United States District Court, D. Colorado
RACHEL BRAYMAN, on behalf of herself and all similarly situated persons, Plaintiff,
v.
KEYPOINT GOVERNMENT SOLUTIONS, INC., a Delaware corporation, Defendant.
ORDER RESOLVING PENDING MOTIONS
William J. Martinez United States District Judge.
Plaintiff
Rachel Brayman (“Brayman”) brings this action
against Defendant KeyPoint Government Solutions, Inc.,
(“KeyPoint”) for alleged violations of the Fair
Labor Standards Act (“FLSA”), 29 U.S.C.
§§ 201 et seq. (ECF No. 1.) Brayman's
FLSA claim concerns KeyPoint's alleged failure to
properly compensate a certain class of employees known as
“Investigators” for overtime hours worked, and an
alleged policy of unlawfully prohibiting overtime in certain
circumstances. (Id. ¶¶ 20-25.) Although
the Court has yet to authorize notice to KeyPoint employees
who might join Brayman in a collective action, roughly fifty
of them have opted in to this lawsuit through notices of
consent to join filed by Brayman's counsel.
Currently
before the Court is KeyPoint's Motion for
Reconsideration, or in the Alternative, Certification of an
Interlocutory Appeal (“Motion to Reconsider”).
(ECF No. 73.) KeyPoint asks the Court to reconsider certain
portions of its prior order granting conditional
certification of this lawsuit as a collective action.
(See ECF No. 69.)
Also
before the Court is Brayman's Motion for Equitable
Tolling. (ECF No. 72.) Brayman requests that the Court toll
the FLSA statute of limitations from the time she moved for
conditional certification.
Finally,
before the Court are eight motions to compel arbitration
filed by KeyPoint against twenty-seven opt-in plaintiffs who
are subject to arbitration agreements (collectively,
“Motions to Compel”). (ECF Nos. 84, 93, 106, 110,
124, 128, 129, 130.)
For the
reasons explained below, the Court grants the Motion to
Reconsider as to the question of whether collective action
notice should be transmitted to potential collective action
members subject to an arbitration agreement. In addition, the
Court strikes the notices of consent to join filed by current
opt-in plaintiffs subject to arbitration agreements, and in
turn denies the various Motions to Compel as moot. Finally,
the Court grants the Motion for Equitable Tolling.
I.
BACKGROUND
A.
The Arbitration Agreement
Brayman
filed this lawsuit on March 8, 2018. (ECF No. 1.) On March
16, 2018, KeyPoint's counsel e-mailed a letter to
Brayman's counsel announcing that one of the opt-in
plaintiffs (Tschiffely) had signed an arbitration agreement.
(ECF No. 29-21 at 2.)[1]KeyPoint's counsel asked Brayman's
counsel to “[p]lease let us know if Mr. Tschiffely will
voluntarily withdraw his consent to join. Please be advised
that if you will not agree to do so, we will proceed with a
motion to compel arbitration and will seek our fees in doing
so.” (Id. at 3.)
The
arbitration agreement in question “applies, without
limitation, ” to essentially any conceivable dispute
between the employee and KeyPoint, specifically including
disputes about “compensation, classification, minimum
wage, . . . overtime, [and] breaks and rest periods.”
(ECF No. 84-2 § 1.) For good measure, it also
specifically embraces “claims arising under the Fair
Labor Standards Act.” (Id.)
“Additionally, ” the agreement continues,
“the Arbitrator, and not any federal, state, or local
court or agency, shall have the exclusive authority to
resolve any dispute relating to the interpretation,
applicability, enforceability, or formation of this
Agreement. However, the preceding sentence shall not apply to
the ‘Class Action Waiver' described below.”
(Id.)
The
Class Action Waiver reads,
Both KeyPoint and you agree to bring any dispute in
arbitration on an individual basis only, and not on a class,
collective, or private attorney general representative basis;
there will be no right or authority for any dispute to be
brought, heard or arbitrated as a class, collective,
representative or private attorney general action, or as a
member in any purported class, collective, representative or
private attorney general proceeding. . . . Disputes regarding
the validity or enforceability of the Class Action Waiver may
be resolved only by a civil court of competent jurisdiction
and not by an arbitrator.
(Id. § 5.)
Concerning
the monetary aspects of arbitration, the agreement states,
Each party will pay the fees for his, her or its own
attorneys, subject to any remedies to which that party may
later be entitled under applicable law. However, in all cases
where required by law, KeyPoint will pay the Arbitrator's
and arbitration fees. If under applicable law KeyPoint is not
required to pay all of the Arbitrator's and/or
arbitration fees, such fee(s) will be apportioned between the
parties in accordance with said applicable law, and any
disputes in that regard will be resolved by the Arbitrator.
(Id. § 6.)
Finally,
the agreement contains a severability clause: “[I]n the
event that any portion of this Agreement is deemed
unenforceable, only the unenforceable language will be
severed from this Agreement and the remainder of this
Agreement will be enforceable.” (Id. §
9.)
B.
Representations About Arbitrating Opt-In Plaintiffs'
Claims
On
March 22 and 23, 2018, KeyPoint's counsel followed up in
the same e-mail thread in which she had sent the March 16
letter regarding Tschiffely's arbitration agreement. (ECF
No. 29-20.) KeyPoint's counsel attached materially
identical arbitration agreements for opt-in plaintiffs
Betton, George, Jones-Rose, and Perry. (ECF No. 29-20 at 1-2;
ECF Nos. 84-3 through 84-6.)
On
April 2, 2018, KeyPoint's counsel-having apparently heard
nothing from Brayman's counsel-continued the e-mail
thread: “I would appreciate receiving an update on the
issue regarding the opt-ins who are subject to the dispute
resolution agreement. Please advise.” (Id. at
1.) The following day, Brayman's counsel replied,
“No need to file a motion to compel arbitration. We
will pursue these claims in arbitration. What do you know
about the recent opt-ins? Do you have a proposal that you
want me to consider for sending them to arbitration?”
(Id.)
C.
Conditional Certification Proceedings
1.
Brayman's Conditional Certification Motion
Brayman
moved for conditional certification on April 6, 2018
(“Certification Motion”). (ECF No. 22.) As part
of that motion, Brayman predicted that KeyPoint “will
likely argue that the scope of any notice should be limited
to those Investigators who did not sign an arbitration
agreement.” (Id. at 13.) Brayman asserted that
“such an argument should be rejected” because
“[t]hose who did sign arbitration agreements should
still be notified about the existence of this lawsuit and be
provided with the opportunity to protect their claims from
expiring. This is true even if it is later determined that
certain collective members must arbitrate their
claims.” (Id.) Later in the same brief,
however, Brayman offered assertions suggesting that there
would be no “later determin[ation]” about
arbitrability because it was a given as to those who had
signed arbitration agreements:
After Investigators are timely notified of the lawsuit and
individuals make a claim, the parties can sort out whether
[those] who actually join the case have arbitration
agreements, as they have cooperatively done thus far. To
explain, shortly after Plaintiff filed her Complaint,
Defendant's counsel informed Plaintiff's counsel that
while Named Plaintiff Rachel Brayman had not signed an
arbitration agreement, several other current Opt-in
Plaintiffs had. Plaintiff's counsel subsequently made
clear that for those Opt-in Plaintiffs with signed
arbitration agreements, they would voluntarily arbitrate
their claims without the need for Defendant to file a motion
to compel arbitration. In short, all Investigators are
entitled to notice of their potential overtime claims
regardless of the forum in which they may ultimately be
required to assert them.
(Id. at 15 (citation omitted).)
2.
Negotiations Over a Stipulation Regarding
Arbitration
On
April 12, 2018-after the filing of the Certification Motion
but before KeyPoint's deadline to respond-KeyPoint's
counsel submitted a draft stipulation regarding arbitration
to Brayman's counsel. According to Brayman's counsel
(in a declaration submitted in opposition to the Motion to
Reconsider), “The parties' negotiations on that
stipulation ultimately broke down after multiple rounds of
red-lined edits because the parties could not agree on the
terms of the stipulation. As part of the parties'
negotiations on the proposed stipulation, Plaintiff
specifically sought to preserve her right to make any
enforceability arguments.” (ECF No. 79-1 ¶ 5.)
According to KeyPoint's counsel (in a declaration
submitted with KeyPoint's reply in support of the Motion
to Reconsider), “In reviewing the correspondence
exchanged between counsel, I see no statements reflecting an
intention or indication by Plaintiff that she believed the
agreements were not enforceable in the first place, or that
she intended to subsequently challenge the enforceability of
the arbitration agreement before this Court.” (ECF No.
80-1 ¶ 6.)
The
parties redlined drafts are in the record, along with the
cover e-mails transmitting them. (ECF Nos. 89-3, 89-4.) These
documents show that the parties' major disagreements
centered around Brayman's proposal that KeyPoint
stipulate to pay for the arbitrator's fees and costs and
Brayman's proposal that this action be stayed, rather
than dismissed, as to the opt-in plaintiffs subject to an
arbitration agreement. (See id.)
3.
KeyPoint's Response Brief
In its
response to the Certification Motion, KeyPoint estimated that
about 2, 600 of the potential collective members, out of a
total of about 4, 200, are subject to “identical”
arbitration agreements. (ECF No. 29 at 6.) KeyPoint further
stated, “Counsel for Plaintiff has agreed that
[potential collective action members] who have executed
arbitration agreements will submit those claims individually
to individual arbitration, and the parties are in the process
of discussing a stipulation regarding the same.”
(Id.)
KeyPoint
went on to argue that providing notice even to those who
cannot join an FLSA collective action, simply because they
might have an FLSA claim through an arbitral forum, is an
improper use of the notice process. (Id. at 12-13.)
KeyPoint asserted that “there is no dispute here as to
the enforceability of the arbitration agreements, ”
referring to Brayman's counsel's April 2, 2018 e-mail
quoted above. (Id. at 13.) “Thus[, ] issuing
notice to individuals with arbitration ...