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Degidio v. Crazy Horse Saloon And Restaurant Inc.

United States Court of Appeals, Fourth Circuit

January 18, 2018

ALEXIS DEGIDIO, individually and on behalf of all others similarly situated, Plaintiff-Appellee,
v.
CRAZY HORSE SALOON AND RESTAURANT INC, d/b/a Thee New Dollhouse, Defendant-Appellant, and JOSEPH B. HARGADON, Third Party Defendant.

          Argued: December 5, 2017

         Appeal from the United States District Court for the District of South Carolina, at Florence. Bruce H. Hendricks, District Judge. (4:13-cv-02136-BHH)

         ARGUED:

          James Leon Holt, Jr., JACKSON, SHIELDS, YEISER & HOLT, Cordova, Tennessee, for Appellant.

          Jamisen A. Etzel, CARLSON LYNCH SWEET KILPELA & CARPENTER, LLP, Pittsburgh, Pennsylvania, for Appellee.

         ON BRIEF:

          Gary Lynch, CARLSON LYNCH SWEET KILPELA & CARPENTER, LLP, Pittsburgh, Pennsylvania, for Appellee.

          Before WILKINSON, KING, and FLOYD, Circuit Judges.

         Affirmed and remanded by published opinion. Judge Wilkinson wrote the opinion, in which Judge King and Judge Floyd joined.

          WILKINSON, CIRCUIT JUDGE.

         Plaintiff-appellee Alexis Degidio filed a putative collective and class action against defendant-appellant Crazy Horse Saloon and Restaurant, Inc. (Crazy Horse). This appeal concerns the enforceability of arbitration agreements that were executed more than a year after this litigation began.[1]

         Arbitration is a valuable means of resolving disputes expeditiously, but this case shows that it can sometimes be abused to prolong litigation, exploit the judicial process, and give defendants two opportunities to prevail on the merits. The district court denied Crazy Horse's motion to compel arbitration. For the reasons that follow, we affirm its judgment and remand for further proceedings consistent with this opinion.

         Degidio also argues on appeal that because the National Labor Relations Act (NLRA) protects employees' right to "engage in . . . concerted activities for . . . mutual aid or protection, " 29 U.S.C. § 157, it invalidates arbitration agreements that prevent employees from bringing class or collective actions against employers. This question is currently before the Supreme Court. See Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. 2016), cert. granted, 137 S.Ct. 809 (Jan. 13, 2017) (No. 16-285). Since we find the arbitration agreements infirm for reasons quite independent of the question raised in Epic Systems, we have no need to address that issue.

         I.

         Degidio performed as an exotic dancer at Crazy Horse's gentlemen's club in 2012 and 2013. Crazy Horse classified entertainers who performed at its club as "independent contractors." The entertainers were not paid by Crazy Horse, but were instead compensated through customer tips.[2]

         Degidio filed this class and collective action on August 8, 2013. Degidio alleged that Crazy Horse misclassified her and other putative class members as independent contractors and that it further violated the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. Degidio also claimed that Crazy Horse violated the South Carolina Payment of Wages Act (SCPWA), SC Code § 41-10-10 et seq., by failing to pay entertainers ...


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