Source: https://caselaw.findlaw.com/us-3rd-circuit/1753283.html
Timestamp: 2019-04-22 11:04:48+00:00

Document:
Between 2006 and 2014, Plaintiff Jessica Herzfeld performed as an exotic dancer at the Gold Club in Philadelphia, a club owned by Defendant 1416 Chancellor (hereinafter referred to as “the Gold Club”). She signed two landlord/tenant leases, memorializing her arrangement with the club—the first in 2006 when she began and a second one in 2013. Shortly after she left the club, Herzfeld, on behalf of herself and a class of similarly situated dancers, commenced a wage-and-hour suit against the Gold Club. Arguing that the two leases contained binding arbitration clauses, the Gold Club moved to compel arbitration of Herzfeld's claims. The District Court denied that motion. Because we find that Herzfeld's claims are statutory and do not arise out of either lease, we will affirm.
At the time Herzfeld began performing at the Gold Club in 2006, she signed a contract, according to which she paid the Gold Club a certain amount of money per shift to “lease” its stage, in exchange for tips. This initial contract was lost, however, during a flood in January 2009.
glasses of wine. Additionally, she was told that she could not continue performing without signing the contract and that she could not bring it home to review the terms. The Gold Club contests the timing, alleging instead that Herzfeld would have been given the contract to sign before her shift started.
The Gold Club insists that the missing 2006 lease contained a similarly worded arbitration clause as a matter of company policy. Herzfeld and the then-managers of the Gold Club, however, do not recall the specifics of the prior agreement.
The District Court opinion presented many interesting and thorny questions of law concerning the enforceability of implicit collective-action waivers in the context of the Federal Arbitration Act. But we need not grapple with those issues today. In short, in an effort to limit its liabilities under labor-employment laws by designating its contracts with the exotic dancers as landlord/tenant leases, the Gold Club has likewise limited the scope of its arbitration clauses. The FLSA and its state counterparts cannot be so easily circumvented. The rights embodied in the FLSA—“minimum wages and maximum work hours”15 —are absolute and unwaivable. For these reasons, we will affirm the District Court.
3. The District Court had federal question jurisdiction pursuant to 28 U.S.C. § 1331. We have jurisdiction to hear this appeal pursuant to 9 U.S.C. § 16(a)(1)(A).
4. Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 772 (3d Cir. 2013) (quoting Puleo v. Chase Bank USA, N.A., 605 F.3d 172, 177 (3d Cir. 2010)).
6. Id. at 772 (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)); Kaneff v. Delaware Title Loans, Inc., 587 F.3d 616, 620 (3d Cir. 2009) (citing Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., Ltd., 636 F.2d 51, 54 (3d Cir. 1980)).
7. Puleo, 605 F.3d at 178 (quoting Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452 (2003)).
8. We may affirm the District Court's judgment on any basis supported by the record. See Tourscher v. McCullough, 184 F.3d 236, 240 (3d Cir. 1999).
12. Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706–07 (1945); Coventry v. U.S. Steel Corp., 856 F.2d 514, 521 n.8 (3d Cir. 1988) (citing D.A. Schulte, Inc. v. Gangi, 328 U.S. 108, 115 (1946)); Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 740–41 (3d Cir. 1981).
13. The District Court reasoned that because Herzfeld contends that she is an employee in abrogation of the agreement that her claims do arise out of the agreement. We disagree. Whether Herzfeld is a covered employee and whether she is entitled to minimum wage and overtime under the FLSA and related state statutes are statutory questions that are not predicated on the terms of the lease agreements. See Martin v. Selker Bros., 949 F.2d 1286, 1293 (3d Cir. 1991) (“courts should look to the economic realities of the relationship in determining employee status under the FLSA” rather than the contractually defined relationship). Herzfeld does not need to first dispute the validity of the lease agreement in order to bring her FLSA and related state claims. Similarly, we held in Bell v. Se. Pa. Transp. Auth., 733 F.3d 490, 495–96 (3d Cir. 2013), that the plaintiffs do not need to arbitrate their FLSA claims according to their collective bargaining agreement (“CBA”) because their FLSA claims are independent of the CBA terms. In that case, as is true here, whatever the arbitrator would decide regarding the payments due to the plaintiffs under the CBA would be irrelevant to their FLSA claims.
14. The Gold Club also appeals from two other holdings: (1) that it did not prove by clear and convincing evidence under the Pennsylvania lost instrument rule that the 2006 lease agreement had an enforceable arbitration clause; and (2) that the 2013 arbitration clause cannot be applied retroactively to cover Herzfeld's entire employment history, starting in 2006. Even assuming that the District Court erred in both of these determinations, the Gold Club would still not prevail because Herzfeld's claims do not arise out of either lease agreement and, consequently, are not subject to either arbitration clause.
15. Coventry, 856 F.2d at 521 n.8.

References: § 1331
 § 16
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