United States District Court, E.D. North Carolina, Western Division
JAMES C. FOX, Senior District Judge.
This matter is before the court on Defendant's Motion to Dismiss and/or to Stay and to Compel Arbitration and Motion to Dismiss all Class and Collective Action Allegations [DE-7]. Plaintiff filed a response [DE-10], to which Defendant replied [DE-11]. Additionally, Plaintiff has filed a Motion for Leave of File Sur-Reply [DE-12]. Defendant has filed a Response to Plaintiff's Motion for Leave [DE-15]. For reasons for fully stated below, the Defendant's Motion to Dismiss and/or to Stay and to Compel Arbitration and Motion to Dismiss all Class and Collective Action Allegations is ALLOWED in part and DENIED in part. Plaintiff's Motion for Leave to File Sur-Reply is DENIED.
I. STATEMENT OF THE CASE
Plaintiff Leslie Holden ("Holden") filed the instant collective and class action on June 13, 2014, alleging that Defendant Raleigh Restaurant Concepts, Inc. ("RRC") violated the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201, et seq., and the North Carolina Wage and Hour Act ("NCWHA"), N.C. Gen. Stat. §§ 95-25.1, et seq. Compl. [DE-1] ¶ 1.
RRC operates a gentlemen's club under the trade name "The Men's Club of Raleigh" ("Men's Club"), where Holden worked as an exotic dancer. Compl. ¶¶ 2-3. Holden and RRC executed an "Entertainment Lease" ("agreement") which states that the parties' business relationship is that of landlord and tenant, rather than employer and employee. Pl.'s Response in Opp., Ex. 1 [DE-10-1] ¶ 12. Holden claims that RRC misclassified her and the members of the putative class as independent contractors rather than employees, resulting in violations of statutory minimum wage and overtime requirements. Compl. ¶ 17.
The parties' agreement contains an arbitration clause which states that "any and all controversies between the entertainer and club... shall be exclusively decided by binding arbitration...." Pl.'s Response in Opp., Ex. 1 [DE-10-1] ¶ 21. The agreement also purports to waive Holden's right to initiate or join a class or collective action against the Men's Club. Id. Based on these provisions of the agreement, RRC argues that "arbitration is the proper and exclusive forum for resolving [this] dispute." Def's Mot. to Dismiss [DE-7] at 1. RRC urges the court to dismiss or, alternatively, stay Holden's individual claims and compel arbitration, and to "dismiss, with prejudice, the class and collective allegations from the Complaint as the party's [sic] agreement contains an unambiguous class and collective action waiver." Id. Holden, in turn, contends that the arbitration clause is unenforceable and that the class and collective action waiver "is invalid under the law." Pl.'s Response in Opp. [DE-10] at 3, 15.
A. Holden's Motion to File a Sur-Reply
At the outset, the court considers Holden's Motion to File a Sur-Reply [DE-12]. She states that a sur-reply is necessary in order to further explain how the parties'"arbitration agreement operates to establish a contractual set-off' and to "provide additional commentary" on the Fourth Circuit's unconscionability analysis. Id at 2. RRC, in turn, argues that Holden's "Motion is improper and in violation of the Local Rules of this Court." Def.'s Resp. in Opp. [DE-15] at 1.
The Local Civil Rules for the Eastern District of North Carolina only allow for the filing of a motion, a response to a motion, and a reply. See Local Civil Rule 7.1; Freeman v. City of Fayetteville, 971 F.Supp. 971, 973 n.1 (E.D. N.C. 1997) ("The Local Rules of this court do not allow for the submission of sur-replies."). Accordingly, courts generally allow a party to file a sur-reply "only when fairness dictates based on new arguments raised in the previous reply." DiPaulo v. Potter, 733 F.Supp.2d 666, 670 (M.D. N.C. 2010).
Holden does not seek to file a sur-reply in response to new arguments raised by RRC in its reply. Rather, she requests leave in order "to provide full briefing to the Court so that it can make an informed decision." Mot. to File Sur-Reply [DE-12] at 3. Holden may not file a sur-reply merely to supply the court with additional explanation and commentary. Therefore, her Motion to File a Sur-Reply is denied.
B. RRC's Motion to Compel Arbitration
The Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16, reflects a liberal policy in favor of arbitration agreements. See Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). The Act requires a court to stay an action and compel arbitration "upon being satisfied that the issue involved... is referable to arbitration under [an agreement in writing]." Id. § 3. "A district court therefore has no choice but to grant a motion to compel arbitration where a valid arbitration agreement exists and the issues in a case fall within its purview." ...