Labor & Employment — FLSA – Class Action Waiver – Arbitration – Off-the-Clock Work

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Adams v. Citicorp Credit Services, Inc. (Lawyers Weekly No. 15-03-0289, 30 pp.) (L. Patrick Auld, USMJ) 1:12-cv-00286; M.D.N.C.

Holding: The court agrees with the Eleventh Circuit (Walthour v. Chipio Windshield Repair, LLC, 745 F.3d 1326, (11^th Cir.) cert. denied, 134 S. Ct. 2886 (2014)) that the Fair Labor Standards Act does not set forth a non-waivable substantive right to a collective action. By continuing in their employment after receiving employee handbooks, plaintiffs Whitfield and Kraemer agreed to submit all employment-related disputes to arbitration and to forgo redress via collective action procedures. Nothing in that agreement frustrates the purpose of the FLSA; however, rendering that agreement unenforceable would frustrate the purpose of the Federal Arbitration Act. The court declines to find the waiver unenforceable.

Defendant’s motion to compel arbitration is granted as to plaintiffs Whitfield and Kraemer. Plaintiffs’ motion to conditionally certify a collective action is granted.

The court rejects plaintiffs’ argument that the collective-action waiver does not apply to conduct that occurred before the waiver went into effect in 2011. Defendant’s arbitration policy calls for arbitration of employment “disputes” while the language concerning collective action describes “claims.” This distinction indicates that the collective action waiver’s prospective application language refers to proceedings (i.e., claims) rather than to the underlying conduct (i.e., disputes). The instant proceedings commenced well after defendant promulgated the version of the arbitration policy that includes the collective action waiver. Accordingly, that waiver applies to this case.

Plaintiff Adams was no longer employed by defendant when it promulgated the collective action waiver, so it does not apply to him.

Plaintiffs complain that defendant only paid them while they were logged on to defendant’s telephone system but required them to perform tasks before logging on and after logging off. Plaintiffs have made a sufficient showing to warrant conditional certification of a class of employees defined as “all customer service telephone operator employees who work or worked at [defendant’s] Greensboro, North Carolina call center facility after March 22, 2009, who used the telephone system to record their time.”

Motions granted in part, denied in part.