Rose Lorenzo v. Prime Communications, L.P. , 806 F.3d 777 ( 2015 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1622
ROSE LORENZO,
Plaintiff - Appellee,
v.
PRIME COMMUNICATIONS, L.P., a Texas General Partnership,
Defendant - Appellant.
No. 14-1727
ROSE LORENZO,
Plaintiff - Appellee,
v.
PRIME COMMUNICATIONS, L.P., a Texas General Partnership,
Defendant - Appellant.
Appeals from the United States District Court for the Eastern
District of North Carolina, at Raleigh. Malcolm J. Howard,
Senior District Judge; Kimberly Anne Swank, Magistrate Judge.
(5:12-cv-00069-H)
Argued: October 27, 2015 Decided: November 24, 2015
Before NIEMEYER, KING, and SHEDD, Circuit Judges.
No. 14-1622 dismissed; No. 14-1727 affirmed by published
opinion. Judge Niemeyer wrote the opinion, in which Judge King
and Judge Shedd joined.
ARGUED: William Wayne Pollock, RAGSDALE LIGGETT, PLLC, Raleigh,
North Carolina, for Appellant. Harris D. Butler III, BUTLER
ROYALS, PLC, Richmond, Virginia, for Appellee. ON BRIEF: John
B. Walker, RAGSDALE LIGGETT, PLLC, Raleigh, North Carolina, for
Appellant. Zev H. Antell, BUTLER ROYALS, PLC, Richmond,
Virginia; Stephen A. Dunn, EMANUEL & DUNN, Raleigh, North
Carolina, for Appellee.
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NIEMEYER, Circuit Judge:
Rose Lorenzo commenced this action against her former
employer, Prime Communications, L.P., under the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the North
Carolina Wage and Hour Act, N.C. Gen. Stat. § 95-25.1 et seq.,
alleging that she was unlawfully deprived of wages earned as
commissions and overtime pay earned from work of more than 40
hours per week.
The district court conditionally certified her FLSA claim
as a collective action under 29 U.S.C. § 216(b) and certified
her North Carolina Wage and Hour Act claims as a class action
under Federal Rule of Civil Procedure 23. It also denied Prime
Communications’ motion to compel arbitration, concluding that
Lorenzo never agreed to arbitrate such claims. Prime
Communications separately appealed both rulings, and we
consolidated the two appeals.
We now affirm the district court’s order denying Prime
Communications’ motion to compel arbitration, concluding that
Prime Communications failed to produce evidence demonstrating
that Lorenzo agreed to arbitrate any of her claims. We also
dismiss Prime Communications’ appeal from the class action
certification order, concluding that its petition for permission
to appeal the district court’s order was untimely filed.
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I
Lorenzo began employment with Prime Communications, an
authorized retailer of AT&T wireless communication devices and
services, in October 2009 as a “solutions specialist” in a
retail store in Fuquay-Varina, North Carolina. As a solutions
specialist, Lorenzo sold merchandise and cell-phone service
plans, among other things. In February 2010, she was promoted
to store manager of a retail store in Raleigh, North Carolina.
As a solutions specialist, Lorenzo received hourly wages,
paid biweekly, plus a variable commission based on the gross
profit of individual sales that she made. As a store manager
she received a salary, paid biweekly, plus a variable commission
based on the gross profits of the store, which was sometimes
referred to as a bonus. All commissions and bonuses were paid
separately from wages and salaries with a monthly check.
Lorenzo commenced this action in February 2012 under the
FLSA and the North Carolina Wage and Hour Act, alleging that
Prime Communications deprived her of lawful wages, in violation
of those acts. More particularly, she alleged that Prime
Communications incorrectly calculated her commissions and
bonuses and failed to pay her overtime pay, even though she
worked for more than 40 hours per week.
The district court conditionally certified the FLSA claim
as a collective action under 29 U.S.C. § 216(b) and certified
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the state wage and hour claims as a class action under Federal
Rule of Civil Procedure 23.
Relying on an arbitration provision contained in its
Employee Handbook, which had been provided to Lorenzo when she
began her employment, Prime Communications filed a motion to
compel arbitration. The district court denied the motion,
concluding that Prime Communications did not provide sufficient
evidence that Lorenzo had agreed to arbitration. The court held
that mere receipt of the Employee Handbook and continued work
for Prime Communications after receiving it were insufficient
evidence of Lorenzo’s agreement to the Handbook’s arbitration
provision. In response to Prime Communications’ argument that
“its routine requirement for employees to execute an
acknowledgment form [was] sufficient evidence of [Lorenzo’s]
agreement,” the court noted that Prime Communications “ha[d]
been unable to produce any signed acknowledgment form signed by
[Lorenzo],” and thus found the argument “untenable.”
When, about two months later, Prime Communications located
a copy of the acknowledgment form that Lorenzo had signed and
asked the district court to reconsider its ruling denying
arbitration, the court refused to change its position because
“the acknowledgment [form] explicitly state[d] that the handbook
does not create a contract.”
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Relying on the Federal Arbitration Act (“FAA”), 9 U.S.C.
§ 16(a), Prime Communications filed this interlocutory appeal
challenging the district court’s order denying its renewed
motion to compel arbitration, and relying on Federal Rule of
Civil Procedure 23(f), Prime Communications filed a separate
petition for permission to appeal the district court’s order
certifying the state wage and hour claims as a class action. *
Lorenzo filed a motion to strike the petition for permission to
appeal the class action certification order because Prime
Communications did not file its petition within 14 days of the
district court’s order, as required by Rule 23(f).
By order dated June 24, 2014, we deferred Lorenzo’s motion
to strike the petition for permission to appeal, pending oral
argument, and by order dated July 25, 2014, we consolidated the
two appeals.
II
The facts critical to Prime Communications’ renewed motion
to compel arbitration are not disputed. Lorenzo acknowledged
that she received Prime Communications’ 2010 Employee Handbook
when beginning her employment and that the Handbook committed
* The district court’s order also conditionally certified
Lorenzo’s FLSA claim as a collective action, but Prime
Communications does not seek permission to appeal that aspect of
the order.
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“all employment issues” first to an internal dispute resolution
process, then to mediation, and finally to arbitration. It
provided that employees “waived all rights to bring a lawsuit
and to a jury trial regarding any dispute,” including claims
under the FLSA. After receiving the Handbook, Lorenzo continued
her employment with Prime Communications.
Lorenzo also signed a form on October 20, 2009, explicitly
acknowledging receipt of the Handbook. That form provided in
relevant part:
I understand that I am responsible for reviewing the
Prime Communications Employee Handbook.
* * *
I understand that the Prime Communications’ Employee
Handbook is not a contract of employment and does not
change the employment-at-will status of employees.
Moreover, no provision should be construed to create
any bindery [sic] promises or contractual obligations
between the Company and the employees (management or
non-management).
* * *
By my signature below, I acknowledge, understand,
accept, and agree to comply with the information
contained in the Employment Handbook. I acknowledge
that I will review and read the Company Handbook and
that I have the opportunity to ask my Manager
questions about the Handbook. I further acknowledge
that I fully understand or will make sure that I do
understand the contents there of, as they relate to my
employment with Prime Communications. I understand
that the information contained in the Handbook are
guidelines only and are in no way to be interpreted as
a contract.
(Emphasis added).
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The district court concluded that Lorenzo’s receipt of the
Handbook and her continued employment were insufficient to
create an agreement to arbitrate and that, in any event, the
arbitration provision in the Handbook conflicted with the
acknowledgment form, which “explicitly state[d] that the
handbook does not create a contract.” The court accordingly
denied Prime Communications’ motions to compel arbitration.
Prime Communications contends that the district court erred
in refusing to compel arbitration because “Lorenzo agreed to
arbitrate all disputes relating to her employment by
affirmatively assenting to the provisions of Prime’s Employee
Handbook, which include[d] a dispute resolution provision
requiring arbitration.” It argues that the arbitration
provision of the Employee Handbook is binding and severable from
the rest of the Handbook, “regardless of whether [the] employee
handbook as a whole constitute[d] an employment contract.” It
notes that, under existing case law, arbitration should be
favored and therefore “any doubts must be resolved in favor of
arbitration as a matter of federal law.”
Lorenzo responds by pointing to the express language of her
signed acknowledgment form, which denied that any provisions in
the Employee Handbook created a contract. She asserts that,
“where a signed acknowledgment page repeatedly states that no
provisions in the Handbook are contractual,” the Handbook cannot
8
be found to have created a contract. She argues that unlike
some cases cited by Prime Communications, the acknowledgment
form at issue here did not exempt the Employee Handbook’s
arbitration provision from the acknowledgment form’s explicit
statements disclaiming that the Handbook established any binding
obligations.
The parties correctly presume that resolution of this issue
requires the determination of whether the parties entered into a
contract to commit employment disputes to arbitration. The FAA
so provides unambiguously:
A written provision in . . . a contract evidencing a
transaction involving commerce to settle by
arbitration a controversy thereafter arising out of
such contract . . . 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 (emphasis added). While the Supreme Court has
acknowledged a “liberal federal policy favoring arbitration,”
AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1745 (2011)
(quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 24 (1983)), it has also consistently held that § 2 of
the FAA reflects the “fundamental principle that arbitration is
a matter of contract,” id. (quoting Rent-A-Center, West, Inc. v.
Jackson, 561 U.S. 63, 67 (2010)). Thus, a court may order
arbitration only when it “is satisfied that the parties agreed
to arbitrate.” Granite Rock Co. v. Int’l Bhd. of Teamsters, 561
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U.S. 287, 297 (2010). And the question of whether the parties
agreed to arbitrate is resolved by application of state contract
law. See Johnson v. Circuit City Stores, Inc., 148 F.3d 373,
377 (4th Cir. 1998).
North Carolina contract law, like that of most states,
requires that the parties “assent to the same thing in the same
sense, and their minds meet.” Normile v. Miller, 326 S.E.2d 11,
15 (N.C. 1985) (internal quotation marks omitted) (quoting
Goeckel v. Stokely, 73 S.E.2d 618, 620 (N.C. 1952)).
In this case, Lorenzo’s acknowledgment that she received
the Handbook and her continued work after reviewing its
arbitration terms could have created implied assent under North
Carolina law. See Hightower v. GMRI, Inc., 272 F.3d 239, 242-43
(4th Cir. 2001) (reviewing North Carolina case law holding that
“continuing employment after learning of the existence of [a
company’s dispute resolution procedure] constitutes an
employee’s agreement to be bound by an arbitration agreement”).
To the extent that the district court in this case failed to
recognize that principle, it erred. Nonetheless, there is, in
this case, the additional fact that around the time that Lorenzo
received the Employee Handbook, she also signed an
acknowledgment form providing that the terms of the Employee
Handbook, including its arbitration provision, were “guidelines
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only” that did not create any binding commitments. As the
signed form stated unambiguously:
I understand that the Prime Communications’ Employee
Handbook is not a contract of employment and . . . no
provision should be construed to create any bindery
[sic] promises or contractual obligations between the
Company and the employees (management or non-
management).
* * *
I understand that the information contained in the
Handbook are guidelines only and are in no way to be
interpreted as a contract.
The district court correctly recognized that the
acknowledgment form that Prime Communications drafted and
Lorenzo signed expressly disclaimed any implied agreement to be
contractually bound by any terms in the Employee Handbook. Any
implied assent that might have been created by Lorenzo’s receipt
and review of the Handbook and by her continued employment was
nullified by the express agreement of the parties not to be
bound by any of the Handbook’s terms. Cf. Snyder v. Freeman,
266 S.E.2d 593, 602-03 (N.C. 1980) (explaining the North
Carolina legal principle “that where there is an express
contract between parties, there can be no implied contract
between them covering the same subject matter dealt with in the
express agreement”).
Accordingly, we affirm the district court’s order denying
Prime Communications’ renewed motion to compel arbitration.
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III
Prime Communications also seeks permission under Federal
Rule of Civil Procedure 23(f) to appeal the district court’s
order certifying Lorenzo’s state wage and hour claims as a class
action under Rule 23. Lorenzo filed a motion to strike Prime
Communications’ petition as untimely filed. We now grant that
motion and dismiss Prime Communications’ petition.
The district court entered its class certification order on
March 24, 2014. Relying on Rule 23(f), Prime Communications
filed a petition for permission to file an interlocutory appeal
from that order on April 10, 2014. Rule 23(f) authorizes review
of interlocutory orders granting or denying class certification
if a court of appeals grants permission. But the Rule provides
that any petition for permission must be “filed with the circuit
clerk within 14 days after the order is entered.” As Lorenzo
noted, Prime Communications filed its petition for permission to
appeal 17 days after the district court entered its order
granting certification, which fails to satisfy Rule 23(f)’s 14-
day deadline.
Although it is unclear whether Rule 23(f)’s deadline is
jurisdictional, see Eberhart v. United States, 546 U.S. 12, 17-
19 (2005) (casting doubt on the notion that the timeliness of
notices of appeal generally is jurisdictional), this court and
others have nonetheless consistently interpreted Rule 23(f)’s
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14-day time limit to be “rigid and inflexible,” Nucor Corp. v.
Brown, 760 F.3d 341, 343 (4th Cir. 2014) (quoting Fleischman v.
Albany Med. Ctr., 639 F.3d 28, 31 (2d Cir. 2011)); see also
Pashby v. Delia, 709 F.3d 307, 318 (4th Cir. 2013) (“[A]n
appellant must file a petition to appeal within fourteen days
after the district court enters its order regarding class
certification” (emphasis added)); Gutierrez v. Johnson &
Johnson, 523 F.3d 187, 192 (3d Cir. 2008) (describing Rule
23(f)’s time limit as “strict and mandatory”); Carpenter v.
Boeing Co., 456 F.3d 1183, 1190 n.1 (10th Cir. 2006) (“Even if
[Rule 23(f)] is not jurisdictional, however, it is
unquestionably ‘mandatory’ if properly raised by the opposing
party”).
Prime Communications argues that its filing was timely
because three days must be added to the Rule 23(f) deadline by
reason of Federal Rule of Civil Procedure 6(d) and Federal Rule
of Appellate Procedure 26(c). Rule 6(d) provides, “When a party
may or must act within a specified time after service . . . , 3
days are added after the period would otherwise expire under
Rule 6(a).” Fed. R. Civ. P. 6(d) (emphasis added). And Rule
26(c) provides similarly, “When a party may or must act within a
specified time after service, 3 days are added after the period
would otherwise expire under Rule 26(a).” Fed. R. App. P. 26(c)
(emphasis added). These Rules extend deadlines following the
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service of documents by an opposing party in specified
circumstances to accommodate time needed to effect service; they
do not apply to filing deadlines following entry of court
orders, as Prime Communications mistakenly contends. Rule 23(f)
provides for a 14-day filing deadline which “runs once the
original order on certification is entered.” Nucor Corp., 760
F.3d at 343 (emphasis added). Because Prime Communications
filed its petition for permission to appeal 17 days after the
district court entered its order, we dismiss the petition as
untimely filed under Rule 23(f). Accord Eastman v. First Data
Corp., 736 F.3d 675, 677 (3d Cir. 2013) (explaining that “[t]he
time to file a Rule 23(f) petition runs from entry of the order,
not service of a document,” and therefore dismissing as untimely
a Rule 23(f) petition filed 3 days after Rule 23(f)’s 14-day
deadline).
IV
In sum, in appeal No. 14-1727, we affirm the district
court’s order denying Prime Communications’ renewed motion to
compel arbitration, and in appeal No. 14-1622, we dismiss as
untimely Prime Communications’ petition for permission to appeal
under Rule 23(f). In view of these rulings, we do not reach
Lorenzo’s claims that Prime Communications waived its right to
arbitrate by continuing its participation in the litigation in
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court and that the arbitration program at issue is substantively
defective. We also do not reach Prime Communications’ claim
that the district court abused its discretion in certifying
Lorenzo’s state claims as a class action.
No. 14-1622 DISMISSED;
No. 14-1727 AFFIRMED
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