Case: 13-12561       Date Filed: 03/25/2014      Page: 1 of 24


                                                                      [DO NOT PUBLISH]

                 IN THE UNITED STATES COURT OF APPEALS

                           FOR THE ELEVENTH CIRCUIT


                                        No. 13-12561


                         D.C. Docket No. 4:12-cv-00627-KOB



MARY BILLINGSLEY,
on behalf of herself and all others similarly situated,
FANNIE THRASH,
on behalf of herself and all others similarly situated,
                                                                       Plaintiffs-Appellees,

                                            versus

CITI TRENDS, INC.,
                                                                      Defendant-Appellant.



                       Appeal from the United States District Court for
                              the Northern District of Alabama


                                    March 25, 2014

Before HULL, Circuit Judge, and Goldberg, ∗ Judge, and Smith, ** District Judge.

       ∗
          Honorable Richard W. Goldberg, United States Court of International Trade Judge,
sitting by designation.
       **
          Honorable C. Lynwood Smith, Jr., United States District Judge for the Northern
District of Alabama, sitting by designation.
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HULL, Circuit Judge:

      Plaintiffs-appellees Mary Billingsley and Fannie Thrash (collectively,

“Billingsley”) filed a putative collective action pursuant to the Fair Labor

Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., against defendant-appellant Citi

Trends, Inc. (“Citi Trends”). Citi Trends moved to compel arbitration based on the

terms of an arbitration agreement executed after the filing of the action but before

the district court certified the FLSA collective action.

      The district court denied Citi Trends’s motion to compel arbitration, and Citi

Trends appeals. After review of the record and the briefs of the parties, and having

the benefit of oral argument, we affirm.

                                I. BACKGROUND

A.    Complaint

      Citi Trends is a retail clothing store. Billingsley is a store manager at Citi

Trends.

      On February 23, 2012, Billingsley filed a putative collective action against

Citi Trends. In the complaint, Billingsley alleges that Citi Trends violated the

FLSA by improperly designating its store managers as exempt employees and

failing to compensate them for their overtime hours.



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       As allowed by the FLSA, Billingsley filed her putative collective action on

behalf of herself and other similarly-situated Citi Trends’s store managers. See 29

U.S.C. § 216(b). The complaint urged the district court to issue notice or allow

Billingsley to send notice to all similarly-situated store managers.

B.     Planning Conferences and Order

       The parties participated in a Rule 26(f) 1 conference. And, on May 15, 2012,

the parties filed a joint Rule 26(f) planning report. In that report, the parties

proposed a schedule and process for pursuing conditional FLSA collective action

certification and issuing notice to similarly-situated store managers.

       As a general matter, the parties proposed following the conditional collective

action certification process endorsed by this Court in Hipp v. Liberty National Life

Insurance Co., 

, 1219 (11th Cir. 2001).2 Consistent with the Hipp-

endorsed process, the parties proposed that Billingsley would move the district

court for an order permitting court-supervised notice of the similarly-situated store

       1
           Unless otherwise stated, “Rule” refers to the Federal Rules of Civil Procedure.
       2
         The Eleventh Circuit has endorsed a two-tiered approach to determining notification and
certification of opt-in collective actions under 29 U.S.C. § 216(b), which allows the district court
to address, at two different stages, the question of whether plaintiffs are “similarly situated” for
the purposes of the FLSA. 

. The first determination is made at the so-
called “notice” or “conditional certification” stage, where the district court makes a decision—
usually based only on the pleadings and affidavits which have been submitted—whether notice
of the action should be given to potential collective action members. 

If the district
court “conditionally certifies” the collective action, putative collective action members are given
notice and the opportunity to “opt-in.” 

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managers’ FLSA opt-in rights within 60 days of the district court’s issuance of a

scheduling order. The parties proposed a 30-day timeframe for Citi Trends to

respond to Billingsley’s motion and a 7-day window for Billingsley to reply.

      On May 31, 2012, the district court held a scheduling conference with the

parties. Based on the joint scheduling conference, on June 14, 2012, the district

court entered a preliminary scheduling order pursuant to Rule 16(b). In its order,

the district court provided the briefing schedule for conditional collective action

certification and court-ordered notice of the action.

C.    Motion for Conditional Certification

      On August 7, 2012, Billingsley filed a Motion for Conditional Certification

and Court Approved Issuance of Notice. Billingsley supported her motion with

briefing and evidentiary materials.

      On October 17, 2012, after receiving two extensions of time, Citi Trends

responded in opposition to Billingsley’s motion for conditional certification. To

support its response, Citi Trends filed evidentiary materials, which included

(1) fill-in-the-blank declarations and (2) arbitration agreements executed by several

dozen store managers (i.e., potential members of the collective action). Citi

Trends’s opposition brief informed the district court that—if the court certified the




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FLSA collective action—the store managers who had executed the arbitration

agreements would be subject to arbitration and unable to join the collective action. 3

       As discussed in detail below, Citi Trends gathered the declarations and

arbitration agreements after the district court set forth the schedule and procedures

for Billingsley’s motion for conditional certification and notice. Citi Trends

gathered these documents through back-room meetings that were “highly coercive”

and “interrogation-like.”

D.     Motion to Strike and Motion for Entry of Protective Order

       On October 31, 2012, based on Citi Trends’s conduct in obtaining the

declarations and arbitration agreements from potential collective action members,

Billingsley asked the district court for three corrective actions. First, Billingsley

filed a motion to strike the store managers’ declarations. Second, Billingsley

sought a protective order that would prohibit Citi Trends or its agents “from

communicating with any plaintiff, opt-in plaintiff or potential collective class

member regarding matters related to this litigation in a[n] intimidating, misleading

or coercive manner.” Third, Billingsley asked the district court to “issue a

corrective letter or include such corrections in an order granting court supervised


       3
         On November 19, 2012, the first putative collective action member subject to an
arbitration agreement joined this action. A month later, two additional collective action members
subject to the arbitration agreement joined the action.


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notice to potential plaintiffs of their opt-in rights correcting the effects of [Citi

Trends’s] conduct.”

      After briefing by both parties, the district court denied Billingsley’s motion

to strike and motion for a protective order. The district court deferred ruling on

Billingsley’s request for corrective action until the district court issued a ruling on

Billingsley’s motion for conditional collective action certification.

E.    Ruling on Conditional Certification and Corrective Action

      On January 14, 2013, the district court held a hearing on Billingsley’s

motion for conditional certification.

      Based on affidavits from several opt-in plaintiffs and the lenient standard for

conditional certification in a FLSA collective action, the district court granted

Billingsley’s (1) motion for conditional certification of the collective action and

(2) motion to send court-approved notice to potential opt-in plaintiffs. 4

      The district court then turned to the issue deferred in its earlier order:

Billingsley’s motion for corrective action. Pertaining to the request for corrective

action, the district court found that—after the parties’ May 31, 2012 status

conference and before Billingsley’s deadline to move for conditional certification

and notice—“Citi Trends initiated company-wide in-person meetings between two

      4
          The district court approved the text of the notice at a later date.


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corporate representatives and its [store managers], who are potential collective

class members” but not presently parties to the lawsuit. The district court found

that, at these meetings and at Citi Trends’s direction, almost every store manager

completed a fill-in-the-blank declaration about her job duties and signed an

arbitration agreement that bound the store manager to arbitrate any claims she had

against Citi Trends.

      Based on its “responsibility to see that an employer not engage in coercion

or duress to decrease the size of a collective class and defeat the purpose of the

collective action mechanism of the FLSA,” the district court granted, in part,

Billingsley’s motion for corrective action. Specifically, the district court ordered

that its supervised notice state that any potential plaintiff who felt that she signed

the mandatory arbitration agreement under duress was allowed to opt-in to the

collective action notwithstanding her agreement to the contrary. Based on this

decision, the court stated that Citi Trends could not move to compel arbitration for

those store managers who might elect to opt-in to the action, even if those

managers had signed the arbitration agreement.

F.    Motion for Reconsideration and Motion to Compel Arbitration

      Defendant Citi Trends requested reconsideration of the district court’s order

allowing putative plaintiffs to opt-in to the FLSA collective action notwithstanding


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the terms of the arbitration agreement. Citi Trends simultaneously moved to

compel arbitration.

      After briefing by the parties, the district court granted Citi Trends’s motion

for reconsideration and scheduled an evidentiary hearing on Citi Trends’s motion

to compel arbitration. The court stated that the hearing was intended to elicit

“evidence surrounding the potential opt-in plaintiffs’ signing of the mandatory

arbitration agreements to determine if any coercion, duress, or intimidation

occurred.”

      After a two-day evidentiary hearing, which included live testimony, the

district court orally denied Citi Trends’s motion to compel arbitration. The district

court followed its oral order with a written order denying Citi Trends’s motion to

compel arbitration.

G.    District Court’s Findings of Fact

      To support its order denying Citi Trends’s motion to compel arbitration, the

district court made the following findings of fact:

      Citi Trends devised and implemented a new alternative dispute resolution

(“ADR”) policy in the late spring and early summer of 2012—after it was served

with the complaint in this action on February 27, 2012, and after the district court

set a scheduling conference for May 31, 2012. Weeks after the district court’s


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May 31, 2012 scheduling order,5 Citi Trends began to roll out its new ADR policy.

The ADR policy included a mandatory agreement to arbitrate all disputes

individually rather than collectively.

       By June 30, 2012, Citi Trends sent its human resource representatives to

meet with store managers to roll out the new ADR policy—but only to putative

collective action members (i.e., store managers). Throughout the summer, Citi

Trends’s human resource representatives met individually with all store managers

across the country. Citi Trends had two employees in each ADR meeting: a

human resources representative and a “witness.”

       The human resources representative who met with the store managers

advised Citi Trends in its employment decisions. Thus, the store managers

reasonably believed the human resources representative had authority to make or

influence employment decisions, including hiring and firing decisions.

       Store managers were ordered to attend the ADR meetings by their

supervisors. Citi Trends did not inform the store managers of the true purpose of

the mandatory meetings. Instead of telling the store managers that the meetings




       5
         The scheduling order required Billingsley to file a motion for conditional certification of
the collective action by July 31, 2012 with briefing to be completed by September 10, 2012.


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concerned the company’s new ADR policy, Citi Trends told the store managers

that the mandatory meetings concerned the issuance of a new employee handbook.

       Typically, Citi Trends rolled out its new employee handbook in a group

setting. The handbook was generally provided in printed form (i.e., not as a

photocopy), and the employees were required to sign for the handbook. Here,

however, Citi Trends did not follow any of its general procedures for rolling out

the employee handbook. Instead, Citi Trends (1) held two-on-one private meetings

with each store manager in a small, back room in Citi Trends retail stores—the

same places where the store interrogated or investigated its employees,

(2) discussed only the ADR policy and the fill-in-the-blank declarations related to

the store managers’ job duties, (3) provided photocopied versions of the employee

handbooks as the store managers left the meetings, and (4) did not require the store

managers to sign for the photocopied employee handbook.6 The district court

found that this rushed and atypical rollout of the employee handbook demonstrated

that Citi Trends’s handbook rollout was “pretext for presenting the [arbitration]

Agreement to the [store managers] to derail their participation in this lawsuit.”




       6
        Eventually, the store managers (and all other Citi Trends employees) received, and
signed for, printed versions of the employee handbooks in the usual way.


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       When a store manager arrived at the back-room meetings, a human

resources representative greeted the store manager. A second individual was also

at each meeting; however, this person was not introduced to, or known by, the

store managers.

       At the meetings, Citi Trends’s human resources representative gave the store

managers these documents: the arbitration agreement, a fill-in-the-blank

declaration, and the store manager disclosure. The store managers were asked to

sign each of these documents at the meeting.

       Citi Trends informed the store managers that the arbitration agreement was a

condition of continued employment. The store managers understood that they

would be fired if they did not assent to the arbitration agreement or the new ADR

policy. 7 Thus, the store managers lacked meaningful choice in whether to sign the

arbitration agreements or other documents. The district court found the setting of

the back-room meetings to be a “highly coercive” and “interrogation-like.”

       Opt-in plaintiffs testified that they signed the documents but felt intimidated

by the human resources representative. They also felt pressured to sign the



       7
        As it turns out, Citi Trends intended to defer employment decisions related to a store
manager’s refusal to sign the arbitration agreement until after this lawsuit concludes. However,
Citi Trends did not inform the store managers that immediate termination would not occur if they
declined to sign the arbitration agreement.


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arbitration agreements to avoid losing their jobs. Even when specifically

requested, Citi Trends did not give the store managers copies of the documents that

the store managers signed.

       The district court found that Citi Trends did not conceive or begin to

institute its ADR policy until after the district court held a scheduling conference to

determine when and how Billingsley must move for conditional certification. Citi

Trends then rolled out its ADR policy in a “blitzkrieg fashion” and only required

potential members of this collective action to agree to the ADR policy. The district

court found that Citi Trend’s “ADR roll-out was a hurried reaction specifically

targeted at curtailing this litigation.”

       The district court found that the “purpose and effect” of the arbitration

agreement was “to protect Citi Trends in this lawsuit.” The district court also

found that the timing of the arbitration agreement’s rollout “was calculated to

reduce or eliminate the number of collective action opt-in Plaintiffs in this case”

and the rollout was “replete with deceit” and “designed to be[] intimidating and

coercive.”

H.     District Court’s Conclusions of Law

       Based on its findings of fact, the district court concluded that the arbitration

agreements were unconscionable as a matter of law. Because the arbitration


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agreements were unconscionable, the district court denied Citi Trends’s motion to

compel arbitration against the opt-in plaintiffs who had signed the arbitration

agreements.

      The district court also denied Citi Trends’s motion to compel arbitration

against the opt-in plaintiffs for an alternative reason. The court found that there

was “a record of abuse on the part of Citi Trends in targeting potential class

members and procuring the signatures of its [store managers] on the [arbitration]

Agreements.” As such, the district court exercised its managerial responsibility to

oversee party joinder in FLSA collective actions and determined that—to correct

the effect of Citi Trends’s misconduct—it would not enforce the arbitration

agreements against any opt-in plaintiffs who signed the agreement under Citi

Trends’s coercive ADR rollout process in the summer of 2012.

I.    Court-Approved Notice

      After the district court conditionally certified the collective action and

denied Citi Trends’s motion to compel arbitration, the parties proposed the text of

the notice that would be mailed to potential collective action plaintiffs. The

proposed notice described the action, notified store managers of their right to join

the action, informed store managers that they could join the lawsuit even if they




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had signed the arbitration agreement during the summer of 2012, and described the

procedure for joining the action.

       The district court approved parties’ proposed notice.

J.     Instant Appeal

       Defendant Citi Trends timely appealed from the district court’s order

denying Citi Trends’s motion to compel arbitration. See 9 U.S.C. § 16 (permitting

interlocutory appeal from an order denying a motion to compel arbitration).

       The district court stayed the proceeding below pending resolution of this

appeal. The stay went into effect after the notice and joinder (i.e., opt-in) period

ended.

                                      II. DISCUSSION

       The district court provided alternative reasons for its decision to deny Citi

Trends’s motion to compel arbitration. We begin with the district court’s decision

to deny Citi Trends’s motion to compel arbitration based on the district court’s

responsibility to oversee party joinder in FLSA actions. 8




       8
        We review this portion of the district court’s order for abuse of discretion. See Gulf Oil
Co. v. Bernard, 

, 103, 

, 2201 (1981).


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A.     FLSA

       Congress passed the FLSA to protect workers from overbearing practices of

employers who had greatly unequal bargaining power over their workers. See

Roland Elec. Co. v. Walling, 

, 668 n.5, 

, 418 n.5 (1946).

Congress has expressed a policy that FLSA plaintiffs should have the opportunity

to proceed collectively. See 29 U.S.C. § 216(b); Hoffmann–La Roche, Inc. v.

Sperling, 

, 173, 

, 488 (1989) (discussing the FLSA’s

“broad remedial goal”). 9 To join the FLSA collective action, each party plaintiff

must consent in writing to become a plaintiff in the case. 29 U.S.C. § 216(b). This

is referred to as opting-in to the action. 10

       The FLSA’s collective action mechanism (1) reduces the burden on low

wage employees through the pooling of resources and (2) allows for the efficient

resolution of common issues of law and fact that arise from the same illegal

conduct. Morgan v. Family Dollar Stores, Inc., 

, 1264–65 (11th Cir.

2008); see also Hoffmann–La 

, 110 S. Ct. at 486 (noting a

       9
         Hoffmann–La Roche involved a suit brought under the Age Discrimination in
Employment Act, 29 U.S.C. § 621 et seq. 

, 110 S. Ct. at 484.
Section 7(b) of the ADEA incorporates the enforcement provisions of the Fair Labor Standards
Act, including 29 U.S.C. § 216(b). 29 U.S.C. § 626(b).
       10
          The requirement that potential plaintiffs “opt-in” to the collective action is a primary
feature that distinguishes FLSA collective actions from class actions that are subject to Rule 23.
Indeed, unlike the FLSA, Rule 23 requires putative class members to “opt out” if they do not
wish to be bound by the outcome of the class action. See Fed. R. Civ. P. 23(c)(2)(B).


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collective action affords plaintiffs the “advantage of lower individual costs to

vindicate rights by the pooling of resources” and “[t]he judicial system benefits by

efficient resolution in one proceeding of common issues of law and fact”).

B.    District Court’s Managerial Responsibility

      Although collective and class actions “serve an important function in our

system of civil justice,” collective and class actions present “opportunities for

abuse as well as problems for courts and counsel in the management of cases.”

Gulf Oil Co. v. Bernard, 

, 99–100, 

, 2199–2200 (1981)

(discussing Rule 23 class actions); see Hoffmann–La 

, 110

S. Ct. at 486–87 (extending reasoning of Gulf Oil to collective actions).

      In particular, the benefits of the FLSA’s collection action mechanism

“depend on employees receiving accurate and timely notice concerning the

pendency of the collective action, so that they can make informed decisions about

whether to participate.” Id. at 

. Because formal notice to

putative FLSA collective members is provided after conditional certification has

been approved by the district court, pre-certification, ex parte communication with

putative FLSA collective members about the case has an inherent risk of prejudice

and opportunities for impropriety.




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      To avoid such prejudice and impropriety and to ensure the potential

plaintiffs have a fair opportunity to opt-in to a FLSA collective action, the district

court has the discretion to “facilitat[e] notice to potential plaintiffs” and “broad

authority” to exercise control over the collective action and to govern the conduct

of counsel and parties in the collective action. See Gulf 

, 101

S. Ct. at 2200 (class actions); see also Hoffmann–La 

–

(affirming the power of district courts to exercise control over

collective actions); Kleiner v. First Nat’l Bank of Atlanta, 

, 1200

(11th Cir.1985) (noting the district court’s “preeminent role in managing the

notification process”).

      A district court’s authority to control counsels’ conduct in a § 216(b)

collective action includes the authority to prevent confusion and unfairness

concerning an FLSA collective action. See Hoffmann-La 

–

. It also includes “authority to manage the process of joining

multiple parties in a manner that is orderly, sensible, and not otherwise contrary to

statutory commands or the provisions of the Federal Rules of Civil Procedure.” Id.

at 

(citing Fed. R. Civ. P. 83).

      Indeed, because of the potential for abuses in collective actions, such as

unapproved, misleading communications to absent class members, “the court has a


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managerial responsibility to oversee the joinder of additional parties to assure that

the task is accomplished in an efficient and proper way.” See 

110 S.

Ct. at 486. The district court also has the responsibility to insure that all parties act

fairly while the court decides whether and how the action will move forward under

the FLSA. See id. at 

.

      The district courts’ interest in managing collective actions in an orderly

fashion is reinforced by Rule 83(b), which allows courts to “regulate their practice

in any manner consistent with” federal or local rules. Fed. R. Civ. P. 83(b). “Rule

83 endorses measures to regulate the actions of the parties to a multiparty suit.”

Hoffmann–La 

, 110 S. Ct. at 487 (citing Gulf 

n.10). Consistent with Rule 83, “courts traditionally

have exercised considerable authority ‘to manage their own affairs so as to achieve

the orderly and expeditious disposition of cases.’ ” 

110 S. Ct. at 487

(quoting Link v. Wabash R.R. Co., 

, 630–631, 

, 1389

(1962)).

      The district courts’ interest in managing collective actions is also reinforced

by Rule 16(b), which requires the court to enter a scheduling order limiting time

for various pretrial steps such as joinder of additional parties. 

110 S. Ct.

at 487.


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C.    Court’s Authority to Correct the Effects of Citi Trends’s Conduct

      Given the “broad authority” that the district court has to manage parties and

counsel in an FLSA collective action, the district court did not abuse its discretion

in determining that Citi Trends’s conduct in the summer of 2012 undermined the

court’s authority to manage the collective action. Nor did the district abuse its

discretion in determining that—to correct the effect of Citi Trends’s misconduct—

it would allow putative collective action members to join the lawsuit

notwithstanding their coerced signing of the arbitration agreements.

      Whatever right Citi Trends may have had to ask its employees to agree to

arbitrate, the district court found that its effort in the summer of 2012 was

confusing, misleading, coercive, and clearly designed to thwart unfairly the right of

its store managers to make an informed choice as to whether to participate in this

FLSA collective action. Since the arbitration agreements by their terms will

directly affect this lawsuit, the district court had authority to prevent abuse and to

enter appropriate orders governing the conduct of counsel and the parties. See

Hoffmann–La 

, 110 S. Ct. at 486–87; see also 

(class action).

      The district court simply did what other district courts routinely do: exercise

discretion to correct the effects of pre-certification communications with potential


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FLSA collective action members after misleading, coercive, or improper

communications are made. 11 See, e.g., Balasanyan v. Nordstrom, Inc., No. 11-CV-

2609-JM-WMC, 

, at *1–2, 4 (S.D. Cal. Mar. 8, 2012) (refusing to

enforce individual arbitration agreement in an FLSA action because the

defendant’s imposition of the agreement was an improper class communication);

Williams v. Securitas Sec. Servs. USA, Inc., No. 10-7181, 

, at *8–12 (E.D. Pa. July 13, 2011) (invalidating arbitration agreement

imposed on the defendant’s employees during pre-certification stage of FLSA

litigation and ordering corrective measures because the arbitration agreement was a

“confusing and unfair communication” with the potential opt-in plaintiffs); Ojeda-

Sanchez v. Bland Farms, 

, 1379–81 (S.D. Ga. 2009) (granting

       11
          Courts take similar action when misleading or improper communications are directed at
Rule 23 class action plaintiffs. See, e.g., 

–03 (recognizing district
court’s authority to police Rule 23 class member contacts and to prohibit the defendant from
engaging in unsupervised, unilateral communications with the plaintiff class members to solicit
opt-out forms from those class members); O’Connor v. Uber Techs., Inc., No. C-13-3826 EMC,

, *7 (N.D. Cal. Dec. 6, 2013) (invalidating an arbitration agreement imposed
before class certification where the imposition of the agreement ran a substantial risk of
interfering with the class members’ rights under Rule 23); In re Currency Conversion Fee
Antitrust Litig., 

, 252-54 (S.D.N.Y. 2005), appeal granted, order amended by
No. M 21-95, 

(S.D.N.Y. Aug. 9, 2005) (refusing to enforce an arbitration
agreement because the agreement was instituted through misleading means after the case was
filed and, thus, was an improper communication with putative class members that interfered with
the proper administration of the class action); Mevorah v. Wells Fargo Home Mortgage, Inc.,
No. C 05-1175 MHP, 

, at *5-6 (N.D. Cal. Nov. 17, 2005) (ordering various
actions, including the cessation of unapproved pre-certification communications with potential
class members, to correct any inaccurate impression created by the defendant’s misleading and
improper pre-certification communications).


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a limited protective order in FLSA collective action where the defendants engaged

in unsupervised, unsolicited, in-person interviews of the plaintiffs in an

environment that encouraged speedy and uninformed decision-making); Longcrier

v. HL-A Co., 

, 1229–30 (S.D. Ala. 2008) (striking

declarations obtained through the defendants’ abusive and misleading

communications with prospective opt-in plaintiffs); Jones v. Casey’s Gen. Stores,

, 1086, 1089 (S.D. Iowa 2007) (limiting the plaintiffs’

counsel from affirmatively soliciting potential opt-in plaintiffs to join the FLSA

action and requiring counsel to modify their website to provide “only a factual,

accurate, and balanced outline of the proceedings”); Maddox v. Knowledge

Learning Corp., 

, 1342–44 (N.D. Ga. 2007) (observing that

district courts in § 216(b) actions rely on broad case management discretion by

limiting misleading, pre-certification communications and exercising that

discretion in the case before the court by ordering the plaintiffs to correct false,

unbalanced, and misleading statements on their website); Belt v. Emcare, Inc., 

, 667–70 (E.D. Tex. 2003) (sanctioning the employer and enjoining

the employer from communicating ex parte with potential class action members

because the employer intentionally attempted to subvert the district court’s role in




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the FLSA collective action by unilaterally sending a misleading and coercive letter

to potential plaintiffs that encouraged those persons not to join).

      District courts’ corrective actions have included refusal to enforce arbitration

agreements instituted through improper means and where the timing of the

execution of those agreements was similar to the post-filing, pre-certification

timing in this case. See, e.g., Balasanyan, 

, at *1–2; Williams,

, at *8–12; see also In re Currency Conversion Fee

Antitrust 

–54 (imposing similar corrective action in

Rule 23 class action).

      The district court did not abuse its discretion in correcting the effects of Citi

Trends’s improper behavior in this case. The district court held an initial hearing,

after which it denied Citi Trends’s motion to compel arbitration. The court then

reconsidered its order, held an additional two-day evidentiary hearing, made

specific and detailed findings of fact that were supported by the record, and took

minimal action to correct the effects of Citi Trends’s conduct.

      The district court limited its order temporally and substantively. The district

court limited its order to those agreements signed under the coercive conditions

used by Citi Trends in the summer of 2012. And, the district court limited its order

to this particular FLSA action. The court specifically said that it was not ruling on


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the enforceability of the arbitration agreements as they relate to other cases or

controversies. The district did not restrict Citi Trends from entering into new

arbitration agreements with the store managers; nor did the court prevent store

managers from electing to comply with the terms of the arbitration agreements that

they signed in the summer of 2012.

      The district court’s limited remedial action is not an abuse of its

considerable discretion to manage this collective action. Accord 

(holding that a district court’s power to manage a class action included the

power to prohibit a defendant from making “unsupervised, unilateral

communications with the plaintiff class”). That is especially true given the opt-in

nature of FLSA collective actions. Because FLSA plaintiffs must opt-in,

unsupervised, unilateral communications with those potential plaintiffs can

sabotage the goal of the FLSA’s informed consent requirement by planting the

slightest seed of doubt or worry through the one-sided, unrebutted presentation of

“facts.” Because the damage from misstatements could well be irreparable, the

district court must be able to exercise its discretion to attempt to correct the effects

of such actions. See Hoffmann–La 

, 110 S. Ct. at 486

(noting that court intervention in the collective action notice process may be

necessary).


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       Because we affirm the district court’s decision to deny enforceability of the

arbitration agreements in this case, we necessarily must affirm the district court’s

order denying Citi Trends’s motion to compel arbitration.12

                                    III. CONCLUSION

       Because the district court did not abuse its discretion in managing the

parties’ and counsels’ conduct in this FLSA collective action, the district court’s

order denying Citi Trends’s motion to compel arbitration is affirmed. 13

       AFFIRMED.




       12
          The district court’s “managerial responsibility” rationale for not compelling arbitration
did not relate to the substantive validity of the arbitration agreements. Instead, the district
court’s “managerial responsibility” rationale addressed, as a procedural matter, whether and how
the district court can regulate an employer’s attempt to impose an arbitration requirement and
waiver of legal rights during the course of a FLSA collective action lawsuit. Thus, our
affirmance of the district court’s exercise of its managerial discretion does not require us to
determine whether the district court lacked authority to consider issues related to the arbitration
agreements’ enforceability or formation.
       13
         Because we affirm on this ground, we do not reach the district court’s alternative reason
for denying Citi Trends’s motion to compel arbitration.


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