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Barone v. Laz Parking Ltd, LLC

United States District Court, D. Connecticut

October 20, 2019

ANTHONY BARONE, on behalf of, Himself and all others Similarly situated Plaintiff,
v.
LAZ PARKING LTD, LLC, Defendant.

          RULING DENYING DEFENDANT'S MOTION TO LIMIT NOTICE

          ROBERT A. RICHARDSON UNITED STATES MAGISTRATE JUDGE.

         The plaintiffs brought this action for unpaid wages under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq. In June of 2018, the plaintiffs filed a motion for conditional certification. (Dkt. #49). After the parties fully briefed the issue, the Honorable Vanessa L. Bryant granted the motion for conditional certification, on June 28, 2019. The defendant now seeks an order excluding any individuals who have signed arbitration agreements from receiving notice of the conditionally certified collective. (Dkt. #79). The plaintiffs oppose the motion. Based on the briefs and the controlling law, the defendant's motion is DENIED.

         I. Timeliness and Waiver

         Plaintiffs argue that the motion to exclude the individuals who signed arbitration agreements from receiving notice raises an issue that could have and should have been raised while the parties were arguing over conditional certification. As a result, the plaintiffs argue that the defendant has waived the issue. The plaintiffs also argue that the motion is an improper and untimely motion for reconsideration. In response, the defendant argues that the “Court never addressed the arbitration issue. In other words, there is nothing for this Court to reconsider.” (Dkt. #82, at 16). The defendant also argues that there is no procedural rule that required the defendant to raise the arbitration agreements in its opposition to the motion for conditional certification. (Dkt. #82, at 15).

         By way of relevant background, the plaintiffs filed their motion for conditional certification in June of 2018. In connection with the motion, the parties filed a total of six briefs, focusing primarily on whether the plaintiffs are “similarly situated.” (Dkt. #50, 51, 52, 54, 55 and 57). On February 11, 2019, this Court issued a ruling which granted the motion for conditional certification. (Dkt. #58).

         On March 5, 2019, the defendant objected to the ruling and requested review by the Honorable Vanessa L. Bryant. (Dkt. #62). Thereafter, both parties submitted briefs. (Dkt. #64-66). On June 28, 2019, the Honorable Vanessa L. Bryant overruled the defendant's objection and granted conditional certification of the FLSA class. (Dkt. #70).

         On August 9, 2019, the defendant filed a motion to exclude any individuals who signed arbitration agreements from receiving notice of the conditionally certified collective. (Dkt. #79). In its motion, the defendant relies on In re: JPMorgan Chase & Co., 916 F.3d 494 (5th Cir. 2019), in which the Fifth Circuit Court of Appeals excluded employees who signed arbitration agreements from receiving notice of the conditionally certified collective. Id. at 497. Although JPMorgan was decided before the defendant briefed its objection to the Court's ruling (Dkt. #62), neither party mentioned JPMorgan or the arbitration agreements in their briefs. (Dkt. #64, 65 and 66). Thus, the arbitration issue was never before the court. As a result, the Court concludes that the pending motion is not a motion for reconsideration.

         The next question is whether the defendant was required to raise the arbitration agreements while opposing the motion for conditional certification. The issue raised in JPMorgan is not new. As the defendant states in its brief, the reasoning of JP Morgan is not new. This Court need not look past Hoffman-La Roche[v. Sperling, 493 U.S. 165 (1989)] to come to the same conclusion as the Fifth Circuit did in JPMorgan.

(Dkt. #79 at 9). The plaintiff argues that this statement is an acknowledgement by the defendant that it could have and should have raised the arbitration agreements earlier, such that the failure to do so constitutes a waiver of the issue. (Dkt. #80, 9-10). The Court concludes that the defendant was not required to raise the arbitration agreements earlier. Indeed, many of the cases cited by the plaintiffs hold that the determination of whether an arbitration agreement is enforceable is best left for step two of the certification process, as opposed to step one. (Dkt. #80, at 11-13). Since the defendant did not waive its right to raise the arbitration agreements, the Court will address the merits of the motion.

         For the reasons discussed below, the Court DENIES the motion to exclude the individuals who have signed arbitration agreements from receiving notice. However, nothing in this ruling will prohibit the defendant from raising the issue in a motion to compel arbitration or at the second stage of the certification process.

         II. Potential exclusion of individuals who signed arbitration agreements at the conditional certification stage

         The defendant asks the Court to exclude any individuals who signed arbitration agreements from receiving notice of the collective action. In making its argument, the defendant relies on the Fifth Circuit's decision in In re: JPMorgan Chase & Co., 916 F.3d 494 (5th Cir. 2019).

         In JPMorgan, the district court granted a motion for conditional class certification in an FLSA case. Thereafter, the defendant sought a writ of mandamus to direct the court to exclude any employees who signed arbitration agreements from receiving notice. The Fifth Circuit excluded such individuals from receiving notice. Id. at 497 (“we hold that district courts may not send notice to an employee with a valid arbitration agreement unless the record shows that nothing in the agreement would prohibit that employee from participating in the collective action.”)(Emphasis added).

         Defendant LAZ Parking notes that the Fifth Circuit's decision “is the first circuit court decision to interpret the text of the FLSA and Hoffman-LaRoche in the context of whether those with arbitration agreements should receive notice.” (Dkt. #79, at 12). The defendant argues that if the court allows individuals who signed arbitration agreements to receive notice of the collective action, the court would be treating their arbitration “agreements as presumptively unenforceable.” (Dkt. #79, at 5). The defendant argues that by seeking to provide notice to the individuals who signed arbitration agreements, the plaintiffs are attempting to “stir up litigation and unjustifiably double the size of the collective” even though the Supreme Court supposedly prohibited such tactics in Hoffman-La Roche v. Sperling, 493 U.S. 165 (1989). (Dkt. #79, at 6). Since the defendant repeats this argument multiple times, (Dkt. #79, at 5, 6 and 14), it should be noted that the majority opinion in Hoffman-La Roche did not actually raise the concern about stirring up litigation.[1] The concern was raised by the dissenting opinion. In any event, courts have generally rejected the notion that sending notice to individuals with arbitration agreements stirs up litigation. Garcia v. Chipotle Mexican Grill, Inc., No. 16 Civ. 601 (ER), 2019 WL 358503, at *3-4 (S.D.N.Y. Jan. 29, 2019).

         Relying largely on cases that pre-date JPMorgan, the plaintiffs argue that courts within the Second Circuit have consistently refused to exclude plaintiffs from receiving notice simply because they have signed arbitration agreements. See Gathmann-Landini v. Lululemon USA, Inc., No. 15-cv-6867, 2018 WL 3848922, at *1 n.2 (E.D.N.Y. Aug. 13, 2018); Castillo v. Perfume Worldwide Inc., No. 17-cv-2972 (JS)(AKT), 2018 WL 1581975, at *12 (E.D.N.Y. Mar. 30, 2018); Varghese v. JP Morgan Chase & Co., No. 14-cv-1718 (PGG), 2016 WL 4718413, at *8-9 (S.D.N.Y. Sept. 9, 2016); Morales v. Rochdale Village, Inc., 15 CV 502 (RJD)(RML), 2016 WL 11190525, at *6 (E.D.N.Y. Aug. 15, 2016); Racey v. Jay-Jay Cabaret, Inc., No. 15-cv-8228 (KPF), 2016 WL 3020933, at *5 (S.D.N.Y. May 23, 2016); Guzman v. Three Amigos SJL Inc., 117 F.Supp.3d 516, 526 (S.D.N.Y. 2015)(since the defendants had not moved to compel arbitration for any of the named plaintiffs, the court found that the “validity of the arbitration clause defense is speculative at this stage.”); Romero v. La Revise Assocs., L.L.C., 968 F.Supp.2d 639, 647 (S.D.N.Y. 2013)(“case law makes clear that this sort of merits-based determination should not take place at the first stage of the conditional collective action approval process.”); Hernandez v. Immortal Rise, Inc., No. 11-cv-4360 (RRM)(LB), 2012 WL 4369746, at *5 (E.D.N.Y. Sept. 24, 2012); D'Antuono v. C & G of Groton, Inc., No. 3:11-cv-33 (MRK), 2011 WL 5878045 (D. Conn. Nov. 23, 2011).[2]

         The Court agrees with the plaintiffs that the weight of authority within the Second Circuit militates against adopting the Fifth Circuit's approach. As the court observed in Gathmann-Landini, 2018 WL 3848922, at *1 n.2 (E.D.N.Y. Aug. 13, 2018), “[c]ourts in this circuit have consistently moved forward with the first step of FLSA collective actions to determine if plaintiffs are similarly situated, without regard to arbitration agreements made by the plaintiffs.”

         The defendant relies upon Lanqing Lin v. Everyday Beauty Amore, Inc., No. 18-cv-729 (BMC), 2018 WL 6492741 (E.D.N.Y. Dec. 10, 2018), a 2018 case within the Second Circuit in which a district court decided to exclude plaintiffs who had signed arbitration agreements. In Lanqing Lin, the plaintiffs argued that “employees cannot waive their FLSA rights by contract” and that the question of whether the arbitration agreements are valid and enforceable should be determined at the second step of the certification process. Id. at *4. The court stated

[a]lthough plaintiffs are technically correct that the first step considers only whether other employees are similarly situated as to the existence and application of a common practice or policy - as compared to their ability to recover on the merits or their means to do so - this nuance cannot save them here. Indeed, every case plaintiffs cite in support of this position predates Sutherland [v. Ernst & Young ...

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