benefits of employment but do not want the consequences of that employment and what i'd like to do initially is give a little bit of background here as to the relationship between cellular sales in these two plaintiffs in connection with their employment relationship and a prior independent contractor relationship and i think that's important because i don't believe that i did a very good job doing that before the district court because i think the district court you know in order that  maybe indicated that there was some misunderstanding as to the prior relationship so if i could sell yourself as a company that has a contract with the rising to sell the horizon wireless service and various states throughout the country including south carolina prior to january first two thousand and twelve cellular sales did not have employees as sales representatives to sell this service although the pla claims that necessarily require that they are employees or to prevail in those claims they will have to demonstrate that in fact they were employees which gets us to the compensation agreement that each of these individuals signed when they became employees of the company they signed the agreement on january first two thousand and twelve cellular sales made a cloverleaf change to the way it was conducting its business in january of two thousand and twelve and as part of that decided to actually hire sales representatives as opposed to contracting with sales companies now there's no dispute at least from my client's perspective that prior to january first two thousand and twelve these individuals were not employees of the company they had their say you say there's no dispute contracted with cellular sites and that's the that's the dispute exactly dogs so if i could turn then to that the compensation agreement here in the arbitration clause that it is at issue is i think it's important to look at the language of that contract because of the district court ruling because the contract itself does not limit the armature bill claims to those claims arising from the compensation agreement in fact it's very clear that it says it's claims that claims disputes or controversies that arise out of the document the document being the compensation agreement that they signed in january of two thousand and twelve or the employee's employment with the company so that or there necessarily means that there is something else  got there was no preexisting employment relationship with them and your company their relationship was with their best sales come right absolutely you're ok i saw what you want to do if you want to make an arbitration clause not why i think that in this particular case it's appropriate i think it's appropriate because if we assume for a moment that these individuals were employees prior to january first two thousand and twelve which is what the plaintiffs will ultimately have to prove to the court i'm sorry to interrupt but why would we assume that because we don't have to assume anything in order in order for the plaintiffs to prevail in this case there would have to be a finding that they were employees there will have to be a finding exactly but we don't have to assume anything we don't make findings up here that's a role of the trial judge but not for purposes of whether or not the courtship compel arbitration you have to look at the pleading itself when you look at the point this complaint and you go through the plaintiff's complaint throughout the complaint they allege at all times are in january first two thousand and twelve and at times after january first two thousand and twelve there's no the the point is make that you referred to the now in operative complaint now you are i'm i'm referring to be amended the amended complaint which is the complaint that the district court in its order denying the most to compel arbitration on the district court looked at the amended complaint and looked at the amended complaint all it did was to carve out any claims after january first two thousand and twelve when the conversion occur exactly and that's why i'm sorry i really don't mean to keep interrupting you but you said you alluded to allegations about posts january first but the plaintiffs are that have essentially abandoned any claim purportedly arising after january first they do abandon their claims after january first two thousand and twelve but i don't abandon their claims that they were in fact employees prior to january first two thousand and twelve exactly in fact in their complain they continue to take the position that they were employees prior to january first two thousand and twelve right and when i had what i was trying to explain before is if these people were employees prior to january first two thousand and twelve and they would have signed this compensation on january first two thousand and twelve that had the arbitration provision and had there not been an arbitration provision before that i think the fourth circuit is clear that that would be retroactively applied to these individuals pre january first two thousand and twelve relationship so if if we look at how this plays out with the allegations in the complaint which is what we have to rely on these individuals are saying that they are employees if they were employees prior to january first two thousand and twelve it doesn't matter under fourth circuit law that they didn't sign an agreement to arbitrate their claims until january first two thousand you're not using this language but it really sounds like you're arguing some form of  understand roger activity and certainly this court and the supreme court have been very willing to find retroactivity when it comes to sort of intervening arbitration clauses but here we have very different facts we have on the ground real facts that these plaintiffs were employees of their own l l c s now  purposes of the f l s a claims they allege that they were defacto employees and should have been treated as employees for wage purposes by your client but that's a far cry from the counterfactual hypothetical you just articulated which was suppose they'd never had an l l c before january first when they signed these contracts requir midstream but that's not what happened here it's absolutely not what happened here and i would agree with your honor that that would certainly make it a much easier case for my client's perspective a very different case it is i don't know that it's a very case i can agree that it's a very different case because i don't believe that what the district court had to do in connection with determining whether or not these players were subject to the arbitration is to look to the complainant self and if you look to the complaint itself the allegations of employment is what triggers the arbitration clause in this retroactivity they were not in contract with you with your company in this this is not disputed correct that's not disputed your honor but what my client contracted for in january of two thousand and twelve when it had these individuals sign the compensation agreement as a condition of their employment was that all employment related disputes were going to be compelled to arbitration and in this particular he said with the company with the company that's correct you had to deal with just you made the choice of the word you should honor but the dispute that we're living gating is it is now an employment related dispute with the company the claim is being brought against the company my client contract in january two thousand and twelve that those types of claims any claim related to employment related claims are going to be compelled to arbitration so it at ulta had at some point if in fact the point is are successful in proving that they were not independent contractors and were misclassified there is going to be an employment related dispute because it's necessarily an say in a south carolina wage claim that the court will have to consider so i don't know that the the bar relationship while it certainly muddies the waters a bit in this particular case at some point this is an employment related dispute that everyone agreed was going to be subject to arbitration and hours of the rest of my time thank you thank you for th claims they did not agree to arbitrate and the second issue is can the court enforce an arbitration agreement that not only forces arbitration on the plaintiffs but also attempts in the wording of that very arbitration agreement to rip away from the plaintiffs statutorily guaranteed rights under federal statute the answer to both of those questions is no the answer no was reached by the district court on the first issue and it should be affirmed here today the appellate argument of this court on this first issue whether the arbitration clause an issue applies must be based on the allegations of the coin is off base and wrong that is not the law in the circuit that is not the law in the united states in making this argument what the appellant is doing is taking a legal standard a legal definition of employee under one statute and trying to apply that to a private contract and you simply can't do that ironically enough what you're claiming is that the that pelleas are employees and so they are entitled to a certain wage in our considerations that's that's your claim correct and that's what we need to look to now so you see how is that not an employee related dispute when we are to look at the very broad language arbitration clause here and the law favors arbitration i'm glad that you asked the question and plead in our complaint that they violated the fair labor standards act what we're saying to the court is court we get we meet the legal standard set forth an employee under the fair labor standards act we meet that standard and therefore we get the protections afforded to us under that stack right you want the protections of that statute i mean i don't know how a fair labor standards act complaint is not an employee related dispute so you want the protections of that statute but but then you don't you want to have your cake and eat it too you don't want arbitration for this employee related dispute we we don't your honor we respectfully don't and this is why because when we we we are pleading as to the merits of our case that we meet the stand but when it comes to the f a a what this court has always focused on it is the contracts not so at all not so at all with regard to the fair labor standards act ok under the fair labor standards act what the parties contract for doesn't matter there is a different standard set forth under the fair labor standards act then there is for purposes of the f a a in fact dozens of fairly bush didn't actually prohibit forfeiture of the benefits and rights under that absolute one of those unique federal a person can't sign away these rights that that is absolutely correct your honor and that goes to the second issue that i write this to say i'm sorry but it's not to say you can't arbitrary those rights that's right you can't away that is absolutely right under both the f a a and the fair labor standards act when you take those two acts together and you take the case law together what you can do is you can agree to change the venue or change the forum where you resolve disputes under the fair labor standards act but you can't per subjectively waive your statutorily guaranteed that we can't recover we can't recover statutory damages the fair labor standards act says we can get liquidated damages the fair labor standards act says we can get attorneys fees if we prevail but under this arbitration agreement it says that we can't do that it says the parties agree that no arbitrator has the authority to award punitive damages or other damages not measured by the prevailing parties three year lookback we're talking about some real money here potentially we're talking about some significant money and the estimate i gave you is really just i'm i'm guessing i mean i really am yes and but to answer your question we think it's several hundred maybe over one thousand i don't know but my point earlier was that he and i want to be clear your honor we didn't do a good job briefing this we did not do a good job briefing the issue of what is the arbitration clause actually say aside from the employee you know but beginning beyond that part of the arbitration and that's why i want to make clear to the court here today you simply can't enforce this arbitration clause because it's not just an arbitration clause it's a lot more than that it attempts to rip away statutory rights that congress has afforded to the plaintiffs and that's why i was saying to your honor's question earlier when you asked about employee and doesn't this involve an employment speed that's why i was saying earlier to th weston that when we make legal pleadings what we are saying to the court is alm we meet the standard of the statute that we're suing on we meet that standard ok because in the law there are different standards even in this area of labor employment law there are different standards there are different legal tests there are different legal definitions of employee employer independent contractor ok and for purposes of the f a a that doesn't matter because under this circuit's f a a law what matters is how the parties contract it what govern is how they contract it what how they contract did change pretty radically because what they contract it for war prior to january two thousand twelve was a relationship of and independent contractor and that changed after that they get to define their relationship for purposes of the  that's what the f a a does it encourages the parties were for it doesn't encourage it at least allows the parties to contract for what they want to contract for with regard to arbitration reached to just labor employment issues made it it can have all kinds of of far reaching implied implications contractor with subcontractor in a whole host of right about the other things that that's what allows but with regard to the fair labor standards act that's a different legal standard altogether and in the standard there is you know an economic reality standard well look in this area of law we get into this issue in tort law too with regard to the doctrine of responding we get into this and we say that you know in order to prove a responding out superiority you have to show that the alleged employer had actual control of the manner of performance but that's a different standard there's no question that this circuit has retroactively applied arbitration agreements no question about it right now the the cases that they've cited to be different in four significant ok first of all they differ because in every one of those cases every one of the cases they cited for to you they didn't that they the parties agreed to arbitra but that didn't change the underlying rights that they were disputing they didn't try to rip away statutorily guaranteed rights in any of those cases because you say you simply can't do that your honor and all of those cases are different because all of those cases wore a sensually we agreed to arbitrate we agreed arbitrary we agreed arbitrary but this arbitration clause that's now before this court with far beyond me because it took away statutorily guaranteed rights and the district court never reached that issue because the district court simply concluded the plaintiffs are going to limit themselves to to prior to january two thousand and twelve so that that essentially resolve the issue but it's certainly relevant here today because when you look at the supreme court and what the supreme court has said about this they said in the gilmore versus interstate slash johnson case this is a quote in dealing with an eighty a point so long as the perspective litigant affect vindicate his or her statutory cause of action in the arbitration forum the statute meaning the ag e a a will continue to serve both its remedial and deterrent function trust litigation and in the verses rich products corporation case reliant on supreme court precedent in this area the court said you cannot through an arbitration  perspectively limit the damages that are statutorily guaranteed to it sounds like you're arguing that you regret your amended complaint i don't regret it no sir i don't regret it at all but basing up now that you've thought about it and i don't mean is criticism that now that you've thought about it seems like maybe you should've you should have persisted in the post then you were first claim as well well maybe you'll do that when and if the case goes yet met maybe so you're on because hindsight hindsight is twenty twenty wisdom and you see what i what i will tell you what i do regret what i do regret is is not bringing this issue to the forefront with the district court and what i do regret is not better briefing that issue before the court yeah i didn't do it until stand in here right i add i did yeah i i thought i heard you say there were four reasons why this case is different from fourth circuit precedent i've only heard one thing i wanted one party and i think you're quite a lot i would like to hear the other three yes sir yes ma'am i'm sorry another mistake he pointed out one and i just made another one the second third and fourth reason day in the other cases that they've cited to you there is a merger integration clause that that gets us to the care of notion versus hallmark case that's in the low buy in case not present here if they wanted to go back and they wanted to capture that first contract they needed that says we're going back on everything that went before we're capturing and you just don't have that in this in this case well that doesn't it that wording is fine to capture everything going for that that absolutely captures everything from january first two thousand and twelve to one four but it didn't say anything your i mean there were there really isn't because when you look at those two contracts you could look at when you look at them side by side they look different i don't even look at the site you don't even have to speak english to to know or read english to know that  they look fundamentally different and then when you read them they certainly read fundamentally different and i want to go back in and finish answering your honour's question the third thing here is the relationship  some of those other cases that they have sided the relationship of the parties contractually stated sign ok esau that for example in the le vine case which by the way also had the integration clause i was talking about the merger integration clause you saw that in side of christian versus comcast that they sided which was a contract for cable television services and you know in that case cable television services just kept kept going the only thing that changed was an arbitration agreement well not so here when you fundamentally change the contractual relationship of the employees when they go for all right ten nine hundred nine independent contractors the w t employees when they go from no taxes being withheld no employer match on social security to all that stuff happening that's sort of another kind of cases fundamentally different than what we have here today and then the final is the final thing the fourth point i would make would be where you have two contracts in time like we have here their they're asking you to do a couple of things rewrite and and a merger integration clause and rewrite and take out the parts that limit us to statutory it limit our statutory damages and judge gregory you said it best in the prior oral argument we are heard a lot of arguments about the enforceability of the agreement but i think the judge that got it correctly that that's not been presented to the court it wasn't presented to the district court and certainly not presented to this court either so i don't believe that's the  proper issue before the court at this point i think we are actually talking about those who are home to from ground zero your honor you can affirm what you can affirm on those grounds that have been raised at the district at that have been raised at the district court level at this point there's been no there's been no complaint whatsoever as to the enforceability of the agreement beyond what has been brought ryall it was i just heard an oral argument today and i do think that if that issue was briefed i think it would be clear that this arbitration clause isn't for but moving on to the issue that i think is properly before the court which is the scope of the arbitration provision and i hear opposing counsel over and over again why would it be enforceable i mean i realize he just brought it up today one i don't believe that the contract itself takes takes away statutory rights the contract itself says that punitive damages the arbitrator can award punitive damages that aren't measured by a party's actual damages and both the f l s say in the south carolina claim that had been brought in this particular case the so called punitive damages are liquidated damages would be measured by the parties actual damages for the f l s a essentially a double damage provision and out of the south carolina wage law a a a triple damage component so i don't think that that the contract itself does that but more importantly the courts are clear that those are issues for the arbitrator to decide as to number one whether or not the arbitrator is not bound by the agreement to the extent that it would take away statutory rights and the courts have been clear that they will compel arbitration subject and give some discretion to the arbitrator to in fact enforce the party's statutory rights exactly that it prohibits a party from vindicating their statutory rights in the courts that they if the f l s say had it there the court said that by prohibiting collective action or not prohibiting the individuals from pursuing their own individual rights which is what the say was there to protect so i think the american express case stands for that proposition but if i could just briefly your honor addressed the scope issue because i don't think i hear arguments about we needed to put an integration clause in our contract in order to make evidence of a purpose to exclude the claim for arbitration will survive is to preclude a claim from going to arbitration so i think it's there were reversed of what opposing counsel said in this case it's not that we need to demonstrate that some other claim is within the arbitration clause but more importantly did we do anything to exclude particular claims from the arbitration clause and i don't think that's the case i think the arbitration clause in office is the entire employment relationship whether the pre or post  january first two thousand and twelve in the board parties did not and to exclude any time any claims prior to that time there simply was no temp or a limitation on the so let me see if i have this straight your argument is these two  plaintiffs were employee of a separate company before january for their respective companies had agreements with your client january first comes and now your client hires the former employees of a different company and under their of hourman agreement they have to arbitrate even though you never call them employees before january first and in fact they were employees of a different company that's me i think i fairly summarized your position right you did your own arm i stated in a bit of a different way if i if i could is that had these two plaintiffs brought claims based on their independent contractor relationship under the independent  contractor sales agreement that they had with my client in other words if they had led's for example that they were that their l l c and your client were the joint together constituted a joint employer under federal law you know we have lots of laws about who is a joint employer then you would say what in that particular would have been ok i don't think that would be ok because they're still making the allegation that they were an employee of my client wondered no circumstances once they signed those january first agreements could they ever sue your client for anything that's not no that's absolutely not my position of a good companies position they could sue my client for anything related to the independent contractor relationship anything in connection with the sales agreement that they signed there was a prior contract with the sales like breach of contract for nonpayment of breach of connotations of some there's the contract itself as various provisions in it including  compensation issues and what do you say about drafting ambiguities against the draft i start putting in the goodies against the i don't believe that applies in this case because i think the f a the f a a a in the cases interpret in the a give a strong presumption to arbiter ability to the arbitration of claims in this particular case because these are the claims that have been asserted in this case in the the the language of the court uses does it touch matters that would invoke the arbitration provision and i think without question your honor the allegation of an employment relationship prior to january first two thousand and twelve necessarily touch matters that incompetent or that blew up was the do you agree do you not that whether there's a draft or i would agree that that's your argument is that the f a a somehow trumps the preamps that state court dot that state will adopt if it doesn't preempted your honor then it certainly is something that needs to be read in conjunction with the south carolina state state common law with respect to drafting the provision against the a to interpret the provision against the draft i don't think that you can isolate an interpretation of an arbitration provision looking solely to state law without looking at also the f a a in the cases interpret in the f a a because most importantly in this particular case the parties agreed that the f a a would control so i think i don't think you can look at it in isolation and interpret against the draft or without looking at it that way as well