Billingsley v. Citi Trends, Inc.

948 F. Supp. 2d 1287, 20 Wage & Hour Cas.2d (BNA) 1294, 2013 WL 2350163, 2013 U.S. Dist. LEXIS 74910
CourtDistrict Court, N.D. Alabama
DecidedMay 29, 2013
DocketNo. 4:12-CV-0627-KOB
StatusPublished
Cited by1 cases

This text of 948 F. Supp. 2d 1287 (Billingsley v. Citi Trends, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Billingsley v. Citi Trends, Inc., 948 F. Supp. 2d 1287, 20 Wage & Hour Cas.2d (BNA) 1294, 2013 WL 2350163, 2013 U.S. Dist. LEXIS 74910 (N.D. Ala. 2013).

Opinion

MEMORANDUM OPINION

KARON OWEN BOWDRE, District Judge.

This Fair Labor Standards Act case presents the court with a dilemma: enforce arbitration agreements against Defendant Citi Trends Store Managers, who are potential opt-in Plaintiffs in this collective action that were obtained during the conditional certification stage of this case [1290]*1290and gut the collective action mechanism Congress provided for the protection of employees or refuse to enforce the arbitration agreements and run afoul of the federal policy favoring their enforcement. Because of the particular events surrounding the roll-out of the arbitration agreement in this case, as specifically discussed below, the court finds it cannot approve employer conduct like that involved in this case specifically targeting only potential class members during a critical juncture in this case with the definite goal of undercutting the Congressional intent behind the collective action process. The court will DENY the Defendant’s motion to compel arbitration and preserve the viability of the collective action mechanism.

I. Procedural Background

This matter comes before the court on the “Defendant’s Motion for Reconsideration of the Court’s Oral Order Prohibiting Arbitration and to Compel Arbitration against Opt-ins who are subject to Arbitration Agreements.” (Doc. 60). The Plaintiffs, Citi Trends Store Managers, in this FLSA collective action claim that Citi Trends improperly designated the Store Managers as exempt employees when they should have been designated as hourly employees and paid overtime. The court conditionally certified the collective class on January 23, 2013, 2013 WL 246115, but has not yet approved notice to Citi Trends Store Managers because of the Defendant’s motion to reconsider.

Defendant Citi Trends, Inc. argues that this court’s ruling at the January 2013 hearing that it could not seek to compel arbitration against those opt-in Plaintiffs who signed mandatory arbitration agreements was an error of law. The Plaintiffs argue that the court’s ruling was appropriate and necessary to correct Citi Trends’s wrongful action — intimidating its employees into waiving their rights to join this lawsuit by signing mandatory arbitration agreements. On April 19, 2013, the court granted the motion to reconsider its ruling and set an evidentiary hearing to hear evidence surrounding presentment of the arbitration agreements to determine if any coercion, duress, or intimidation occurred.

In its brief supporting its motion to reconsider and compel arbitration, Citi Trends argues that the court has not made the requisite evidentiary finding to limit Citi Trends’s communications with its employees and that the Agreement is enforceable under Georgia law. The Plaintiffs responded, arguing that under its managerial responsibility for ensuring fair notice to the class, the court has the duty and the responsibility to oversee the FLSA collective action; to prohibit the kind of conduct that Citi Trends employed in this case; and to declare the Agreements invalid as they impact this action. The court recognizes that these arguments create two separate issues and will address the evidence presented at the hearing under both legal theories because the court finds that they both apply to this case.

II. Background Information

This motion exclusively concerns a very discrete moment in time when Citi Trends had all of its then-employed Store Managers (“SMs”) sign the Citi Trends Arbitration Agreement (“the Agreement”). (Doc. 47-6). Citi Trends presented the SMs with three documents at the time it had the SMs sign the Agreement: the Store Manager Disclosure (doc. 47-2); the Store Manager Declaration (doc. 47-4); and the Agreement. (Doc. 47-6). The pertinent portions of the Agreements are set out below:

In consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, you and the Company agree as follows:
[1291]*1291 1. The Mutual Agreement to Arbitrate: Overview
Except for the claims set forth in the paragraph below, you are required to arbitrate any and all disputes, claims, or controversies (“claim”) against the Company that could be brought in a court including, but not limited to, all claims arising out of your employment and the cessation of employment, including any claim that could have been presented to or could have been brought before any court. This Agreement to arbitrate includes ... the Fair Labor Standards Act.... Likewise, the Company has a reciprocal obligation to arbitrate any covered claim against you and also agrees to be bound by the terms of this Agreement regarding any matter covered herein....
3. Class/Collective Action Waiver
This Agreement requires all claims to be pursued on an individual basis only. You and the Company hereby waive all rights to (I) commence, or be a party to, any class, representative or collective claims or (ii) jointly bring any claim against each other with any other person or entity....
4. Severability and Related Issues
The Arbitrator, and not any federal, state or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to, any claim that all or any part of this Agreement is void or voidable....
5. Consideration
In additional to the consideration being a mutual Agreement to arbitrate, the Company agrees to reimburse you for any administrative filing fees the arbitration firm may impose on you to initiate arbitration. As further consideration, the Company will pay 100% of the arbitration firm’s fees as well as the arbitrator’s fees and expenses. To the extent permitted by applicable law, your continued employment and/or your accepting employment with the Company subsequent to this Agreement’s implementation also shall constitute consideration and acceptance by you of the terms and conditions set forth in this Agreement....
7. Other Issues
e. No Employment Agreement! Employment At Will
The terms and conditions described in this Agreement are not intended to, and shall not, create a contract of employment for a specific duration of time. Employment with the Company is at-will and voluntarily entered into and both you and the Company are free to end that relationship at any time, for any reason and with or without prior notice.
f Condition of Employment
It is a condition of your employment by the Company that you agree to be bound by the terms of this agreement.... [1292]*1292SIGNING. BY ISSUANCE OF THIS AGREEMENT, THE COMPANY AGREES TO BE BOUND TO ITS TERMS WITHOUT ANY REQUIREMENT TO SIGN THIS AGREEMENT.

[1291]*1291I KNOWINGLY AND FREELY AGREE TO THIS MUTUAL AGREEMENT TO ARBITRATE CLAIMS, WHICH OTHERWISE COULD HAVE BEEN BROUGHT IN COURT.

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Bluebook (online)
948 F. Supp. 2d 1287, 20 Wage & Hour Cas.2d (BNA) 1294, 2013 WL 2350163, 2013 U.S. Dist. LEXIS 74910, Counsel Stack Legal Research, https://law.counselstack.com/opinion/billingsley-v-citi-trends-inc-alnd-2013.