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Conners v. Gusano's Chi. Style Pizzeria

United States Court of Appeals, Eighth Circuit

March 9, 2015

Jacqueline L. Conners, individually and on behalf of all others similarly situated; Rachel Hobbs, individually and on behalf of all others similarly situated; Blaire Larson, individually and on behalf of all others similarly situated; Maria Campanelli, individually and on behalf of others similarly situated; Katey Tiller, individually and on behalf of all others similarly situated; Sarina Ellis, individually and on behalf of others similarly situated; Cecilie Washburn, individually and on behalf of all others similarly situated; Whitney Koch, individually and on behalf of all others similarly situated; Lacie Morgan, individually and on behalf of all others similarly situated, Plaintiffs - Appellees
v.
Gusano's Chicago Style Pizzeria, doing business as Kennedy's Pizzeria Inc.; Catfish Pies Inc.; Crazy Pies Inc.; Fayetteville Pies Inc.; Gusano's Chicago Style Pizzeria of Bella Vista Inc., Defendants - Appellants, Hendrix Brands Inc., Defendant, Pizza Profits Inc.; Show Me Pies Inc.; Ben Bisenthal; Clearwater Social Club Inc., doing business as Gusano's Chicago Style Pizzeria of Conway #1 Inc.; Three Buddies Incorporated, Defendants - Appellants, Timothy Chappell, Defendant

Submitted January 14, 2015

Page 836

Appeal from United States District Court for the Eastern District of Arkansas - Little Rock.

For Jacqueline L. Conners, Individually and on behalf of all others similarly situated, Rachel Hobbs, Individually and on behalf of all others similarly situated, Blaire Larson, individually and on behalf of all others similarly situated, Maria Campanelli, individually and on behalf of others similarly situated, Katey Tiller, individually and on behalf of all others similarly situated, Sarina Ellis, individually and on behalf of others similarly situated, Cecilie Washburn, individually and on behalf of all others similarly situated, Whitney Koch, individually and on behalf of all others similarly situated, Lacie Morgan, individually and on behalf of all others similarly situated, Plaintiffs - Appellees: Matthew Michael Ford, John T. Holleman, Maryna O. Jackson, Timothy A. Steadman, Holleman & Associates, P.A., Little Rock, AR.

For Gusano's Chicago Style Pizzeria, doing business as: Kennedy's Pizzeria Inc., Catfish Pies Inc., Crazy Pies Inc., Fayetteville Pies Inc., Gusano's Chicago Style Pizzeria of Bella Vista Inc., Pizza Profits Inc., Show Me Pies Inc., Ben Bisenthal, Clearwater Social Club Inc., doing business as: Gusano's Chicago Style Pizzeria of Conway #1 inc., Three Buddies Incorporated, Defendants - Appellants: James Matthew Gary, Genoveva Gilbert, Ashley Welch Hudson, Kutak & Rock, Little Rock, AR; Matthew Scott Jackson, Samantha Leflar, Kutak & Rock, Fayetteville, AR.

Before RILEY, Chief Judge, BEAM and COLLOTON, Circuit Judges.

OPINION

Page 837

RILEY, Chief Judge.

After Jacqueline Conners filed this Fair Labor Standards Act (FLSA) collective action, see 29 U.S.C. § 216(b), against her former employer and a number of associated entities (collectively, Gusano's Pizza), several of these entities implemented a new arbitration policy applicable to their current employees, which required all employment-related disputes between the current employees and Gusano's Pizza to be resolved though individual arbitration. Citing public policy reasons, the district court declared the arbitration policy unenforceable insofar as it could prevent current employees of these restaurants from joining this collective action. On interlocutory appeal, we conclude former employees like Conners lack standing under Article III of the United States Constitution to challenge the arbitration agreement, which applied only to current employees. We vacate the district court's order and remand the case to the district court.

I. BACKGROUND

A. Facts

On January 2, 2014, Conners, a former server at a Gusano's Pizza restaurant, filed this collective action on behalf of herself and other current and former Gusano's Pizza restaurant servers, alleging the employees were subjected to illegal tip pooling in violation of the FLSA. Several other former employees soon opted into the action.

A month later, the Gusano's Pizza restaurants each implemented a new arbitration policy in the form of an agreement[1] that purports to bind all current employees who did not opt out of the arbitration agreement. At the top of the first page of each arbitration agreement, the following text appears:

This Agreement to Arbitrate Disputes (called the " Agreement" ) is a contract between you and [employer name]. The Agreement sets out your rights and the rights of [employer name] in connection with the resolution of employment-related disputes. You have the right to ask independent advisors of your choice, including lawyers, to explain ...

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