contended that the ARC dispute-resolution steps do not violate the AMWA and therefore do not void the arbitration agreements. Pinnacle Pointe acknowledged that it inadvertently failed to attach copies of Nelson’s ARC Acknowledgment Form and ARC Agreement and therefore attached a copy of both as exhibits. Nelson’s ARC Agreement is similar to Anderson’s ARC Agreement (1) it is governed by the FAA; (2) it applies to any dispute arising out of or related to employee’s employment with...