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Allen v. SSC Lexington Operating Co., LLC

United States District Court, M.D. North Carolina

September 29, 2017

CYNTHIA ALLEN, individually and on behalf of all similarly situated individuals, Plaintiff,
v.
SSC LEXINGTON OPERATING COMPANY LLC, a North Carolina Limited Liability Company, d/b/a BRIAN CENTER NURSING CARE/LEXINGTON, Defendant.

          MEMORANDUM OPINION AND ORDER

          OSTEEN, JR., United States District Judge.

         This matter comes before the court on Defendant's Motion to Compel Individual Arbitration and Stay Proceedings. (Doc. 10.) Plaintiff filed a response in opposition (Doc. 22), and Defendant filed a reply (Doc. 30). This matter is now ripe for resolution and for the reasons stated herein, Defendant's motion will be granted.

         I. BACKGROUND

         Plaintiff Cynthia Allen (“Allen”) filed this putative class and collective action against Defendant SSC Lexington Operating Company LLC, d/b/a Brian Center Nursing Care/Lexington (“SSC”) on August 24, 2016, alleging claims under the Fair Labor Standards Act (“FLSA”) including failure to pay minimum wages, failure to pay overtime wages, and failure to keep records. (Complaint (Doc. 1) at 14-20.) Plaintiff also alleged similar violations under certain provisions of the North Carolina Wage and Hour Act (“NCWHA”) and the North Carolina Administrative Code (“NCAC”). (Id. at 20-21.) On November 17, 2016, Plaintiff filed a Motion for Conditional Certification and Notification of all Putative Class Members under the FLSA. (Doc. 6.)

         On February 16, 2017, Defendant filed the instant Motion to Compel Individual Arbitration and Stay Proceedings (Doc. 10), and a Partial Motion to Dismiss (Doc. 12). On March 23, 2017, Plaintiff filed an Amended Complaint, again alleging a claim under FLSA for failure to pay overtime wages and alleging similar violations of state law. (Amended Complaint (“Am. Compl.”) (Doc. 21) at 14-17.)

         SSC is a North Carolina limited liability company providing short-term and long-term health care services. (Am. Compl. (Doc. 21) ¶ 14.) Allen worked as an hourly employee for SSC from February 2014 until September 2015 as a Licensed Vocational Nurse/Licensed Practical Nurse. (Id. ¶ 13.) As part of her employment, Allen was given certain documents including an Employment Dispute Resolution Book (“EDR Booklet”), which detailed an Employment Dispute Resolution Program (“EDR Program”). (Def.'s Mem. in Supp. of Mot. to Compel (“Def.'s Br.”), Ex. 1, Sworn Decl. of Katherine M. Tate (“Tate Decl.”) (Doc. 11-1) at 2-3; Exs. A & B attached to Tate Decl. (Doc. 11-1) at 5-15.)[1] The last page of the EDR Booklet contained an EDR Program acknowledgment form, which Allen signed on February 10, 2014, acknowledging she was “bound to use the EDR Program to resolve [her] employment related disputes as described within the booklet.” (Tate Decl. (Doc. 11-1) at 3, 15.) The EDR Booklet provides in the introduction, in pertinent part:

Your decision to accept employment or to continue employment with the Company constitutes your agreement to be bound by the EDR Program. Likewise, the Company agrees to be bound by the EDR Program. This mutual agreement to arbitrate claims means that both you and the Company are bound to use the EDR Program as the only means of resolving employment related disputes and to forego any right either may have to a jury trial on issues covered by the EDR Program. However, no remedies that otherwise would be available to you or the company in a court of law will be forfeited by virtue of the agreement to use and be bound by the EDR Program. This Program covers only claims by individuals and does not cover class or collective actions.

(Id. at 6 (emphasis added).) The EDR Booklet states that “[d]isputes covered under the EDR Program pertain to claims such as discipline, discrimination, fair treatment, harassment, termination and other legally protected rights.” (Id. at 7.)

         Under the EDR Program, covered disputes proceed in four steps, with the last step being binding arbitration. (Id. at 8-10.) The EDR Booklet also acknowledges that the “application, interpretation and enforcement of the EDR Program is covered by the Federal Arbitration Act.” (Id. at 7.)

         II. ANALYSIS

         Defendant SSC moves this court to compel arbitration of Plaintiff's individual claims. SSC argues that Allen agreed, as part of the EDR Program, to “arbitrate her individual claims” as a condition of her employment. (Def.'s Br. (Doc. 11) at 2, 10.) In SSC's view, the sentence, “[t]his Program covers only claims by individuals and does not cover class or collective actions, ” is an “express collective action and class action waiver.” (Id. at 13-14.) The purported waiver, according to SSC, “expressly prohibits class and collective arbitration.” (Id. at 2). Therefore, SSC argues that Allen's individual claims only should be compelled to arbitration. (Id.)

         Allen disputes this interpretation. She interprets “[t]his Program covers only claims by individuals and does not cover class or collective actions” to mean that only individual claims fall within the scope of the EDR Program. (Pl.'s Resp. in Opp'n to Def.'s Mot. to Compel Arbitration (“Pl.'s Resp.”) (Doc. 22) at 2-3, 5-6.) Allen argues that because she brought a collective and class action lawsuit, the EDR Program and, more specifically, the arbitration agreement, is simply inapplicable. (Id. at 3.)

         Initially, this court notes that federal policy strongly favors arbitration. The Federal Arbitration Act (“FAA”) represents “a liberal federal policy favoring arbitration agreements” and applies “to any arbitration agreement within the coverage of the [FAA].” Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). Under the FAA, a written arbitration agreement “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. A court must compel arbitration if “(i) the parties have entered into a valid agreement to arbitrate, and (ii) the dispute in question falls within the scope of the arbitration agreement.” Chorley Enters., Inc. v. Dickey's Barbecue Rests., Inc., 807 F.3d 553, 563 (4th Cir. 2015), cert. Denied, ___ U.S. ___, 136 S.Ct. 1656 (2016) (citing Muriithi v. Shuttle Express, Inc., 712 F.3d 173, 179 (4th Cir. 2013)).

         Here, the parties do not dispute that the arbitration agreement is valid, and Allen does not argue that, had she brought her FLSA and state law claims individually, that they would be subject to arbitration. The parties' only disagreement centers on whether the dispute falls within the scope of the EDR Program - specifically, whether the EDR Program precludes collective and class arbitration, (Def.'s Br. (Doc. 11) at 2, 13-14), ...


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