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Mason, v. Synchrony Bank

United States District Court, S.D. Ohio, Western Division

January 22, 2018

MARY MASON, etal., on behalf of themselves and others similarly situated, Plaintiffs,
v.
SYNCHRONY BANK, Defendant.

          MICHAEL J. NEWMAN MAGISTRATE JUDGE

         DECISION AND ENTRY SUSTAINING IN PART AND OVERRULING IN PART DEFENDANT SYNCHRONY BANK'S MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, IN THE ALTERNATIVE, TO STAY PROCEEDINGS (DOC. #18), AND OVERRULING AS MOOT PLAINTIFFS MARY MASON, YAHAIRA DIAZ-REYES AND KARETTA PARTRIDGE'S MOTION FOR CONDITIONAL CERTIFICATION, EXPEDITED OPT-IN DISCOVERY, AND COURT-SUPERVISED NOTICE TO POTENTIAL OPT-IN PLAINTIFFS (DOC. #15); PLAINTIFFS' COMPLAINT (DOC. #1) IS DISMISSED WITH PREJUDICE-TERMINATION ENTRY

          WALTER H. RICE UNITED STATES DISTRICT JUDGE

         Plaintiffs, Mary Mason ("Mason"), Yahaira Diaz-Reyes ("Diaz-Reyes") and Karetta Partridge ("Partridge") (collectively "Plaintiffs" or, when applicable, "named Plaintiffs"), allege that Synchrony Bank ("Defendant" or "Synchrony") failed to compensate them for the time they spent performing required, but unpaid, "work before clocking in each day, including, but not limited to, starting, booting up, and logging into Defendant's computer systems, numerous software applications, and phone systems." Doc. #1, ¶ 22, PAGEID #4. Plaintiffs claim that Defendant's refusal to pay Plaintiffs for that pre-shift work resulted in Plaintiffs not being paid for all hours worked or for overtime compensation "for all of the hours they worked over 40 [during] each workweek[, ]" id., ¶ 32, PAGEID #5, in violation of the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. § 201 etseq., and the Ohio Minimum Wage Fair Standards Act ("OMFWSA"), Ohio Rev. Code § 4111.01 et seq. Id., ¶¶ 48-58, PAGEID #8-10. On October 30, 2017, Plaintiffs filed a Motion for Conditional Certification, Expedited Opt-In Discovery, and Court-Supervised Notice to Potential Opt-In Plaintiffs ("Motion for Conditional Certification"), asking the Court to certify conditionally a collective action as to Plaintiffs' FLSA claims. Doc. #15, PAGEID #67.

         On November 8, 2017, Defendant filed a Motion for Postponement of Briefing on Plaintiffs' Motion for Conditional Certification ("Motion for Postponement"), declaring its intention to file a Motion to Compel Individual Arbitration and Dismiss or, in the Alternative, to Stay the Proceedings ("Motion to Compel"). Doc. #16, ¶ 6, PAGEID #120-21. Defendant argued that its Motion to Compel would raise a threshold issue of whether this Court has jurisdiction to hear Plaintiffs' claims, individually or on a collective or class-wide. Id., ¶ 7, PAGEID #121. Defendant filed its Motion to Compel the next day. Doc. #18. As part of a telephonic status conference on December 15, 2017, the Court orally sustained the Motion for Postponement, concluding that the Motion to Compel required the Court to determine-at the outset-whether the arbitration agreements are enforceable and, thus, deprive this Court of jurisdiction to hear Plaintiffs' claims. On December 18, 2017, after the Motion to Compel was fully briefed, the parties entered into an agreement to toll the statute of limitations as to Plaintiffs' FLSA claims until February 7, 2018.

         For the reasons set forth below, Defendant's Motion to Compel is OVERRULED as to its request for a stay of proceedings, and SUSTAINED in all other respects. Plaintiffs' Motion for Conditional Certification is OVERRULED AS MOOT, and their Complaint is DISMISSED WITH PREJUDICE.

         I. FACTUAL BACKGROUND

         The named Plaintiffs were employed by Defendant at various times between November 14, 2014, and August 7, 2017. Doc. #1, ¶¶ 16-18, PAGEID #3-4. At all times, Plaintiffs allege, Defendant was subject to the FLSA and OMFWSA minimum wage and overtime requirements, and Plaintiffs were non-exempt employees paid on an hourly basis. Id., ¶¶ 10-13, 20-21, PAGEID #3, 4. Prior to beginning employment, Defendant sent to Plaintiffs a set of employment policies, which Plaintiffs were required to sign and return to Defendant as a condition of their employment. Doc. #33, PAGEID #386 (citing Doc. #19-3, PAGEID #237-40; Doc. #33-1, ¶¶ 3(a-b), 4, PAGEID #394-95). One of the policies, prior to December 1, 2015, was Defendant's alternative dispute resolution ("ADR") program of binding arbitration, entitled "Solutions." Doc. #19-3, ¶ 7, PAGEID #199. Solutions required employees to submit all employment-related disputes to arbitration, including wage and hour claims, and waiving any right that employees or Defendant would have to litigate a claim in state or federal court. Id., ¶ 5, PAGEID #209. Further, Solutions required employees to arbitrate any employment-related dispute on an individual basis, and contained an express provision by which employees and Defendant waived any right to resolve their claims as part of a class or collective action. Doc. #19-2, § M, PAGEID #180; Doc. #19-3, ¶18, PAGEID #202. In late 2015, in conjunction with its separation from General Electric Capital Corporation, Defendant transitioned its ADR program away from Solutions to a new program known as "Resolution." Doc. #19-3, ¶¶ 4-5, 8, PAGEID #199, 204. "[E]mployees hired on or after September 1, 2015[, ] agreed to Resolution at the time of, and as a condition of, their hiring and employment. All other then-current employees of Defendant became subject to Resolution effective December 1, 2015. Any then-former employees not covered by Resolution remained bound by Solutions." Id., ¶ 8. On or about October 1, 2015, Marc Chini, Defendant's Human Resources Leader ("Chini"), informed all of its employees (including all named Plaintiffs) of the transition to Resolution via an electronic mail message with the subject line "ACTION REQUIRED: Synchrony Financial Alternative Dispute Resolutions Program[.]" Id., PAGEID #204. Chini stated that Resolution would take effect on December 1, 2015, and asked employees "to acknowledge that you are bound by the terms of Resolution by clicking the voting button above at the top of this message*." Id. (emphasis in original). Chini's email stated that as of December 1, 2015, "all employees receiving this letter will be required to address claims through Resolution as individual claims. You may not pursue them in court[, ] and this is exactly the same as your current situation" under Solutions. Id., PAGEID #205 (emphasis in original).

         Neither Chini's email nor the Resolutions program description, which was hyperlinked in the email, Doc. #19-3, ¶ 10, PAGEID #200, PAGEID #204, contained any provision by which employees could elect not to participate in Resolution and remain employed by Defendant. AN named Plaintiffs and all but three of the opt-in Plaintiffs were employed by Defendant on or after December 1, 2015. Doc. #19-3, ¶ 11, PAGEID #200; Doc. #33-1, ¶ 5, PAGEID #395.

         The Resolution program description contained a section entitled "Exclusivity of Arbitration for Covered Claims; Injunctive Relief; [and] Individual Nature of Covered Claims[, ]" which stated that "Employees and [Defendant] are not allowed to litigate a Covered Claim in Any Court." Doc. #19-1, § I, PAGEID #158. Further, the section required that "Employees . . . waive their right[s] to pursue any Covered Claims as, or against, a representative or member of a class or collective action .... All Covered Claims must be brought on an individual basis only in Resolution." Id., PAGEID #159 (emphasis added). All named Plaintiffs continued working for Defendant after December 1, 2015, but none is currently employed by Defendant. Doc. #1, ¶¶ 16-18, PAGEID #3-4.

         II. LEGAL STANDARD FOR MOTION TO COMPEL ARBITRATION

         The United States Arbitration Act of 1925, 9 U.S.C. § 1 et seq., also known as the Federal Arbitration Act ("FAA"), promotes "a liberal federal policy favoring arbitration agreements, " and "questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). "In deciding whether to compel arbitration of a federal statutory claim, we first consider whether the statutory claim is generally subject to compulsory arbitration. If the claim is not exempt from arbitration, we must then consider whether the arbitration agreement is valid." Morrison v. Circuit City Stores, inc., 317 F.3d 646, 665 (6th Cir. 2003) (citing Floss v. Ryan's Family Steak Houses, Inc., 211 F.3d 306, 311 (6th Cir. 2000). "[A]n agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, 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. "[T]he party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration." Green Tree Fin. Corp.-Ala v. Randolph, 531 U.S. 79, 91, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000). Nonetheless, "[i]n evaluating motions or petition[s] to compel arbitration, courts treat the facts as they would in ruling on a summary judgment motion, construing all facts and reasonable inferences that can be drawn therefrom in a light most favorable to the non-moving party." Raasch v. NCR Corp., 254 F.Supp.2d 847, 851 (S.D. Ohio 2003) (Rice, C.J.).

         III. ANALYSIS

         A. Compulsory Arbitration of FLSA Claims, and Compulsory Individual Arbitration of ...


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