United States District Court, M.D. North Carolina
CYNTHIA ALLEN, individually and on behalf of all similarly situated individuals, Plaintiff,
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.
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.
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.)
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.)
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.) 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.)
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.)
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.)
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.)
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)).
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), ...