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144323

Holickv.CellularSalesofNewYork,LLC

144323
Holickv.CellularSalesofNewYork,LLC

UNITEDSTATESCOURTOFAPPEALS
FORTHESECONDCIRCUIT

AugustTerm,2014

(Argued:June4,2015Decided:September22,2015)

DocketNo.144323

JANP.HOLICK,JR.,STEVENMOFFITT,JUSTINMOFFITT,GURWINDER
SINGH,JASONMACK,TIMOTHYM.PRATT,andWILLIAMBURRELL,on
behalfofthemselvesandallotherssimilarlysituated,

PlaintiffsAppellees,

v.

CELLULARSALESOFNEWYORK,LLC,CELLULARSALESOFKNOXVILLE,
INC.,

DefendantsAppellants.1

Before:WESLEY,HALL,andCARNEY,CircuitJudges.

TheClerkoftheCourtisrespectfullydirectedtoamendthecaptiontoconformtothe
above.
1

PlaintiffsAppelleesTimothyPrattandWilliamBurrellaretwoofthe
namedplaintiffsinthisputativeclassactionlawsuitagainstDefendants
AppellantsCellularSalesofNewYork,LLCanditsparentcompanyCellular
SalesofKnoxville,Inc.Intheirsuitbroughtunderstateandfederallaborlaws,
Plaintiffsallegethat,during2010and2011,theywereunlawfullydeniedvarious
formsofcompensationandbenefitsbecauseDefendantsimproperlyclassified
themasindependentcontractorsratherthanemployees.Defendantsmovedto
compelarbitrationbasedonanarbitrationclausecontainedinPlaintiffs
subsequentemploymentagreements.Thedistrictcourtdeniedthemotionto
compelarbitration,findingthatanothercontractthatwasineffectduringthe
timewhenPlaintiffsclaimsarosesupportedafindingofnonarbitrability.
Defendantsnowpursuethisinterlocutoryappeal.WeAFFIRM.

C.LARRYCARBO,III,Chamberlain,Hrdlicka,White,Williams&
Aughtry,Houston,TX(JulieR.Offerman,Chamberlain,Hrdlicka,
White,Williams&Aughtry,Houston,TX;JosephM.Dougherty,
HinmanStraub,P.C.,Albany,NY,onthebrief),forDefendants
Appellants.

RONALDG.DUNN(DanielA.Jacobs,onthebrief),Gleason,Dunn,
Walsh&OShea,Albany,NY,forPlaintiffsAppellees.

WESLEY,CircuitJudge:

PlaintiffsAppelleesTimothyPrattandWilliamBurrellaretwoofthe

namedplaintiffsinthisputativeclassactionlawsuitagainstDefendants
AppellantsCellularSalesofNewYork,LLC(CellularSales)anditsparent
companyCellularSalesofKnoxville,Inc.(CellularSalesofKnoxville).Intheir
suitbroughtunderstateandfederallaborlaws,Plaintiffsallegethat,during2010
and2011,theywereunlawfullydeniedvariousformsofcompensationand
2

benefitsbecauseDefendantsimproperlyclassifiedthemasindependent
contractorsratherthanemployees.Defendantsmovedtocompelarbitration
basedonanarbitrationclausecontainedinPlaintiffssubsequentemployment
agreements.TheUnitedStatesDistrictCourtfortheNorthernDistrictofNew
York(Mordue,J.)deniedthemotiontocompelarbitration,findingthatanother
contractthatwasineffectduringthetimewhenPlaintiffsclaimsarose
supportedafindingofnonarbitrability.Defendantsnowpursuethis
interlocutoryappeal.
Forthereasonsstatedbelow,thejudgmentofthedistrictcourtis
AFFIRMED.

BACKGROUND2
CellularSalesisinthebusinessofsellingVerizonWirelesscellularservice
plansandmerchandise.PlaintiffsAppelleesTimothyPrattandWilliamBurrell
bothbegantheirrelationshipwithCellularSalesin2010.Atthattime,Cellular
SalesrequiredPlaintiffstoformacorporateentity(suchasalimitedliability
company)andsignaNonExclusiveIndependentSalesAgreement(Sales

Thefactsaredrawnfromthedistrictcourtsmemorandum,supplementedas
necessarybytherecord.ThefactsprovidedrelateonlytoPrattandBurrellbecause
DefendantsCellularSalesanditsparentcompanyhaveappealedthedistrictcourts
denialofthemotiontocompelarbitrationonlyastothosePlaintiffs.
2

Agreement)inordertobesalesrepresentatives.JointApp.231,241.3Each
PlaintiffsignedaSalesAgreementastherepresentativeofhisrespective
company;theSalesAgreementsestablishedaformalrelationshipbetween
CellularSalesandPlaintiffscompanies.Relevantforthisappeal,eachSales
AgreementstatedthattherespectivePlaintiffscompanywasanindependent
contractorofCellularSales.JointApp.233.Inturn,eachPlaintiffwasan
employeeofhisowncompany(referredtoasaSalesCompany):Eachperson
whoisengagedbytheSalesCompanytorenderserviceswithrespecttothose
activitiesforwhichSalesCompanyreceivesSalesCommissionsshallbean
employeeoftheSalesCompanyandnotof[CellularSales].Id.(emphasesadded).
TheSalesAgreementswentontostatethatCellularSaleswouldnot
withholdtaxesonthecommissionsPlaintiffsearnedandthatPlaintiffswerenot
entitledtoanycompensation,benefits,vacationorvacationpay,sickleave,
participationinaretirementprogram,healthinsurance,disabilityinsurance,
unemploymentbenefitsorotherbenefitsfrom[CellularSales].JointApp.234.
EachSalesAgreementincludedadisputeresolutionmechanismthatrequired
thepartiestosubmitadisputearis[ing]underth[e]Agreement...to

Forconvenience,wecitetothecontractsBurrellsigned.ThecontractsPrattsigned
containcontractualprovisionsthatareidenticaltotheprovisionscitedinthisopinion.
SeeJointApp.22528(SalesAgreement);JointApp.21117(CompensationAgreement).
3

mediation.JointApp.235.Shouldmediationfailtoresolvethedispute,the
partiesretainedtherighttopursueanyappropriatelegalactionsagainstthe
otherPartyinacourtofcompetentjurisdiction.JointApp.23536.

In2011,CellularSalesofferedPlaintiffsAppelleesfulltimeemployment.

OnoraboutJanuary1,2012,bothPrattandBurrellsignedCompensation
AgreementswithCellularSalesthat,incontrastwiththepriorSalesAgreements,
containedanarbitrationclause.Thisprovisionstates,inrelevantpart:All
claims,disputes,orcontroversiesarisingoutof,orinrelationtothisdocumentor
Employeesemploymentwith[CellularSales]shallbedecidedbyarbitration..
..JointApp.219.ThefirstparagraphoftheCompensationAgreement
providesforanatwillemploymentrelationship,statingthat[CellularSales]
hasemployedyou(Employee)tosell[VerizonWirelessservicesandrelated
equipment].JointApp.218.PlaintiffsAppelleesallegethat,afterthe
CompensationAgreementsweresigned,CellularSalesbegantotreatthem
differentlyby,interalia,directlypayingcommissionstoPlaintiffsAppelleesand
withholdingfederaltaxesfromthosecommissions.
PlaintiffsAppelleeshavetemporallyconfinedtheirclaimstoeventsthat
transpiredpriortoJanuary1,2012.Theyallegethatbeforetheexecutionofthe

CompensationAgreements,CellularSalesmisclassifiedthemasindependent
contractorswhentheywereactuallyemployees(withinthemeaningofvarious
laborlaws)becauseCellularSalescontrolledtheirworkperformance.Asa
result,PlaintiffsAppelleeswereallegedlydeprivedof,amongotherthings,
overtimecompensationandminimumwage.PlaintiffsAppelleesseek
compensationowedundertheFairLaborStandardsActof1938(FLSA),29
U.S.C.201etseq.,NewYorkcommonlaw,andvariousprovisionsofNew
YorksLaborLaw,N.Y.Lab.Law190etseq.,650etseq.(McKinney).

DISCUSSION4

DefendantsAppellantsCellularSalesandCellularSalesofKnoxville,Inc.

arguethatthedenialoftheirmotiontocompelarbitrationconflictswithlong
standingfederalprecedentunderwhichalldoubtsastotheintentoftheparties
andthescopeofanarbitrationclausemustberesolvedgenerouslyinfavorof
arbitration.5AppellantsBr.10.PlaintiffsAppelleesPrattandBurrellrespond
thatthisCourtneednotreachDefendantsAppellantsargumentbecausethe
CompensationAgreementisunambiguous.UnderPlaintiffsAppelleesview,

ThisCourtreviewsdenovothedistrictcourtsdecisiontodenyamotiontocompel
arbitration.MotorolaCreditCorp.v.Uzan,388F.3d39,49(2dCir.2004).
5Wehavejurisdictionoverthisinterlocutoryappealpursuantto9U.S.C.16(a)(1)(C).
4

theplainlanguageofthecontractrevealsthatthepartiesdidnotintendthe
arbitrationclausetohavearetroactivescopebecausePlaintiffsAppellees
employmentstartedthedaytheCompensationAgreementsweresigned.
Indecidingwhetheradisputeisarbitrable,wemustanswertwo
questions:(1)whetherthepartiesagreedtoarbitrate,and,ifso,(2)whetherthe
scopeofthatagreementencompassestheclaimsatissue.BankJuliusBaer&Co.
v.WaxfieldLtd.,424F.3d278,281(2dCir.2005)(alterationandinternalquotation
marksomitted),abrogatedonothergroundsbyGraniteRockCo.v.IntlBhd.of
Teamsters,561U.S.287(2010).Inthiscase,thepartiesagreedinthe
CompensationAgreementtoarbitrate.Thus,ourdiscussionfocusesonthescope
ofthatagreement.Thedistrictcourtcorrectlydeterminedthatthearbitration
clauseatissuehereisbroadbecauseitappliesto[a]llclaims,disputes,or
controversiesarisingoutof,orinrelationtothisdocumentorEmployees
employmentwith[CellularSales],JointApp.219.SeeJLMIndus.v.StoltNielsen
SA,387F.3d163,172(2dCir.2004).Further,sincethearbitrationclausehasno
explicittemporallimitation,ourtaskistoanalyzewhethertheclaimsaris[e]out
of,or[relate]to...Employeesemploymentwith[CellularSales],JointApp.

219.6SeeSmith/EnronCogenerationLtd.Pshipv.SmithCogenerationIntl,198F.3d
88,99(2dCir.1999).
[I]nlightofthestrongfederalpolicyinfavorofarbitration,theexistence
ofabroadagreementtoarbitratecreatesapresumptionofarbitrabilitywhichis
onlyovercomeifitmaybesaidwithpositiveassurancethatthearbitration
clauseisnotsusceptibleofaninterpretationthatcoverstheasserteddispute.
Doubtsshouldberesolvedinfavorofcoverage.7Id.(internalquotationmarks
omitted).However,theFederalArbitrationActs8liberalpolicyinfavorof

Wedonotanalyzetheportionofthearbitrationagreementthatreferencesdisputes
...arisingoutof,orinrelationtothisdocument,JointApp.219,becauseDefendants
AppellantshavenotarguedthatPlaintiffsAppelleesclaimsaroseoutofthe
CompensationAgreements.
7PlaintiffsAppelleescontendthatarecentSecondCircuitdecision,Lloydv.J.P.Morgan
Chase&Co.,791F.3d265,26970(2dCir.2015),underminespriorcasesinwhichthis
Courthasrequiredpositiveassurancetorebutthepresumptionofarbitrability.The
LloydCourtlabeledthepresumptionofarbitrabilitysoft,and,inPlaintiffsAppellees
view,discardedtherequirementforpositiveassurancetorebutthepresumptionof
arbitrability.Id.at270.WefindPlaintiffsAppelleesargumentunpersuasivefortwo
reasons.First,sinceonepanelofthisCourt[typically]cannotoverruleapriordecision
ofanotherpanel,Gelmanv.Ashcroft,372F.3d495,499(2dCir.2004)(internalquotation
marksomitted),weareboundbythisCircuitscasesthatrequirepositiveassuranceto
rebutthepresumptionofarbitrability.Second,theanalysisinLloyddidnotturnonthe
presumptionofarbitrability,see791F.3dat27071,makingitscharacterizationofthe
presumptiondicta.
8TheFederalArbitrationActprovides:Awrittenprovisioninany...contract
evidencingatransactioninvolvingcommercetosettlebyarbitrationacontroversy
thereafterarisingoutofsuchcontractortransaction,ortherefusaltoperformthewhole
oranypartthereof,oranagreementinwritingtosubmittoarbitrationanexisting
controversyarisingoutofsuchacontract,transaction,orrefusal,shallbevalid,
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arbitrationislimitedbytheprinciplethatarbitrationisamatterofconsent,not
coercion.Specifically,arbitrationisamatterofcontract,andthereforeaparty
cannotberequiredtosubmittoarbitrationanydisputewhich[it]hasnotagreed
sotosubmit.JLMIndus.,387F.3dat171(alterationinoriginal)(citationsand
internalquotationmarksomitted).Itisaxiomaticthat[w]hetherenforcingan
agreementtoarbitrateorconstruinganarbitrationclause,courtsandarbitrators
mustgiveeffecttothecontractualrightsandexpectationsoftheparties.Inthis
endeavor,aswithanyothercontract,thepartiesintentionscontrol.Stolt
NielsenS.A.v.AnimalFeedsIntlCorp.,559U.S.662,682(2010)(citationsand
internalquotationmarksomitted).
Whenconsideringwhetherclaimsfallwithinthescopeofanarbitration
clause,therefore,weanalyzethefactualallegationsmadeintheplaintiffs
complaint.Smith/Enron,198F.3dat99.Iftheallegationsunderlyingtheclaims
touchmatterscoveredbytheparties...agreements,thenthoseclaimsmustbe
arbitrated,whateverthelegallabelsattachedtothem.Id.(internalquotation
marksomitted).9

irrevocable,andenforceable,saveuponsuchgroundsasexistatlaworinequityforthe
revocationofanycontract.9U.S.C.2.
9Whendecidingwhetherthepartiesagreedtoarbitrateacertainmatter...,courts
generally...applyordinarystatelawprinciplesthatgoverntheformationof

TosupporttheirargumentthattheCompensationAgreementsarbitration
clauseappliesonlyprospectively,PrattandBurrellrelyheavilyonan
unpublishedopinioninwhichtheFourthCircuitinterpretedanarbitration
agreementinacontextquitesimilartothiscase.SeeNewbanksv.CellularSalesof
Knoxville,Inc.,548F.Appx851(4thCir.2013).Asnewlyhiredemployeesofthe
defendants(oneofwhichwasCellularSalesofKnoxville,Inc.),theNewbanks
plaintiffssignedcompensationagreementsthatcontainedanarbitrationclause.
Id.at852.Asinthiscase,theplaintiffshadpreviouslybeenemployeesoftheir
ownsalescompanies,which,inturn,wereindependentcontractorsforthe
defendantspursuanttoasalesagreementbetweenthesalescompaniesandthe
defendants.Id.at852,855.Alsosimilartoourcase,theexecutionofthenew
compensationagreementswasthefirsttimetheplaintiffshadboundthemselves
individuallyinacontractwiththedefendants.Id.

contracts.FirstOptionsofChicago,Inc.v.Kaplan,514U.S.938,944(1995).Weinterpret
acontracttogivefullmeaningandeffecttoallofitsprovisions.LaSalleBankNatl
Assnv.NomuraAssetCapitalCorp.,424F.3d195,206(2dCir.2005)(internalquotation
marksomitted).Onappeal,bothpartiescitetoNewYorklaw,andneitherpartyhas
arguedthatthelawofanyotherstateappliestothisdispute.InNewYork,acontracts
clausesshouldbereadtogethercontextuallyinordertogivethemmeaning.Diamond
CastlePartnersIVPRC,L.P.v.IAC/InterActiveCorp,82A.D.3d421,422(N.Y.App.Div.
2011)(internalquotationmarksomitted).Itisafundamentalprincipleofcontract
interpretationthat,intheabsenceofambiguity,theintentofthepartiesmustbe
determinedfromtheirfinalwritingandnoparolevidenceorextrinsicevidenceis
admissible.IntlKlafterCo.v.ContlCas.Co.,869F.2d96,100(2dCir.1989).

10

Basedonthecontractsplainlanguage,theNewbankscourtdetermined
thatth[e]arbitrationrequirementonlyappliestocausesofactionaccruingfrom
theexecutionofthe[c]ompensation[a]greementsandonward.Id.at855.The
FourthCircuitgroundeditsanalysisinthecompensationagreementsfirst
paragraph,whichinformedthesignerthatheorshehadbecomeanatwill
employeeofCellularSales.Id.Thecourtwentontosupportitsconclusionby
notingthattheplaintiffshadlimitedtheirclaimstothetimeperiodpriortowhen
theysignedthecompensationagreementsandthat,duringthatperiod,the
plaintiffsdidnothaveanyformalorcontractualrelationshipwithCellularSales
atall.Id.Althoughacknowledgingthatthecompensationagreementsdidnot
referencethepriorsalesagreement,thecourtneverthelessdeemedthesales
agreementtheonlyrelevantdocumentthatexistedduringthetimeperiodto
whichtheplaintiffshadconfinedtheirclaims.Id.
UnliketheFourthCircuit,wearenotpersuadedthatthiscasebeginsand
endswiththeplainlanguageoftheCompensationAgreements.Thefirst
paragraphoftheCompensationAgreementstatesinfull:
Cellular Sales (Company) is in the business of retail sales of
Verizon Wireless services and related equipment and accessories
(Products).Companyhasemployedyou(Employee)tosellthe
Products. Employees employment with Company is, and shall

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remain at all times, atwill, and Company may terminate


Employeesemploymentatanytimeforanyreasonorfornoreason,
and Employee may terminate employment at any time for any
reasonorfornoreason.

JointApp.218(emphasesomitted).Neitherthisparagraphnoranyother
provisionofthecontractstatesthattheemployeremployeerelationship
commencedwiththeexecutionoftheCompensationAgreementorotherwise
useslanguagestatingthattheemploymentrelationshipreplacedaprior
contractualarrangement.Theuseofthephrasehasemployedyoudoesnot
indicatespecificallywhentheemploymentrelationshipcommenced.Although
contractuallanguagereferringtothepaymentofcommissionsbeginningonthe
thirdmonthaftercommencementofemploymentandanexampleconcerning
Januarysalescommissionsmightsuggestanunderstandingthatthecontractual
employmentrelationshipbeganinJanuary2012,JointApp.219,theyarenot
determinativeofthestartdateforPlaintiffsAppelleesemployment.Instead,it
isonlythroughparolevidencethatweknowthattheemployeremployee
relationshipcommencedwhenPrattandBurrellsignedtheCompensation
Agreements.Solelyreadingwithinthefourcornersofthecontract,wecannot
discernwhetherthepartiesintendedforthearbitrationagreementsscopeto
coverthecurrentdispute.SincetheplainlanguageoftheCompensation

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Agreementisambiguous,weturntowhetherparolevidenceshedslightonthe
partiesintent.
DefendantsAppellantscontendthatthearbitrationclausehereis
susceptibleofaninterpretationthatcoversthedisputeatissueherebecausePratt
andBurrellallegethattheywereCellularSalesemployeespriortosigningthe
CompensationAgreements.10Inresponse,PlaintiffsAppelleescontendthatthe
priorSalesAgreementsandtheconductofthepartiesrevealspositiveassurance
thatthepartiesdidnotintendforthearbitrationagreementtoapplytoclaims
thataroseduringthetimeperiodwhenDefendantsAppellantsaffirmatively
labeledPlaintiffsAppelleesasnonemployees.11

DefendantsAppellantsalsosubmitthatPrattandBurrellhavenotprofferedforceful
evidencethatsupportsafindingofnonarbitrability.Theirargumentisrootedinaline
ofSupremeCourtcasesthatrelatetoarbitrationclausesincollectivebargaining
agreements.SeeUnitedSteelWorkersLocal45025v.E.I.DuPontdeNemours&Co.,565
F.3d99,10102(2dCir.2009)(percuriam);see,e.g.,AT&TTechs.v.CommcnsWorkersof
Am.,475U.S.643,650(1986).AstheSupremeCourthasnoted,arbitratorsareina
betterpositionthancourtstointerpretthetermsofa[collectivebargainingagreement].
Wrightv.UniversalMar.Serv.Corp.,525U.S.70,78(1998)(emphasisomitted).Although
thisCourthasalsorequiredforcefulevidencetorebutthepresumptionofarbitrability
inthecontextofinternationalarbitrationagreements,wereasonedthatsuchan
approachwascorrectbecause[t]hepolicyinfavorofarbitrationisevenstrongerinthe
contextofinternationalbusinesstransactionsthanthetypicalcase.DavidL.Threlkeld
&Co.v.Metallgesellschaft,Ltd.,923F.2d245,248(2dCir.1991).DefendantsAppellants
havenotpersuadedusthattheforcefulevidencerequirementshouldbeextendedtothe
contractpresentlybeforeus.
11Inthealternative,PlaintiffsAppelleessubmitthatwecanaffirmbasedonthealleged
unconscionabilityofcertainaspectsofthearbitrationagreement.Ourresolutionofthe
10

13

DefendantsAppellantsarecorrectthatthisCourthasheldthatbroad
arbitrationprovisionsthatcontainnoexpresstemporallimitationcanapplyto
claimsthatarosepriortotheexecutionofthearbitrationagreement.For
example,inCoenenv.R.W.Pressprich&Co.,453F.2d1209(2dCir.1972),the
plaintiffhadsignedanarbitrationagreementaspartofhisapplicationfor
membershipintheNewYorkStockExchange(NYSE);itprovidedthatthe
partiesagreedtoarbitrate[a]nycontroversybetween...members....Id.at
121112(alterationinoriginal).Theplaintiffsubsequentlybroughtclaims
againstanotherNYSEmembernamedPressprich.Seeid.Theplaintiffargued
thatheshouldnotberequiredtoarbitratebecausetheclaimpredatedthe
arbitrationagreement;thisCourtdisagreed.Seeid.Wereasonedthat,even
thoughtheclaimpredatedthearbitrationagreement,theplaintiffhadsignedit
withfullknowledgethathehadaclaimagainstPressprichandthatPressprich
wasaStockExchangemember.Id.at1212.12UnfortunatelyfortheDefendants

arbitrabilityissueinPlaintiffsAppelleesfavormakesitunnecessaryforustoevaluate
themeritsoftheirunconscionabilityargumentsinthefirstinstance.
12DefendantsAppellantsalsociteArrigov.BlueFishCommodities,408F.Appx480(2d
Cir.2011)(summaryorder),acaseinwhichwestatedthatanarbitrationclausethat
appliedtoallfederalandstatestatutoryclaimscoveredemploymentbasedclaims
thatpredatedthearbitrationclause.Id.at481(internalquotationmarksomitted).
However,inthatcase,theplaintiffsignedacomprehensiveemploymentagreement
containinganarbitrationclausethreemonthsintohisemployment.Id.Weconclude

14

Appellants,though,Coenenandcaseslikeitaresimplynotonpoint.Wearenot
persuadedbyDefendantsAppellantsargumentthatwemustinterpretthe
arbitrationagreementheretohaveanexpansivetemporalscopesimplybecause
thisCourthasdonesoinothercases.Instead,thecorrectapproachistoassess
whetherthepartiesintendedforthearbitrationclausetocoverthepresent
dispute.
BasedonthepartiesconductpriortoexecutingtheCompensation
Agreements,thepresumptionofarbitrabilityisovercomebecausewefind
positiveassurancethatthearbitrationclausesscopeatleastinsofarasit
concernsthepromisetoarbitratemattersarisingoutof,orinrelationto
Employeesemploymentistemporallylimited.Wereachthisconclusion,in
largepart,basedonthefactthatwhentheCompensationAgreementswere
signed,thepartiescontractualpositionschangedinawaythatimpacted
arbitrability.IntheSalesAgreements,DefendantsAppellantsagreedwiththe
SalesCompaniesthatPrattandBurrellwerenotemployeesofCellularSales.
However,aboutayearandahalflater,DefendantsAppellantsagreedtoemploy

thatArrigoisdistinguishablebecausetherewasnoallegationinthatcase,asthereis
here,thatthepartiescontractualrelationshipchangedinawaythatimplicatedthe
arbitrationclauseatthetimethecontractcontainingthearbitrationagreementwas
executed.

15

PrattandBurrell.13Thisevolvingbusinessrelationshipisdirectlyrelevantto
whetherthepartiesintendedtohaveanemploymentrelationshippriorto
executingtheCompensationAgreement.Itwouldbeinconsistentwiththe
partiesconducttoconstruetheCompensationAgreement,whichreferenced
employment,toapplytoaperiodwhenthepartiesthemselvesdidnot
contemplatesucharelationship.SeeMehlerv.TerminixIntlCo.,205F.3d44,49
50(2dCir.2000)(determiningscopeofarbitrationagreementbythecontracts
language,thetimingofitsexecution,andtheconductoftheparties).
DefendantsAppellantschangeincourseisjustthetypeofpositiveassurance
requiredtoshowthatthepartiesdidnotintendforthearbitrationclausetocover
thecurrentdispute.
Ourconclusionisconfirmedbyourexaminationoftheallegationsinthe
complaint.Toassesswhethertheseallegationstouchmatterscoveredbythe
arbitrationagreement,DefendantsAppellantswouldhaveuslookatthe
complaintsallegationthatPrattandBurrellwereinfactDefendantsAppellants

AslateasDecember28,2011,anofficemanageratCellularSalesexplainedhowtofill
outtheemploymentapplicationcorrectly,clarifyingthatrecipientsofheremailwere
notemployees:EveryonepleasemakesureyouanswertheY/Nquestionscorrectlyon
theEmploymentApplication.YouarenotcurrentlyanemployeeofCellularSalesyouare
CONTRACTEDwithCellularSales;youareanemployeeofyourowncompany(LLCor
Corp).JointApp.257(emphasisadded).
13

16

statutoryemployeespriortoexecutingtheCompensationAgreements.That
argument,althoughsuperficiallyappealing,iswrong.Thecomplaintsfactual
allegationsincludethemannerinwhichPrattandBurrellworkedfor
DefendantsAppellantsandhowDefendantsAppellantsexercisedcontrolover
thatwork.Thesefactualallegationsdonottouchmatterscoveredbythe
arbitrationclausebecausetheydonotevincethepartiesintenttoenterintoan
employmentrelationship.Instead,themoresalientfactualallegationfor
assessingthearbitrationagreementsscopeishowDefendantsAppellantslabeled
PrattandBurrellasnonemployees.
ForpurposesoftheFLSA,acompanysdecisiontolabelaworkerasan
independentcontractororanonemployeewillnotcarrytheday.SeeIrizarry
v.Catsimatidis,722F.3d99,104(2dCir.2013).Contractlaw,ontheotherhand,is
anareaoflawwherelabelsmatter.Thefocalpointofthisdisputeisnotrelated
totheCompensationAgreements.DefendantsAppellantshavemaintained
beforethedistrictcourtthatPrattandBurrellwereindependentcontractors,and
theymayattempttousetheSalesAgreementstoprovethat.Thisdisputeis
abouteventsthattranspiredwhentheSalesAgreementswereineffect,andthese
contractshavetheirowndisputeresolutionmechanism.AfterDefendants

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AppellantsaffirmativelystatedthatPrattandBurrellwerenotemployeesfor
overayear,itringshollowforthemtonowarguethatthepartiesintendedthe
wordemploymentintheCompensationAgreementstoapplyretroactivelyas
tothisdispute.Findingpositiveassurancethatthepartiesdidnotintendforthe
arbitrationagreementtoberetroactive,weaffirmthedistrictcourtsdenialofthe
motiontocompelarbitration.

CONCLUSION

Fortheforegoingreasons,thejudgmentofthedistrictcourtisAFFIRMED.

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