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Stevenson v. Great American Dream, Inc.

United States District Court, N.D. Georgia, Atlanta Division

July 15, 2014

MARTISHA STEVENSON, Individually and on behalf of others similarly situated, et al., Plaintiffs,
THE GREAT AMERICAN DREAM, INC. doing business as Pinups, et al., Defendants.


THOMAS W. THRASH, Jr., District Judge.

This is an FLSA overtime case. It is before the Court on the Plaintiff Kwanza Edwards' Motion for Reconsideration [Doc. 109]. For the reasons set forth below, the Plaintiff's Motion for Reconsideration [Doc. 109] is DENIED.

I. Background

The Plaintiffs Martisha Stevenson and Elisha Hunter - former adult entertainers at Pin Ups Nightclub - brought suit alleging that they were entitled to minimum wage and overtime compensation under the FLSA. On December 17, 2012, they moved for conditional certification of a collective action class, [1] which was granted on August 14, 2013.[2] The Plaintiff Kwanza Edwards filed an opt-in form to become part of the collective action class on October 7, 2013.[3] However, on February 24, 2013 - after Stevenson and Hunter had moved for conditional certification, but before Edwards had opted in - Edwards signed an arbitration agreement.[4] The Defendant filed a motion to compel Edwards to arbitrate her claim, which the Court granted on January 16, 2014.[5] On January 22, 2014, Edwards filed her first Motion for Reconsideration, [6] which was denied.[7] Edwards now again moves the Court to reconsider its ruling.

II. Legal Standard

Local Rule 7.2 provides that motions for reconsideration are not to be filed "as a matter of routine practice, " but only when "absolutely necessary."[8] A party may move for reconsideration only when one of the following has occurred: "an intervening change in controlling law, the availability of new evidence, [or] the need to correct clear error or prevent manifest injustice."[9] Further, a party "may not employ a motion for reconsideration as a vehicle to present new arguments or evidence that should have been raised earlier, introduce novel legal theories, or repackage familiar arguments to test whether the Court will change its mind."[10]

III. Discussion

Edwards argues that the Court erred in finding that the arbitration agreement was not unconscionable. Under Georgia law, the "unconscionability doctrine contemplates both procedural unconscionability, which addresses the process of making the contract, and substantive unconscionability, which looks to the contractual terms themselves."[11] In moving the Court to reconsider its ruling, Edwards focuses not so much on the content of the arbitration agreement, or the procedure by which it was executed, but rather on the time at which it was executed. Edwards argues that an otherwise permissible arbitration agreement is unconscionable if it was executed during the pendency of a collective action for which the signatory may potentially have been a participant. This argument fails. Regardless of whether there is a pre-existing collective action, the effect of the arbitration agreement is the same: it prevents the signatory from litigating her FLSA claim in a judicial forum. In her Motion for Reconsideration, the Plaintiff does not deny that - in Caley v. Gulfstream Aerospace Corp.[12] - the Eleventh Circuit stated that a compulsory arbitration agreement issued to an employee is not per se unconscionable.[13] The Plaintiff similarly concedes that - according to Caley - an arbitration agreement is not unconscionable simply because it requires a party to forfeit her right to take part in a collective action.[14] It is thus unclear why, for the unconscionability analysis, it makes any difference when the collective action was initiated.

In response, Edwards argues that the Eleventh Circuit in Billingsley v. Citi Trends, Inc.[15] found that an arbitration agreement executed during the pendency of a collective action was unconscionable.[16] This is incorrect. In Billingsley, the district court had cited two bases for not enforcing an arbitration agreement: (1) the agreement was unconscionable, and (2) the court could set aside the arbitration agreement using its inherent authority to supervise and manage a collective action.[17] In affirming the judgment, the Eleventh Circuit expressly noted that it was only relying on the latter ground.[18] It did not address unconscionability.[19] Edwards then contends that the arbitration agreement "divest[s]" her of the "right to participate in the pending litigation[]."[20] But the same could be said if the arbitration agreement had been signed prior to the filing of this action - it still would have inhibited Edwards from opting-in.[21] Again, this argument does not support Edwards' assertion that the arbitration agreement is unconscionable due to the time at which it was executed.

The Court also rejects Edwards' arguments for why the Court, pursuant to its inherent authority to manage a collective action, ought to disregard the arbitration agreement. The Court has "broad authority to exercise control over the collective action and to govern the conduct of counsel and parties in the collective action."[22] This includes the "authority to prevent confusion and unfairness concerning an FLSA collective action."[23] This authority is necessary here because " ex parte communication with putative FLSA collective members about the case has an inherent risk of prejudice and opportunities for impropriety."[24] Here, as Edwards herself acknowledges, the Defendant did not communicate with her about this case.[25] The Defendant simply did what it was allowed to do: it "require[d] [its] employee[s] to arbitrate, rather than litigate, rights under various federal statutes."[26] Although this may incidentally affect the litigation by reducing the total number of participants, that alone does not compel the Court to disregard an otherwise valid arbitration agreement.

In response, Edwards cites to multiple out-of-Circuit decisions, none of which stand for the proposition that an arbitration agreement executed during a collective action suit is presumptively an impermissible intrusion upon a court's managerial authority. For example, in Williams v. Securitas Sec. Services USA, Inc.[27] the Eastern District of Pennsylvania invalidated an arbitration agreement because it "did not require an employee to sign the document before it [became] effective, " and because "the agreement [was] written in single-spaced, small type and crafted so as not to be easily understood by lay persons."[28] Similarly, in Piekarski v. Amedisys Illinois, LLC, [29] the Northern District of Illinois invalidated an arbitration agreement because "it [was] likely that... [the] employees did not understand they would be bound by [the] agreement... unless they affirmatively opted-out."[30] Edwards does not allege that similar circumstances are present here.

Edwards then argues that the Defendant ought to have informed her of the current litigation.[31] But it is unclear how the Defendant's failure to discuss this case with Edwards interfered with the Court's managerial authority. To the extent that this is another argument for why the arbitration agreement is unconscionable, the Court is still unpersuaded. Even if Edwards was unaware of this litigation when she signed the arbitration agreement, she does not deny that the text of the arbitration agreement made it clear to her that she could not participate in an FLSA collective action suit, pre-existing or not.

Finally, Edwards argues that the Court ought to hold an evidentiary hearing. In some circumstances, "evidentiary hearings are necessary."[32] They may be required, for example, when there is a genuine dispute over material facts.[33] Here, the Defendant correctly points out that there is little dispute regarding the pertinent facts.[34] Indeed, other than referencing the time at which the arbitration agreement was signed, and the inherent bargaining power asymmetry found in any employer-employee relationship, Edwards points to nothing else that she believes was suspect about the manner in which the agreement was executed. Thus, the Court denies Edwards' request for an evidentiary hearing. This is not an exceptional ...

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