Woods v. Caremark PHC, L.L.C.

198 F. Supp. 3d 1046, 2016 U.S. Dist. LEXIS 138018, 2016 WL 5417453
CourtDistrict Court, W.D. Missouri
DecidedAugust 2, 2016
DocketCase No. 4:14-cv-583-SRB
StatusPublished

This text of 198 F. Supp. 3d 1046 (Woods v. Caremark PHC, L.L.C.) is published on Counsel Stack Legal Research, covering District Court, W.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Woods v. Caremark PHC, L.L.C., 198 F. Supp. 3d 1046, 2016 U.S. Dist. LEXIS 138018, 2016 WL 5417453 (W.D. Mo. 2016).

Opinion

ORDER

JUDGE STEPHEN R. BOUGH,

UNITED STATES DISTRICT COURT

Before the Court is Defendants’ Motion to Compel Arbitration. (Doc. #114), For the reasons stated more fully below, the motion is DENIED.

I. Background

On January 1, 2014, Plaintiffs filed this class action and collective action under the Fair Labor Standards Act on behalf of themselves and “similarly situated” employees of Defendants Caremark PHC, L.L.C. and Caremark, L.L.C. Plaintiffs allege they, along with other Customer Care Representatives, performed pre-shift work for which they were not paid in violation of the FLSA and other laws. Defendants filed their motion to compel arbitration on April 15, 2016, more than one year after the Court conditionally certified a FLSA collective action including “all current and former [Caremark] non-exempt hourly CCRs who worked at [Caremark’s] Lee’s Summit call center as a telephone-dedicated customer service employee in the past three years,” more than one year after notice was sent to the collective, and more than one month after Plaintiffs filed their motion seeking nationwide certification of the same collective action.

Defendants argue that the Court must compel arbitration as to all opt-in plaintiffs who signed the CVS Arbitration Policy, which was first implemented in October 2014, well after this litigation was filed. Plaintiffs counter that the CVS Arbitration Policy does not apply to this litigation, and regardless, Defendants waived enforcement of the CVS Arbitration Policy by engaging in litigation and failing to seek to compel arbitration until April 2016. The relevant provisions of the CVS Arbitration Policy state:

Under this Policy, CVS Health (including its subsidiaries) and its Employees agree that any dispute between an Employee and CVS Health that is covered by this Policy (“Covered Claims”) will be decided by a single arbitrator through final and binding arbitration only and will not be decided by a court of jury or any other forum[J ...
Covered Claims also include disputes arising out of or relating to the validity, enforceability or breach of this Policy, except as provided in the section below regarding Class Action Waiver....
This Policy does not apply to claims raised in litigation pending as of the date an Employee first receives or views this Policy....

(Doc. #115-1) (emphasis added).

II. Legal Standard

The Federal Arbitration Act (“FAA”) governs the CVS Arbitration Policy. See 9 U.S.C. § 2. The FAA carries a presumption of arbitrability. Owen v. Bristol Care, Inc., 702 F.3d 1050, 1052 (8th Cir.2013) (citation omitted). “Section 2 requires courts to enforce arbitration agreements according to their terms.” Id. (citation omitted). “[Arbitration is a matter of [1049]*1049contract and party cannot be required to submit to arbitration any dispute which he has not agreed to submit.” Newspaper Guild of St. Louis, Local 36047 v. St. Louis Post Dispatch, LLC, 641 F.3d 263, 266 (8th Cir.2011) (citation and internal quotations omitted). “Thus, when deciding whether to compel arbitration, a court asks whether a valid agreement to arbitration exists, and if so, whether the dispute .falls within the scope of that agreement.” Id.

The question whether the parties have submitted a particular dispute to arbitration, ie., the ‘question of arbitrability,’ is ‘an issue for judicial determination [u]n-less the parties clearly and unmistakably provide otherwise.” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002). The Supreme Court has found questions of ar-bitrability presumptively for a court to decide to include whether the parties are bound by an arbitration agreement and whether an arbitration agreement applies to a particular type of controversy. Id. at 84, 123 S.Ct. 588. “Parties are free to arbitrate threshold or ‘gateway’ questions of arbitrability.” Fox v. Career Educ. Corp., No. 4:11-CV-1584-DDN, 2012 WL 1205155, at *3 (E.D.Mo. Apr. 11, 2012) (finding arbitrator should decide whether arbitration agreement was unenforceable as unconscionable).

III. Discussion

Defendants state that “Plaintiffs do not and cannot argue that their disputes are somehow outside the reach of the CVS Arbitration Policy.” (Doc. #12, p. 2). Defendants misread Plaintiffs’ briefing. In fact, Plaintiffs argue, “[T]he CVS arbitration policy expressly excludes cases already on file.... This exclusion begs the question of why this Motion was filed.” (Doc #120, p. 11). The Court, finds that by the CVS Arbitration Pokey’s plain terms, it does not apply to this litigation, which was pending before implementation of the Policy, and the Court need not decide Plaintiffs’ other arguments opposing arbitration, including but not limited to waiver.

Initially, the Court notes that a decision requiring interpretation of the CVS Arbitration Policy’s language does not fall within the so-called “delegation clause.” The delegation clause applies only to decisions regarding the “validity, enforceability, or breach of [the] Policy[.]” Deciding “enforceability” issues is not the same as deciding whether or not a dispute falls within the CVS Arbitration Policy. Because the parties did not clearly and unmistakably provide that all arbitrability issues would be decided by an arbitrator or more specifically that whether the Policy applies to a particular controversy would be decided by an arbitrator, this Court decides the issue. See Howsam, 537 U.S. at 83, 123 S.Ct. 588.

By its plain terms, the CVS Arbitration Policy does not apply to this litigation. Again, the Policy states, “This, Policy does not apply to claims raised in litigation pending as of the date an Employee first receives or views this Policy.” The term “pending” modifies the term “litigation.” “Pending” does not modify the term “claims.” Accordingly, the CVS Arbitration Policy does not apply to litigation pending as of the date an Employee first receives or views the Policy regardless of whether that Employee’s claim was a part of the pending litigation at the time the Employee received or viewed the Policy. The Employee could have a claim added to pending litigation after receiving or viewing the Policy that would fall outside the scope of the CVS Arbitration Policy so long as the litigation was pending at the time the Employee first received or viewed the Policy.

Such is the case here. This case has been on file since January 1, 2014. An Amended Class Action Complaint was filed without objection on October 6, 2014. Both [1050]*1050dates precede implementation of the CVS Arbitration Policy. The Amended Class Action Complaint alleges, “Defendants’ policy and practice is to deny earned wages and overtime pay to its telephone-dedicated hourly employees at its call center facilities.... This lawsuit is brought as a collective action under the FLSA to recover unpaid wages owed to Plaintiffs and all other similarly situated workers employed in Defendants’ call centers nationwide.”

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198 F. Supp. 3d 1046, 2016 U.S. Dist. LEXIS 138018, 2016 WL 5417453, Counsel Stack Legal Research, https://law.counselstack.com/opinion/woods-v-caremark-phc-llc-mowd-2016.