Adams v. Citicorp Credit Services, Inc.
93 F. Supp. 3d 441
M.D.N.C.2015Background
- Four named plaintiffs (Adams, Harrison, Whitfield, Kraemer) sued Citicorp Credit Services (Citi) alleging off-the-clock/ unpaid overtime work at Citi’s Greensboro call center, invoking the FLSA and NCWHA.
- Citi moved to compel arbitration for Adams, Whitfield, and Kraemer based on a 2011 Employee Handbook Arbitration Policy that (1) requires individual arbitration for employment disputes and (2) contains a class/collective-action waiver.
- Whitfield and Kraemer electronically acknowledged receipt of the 2011 Handbook; Adams did not acknowledge the 2011 Handbook but had acknowledged a 2009 Handbook that permitted prospective amendments.
- Plaintiffs seek conditional certification of an FLSA collective of customer-service telephone operators at the Greensboro call center dating back three years; Plaintiffs submitted declarations describing uniform time-recording via a phone system that missed pre- and post-shift work.
- The court found genuine fact issues whether Adams received notice of the 2011 amendment (so arbitration for him was deferred), compelled arbitration for Whitfield and Kraemer, denied a stay as to others for now, and conditionally certified a limited collective of telephone-system timekeeping customer-service operators.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether named plaintiffs agreed to arbitrate and waive collective actions | Adams: did not assent to 2011 amendment; Whitfield/Kraemer: assented but waiver unenforceable because FLSA collective right is non-waivable | Citi: 2011 Arbitration Policy applies; electronic acknowledgments establish assent and waiver of collective actions | Whitfield and Kraemer must arbitrate individually; factual issue as to Adams (trial required on assent) |
| Enforceability of FLSA collective-action waiver | Waiver invalid because collective mechanisms are essential to FLSA enforcement and thus non-waivable | Waiver valid because collective action is procedural and parties may contractually waive it; FAA favors arbitration | Waiver enforceable; court follows circuit and other appellate precedent upholding such waivers under the FAA |
| Temporal scope/prospective application of the 2011 waiver | Waiver should not apply to claims based on 2010 conduct because 2009 Handbook said amendments apply prospectively only | Arbitration clause broadly covers disputes “arising out of or in any way related to employment,” and waiver applies to proceedings filed after amendment | Waiver applies to this case (claims/patterns are subject to the 2011 policy) |
| Conditional certification of FLSA collective | Plaintiffs: modest showing met—declarations show common phone-based timekeeping that missed pre/post-shift work | Citi: Plaintiffs’ showing is insufficient; proof varies by department, timekeeping system, manager, period | Court conditionally certifies a class limited to customer-service telephone operators who used the telephone system to record time since March 22, 2009 |
Key Cases Cited
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (establishes federal policy favoring arbitration)
- Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (agreements to arbitrate must be enforced)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (presumption favoring arbitration of arbitrable issues)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (effective vindication doctrine and arbitration)
- Adkins v. Labor Ready, Inc., 303 F.3d 496 (4th Cir. 2002) (FLSA collective-action waiver enforceability analysis in Fourth Circuit)
- D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013) (upholding class/collective waivers against NLRB challenges)
- Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2d Cir. 2013) (collective-action waiver enforcement under FAA)
- Walthour v. Chipio Windshield Repair, LLC, 745 F.3d 1326 (11th Cir. 2014) (textual analysis concluding FLSA does not bar waivers of collective actions)