Gordon v. TBC Retail Grp., Inc., No. 2:14-cv-03365-DCN

CourtUnited States District Courts. 4th Circuit. United States District Court of South Carolina
Writing for the CourtDAVID C. NORTON UNITED STATES DISTRICT JUDGE
Docket NumberNo. 2:14-cv-03365-DCN
PartiesANDREW GORDON, TAVIS MCNEIL, DONALD WRIGHTON, NICHOLAS COLE, JACOB GRISSON, AND DAWN DEWEY, on behalf of themselves and others similarly situated, Plaintiffs, v. TBC RETAIL GROUP, INC. d/b/a TIRE KINGDOM, Defendant.
Decision Date11 August 2016

ANDREW GORDON, TAVIS MCNEIL, DONALD WRIGHTON, NICHOLAS COLE, JACOB GRISSON,
AND DAWN DEWEY, on behalf of themselves and others similarly situated, Plaintiffs,
v.
TBC RETAIL GROUP, INC. d/b/a TIRE KINGDOM, Defendant.

No. 2:14-cv-03365-DCN

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA CHARLESTON DIVISION

August 11, 2016


ORDER

The following matters are before the court on defendant TBC Retail Group, Inc.'s ("defendant") motion to compel arbitration for plaintiff Nicholas Cole ("Cole"), ECF No. 331; defendant's motion to compel arbitration for all opt-in plaintiffs who signed the mutual arbitration agreement, ECF No. 81; defendant's motion for summary judgment, ECF No. 88; and plaintiffs' motion for joinder of additional parties, ECF No. 92. For the reasons set forth below, the court denies defendant's motion to compel arbitration for Cole, grants in part and denies in part defendant's motion to compel arbitration for all opt-in plaintiffs who signed the mutual arbitration agreement, grants in part and denies in part defendant's motion for summary judgment, and grants in part and denies in part plaintiffs' motion for joinder of additional parties.

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I. BACKGROUND2

On August 20, 2014, Cole joined plaintiffs Andrew Gordon, Tavis McNeil, Donald Wrighton, Jacob Grissom, and Dawn Dewey (together with Cole, "plaintiffs") in filing the instant action on behalf of themselves and "all other similarly situated employees." Compl. at ¶ 2. Plaintiffs allege that defendant violated the minimum wage and overtime provisions of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. ("FLSA"), by utilizing a compensation plan that did not provide plaintiffs one and one-half times their regular rate of pay when they worked more than forty hours in a workweek. Id. at ¶ 23.

Cole was employed by defendant as a mechanic at the Tire Kingdom located at 7201-900 Two Notch Road in Columbia, South Carolina, from approximately May 2013 until April 2014. Id. ¶ 1. Between February 2013 and October 2013, defendant drafted and developed a Mutual Agreement to Arbitrate Claims and Waiver of Class/Collective Actions (the "Agreement"). ECF No. 32-2, Filoon Dec. ¶¶ 2-8; ECF No. 81-2, Third Filoon Dec. ¶¶ 2-4. Defendant finalized the Agreement in October 2013, and began requiring all new hires to sign the Agreement as of October or November 2013. Filoon Dec. ¶¶ 3, 4. Between October 2013 and March 2014, defendant made the Agreement available for "electronic signature" through the employee portal—a password protected, computer-based document system.3 Id. ¶ 5; see also ECF No. 39-1, Second Filoon Dec. ¶ 9 (describing access and navigation of the employee portal). In March 2014, defendant circulated a company-wide

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communication notifying its employees that the Agreement and a related memorandum (the "Memorandum") were available via the employee portal. Filoon Dec. ¶¶ 7, 8; ECF No. 33-4, Memorandum 2.

The Memorandum explained that the portal now allowed employees to "review and acknowledge [defendant's] policies, processes, and documents," and that this feature was being implemented with two important documents, one being the Agreement. Id. The Memorandum further explained that the Agreement was "a contract" intended "to allow any [employee] to bring any legal claim(s) against [defendant] in a quicker, less formal, and typically less expensive forum than the traditional filing of a lawsuit in court." Id. All employees hired before October 15, 2013, were "required to acknowledge" the Agreement no later than Friday March 21, 2014. Id.

The Agreement provides that, except in certain circumstances not applicable here,

[A]ny and all disputes, claims, complaints or controversies ("Claims") between you and TBC Corporation and/or any of its parents, subsidiaries, affiliates, agents, officers, directors, employees and/or any of its benefit plans, benefit plan fiduciaries, sponsors or administrators (collectively and individually the "Company"), that in any way arise out of or relate to your employment, the terms and conditions of your employment, your application for employment and/or the termination of your employment will be resolved by binding arbitration and NOT by a court or jury. As such, the Company and you agree to forever waive and relinquish their right to bring claims against the other in a court of law.

ECF No. 33-3, Arbitration Agreement. The final page of the Agreement informs the reader as follows:

YOUR SIGNATURE BELOW ATTESTS TO THE FACT THAT:

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1. YOU HAVE READ, UNDERSTAND, AND AGREE TO BE LEGALLY BOUND TO ALL OF THE ABOVE TERMS.

2. YOU ARE SIGNING THIS AGREEMENT VOLUNTARILY.

3. YOU ARE NOT RELYING ON ANY PROMISES OR REPRESENTATIONS BY THE COMPANY EXCEPT THOSE CONTAINED IN THIS AGREEMENT.

4. YOU UNDERSTAND THAT BY SIGNING THIS AGREEMENT, YOU ARE GIVING UP THE RIGHT TO HAVE CLAIMS DECIDED BY A COURT OR JURY.

5. YOU HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH PRIVATE LEGAL COUNSEL AT YOUR EXPENSE.

Id. Directly below this language, the Agreement contains signature blocks for both the "Applicant/Employee" and the "Company." Id.

However, employees were not asked to "sign" or "execute" these signature blocks; instead, employees would "acknowledge" the Agreement by entering their employee number and the last four digits of their social security number into a field located on a separate portion of the Agreement's signature page. See Second Filoon Dec. Ex. A, 13-14. This field appeared below a prompt which stated: "I, ___, hereby certify and affirm that I have read the Mutual Agreement to Arbitrate. Please enter your Employee Number and last four digits of your Social Security Number as your electronic signature." Id. Defendant has produced records indicating that numerous opt-in plaintiffs,4 as well as Cole, electronically "acknowledged" the Agreement in this manner. See Third Filoon Dec. ¶ 12; ECF Nos. 33-2, 33-3, Attachments to Third Filoon Dec. (collecting signature pages, confirmation screen

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shots, and summary charts of employees who filled out acknowledgment field); ECF No. 33-5 (confirmation screenshot of Cole's acknowledgment, dated March 24, 2014). Cole, for his part, claims that he "does not recall" ever doing so. Cole Dec. ¶ 3.

Only then-current employees accessed the Agreement through the employee portal. The process was significantly different for new hires and rehires. These employees "signed" the Agreement through an "electronic onboarding process" known as the "Kronos System." Fifth Filoon Dec. ¶ 3. This system required newly hired or rehired employees to log in using their name and portions of their social security number. Id. The employees then agreed to a block of text labeled "e-Signature Acceptance," which stated that the employee agreed to "use the electronic click as [his or her] 'written' signature." Id. Attach. 22. The employee was then required to view a series of documents, including the Agreement, and "sign" each document by "clicking" an icon labeled "Sign." Id. After the employee provided this electronic signature, a message appeared saying that the document was now "signed," and giving the date and time of the signature. Id. ¶ 4. Employees could not complete the hiring process without "signing" each document.5 Id.

On September 30, 2015, the court granted plaintiffs' motion for conditional class certification. ECF No. 40. As part of that order, the court ordered defendant to provide the names, address, and telephone numbers of all potential opt-in plaintiffs,

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and authorized plaintiffs to mail a court-approved notice to all potential opt-in plaintiffs. Id. at 23. The court specifically required plaintiffs to amend the proposed notice to provide putative class members "sixty (60) days from the date of the notice" to file a consent to join the action (a "consent form"). Id. at 22. On November 12, 2015, plaintiffs filed their Notice of Mailing, indicating the approved notice was mailed to 2,733 putative plaintiffs. ECF No. 42. This gave plaintiffs until January 11, 2016 to file any putative class members' consent forms.

During this opt-in period, plaintiffs filed around 570 consent forms. ECF Nos. 43-73. Notably, only one named plaintiff, Tavis McNeil ("McNeil"), filed a formal consent form. ECF No. 65. Following the conclusion of the scheduled opt-in period, plaintiffs filed 34 additional consent forms. ECF Nos. 73-79. Over the course of the opt-in process, plaintiffs also filed a number of consent forms presenting a variety of unique issues. Specifically, defendant has identified five opt-in plaintiffs who were mistakenly included on the opt-in list, four opt-in plaintiffs defendant has not been able to identify, three John Doe opt-in plaintiffs, and two consent forms that appear to have been filed by a single opt-in plaintiff. Defendant has also identified those opt-in plaintiffs whose consents were filed either two or three years after their final paycheck for work as a Tire Kingdom mechanic under the "turned hour" compensation plan. Fourth Filoon Dec. ¶ 4.

Defendant filed a motion to compel arbitration against Cole on August 3, 2015, well before the opt-in period began. Plaintiffs filed a response to this motion on August 26, 2015, and defendant filed its reply in support on September 8, 2015. On March 7, 2016, defendant filed a second motion to compel arbitration against all

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opt-in plaintiffs who signed the Agreement and asked the court to stay a scheduled hearing on its first motion to compel arbitration, until both matters could be heard together. Defendant then filed a motion for summary judgment on April 22, 2016. Plaintiffs responded to the second motion to compel arbitration on April 29, 2016. Plaintiffs then filed a motion for the joinder of additional parties on May 6, 2016. On May 9, 2016, defendant filed its reply in support of its second motion to compel arbitration, and on May 20, 2016, defendant filed a response to plaintiffs' motion for...

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