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Gordon v. TBC Retail Group, Inc.

United States District Court, D. South Carolina, Charleston Division

August 11, 2016

ANDREW GORDON, TAVIS MCNEIL, DONALD WRIGHTON, NICHOLAS COLE JACOB GRISSON, AND DAWN DEWEY, on behalf of themselves and others similarly situated, Plaintiffs,



         The following matters are before the court on defendant TBC Retail Group, Inc.’s (“defendant”) motion to compel arbitration for plaintiff Nicholas Cole (“Cole”), ECF No. 33[1]; defendant’s motion to compel arbitration for all opt-in plaintiffs who signed the mutual arbitration agreement, ECF No. 81; defendant’s motion for summary judgment, ECF No. 88; and plaintiffs’ motion for joinder of additional parties, ECF No. 92. For the reasons set forth below, the court denies defendant’s motion to compel arbitration for Cole, grants in part and denies in part defendant’s motion to compel arbitration for all opt-in plaintiffs who signed the mutual arbitration agreement, grants in part and denies in part defendant’s motion for summary judgment, and grants in part and denies in part plaintiffs’ motion for joinder of additional parties.

         I. BACKGROUND[2]

         On August 20, 2014, Cole joined plaintiffs Andrew Gordon, Tavis McNeil, Donald Wrighton, Jacob Grissom, and Dawn Dewey (together with Cole, “plaintiffs”) in filing the instant action on behalf of themselves and “all other similarly situated employees.” Compl. at ¶ 2. Plaintiffs allege that defendant violated the minimum wage and overtime provisions of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”), by utilizing a compensation plan that did not provide plaintiffs one and one-half times their regular rate of pay when they worked more than forty hours in a workweek. Id. at ¶ 23.

         Cole was employed by defendant as a mechanic at the Tire Kingdom located at 7201-900 Two Notch Road in Columbia, South Carolina, from approximately May 2013 until April 2014. Id. ¶ 1. Between February 2013 and October 2013, defendant drafted and developed a Mutual Agreement to Arbitrate Claims and Waiver of Class/Collective Actions (the “Agreement”). ECF No. 32-2, Filoon Dec. ¶¶ 2-8; ECF No. 81-2, Third Filoon Dec. ¶¶ 2-4. Defendant finalized the Agreement in October 2013, and began requiring all new hires to sign the Agreement as of October or November 2013. Filoon Dec. ¶¶ 3, 4. Between October 2013 and March 2014, defendant made the Agreement available for “electronic signature” through the employee portal-a password protected, computer-based document system.[3] Id. ¶ 5; see also ECF No. 39-1, Second Filoon Dec. ¶ 9 (describing access and navigation of the employee portal). In March 2014, defendant circulated a company-wide communication notifying its employees that the Agreement and a related memorandum (the “Memorandum”) were available via the employee portal. Filoon Dec. ¶¶ 7, 8; ECF No. 33-4, Memorandum 2.

         The Memorandum explained that the portal now allowed employees to “review and acknowledge [defendant’s] policies, processes, and documents, ” and that this feature was being implemented with two important documents, one being the Agreement. Id. The Memorandum further explained that the Agreement was “a contract” intended “to allow any [employee] to bring any legal claim(s) against [defendant] in a quicker, less formal, and typically less expensive forum than the traditional filing of a lawsuit in court.” Id. All employees hired before October 15, 2013, were “required to acknowledge” the Agreement no later than Friday March 21, 2014. Id.

         The Agreement provides that, except in certain circumstances not applicable here,

[A]ny and all disputes, claims, complaints or controversies (“Claims”) between you and TBC Corporation and/or any of its parents, subsidiaries, affiliates, agents, officers, directors, employees and/or any of its benefit plans, benefit plan fiduciaries, sponsors or administrators (collectively and individually the “Company”), that in any way arise out of or relate to your employment, the terms and conditions of your employment, your application for employment and/or the termination of your employment will be resolved by binding arbitration and NOT by a court or jury. As such, the Company and you agree to forever waive and relinquish their right to bring claims against the other in a court of law.

         ECF No. 33-3, Arbitration Agreement. The final page of the Agreement informs the reader as follows:


Id. Directly below this language, the Agreement contains signature blocks for both the “Applicant/Employee” and the “Company.” Id.

         However, employees were not asked to “sign” or “execute” these signature blocks; instead, employees would “acknowledge” the Agreement by entering their employee number and the last four digits of their social security number into a field located on a separate portion of the Agreement’s signature page. See Second Filoon Dec. Ex. A, 13-14. This field appeared below a prompt which stated: “I,, hereby certify and affirm that I have read the Mutual Agreement to Arbitrate. Please enter your Employee Number and last four digits of your Social Security Number as your electronic signature.” Id. Defendant has produced records indicating that numerous opt-in plaintiffs, [4] as well as Cole, electronically “acknowledged” the Agreement in this manner. See Third Filoon Dec. ¶ 12; ECF Nos. 33-2, 33-3, Attachments to Third Filoon Dec. (collecting signature pages, confirmation screen shots, and summary charts of employees who filled out acknowledgment field); ECF No. 33-5 (confirmation screenshot of Cole’s acknowledgment, dated March 24, 2014). Cole, for his part, claims that he “does not recall” ever doing so. Cole Dec. ¶ 3.

         Only then-current employees accessed the Agreement through the employee portal. The process was significantly different for new hires and rehires. These employees “signed” the Agreement through an “electronic onboarding process” known as the “Kronos System.” Fifth Filoon Dec. ¶ 3. This system required newly hired or rehired employees to log in using their name and portions of their social security number. Id. The employees then agreed to a block of text labeled “e-Signature Acceptance, ” which stated that the employee agreed to “use the electronic click as [his or her] ‘written’ signature.” Id. Attach. 22. The employee was then required to view a series of documents, including the Agreement, and “sign” each document by “clicking” an icon labeled “Sign.” Id. After the employee provided this electronic signature, a message appeared saying that the document was now “signed, ” and giving the date and time of the signature. Id. ¶ 4. Employees could not complete the hiring process without “signing” each document.[5] Id.

         On September 30, 2015, the court granted plaintiffs’ motion for conditional class certification. ECF No. 40. As part of that order, the court ordered defendant to provide the names, address, and telephone numbers of all potential opt-in plaintiffs, and authorized plaintiffs to mail a court-approved notice to all potential opt-in plaintiffs. Id. at 23. The court specifically required plaintiffs to amend the proposed notice to provide putative class members “sixty (60) days from the date of the notice” to file a consent to join the action (a “consent form”). Id. at 22. On November 12, 2015, plaintiffs filed their Notice of Mailing, indicating the approved notice was mailed to 2, 733 putative plaintiffs. ECF No. 42. This gave plaintiffs until January 11, 2016 to file any putative class members’ consent forms.

         During this opt-in period, plaintiffs filed around 570 consent forms. ECF Nos. 43-73. Notably, only one named plaintiff, Tavis McNeil (“McNeil”), filed a formal consent form. ECF No. 65. Following the conclusion of the scheduled opt-in period, plaintiffs filed 34 additional consent forms. ECF Nos. 73-79. Over the course of the opt-in process, plaintiffs also filed a number of consent forms presenting a variety of unique issues. Specifically, defendant has identified five opt-in plaintiffs who were mistakenly included on the opt-in list, four opt-in plaintiffs defendant has not been able to identify, three John Doe opt-in plaintiffs, and two consent forms that appear to have been filed by a single opt-in plaintiff. Defendant has also identified those opt-in plaintiffs whose consents were filed either two or three years after their final paycheck for work as a Tire Kingdom mechanic under the “turned hour” compensation plan. Fourth Filoon Dec. ¶ 4.

         Defendant filed a motion to compel arbitration against Cole on August 3, 2015, well before the opt-in period began. Plaintiffs filed a response to this motion on August 26, 2015, and defendant filed its reply in support on September 8, 2015. On March 7, 2016, defendant filed a second motion to compel arbitration against all opt-in plaintiffs who signed the Agreement and asked the court to stay a scheduled hearing on its first motion to compel arbitration, until both matters could be heard together. Defendant then filed a motion for summary judgment on April 22, 2016. Plaintiffs responded to the second motion to compel arbitration on April 29, 2016. Plaintiffs then filed a motion for the joinder of additional parties on May 6, 2016. On May 9, 2016, defendant filed its reply in support of its second motion to compel arbitration, and on May 20, 2016, defendant filed a response to plaintiffs’ motion for joinder of parties. On May 23, 2016, plaintiffs filed a response in opposition to defendant’s motion for summary judgment, and on May 31, 2016, plaintiffs filed a reply in support of their motion for joinder. Finally, on June 3, 2016, defendant filed a reply in support of its motion for summary judgment. The court held a hearing on June 24, 2016, and the motions are now ripe for the court’s review.

         II. STANDARDS

         A. Motion to Compel Arbitration

         Defendant moves to compel arbitration under Section 4 of the Federal Arbitration Act (“FAA”), which provides in part that a “party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in such agreement.” 9 U.S.C. § 4. Section 2 of the FAA states that a written arbitration agreement “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. “[Q]uestions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration . . .[and] any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 23-24 (1983). Although federal law governs the arbitrability of disputes, ordinary state-law principles resolve issues regarding the formation of contracts. Am. Gen. Life & Accident Ins. Co. v. Wood, 429 F.3d 83, 87 (4th Cir. 2005).

         “Motions to compel arbitration in which the parties dispute the validity of the arbitration agreement are treated as motions for summary judgment.” Rose v. New Day Fin., LLC, 816 F.Supp.2d 245, 251 (D. Md. 2011). “Accordingly, arbitration should be compelled where ‘the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’” Erichsen v. RBC Capital Markets, LLC, 883 F.Supp.2d 562, 566-67 (E.D. N.C. 2012) (quoting Fed.R.Civ.P. 56). A trial is necessary if the material facts regarding the making of an agreement to arbitrate are in dispute. Avedon Engineering, Inc. v. Seatex, 126 F.3d 1279, 1283 (10th Cir. 1997).

         B. Motion for Summary Judgment

         Summary judgment shall be granted “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). “By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Id. at 248. “[S]ummary judgment will not lie if the dispute about a material fact is ‘genuine, ’ that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         “[A]t the summary judgment stage the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Id. at 249. When the party moving for summary judgment does not bear the ultimate burden of persuasion at trial, it may discharge its burden by demonstrating to the court that there is an absence of evidence to support the non-moving party’s case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The non-movant must then “make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Id. at 322. The court should view the evidence in the light most favorable to the non-moving party and draw all inferences in its favor. Anderson, 477 U.S. at 255.

         C. Motion for Joinder of Additional Parties

         Under the FLSA, plaintiffs may institute a collective action against their employer on behalf of themselves and other similarly situated employees. Section 216(b) of the FLSA states,

An action . . . may be maintained against any employer . . . in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.

29 U.S.C. § 216(b). The mechanism outlined in § 216(b) is designed to facilitate the efficient adjudication of similar claims by “similarly situated” employees by permitting the consolidation of individual claims and the pooling of resources in prosecuting such actions against their employers. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170 (1989); LaFleur v. Dollar Tree Stores, Inc., 2014 WL 934379, at *2 (E.D. Va. Mar. 7, 2014); Lynch v. United Servs. Auto. Ass’n, 491 F.Supp.2d 357, 367 (S.D.N.Y. 2007). While § 256(b) outlines the procedures for putative plaintiffs to join a collective action, it does not specify when the putative plaintiffs must opt-in to the action. Regan v. City of Charleston, S.C., No. 2:13-cv-3046, 2015 WL 1299967, at *2 (D.S.C. Mar. 23, 2015). Rather, opt-in deadlines are set by the district court. Id. The FLSA also does not explicitly set forth or otherwise indicate the standard under which a trial court should consider whether putative plaintiffs may join a collective action beyond the specified deadline. Ruggles v. Wellpoint, Inc., 687 F.Supp.2d 30, 37 (N.D.N.Y. 2009). However, courts within this district have weighed the following factors: “(1) whether ‘good cause’ exists for the late submissions; (2) prejudice to the defendant; (3) how long after the deadline passed the consent forms were filed; (4) judicial economy; and (5) the remedial purposes of the FLSA.” Regan, 2015 WL 1299967, at *2 (citing Ruggles, 687 F.Supp.2d at 37).


         The motions addressed in this order each relate, in one way or another, to the requirements for class membership. Despite this general theme, the motions deal with a variety of legal issues and different sets of facts. Defendant’s motions to compel can be analyzed together, as they rely on the same Agreement. Defendant’s motion for summary judgment asks the court to settle four distinct questions: (1) whether the named plaintiffs were required to file consent forms to join this action; (2) whether any plaintiffs who failed to file consent forms within the 60 day opt-in period may be included in this action; (3) whether a two- or three-year statute of limitations applies to plaintiffs’ claims; and (4) whether the various opt-in plaintiffs who were inadvertently included on the putative plaintiff list, or cannot be identified, may be included in this action. Plaintiffs’ motion for joinder of additional parties overlaps with the second issue presented by defendant’s motion for summary judgment. The court first addresses defendant’s motions to compel arbitration and then analyzes each issue presented by the motion for summary judgment in turn. To the extent defendant’s motion for summary judgment overlaps with plaintiff’s motion for joinder of additional parties, the issues will be analyzed together.

         A. Motions to Compel Arbitration

         Defendant argues that Cole and all opt-in plaintiffs who signed the Agreement (the “arbitration plaintiffs”) must be compelled to arbitrate such claims based on the terms of the Agreement. ECF No. 91-1 at 8-13. Plaintiffs contend that the arbitration plaintiffs never actually entered into the Agreement and, therefore, are not bound by its terms.[6] ECF No. 36 at 3-4; ECF No. 89 at 7-12.

         Defendant, as the party seeking to enforce the Agreement, bears the initial burden of “persuading this court that the parties entered into an enforceable arbitration agreement.” Drake v. Mallard Creek Polymers, Inc., 2014 WL 7405762, at *1 (W.D. N.C. Dec. 30, 2014). If defendant makes such a showing, then “the burden shifts to the plaintiff[s] to show that even though there was some written contract, [they] did not actually agree to it-because the[ir] signature was forged, the terms of the contract were misrepresented, or some other reason evincing lack of true agreement.” Czopek v. TBC Retail Grp., Inc., 2014 WL 5782794, at *4 (M.D. Fla. Nov. 6, 2014); see also U.S. ex rel. TBI Investments, Inc. v. BrooAlexa, LLC, 119 F.Supp.3d 512 (S.D. W.Va. 2015) (applying summary judgment standard to motion to compel arbitration and stating that “[o]nce the moving party has met its burden, the burden shifts to the nonmoving party to demonstrate that a genuine issue of material fact exists for trial.”). “When deciding whether the parties agreed to arbitrate a certain matter[, ] courts [] should apply ordinary state-law principles that govern the formation of contracts.” First Options, 514 U.S. at 944.

         Here, there is no question that the language of the Agreement would obligate the arbitration plaintiffs to submit their claims to arbitration. See Agreement 2 (“[A]ny and all disputes, claims, complaints or controversies [] between you and [defendant] . . . that in any way arise out of or relate to your employment . . . will be resolved by binding arbitration NOT by a court or jury.”). The true question is whether the arbitration plaintiffs actually entered into the Agreement. Defendant has produced printouts relating to each arbitration plaintiff, showing either (1) a screenshot of a confirmation page indicating the plaintiff “acknowledged” the Agreement via the employee portal, or (2) a typed name in the Agreement’s signature block indicating the plaintiff “signed” the Agreement via the Kronos System. Compare Third Filoon Dec. Attachment 103 (confirmation screenshot of opt-in plaintiff Hector Miranda); with Third Filoon Dec. Attachment 104 (electronic signature page of opt-in plaintiff Steven Lizarraga).

         1. Prima Facie Showing

         Plaintiffs first argue that this evidence is insufficient to meet defendant’s initial burden because defendant has failed to authenticate these purported “signatures” and “acknowledgments.” ECF No. 89 at 8. In response, defendant highlights evidence that the employee portal was password secured, and the Agreement’s electronic “acknowledgment” required employees to enter their employee number and a portion of their social security number. Second Filoon Dec. ¶ 9, Ex. A.

         “To establish that evidence is authentic, a proponent need only present ‘evidence sufficient to support a finding that the matter in question is what the proponent claims.’” United States v. Vidacak, 553 F.3d 344, 349 (4th Cir. 2009) (quoting Fed.R.Evid. 901(a)). “[T]he burden to authenticate under Rule 901 is not high-only a prima facie showing is required, ” and a “district court’s role is to serve as gatekeeper in assessing whether the proponent has offered a satisfactory foundation from which the jury could reasonably find that the evidence is authentic.” Id. “A signature demonstrates that the signer intends to authenticate a document as her own act through the use of a mark.” Hamdi Halal Mkt. LLC v. United States, 947 F.Supp.2d 159, 164 (D. Mass. 2013). The arbitration plaintiffs all worked in states that have adopted the Uniform Electronic Transactions Act (“UETA”). See Florida Statues § 668.001, et seq.; O.C.G.A. § 10-12-1, et seq. (Georgia); LA Rev. Stat. § 9:2601, et seq. (Louisiana); MS Code § 75-12-1, et seq. (2015) (Mississippi); N.C. Gen. Stat. § 66-311, et seq.; S.C. Code Ann. § 26-6-10, et seq.; 9 VSA § 270, et seq. (Vermont). South Carolina’s version of the UETA provides the following:

An electronic record or electronic signature is attributable to a person if it is the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of a security procedure applied to determine the person to which the electronic record or electronic signature was attributable.

S.C. Code Ann. § 26-6-90.

         Some courts “have found the declaration of the human resource employees sufficient to authenticate electronic signatures.” Tagliabue v. J.C. Penney Corp., Inc., 2015 WL 8780577, at *2 (E.D. Cal. Dec. 15, 2015) (collecting cases). Other courts have focused on the factual circumstances surrounding the purported signature. See Jones v. U-Haul Co. of Mass. & Ohio Inc., 16 F.Supp.3d 922, 934 (S.D. Ohio 2014) (assessing security measures used to protect defendants’ online system and finding employee’s claim that her signature was not authentic failed to create a genuine issue of material fact); Kerr v. Dillard Store Servs., Inc., 2009 WL 385863, at *5 (D. Kan. Feb. 17, 2009) (“While the record establishes that Champlin and plaintiff were at the kiosk on ...

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