Court Opinion

ID: 3157627
Source: CourtListenerOpinion
Date Created: 2015-11-24 20:01:09.495654+00
Date Added: 2024-06-11T07:38:39.163449
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 14-1622

ROSE LORENZO,

                Plaintiff - Appellee,

           v.

PRIME COMMUNICATIONS, L.P., a Texas General Partnership,

                Defendant - Appellant.

                             No. 14-1727

ROSE LORENZO,

                Plaintiff - Appellee,

           v.

PRIME COMMUNICATIONS, L.P., a Texas General Partnership,

                Defendant - Appellant.

Appeals from the United States District Court for the Eastern
District of North Carolina, at Raleigh.    Malcolm J. Howard,
Senior District Judge; Kimberly Anne Swank, Magistrate Judge.
(5:12-cv-00069-H)

Argued:   October 27, 2015              Decided:   November 24, 2015

Before NIEMEYER, KING, and SHEDD, Circuit Judges.
No. 14-1622 dismissed; No. 14-1727 affirmed by published
opinion. Judge Niemeyer wrote the opinion, in which Judge King
and Judge Shedd joined.

ARGUED: William Wayne Pollock, RAGSDALE LIGGETT, PLLC, Raleigh,
North Carolina, for Appellant.    Harris D. Butler III, BUTLER
ROYALS, PLC, Richmond, Virginia, for Appellee.   ON BRIEF: John
B. Walker, RAGSDALE LIGGETT, PLLC, Raleigh, North Carolina, for
Appellant.    Zev H. Antell, BUTLER ROYALS, PLC, Richmond,
Virginia; Stephen A. Dunn, EMANUEL & DUNN, Raleigh, North
Carolina, for Appellee.

                               2
NIEMEYER, Circuit Judge:

     Rose    Lorenzo     commenced      this        action       against    her     former

employer,    Prime     Communications,            L.P.,    under     the    Fair     Labor

Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the North

Carolina Wage and Hour Act, N.C. Gen. Stat. § 95-25.1 et seq.,

alleging that she was unlawfully deprived of wages earned as

commissions and overtime pay earned from work of more than 40

hours per week.

     The district court conditionally certified her FLSA claim

as a collective action under 29 U.S.C. § 216(b) and certified

her North Carolina Wage and Hour Act claims as a class action

under Federal Rule of Civil Procedure 23.                        It also denied Prime

Communications’      motion     to    compel       arbitration,      concluding          that

Lorenzo     never    agreed      to     arbitrate          such     claims.          Prime

Communications       separately        appealed           both     rulings,        and    we

consolidated the two appeals.

     We   now   affirm    the    district          court’s       order   denying     Prime

Communications’      motion     to    compel       arbitration,      concluding          that

Prime   Communications     failed       to       produce    evidence       demonstrating

that Lorenzo agreed to arbitrate any of her claims.                                We also

dismiss     Prime    Communications’             appeal    from    the     class    action

certification order, concluding that its petition for permission

to appeal the district court’s order was untimely filed.

                                             3
                                           I

      Lorenzo     began     employment     with   Prime     Communications,      an

authorized retailer of AT&T wireless communication devices and

services,    in    October    2009    as   a   “solutions    specialist”    in    a

retail store in Fuquay-Varina, North Carolina.                  As a solutions

specialist,       Lorenzo    sold    merchandise    and     cell-phone   service

plans, among other things.            In February 2010, she was promoted

to store manager of a retail store in Raleigh, North Carolina.

      As a solutions specialist, Lorenzo received hourly wages,

paid biweekly, plus a variable commission based on the gross

profit of individual sales that she made.                   As a store manager

she received a salary, paid biweekly, plus a variable commission

based on the gross profits of the store, which was sometimes

referred to as a bonus.             All commissions and bonuses were paid

separately from wages and salaries with a monthly check.

      Lorenzo commenced this action in February 2012 under the

FLSA and the North Carolina Wage and Hour Act, alleging that

Prime Communications deprived her of lawful wages, in violation

of   those   acts.        More   particularly,      she   alleged   that    Prime

Communications       incorrectly       calculated     her     commissions     and

bonuses and failed to pay her overtime pay, even though she

worked for more than 40 hours per week.

      The district court conditionally certified the FLSA claim

as a collective action under 29 U.S.C. § 216(b) and certified

                                           4
the state wage and hour claims as a class action under Federal

Rule of Civil Procedure 23.

        Relying    on     an   arbitration      provision    contained         in   its

Employee Handbook, which had been provided to Lorenzo when she

began her employment, Prime Communications filed a motion to

compel    arbitration.           The   district    court    denied       the   motion,

concluding that Prime Communications did not provide sufficient

evidence that Lorenzo had agreed to arbitration.                       The court held

that mere receipt of the Employee Handbook and continued work

for Prime Communications after receiving it were insufficient

evidence of Lorenzo’s agreement to the Handbook’s arbitration

provision.        In response to Prime Communications’ argument that

“its     routine        requirement      for    employees         to     execute    an

acknowledgment          form   [was]   sufficient    evidence      of     [Lorenzo’s]

agreement,”       the    court   noted   that     Prime   Communications        “ha[d]

been unable to produce any signed acknowledgment form signed by

[Lorenzo],” and thus found the argument “untenable.”

       When, about two months later, Prime Communications located

a copy of the acknowledgment form that Lorenzo had signed and

asked    the   district        court   to   reconsider      its    ruling      denying

arbitration, the court refused to change its position because

“the acknowledgment [form] explicitly state[d] that the handbook

does not create a contract.”

                                            5
     Relying on the Federal Arbitration Act (“FAA”), 9 U.S.C.

§ 16(a), Prime        Communications    filed   this   interlocutory      appeal

challenging     the    district    court’s   order     denying    its    renewed

motion to compel arbitration, and relying on Federal Rule of

Civil    Procedure     23(f),   Prime   Communications    filed    a    separate

petition for permission to appeal the district court’s order

certifying the state wage and hour claims as a class action. *

Lorenzo filed a motion to strike the petition for permission to

appeal    the   class     action   certification       order   because     Prime

Communications did not file its petition within 14 days of the

district court’s order, as required by Rule 23(f).

     By order dated June 24, 2014, we deferred Lorenzo’s motion

to strike the petition for permission to appeal, pending oral

argument, and by order dated July 25, 2014, we consolidated the

two appeals.

                                        II

     The facts critical to Prime Communications’ renewed motion

to compel arbitration are not disputed.                Lorenzo acknowledged

that she received Prime Communications’ 2010 Employee Handbook

when beginning her employment and that the Handbook committed

     * The district court’s order also conditionally certified
Lorenzo’s FLSA claim as a collective action, but Prime
Communications does not seek permission to appeal that aspect of
the order.

                                        6
“all employment issues” first to an internal dispute resolution

process,   then   to    mediation,   and     finally    to   arbitration.   It

provided that employees “waived all rights to bring a lawsuit

and to a jury trial regarding any dispute,” including claims

under the FLSA.        After receiving the Handbook, Lorenzo continued

her employment with Prime Communications.

     Lorenzo also signed a form on October 20, 2009, explicitly

acknowledging receipt of the Handbook.                 That form provided in

relevant part:

     I understand that I am responsible for reviewing the
     Prime Communications Employee Handbook.

                                     * * *

     I understand that the Prime Communications’ Employee
     Handbook is not a contract of employment and does not
     change the employment-at-will status of employees.
     Moreover, no provision should be construed to create
     any bindery [sic] promises or contractual obligations
     between the Company and the employees (management or
     non-management).

                                     * * *

     By my signature below, I acknowledge, understand,
     accept, and agree to comply with the information
     contained in the Employment Handbook.    I acknowledge
     that I will review and read the Company Handbook and
     that I have the opportunity to ask my Manager
     questions about the Handbook.    I further acknowledge
     that I fully understand or will make sure that I do
     understand the contents there of, as they relate to my
     employment with Prime Communications.     I understand
     that the information contained in the Handbook are
     guidelines only and are in no way to be interpreted as
     a contract.

(Emphasis added).

                                       7
     The district court concluded that Lorenzo’s receipt of the

Handbook    and     her    continued    employment         were    insufficient     to

create an agreement to arbitrate and that, in any event, the

arbitration       provision    in   the         Handbook    conflicted    with     the

acknowledgment        form,    which        “explicitly      state[d]     that     the

handbook does not create a contract.”                      The court accordingly

denied Prime Communications’ motions to compel arbitration.

     Prime Communications contends that the district court erred

in refusing to compel arbitration because “Lorenzo agreed to

arbitrate     all      disputes     relating         to      her     employment    by

affirmatively assenting to the provisions of Prime’s Employee

Handbook,     which       include[d]    a       dispute     resolution     provision

requiring     arbitration.”            It       argues     that    the   arbitration

provision of the Employee Handbook is binding and severable from

the rest of the Handbook, “regardless of whether [the] employee

handbook as a whole constitute[d] an employment contract.”                          It

notes   that,     under    existing     case      law,     arbitration    should   be

favored and therefore “any doubts must be resolved in favor of

arbitration as a matter of federal law.”

     Lorenzo responds by pointing to the express language of her

signed acknowledgment form, which denied that any provisions in

the Employee Handbook created a contract.                         She asserts that,

“where a signed acknowledgment page repeatedly states that no

provisions in the Handbook are contractual,” the Handbook cannot

                                            8
be found to have created a contract.                    She argues that unlike

some   cases   cited   by   Prime    Communications,        the    acknowledgment

form   at   issue   here    did    not    exempt    the    Employee    Handbook’s

arbitration    provision    from    the       acknowledgment      form’s   explicit

statements disclaiming that the Handbook established any binding

obligations.

       The parties correctly presume that resolution of this issue

requires the determination of whether the parties entered into a

contract to commit employment disputes to arbitration.                     The FAA

so provides unambiguously:

       A written provision in . . . a contract evidencing a
       transaction   involving    commerce   to    settle  by
       arbitration a controversy thereafter arising out of
       such contract . . . shall be valid, irrevocable, and
       enforceable, save upon such grounds as exist at law or
       in equity for the revocation of any contract.

9 U.S.C. § 2 (emphasis added).                  While the Supreme Court has

acknowledged    a   “liberal      federal      policy   favoring    arbitration,”

AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1745 (2011)

(quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 24 (1983)), it has also consistently held that § 2 of

the FAA reflects the “fundamental principle that arbitration is

a matter of contract,” id. (quoting Rent-A-Center, West, Inc. v.

Jackson, 561 U.S. 63, 67 (2010)).                  Thus, a court may order

arbitration only when it “is satisfied that the parties agreed

to arbitrate.”      Granite Rock Co. v. Int’l Bhd. of Teamsters, 561

                                          9
U.S. 287, 297 (2010).            And the question of whether the parties

agreed to arbitrate is resolved by application of state contract

law.    See Johnson v. Circuit City Stores, Inc., 148 F.3d 373,

377 (4th Cir. 1998).

       North   Carolina    contract    law,    like   that    of    most    states,

requires that the parties “assent to the same thing in the same

sense, and their minds meet.”          Normile v. Miller, 326 S.E.2d 11,

15    (N.C.    1985)   (internal     quotation    marks      omitted)      (quoting

Goeckel v. Stokely, 73 S.E.2d 618, 620 (N.C. 1952)).

       In this case, Lorenzo’s acknowledgment that she received

the    Handbook      and   her    continued    work   after        reviewing   its

arbitration terms could have created implied assent under North

Carolina law.        See Hightower v. GMRI, Inc., 272 F.3d 239, 242-43

(4th Cir. 2001) (reviewing North Carolina case law holding that

“continuing employment after learning of the existence of [a

company’s       dispute     resolution        procedure]      constitutes       an

employee’s agreement to be bound by an arbitration agreement”).

To the extent that the district court in this case failed to

recognize that principle, it erred.              Nonetheless, there is, in

this case, the additional fact that around the time that Lorenzo

received       the     Employee     Handbook,     she      also       signed     an

acknowledgment form providing that the terms of the Employee

Handbook, including its arbitration provision, were “guidelines

                                       10
only”    that    did   not    create    any    binding      commitments.          As   the

signed form stated unambiguously:

      I understand that the Prime Communications’ Employee
      Handbook is not a contract of employment and . . . no
      provision should be construed to create any bindery
      [sic] promises or contractual obligations between the
      Company   and  the  employees   (management  or  non-
      management).

                                        * * *

      I understand that the information contained in the
      Handbook are guidelines only and are in no way to be
      interpreted as a contract.

      The       district      court     correctly        recognized         that       the

acknowledgment         form   that     Prime     Communications           drafted      and

Lorenzo signed expressly disclaimed any implied agreement to be

contractually bound by any terms in the Employee Handbook.                             Any

implied assent that might have been created by Lorenzo’s receipt

and review of the Handbook and by her continued employment was

nullified by the express agreement of the parties not to be

bound by any of the Handbook’s terms.                    Cf. Snyder v. Freeman,

266 S.E.2d 593,     602-03     (N.C.    1980)     (explaining        the     North

Carolina     legal       principle     “that    where       there    is    an     express

contract    between       parties,     there    can    be    no     implied     contract

between them covering the same subject matter dealt with in the

express agreement”).

      Accordingly, we affirm the district court’s order denying

Prime Communications’ renewed motion to compel arbitration.

                                          11
                                      III

     Prime      Communications    also    seeks   permission    under   Federal

Rule of Civil Procedure 23(f) to appeal the district court’s

order certifying Lorenzo’s state wage and hour claims as a class

action under Rule 23.          Lorenzo filed a motion to strike Prime

Communications’ petition as untimely filed.               We now grant that

motion and dismiss Prime Communications’ petition.

     The district court entered its class certification order on

March 24, 2014.         Relying on Rule 23(f), Prime Communications

filed a petition for permission to file an interlocutory appeal

from that order on April 10, 2014.            Rule 23(f) authorizes review

of interlocutory orders granting or denying class certification

if a court of appeals grants permission.              But the Rule provides

that any petition for permission must be “filed with the circuit

clerk within 14 days after the order is entered.”                   As Lorenzo

noted, Prime Communications filed its petition for permission to

appeal   17     days   after   the   district     court   entered   its   order

granting certification, which fails to satisfy Rule 23(f)’s 14-

day deadline.

     Although it is unclear whether Rule 23(f)’s deadline is

jurisdictional, see Eberhart v. United States, 546 U.S. 12, 17-

19 (2005) (casting doubt on the notion that the timeliness of

notices of appeal generally is jurisdictional), this court and

others   have    nonetheless     consistently     interpreted   Rule    23(f)’s

                                         12
14-day time limit to be “rigid and inflexible,” Nucor Corp. v.

Brown, 760 F.3d 341, 343 (4th Cir. 2014) (quoting Fleischman v.

Albany Med. Ctr., 639 F.3d 28, 31 (2d Cir. 2011)); see also

Pashby    v.   Delia,      709 F.3d 307,    318       (4th   Cir.     2013)    (“[A]n

appellant must file a petition to appeal within fourteen days

after    the   district      court       enters          its    order    regarding          class

certification”        (emphasis         added));          Gutierrez       v.     Johnson        &

Johnson,    523 F.3d 187,       192   (3d    Cir.       2008)    (describing         Rule

23(f)’s    time     limit   as     “strict         and    mandatory”);         Carpenter       v.

Boeing Co., 456 F.3d 1183, 1190 n.1 (10th Cir. 2006) (“Even if

[Rule      23(f)]     is         not     jurisdictional,               however,        it      is

unquestionably ‘mandatory’ if properly raised by the opposing

party”).

     Prime     Communications           argues      that       its    filing    was     timely

because three days must be added to the Rule 23(f) deadline by

reason of Federal Rule of Civil Procedure 6(d) and Federal Rule

of Appellate Procedure 26(c).                 Rule 6(d) provides, “When a party

may or must act within a specified time after service . . . , 3

days are added after the period would otherwise expire under

Rule 6(a).”       Fed. R. Civ. P. 6(d) (emphasis added).                           And Rule

26(c) provides similarly, “When a party may or must act within a

specified time after service, 3 days are added after the period

would otherwise expire under Rule 26(a).”                         Fed. R. App. P. 26(c)

(emphasis added).           These Rules extend deadlines following the

                                              13
service     of     documents          by     an        opposing    party     in     specified

circumstances to accommodate time needed to effect service; they

do   not    apply       to    filing       deadlines       following      entry     of   court

orders, as Prime Communications mistakenly contends.                               Rule 23(f)

provides     for    a    14-day       filing       deadline       which    “runs    once   the

original order on certification is entered.”                              Nucor Corp., 760
F.3d   at   343     (emphasis         added).           Because    Prime    Communications

filed its petition for permission to appeal 17 days after the

district court entered its order, we dismiss the petition as

untimely filed under Rule 23(f).                        Accord Eastman v. First Data

Corp., 736 F.3d 675, 677 (3d Cir. 2013) (explaining that “[t]he

time to file a Rule 23(f) petition runs from entry of the order,

not service of a document,” and therefore dismissing as untimely

a Rule 23(f) petition filed 3 days after Rule 23(f)’s 14-day

deadline).

                                                  IV

       In   sum,    in       appeal    No.    14-1727,       we    affirm    the     district

court’s order denying Prime Communications’ renewed motion to

compel arbitration, and in appeal No. 14-1622, we dismiss as

untimely Prime Communications’ petition for permission to appeal

under Rule 23(f).              In view of these rulings, we do not reach

Lorenzo’s claims that Prime Communications waived its right to

arbitrate by continuing its participation in the litigation in

                                                  14
court and that the arbitration program at issue is substantively

defective.     We also do not reach Prime Communications’ claim

that   the   district   court   abused   its   discretion   in   certifying

Lorenzo’s state claims as a class action.

                                                  No. 14-1622 DISMISSED;
                                                    No. 14-1727 AFFIRMED

                                    15