Decided: November 24, 2015
The Fourth Circuit affirmed.
Rose Lorenzo (“Lorenzo”) was a “solutions specialist” at Prime Communications (“Prime”) and was then promoted to store manager. She brought an action against Prime alleging that Prime violated the Fair Labor Standards Act (“FLSA”) and the North Carolina Wage and Hour Act, alleging that Prime miscalculated her commissions and bonuses and failed to pay her overtime pay. The district certified her claims, and Prime filed a motion to compel arbitration based on an arbitration provision contained in the Employee Handbook (“Handbook”). The district court denied the motion for arbitration based on lack of evidence that Lorenzo agreed to arbitration, and further refused to change its position when Prime brought a signed acknowledgment form to the court due to language in the form stating that the Handbook didn’t create a contract. Prime filed an interlocutory appeal for the denial of arbitration and filed a petition to appeal the designation of the claims as a class action, with Lorenzo filing a motion to strike the petition. The Fourth Circuit consolidated the two appeals.
The Fourth Circuit began its analysis by looking at the arbitration language in the Handbook and at the form Lorenzo signed. The Court looked to these documents to decide whether or not the parties entered into a contract to arbitrate employment disputes. The Court looked to North Carolina contract law as the controlling law, which states that in a contract, the parties “assent to the same thing in the same sense, and their minds meet.” Although the Court found that the district court erred in not finding that Lorenzo’s acknowledgment that she received the Handbook and her continuation of work after reviewing the arbitration language could have created implied assent, the Court found that that error was not harmful. Because Lorenzo signed the acknowledgment form, which provided that the terms in the Handbook did not create binding commitments, any implied agreement formed by receipt of the Handbook was expressly nullified. As to Prime’s petition to appeal the class action certification, Rule 23(f) authorizes review of interlocutory orders granting or denying class certifications, but only if the petition is filed within 14 days after the order is entered. Prime filed its petition seeking permission to appeal 17 days after the district court entered its order. For these reasons, the Fourth Circuit affirmed the district court’s order denying the motion to compel arbitration, and dismissed Prime’s appeal from the class action certification order.