United States District Court, D. South Carolina, Charleston Division
Trina Creech, individually and on behalf of similarly situated persons, Plaintiff,
JEM Pizza Group, LLC, JEM Restaurant Group of Florida, Inc., and Does 1-25, Defendants.
PATRICK MICHAEL DUFFY, UNITED STATES DISTRICT JUDGE
matter is before the Court on Defendants' motion to
dismiss (ECF No. 9); Defendants' motion to stay, to
compel arbitration, and to strike Plaintiff's collective
action allegations and jury trial demand (ECF No. 10); and
Plaintiff's motion to dismiss (ECF No. 16). For the
reasons set forth herein, Defendants' motion to dismiss
is denied, while Defendants' motion to stay, to compel
arbitration, and to strike Plaintiff's collective action
allegations and jury trial demand is granted in part and
mooted in part. Finally, Plaintiff's motion to dismiss is
action arises out of Trina Creech's employment with
Defendant JEM Pizza Group, LLC (“JEM Pizza
Group”). Creech is a former pizza delivery driver
who worked for several different Pizza Hut franchises. Her
lawsuit involves Pizza Hut's driver-reimbursement
program. Pizza Hut pays its delivery drivers minimum wage,
along with a per-delivery reimbursement designed to cover
additional costs to the drivers. That reimbursement allegedly
fails to fully compensate drivers for the vehicle costs they
incur, including gas, repairs, insurance, and depreciation.
As a result of those costs, Creech alleges that her effective
wage, and the wages of other similarly-situated delivery
drivers, fell below minimum wage.
seeks to bring a collective action on behalf of herself and
others similarly situated seeking relief for Defendants'
alleged violations of the FLSA. The crux of the dispute in
the instant motions is whether Creech must pursue her claim
in arbitration and, if so, whether other drivers may
arbitrate with her as a collective. Defendants filed their
two motions on October 4, 2016, to which Plaintiff responded
on October 18. Defendants filed a reply as to Defendants'
motion to compel arbitration on October 28, to which
Plaintiff filed a sur reply on November 9. Plaintiff filed
her motion to dismiss on October 25, and Defendants responded
on November 11. Finally, the Court held a hearing on these
motions on December 19. Accordingly, these matters are now
ripe for consideration.
Motions (ECF Nos. 10 & 16)
litigant moves to compel arbitration under the Federal
Arbitration Act (“FAA”), 9 U.S.C. §§ 1
et seq., the district court determines whether a
matter should be resolved through arbitration depending on
(1) whether a valid arbitration agreements exists and, if so,
(2) whether the dispute falls within the scope of the
arbitration agreement. AT&T Tech., Inc. v.
Commc'ns Workers of Am., 475 U.S. 643, 651 (1986);
see Hooters of Am. v. Phillips, 173 F.3d 933, 938
(4th Cir. 1999). The Supreme Court has consistently
encouraged a “healthy regard for the federal policy
favoring arbitration.” Levin v. Alms &
Assocs., 634 F.3d 260, 266 (4th Cir. 2011) (internal
quotation marks and citation omitted). “The heavy
presumption of arbitrability requires that when the scope of
the arbitration clause is open to question, a court must
decide the question in favor of arbitration.”
Id. (citation omitted).
worked at various Pizza Hut locations from 2006 to October
2013, from September 2015 to December 2015, and in June 2016.
On each of those occasions, she allegedly signed an
arbitration agreement as part of her employment application.
During the first time period, she physically signed a paper
arbitration agreement. Creech does not dispute that she
signed that agreement, which does not contain a
collective-action restriction. For the 2015 employment
period, Pizza Hut alleges Creech filled out an online
employment application that did include an arbitration
provision. Pizza Hut contends Creech electronically signed
and acknowledged that she had read and agreed to the
arbitration provision in the online application. Finally,
Pizza Hut similarly alleges Creech electronically signed a
third arbitration agreement in connection with her June 2016
employment application. These latter two arbitration
agreements contain collective-action restrictions. Before
deciding which agreement applies, the Court will first
determine whether Pizza Hut has waived its right to arbitrate
filing suit in this Court, Creech initially filed a demand to
arbitrate and a statement of claim with the American
Arbitration Association (“AAA”). Creech states
that she filed her demand using a standard form application
that Pizza Hut franchisees have used for several years. The
form Creech filed, which is undated, contains no prohibition
of class or collective action arbitration, and it states that
“Pizza Hut will pay the arbitrator's fees, and
Pizza Hut will pay that portion of the arbitration filing fee
in excess of the similar court filing fee had I gone to
court.” (Pl.'s Mem. Opp'n Defs.' Mot., Ex.
5, Arbitration Agreement, ECF No. 13-5, at 2.) In connection
with her demand to arbitrate, Creech served JEM Pizza Group
with her arbitration demand and statement of claim.
Creech filed her demand and paid the AAA's application
fee, the AAA sent a letter on May 19, 2016, requesting the
balance of the $3, 250.00 filing fee. According to Creech,
the letter was sent to JEM Pizza Group. Creech also contends
that Pizza Hut was responsible for paying the balance of the
filing fee based on the quoted language above. The $3, 250.00
filing fee was never paid and, on July 14, the AAA informed
Creech that it was returning her application fee because the
filing fee had not been paid. Finally, on August 5, the AAA
administratively closed the arbitration case for failure to
pay the filing fee.
Pizza Group received Creech's demand for arbitration and
statement of claim, sent by Creech's counsel, at its
corporate address in May 2016. However, neither JEM Pizza
Group nor JEM Restaurant Group of Florida, Inc. (“JEM
Florida”) received the AAA's letter requesting the
balance of the $3, 250.00 filing fee. The AAA's letter is
addressed to one of Creech's attorneys and to JEM Pizza
Group. The letter provides a case number and states that the
action is against both JEM Pizza Group and JEM Florida. While
the address information for Creech's counsel is correct,
the address for JEM Pizza Group is incorrect, as it lists the
address for a ...