11-5213-cv
Raniere, et al. v. Citigroup Inc.



                                    UNITED STATES COURT OF APPEALS
                                       FOR THE SECOND CIRCUIT

                                              SUMMARY ORDER
       Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure
32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a document filed with this
Court, a party must cite either the Federal Appendix or an electronic database (with the notation
“summary order”). A party citing a summary order must serve a copy of it on any party not
represented by counsel.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
12th day of August, two thousand thirteen.

PRESENT:
            RALPH K. WINTER,
            JOSÉ A. CABRANES,
            CHESTER J. STRAUB,
                          Circuit Judges.
_____________________________________

TARA RANIERE, NICHOL BODDEN, and MARK A. VOSBURGH,
on behalf of themselves individually, and on behalf of all
similarly situated persons,

                      Plaintiffs-Appellees,

                      v.

CITIGROUP INC., CITIBANK, N.A., CITIMORTGAGE INC.,

            Defendants-Appellants.1
_____________________________________

FOR DEFENDANTS-APPELLANTS:                                         SAM S. SHAULSON (Howard M. Radzely,
                                                                   William S.W. Chang, on the brief), Morgan,
                                                                   Lewis & Bockius LLP, New York, NY,
                                                                   Washington, DC, and Houston, TX.



1   The Clerk of Court is directed to amend the caption of this case to conform to the listing of the parties shown above.
FOR PLAINTIFFS-APPELLEES:                             DOUGLAS H. WIGDOR (David E. Gottlieb, on
                                                      the brief), Thompson Wigdor LLP, New York,
                                                      NY.

FOR AMICI CURIAE CHAMBER OF
COMMERCE OF THE UNITED STATES
AND SOCIETY FOR HUMAN RESOURCE
MANAGEMENT:                                           Andrew J. Pincus, Evan M. Tager, Archis A.
                                                      Parasharami, Kevin Ranlett, Scott M. Noveck,
                                                      Mayer Brown LLP, Washington, DC; Robin S.
                                                      Conrad, National Chamber Litigation Center,
                                                      Inc., Washington, DC.

FOR AMICI CURIAE NATIONAL
EMPLOYMENT LAWYERS ASSOCIATION,
NATIONAL EMPLOYMENT LAW PROJECT,
AND THE EMPLOYEE RIGHTS ADVOCACY
INSTITUTE FOR LAW & POLICY:      Herbert Eisenberg, Eisenberg & Schnell LLP,
                                 New York, NY; David Borgen, Joseph E.
                                 Jaramillo, Goldstein, Demchak, Baller, Borgen
                                 & Dardarian, Oakland, CA; Rebecca M.
                                 Hamburg, National Employment Lawyers
                                 Association, San Francisco, CA.

       Appeal from an order of the United States District Court for the Southern District of New

York (Robert W. Sweet, Judge).

       UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the District Court’s November 22, 2011 opinion and order

denying defendants’ motion to compel arbitration pursuant to the Federal Arbitration Act, 9 U.S.C.

§ 1, et seq., is REVERSED and the cause is REMANDED to the District Court for proceedings

consistent with this summary order.

                                        BACKGROUND

       On April 6, 2011, plaintiffs-appellees Tara Raniere, Nichol Bodden, and Mark Vosburgh

brought this action against defendants-appellants Citigroup Inc., Citibank, N.A., and CitiMortgage

Inc. (jointly, “Citi”) to recover allegedly uncompensated “overtime” wages pursuant to the Fair

Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. § 201, et seq., and the New York Labor Law


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(“NYLL”) § 190 et seq. Raniere and Bodden (jointly, “plaintiffs”),2 who are currently employees of

Citi, assert that Citi “improperly classified [them] as exempt from the provisions of the FLSA and

improperly denied overtime compensation to which they were entitled.” Raniere v. Citigroup Inc., 827

F. Supp. 2d 294, 299 (S.D.N.Y. 2011). In particular, plaintiffs allege that they were not paid for time

worked in excess of 40 hours per week despite the fact that “throughout their course of

employment, they worked substantially in excess of 40 hours per week, frequently working between

50 and 70 hours per week.” Id. at 300 (internal quotation marks omitted).

         On May 13, 2011, Citi filed a motion to compel arbitration pursuant to the Federal

Arbitration Act (“FAA”), 9 U.S.C. § 1, et seq. Citi asserted that during plaintiffs’ employment, they

“entered into binding arbitration agreements that encompass their claims in this suit.” Id. at 304.

The relevant arbitration agreement, Citi’s Employment Arbitration Policy,

         makes arbitration the required and exclusive forum for the resolution of all disputes
         arising out of or in any way related to employment based on legally protection rights
         . . . that may arise between an employee or former employee and Citi . . . including,
         without limitation, claims, demands, or actions under . . . the Fair Labor Standards
         Act of 1938 . . . and any other federal, state, or local statute, regulation, or common-
         law doctrine regarding employment, employment discrimination, the terms and
         conditions of employment, termination of employment, compensation, breach of
         contract, defamation, retaliation, whistle-blowing, or any claims arising under the
         Citigroup Separation Pay Plan.

App’x 102. Citi’s Employment Arbitration Policy also explicitly provides that “this Policy applies

only to claims brought on an individual basis. Consequently, neither Citi nor any employee may

submit a class action, collective action, or other representative action for resolution under this

Policy.” Id.

         The District Court found that Citi’s Employment Arbitration Policy applied to plaintiffs’

claims and that plaintiffs had agreed to arbitrate the claims at issue, see Raniere, 827 F. Supp. 2d at


2 Plaintiff Mark A. Vosburgh was employed by Citi from October 30, 2002, to February 2, 2009. Citi’s motion to
compel arbitration did not mention Vosburgh, and the District Court’s opinion did not state that Vosburgh was subject
to the underlying arbitration agreement. Accordingly, we refer only to Raniere and Bodden as “plaintiffs.”

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305-08, but it held that the class-action waiver provision in that agreement was not enforceable,

concluding that “a waiver of the right to proceed collectively under the FLSA is unenforceable as a

matter of law,” id. at 314. The District Court also stated its view that the “effective vindication

doctrine” and our decision in In re American Express Merchants’ Litigation, 634 F.3d 187, 196 (2d Cir.

2011) (“Amex II”), “require that if any one potential class member meets the burden of proving that

his costs preclude him from effectively vindicating his statutory rights in arbitration, the clause is

unenforceable as to that class or collective.” Raniere, 827 F. Supp. 2d at 317. Because the District

Court held that “the collective action waiver provision is unenforceable,” it denied Citi’s motion to

compel plaintiffs to submit their claims to arbitration on an individual basis. Id.

        This appeal followed.

                                             DISCUSSION

        We have jurisdiction to consider this appeal because the FAA authorizes interlocutory

appeals from denials of motions to compel arbitration. See 9 U.S.C. § 16(a)(1)(A)-(B). “We review

de novo a district court’s refusal to compel arbitration.” Parisi v. Goldman, Sachs & Co., 710 F.3d 483,

486 (2d Cir. 2013).

        Plaintiffs’ central argument is that we should affirm the District Court because the text and

legislative history of the FLSA are clear that “[t]he right to collective action is an integral and

fundamentally substantive element of the FLSA that cannot be subject to waiver.” Plaintiffs’ Br. 10.

That argument, however, is directly foreclosed by our recent decision in Sutherland v. Ernst & Young

LLP, No. 12-304-cv (2d Cir. filed Aug. 9, 2013). In Sutherland, we applied the Supreme Court’s

recent decision in American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013), to claims

that were virtually identical to those raised here. In doing so, we held that “[a]s in the antitrust

context, no contrary congressional command requires us to reject the waiver of class arbitration in

the FLSA context.” Sutherland, slip. op. at 9 (internal quotation marks and brackets omitted). We


                                                     4
also noted that “every Court of Appeals to have considered this issue has concluded that the FLSA

does not preclude the waiver of collective action claims.” Id. (collecting cases).

        Plaintiffs’ alternative argument in support of affirming the District Court is that our

decisions in In re American Express Merchants’ Litigation, 554 F.3d 300 (2d Cir. 2009) (“Amex I”), Amex

II, 634 F.3d at 187, and In re American Express Merchants’ Litigation, 667 F.3d 204 (2d Cir. 2012)

(“Amex III”), instruct that “collective action waivers are unenforceable where any putative member

of the class or collection would be unable to vindicate their statutory rights.” Plaintiffs’ Br. 47. But

Italian Colors reversed Amex III and requires us to conclude that the District Court’s statements in

this regard were erroneous. Indeed, in Italian Colors, the Supreme Court held that although the

effective vindication doctrine was designed “to prevent [the] prospective waiver of a party’s right to

pursue statutory remedies,” 133 S. Ct. at 2310 (internal quotation marks omitted), that doctrine does

not apply simply because it is not “economically feasible” for a plaintiff to enforce his statutory

rights individually, id. at 2311 n.4 (emphasis omitted). In clarifying the limits of the effective

vindication doctrine in this manner, the Supreme Court specifically noted that “the fact that it is not

worth the expense involved in proving a statutory remedy does not constitute the elimination of the

right to pursue that remedy.” Id. at 2311.

        In sum, substantially for the reasons stated in Italian Colors and Sutherland, we conclude that

the District Court erred in concluding that (1) “a waiver of the right to proceed collectively under

the FLSA is unenforceable as a matter of law,” Raniere, 827 F. Supp. 2d at 314, and (2) “if any one

potential class member meets the burden of proving that his costs preclude him from effectively

vindicating his statutory rights in arbitration, the clause is unenforceable as to that class or

collective,” id. at 317.




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                                           CONCLUSION

        We have considered all of plaintiffs’ arguments on appeal and find them to be without merit.

In light of the Supreme Court’s recent decision in American Express Co. v. Italian Colors Restaurant, 133

S. Ct. 2304, 2311 (2013), and our recent decision in Sutherland v. Ernst & Young LLP, No. 12-304-cv

(2d Cir. filed Aug. 9, 2013), we REVERSE the District Court’s November 22, 2011 opinion and

order denying defendants’ motion to compel arbitration pursuant to the Federal Arbitration Act, 9

U.S.C. § 1, et seq., and we REMAND the cause to the District Court for proceedings consistent with

this summary order.

                                                        FOR THE COURT:
                                                        Catherine O’Hagan Wolfe, Clerk




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