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BOWMAN v. RAYMOURS FURNITURE COMPANY, INC., A-4061-14T1. (2016)

Court: Superior Court of New Jersey Number: innjco20160301315 Visitors: 8
Filed: Mar. 01, 2016
Latest Update: Mar. 01, 2016
Summary: NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION PER CURIAM . Plaintiff Verdelle Bowman appeals from an order entered by the Law Division compelling plaintiff to arbitrate her claims in this case, and staying this action pending the outcome of the arbitration proceeding. We affirm. I. We briefly summarize the salient facts. Plaintiff is an African-American woman who works as a customer-care coordinator for defendant Raymours Furniture Company, Inc., which does business as
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Plaintiff Verdelle Bowman appeals from an order entered by the Law Division compelling plaintiff to arbitrate her claims in this case, and staying this action pending the outcome of the arbitration proceeding. We affirm.

I.

We briefly summarize the salient facts. Plaintiff is an African-American woman who works as a customer-care coordinator for defendant Raymours Furniture Company, Inc., which does business as Raymour & Flanigan Furniture (RF). Plaintiff alleges that on October 18, 2013, Ralph Hunsinger, a supervisor at RF, made a comment to her that she considered racist, discriminatory, and threatening.

Plaintiff reported the comment to the supervisor of RF's Human Resources Department that day, but the supervisor allegedly failed to address the complaint properly. Plaintiff left work and filed a criminal complaint against Hunsinger with the local police department. She alleged that, as a result of her complaint about Hunsinger's comment, she was subject to unfair scrutiny, harassment, and shunning.

Plaintiff claimed that RF's discrimination and retaliation had a severe, adverse impact upon her health. She alleges that she became disabled. She was out of work on sick leave from November 1, 2013, to December 4, 2013. She claimed that, upon her return to work, the "campaign of discrimination and retaliation" resumed, which allegedly caused her to become disabled. She was out of work on sick leave from February 21, 2014, to May 7, 2014.

Plaintiff retained counsel and on March 12, 2014, her attorney wrote to RF asserting claims of discrimination and retaliation, in violation of the New Jersey Law Against Discrimination (NJLAD), N.J.S.A. 10:5-1 to-49. Plaintiff alleged that RF retaliated by cancelling her health insurance. She returned to work on May 7, 2014. She claims that her supervisor resumed the retaliation against her.

RF has an Employment Arbitration Program (Program), which requires that employees arbitrate all claims between RF and the employee that arise from or relate to employment or the termination of employment, and are based on a "legally protected right." The Program defines "legally protected right" to include "any right protected by statute, regulation, ordinance, constitution, contract or common law," including state and federal anti-discrimination or anti-retaliation laws. The Program states that RF and the employee waive "all rights" to have the claim decided by a court, judge, jury or, when permitted by law, an administrative agency.

The Program specifically excludes certain "claims," including claims for workers' compensation or unemployment compensation benefits; employee welfare claims; claims for retirement benefits; unfair labor practice charges; and RF's claims for unpaid debts the employee owes to the company. Also excluded are "disputes about the validity, enforceability or scope of this Program or any part thereof." The Plan states that such claims "are for a court or agency and not for an arbitrator to decide." The Plan requires the claims to be filed within 180 days after the claim arises.

The Program defines the term "Administrator" to mean the American Arbitration Association, JAMS1, "or any other administrator on which [the employee] and [RF] agree." The Plan provides that if AAA and JAMS "cannot or will not serve" and RF and the employee are unable to agree upon an administrator, the court will select the administrator.

The Program further provides that "[i]n the event of any conflict or inconsistency between [the] Program and the Administrator's rules, this Program will govern." The Program also sets forth the minimum qualifications for arbitrators, stating that "unless the parties agree otherwise, the arbitrator must be either a retired judge, or a lawyer with at least [five] years of experience arbitrating employment related claims."

The employee is required to execute the "Associate's Agreement & Consent" form (AA), which states in pertinent part:

I have received a copy of [the Program], which was attached to the Agreement form or has been given to me separately and is incorporated in its entirety herein by reference. I had a full and fair opportunity to review the Program and to understand its terms before signing below. ... I agree to all terms of the Program, which is a contract that I am entering into with... [RF] ... governing how disputes regarding my employment with [RF] are to be resolved. The Program is an essential, required term and condition of my continued employment with [RF]. ... I agree to arbitrate all Claims against [RF] regarding my employment under the terms of and within the deadline set forth in the Program. Such Claims must be filed with the arbitration Administrator defined in the Program. I release and waive all rights I may have to file such Claims in court and further release and waive all rights I may have to have such Claims heard before a jury (and, where permitted by law, an administrative agency and/or and administrative law judge). ... I also agree, hereby and under the Program, to file an arbitration demand with the Administrator no later than 180 days after such Claims arise.... I waive any statute of limitations and administrative filing periods that might provide a longer period of time to file or seek relief for such Claims.

It is undisputed that plaintiff signed an electronic acknowledgement of the Program in 2012 and 2013. It is also undisputed that plaintiff executed the Associate's Agreement and Consent form on September 24, 2014.

On September 26, 2014, plaintiff filed her demand for arbitration with JAMS, and asserted her claims of unlawful discrimination and retaliation. On October 13, 2014, JAMS confirmed the commencement of the arbitration process, and provided the parties with a list of eleven available arbitrators. On October 28, 2014, plaintiff objected to the proposed list, and requested that JAMS provide "a more diverse panel" from which to choose the arbitrator.

On November 7, 2014, RF wrote to JAMS to confirm that it would apply the Program's 180-day limitation period for claims, which RF asserted was not inconsistent with JAMS's "Minimum Standards of Procedural Fairness." RF advised JAMS that it would not proceed to arbitration before JAMS if this provision of the program was not enforced. JAMS did not respond.

On November 14, 2014, plaintiff wrote to JAMS and stated that she was entitled to a diverse panel that "mirror[s] the demographics of a potential jury pool." JAMS responded by providing seven additional proposed arbitrators, all of whom were located outside the New York/New Jersey area. On January 6, 2015, RF wrote to JAMS and objected to the additional expenses that it would have to bear if an arbitrator from outside of the New York/New Jersey area was used. Nevertheless, RF submitted a strike list for the proposed panel. According to RF, it was willing to arbitrate the matter with JAMS even with an out-of-state arbitrator.

RF again sought clarification that JAMS's Minimum Standards would not preclude application of the 180-day limitations period in the Program. On February 18, 2015, JAMS asked plaintiff to respond to RF's contention that the Minimum Standards did not apply in this case because she had executed the arbitration agreement.

JAMS stated that if it determined that its Minimum Standards apply, it would not continue to administer the case unless RF agreed to those standards. Plaintiff took the position that the Minimum Standards applied. On February 19, 2015, RF wrote to JAMS and stated that, if it cannot arbitrate a case where the Program is inconsistent with its Minimum Standards, it should close its file in the case.

The following day, JAMS advised that if RF did not agree to the application of its Minimum Standards, it could not proceed to administer the matter unless plaintiff waived her objections to the disputed provisions. Plaintiff and RF immediately responded, indicating that they were unwilling to waive their positions.

JAMS then informed the parties that because RF's Program did not conform to its Minimum Standards, it would not administer the case. That day, RF filed a demand for arbitration with AAA. It appears that AAA had previously confirmed that it would administer the case in accordance with the Program's terms.

On February 23, 2015, plaintiff filed her complaint in the Law Division, alleging claims of unlawful discrimination and retaliation under the NJLAD. Thereafter, AAA suspended administration of the matter to permit plaintiff to obtain a stay of the arbitration from the court. On April 1, 2015, RF filed a motion to compel arbitration before AAA and to stay the action. Plaintiff opposed the motion, arguing that she was not compelled to arbitrate her claims because RF had breached the terms of the arbitration agreement.

The judge heard oral argument on the motion on April 24, 2015. On April 29, 2015, the judge filed a written opinion, finding that the issue of whether RF breached the agreement is not one the court had the authority to decide. The judge wrote that the issue presented was one the parties would expect an arbitrator to decide, because it did not concern "the validity of the arbitration agreement, the scope of the agreement, or the parties' execution of the agreement." The judge entered the order compelling arbitration with AAA and stayed the action pending conclusion of those proceedings. Plaintiff's appeal followed.

II.

Plaintiff argues that the trial court erred by compelling arbitration. She argues that the issue as to whether RF breached the arbitration agreement is one that pertains to enforceability of the agreement and should be decided by the court, not an arbitrator.

The Federal Arbitration Act (FAA), 9 U.S.C.A. §§ 1-16, and the New Jersey Arbitration Act, N.J.S.A. 2A:23B-1 to-32, "enunciate federal and state policies favoring arbitration." Atalese v. U.S. Legal Serv. Grp., 219 N.J. 430, 440 (2014) citing (AT &T Mobility, LLC v. Concepcion, 563 U.S. 333, 345-46, 131 S.Ct. 1740, 1745, 179 L. Ed. 2d 742, 751 (2011)). The FAA provides that

[a] written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. [9 U.S.C.A. § 2.]

Thus, "courts must place arbitration agreements on equal footing with other contracts and enforce them according to their terms." Concepcion, supra, 563 U.S. at 339, 131 S. Ct. at 1745, 179 L. Ed. 2d at 751. (citations omitted). Therefore, "[a]n arbitration clause cannot be invalidated by state-law `defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.'" Atalese, supra, 219 N.J. at 441 (quoting Concepcion, supra, 563 U.S. at 339, 131 S. Ct. at 1746, 179 L. Ed. 2d at 751).

Like any contract, an agreement to arbitrate "must be the product of mutual assent, as determined in accordance with customary principles of contract law." Id. at 442 (citation and internal quotation marks omitted). Parties may not be compelled to arbitrate when they have not agreed to do so. Ibid. (citation omitted). Furthermore, the parties may only be required to arbitrate issues that they have agreed to submit to arbitration. Ibid. (citation omitted).

Thus, whether parties "are contractually obligated to arbitrate a particular dispute is a matter for judicial resolution." Bd. of Educ. of Bloomfield v. Bloomfield Educ. Ass'n, 251 N.J.Super. 379, 383 (App. Div. 1990), aff'd, 126 N.J. 300 (1991). Moreover, the question of arbitrability is "limited to a narrow range of gateway issues." Opalinski v. Robert Half Int'l, Inc., 761 F.3d 326, 331 (3d Cir. 2014) (citations omitted). Those issues may include the question of whether an arbitration clause in a binding contract applies to a particular dispute. Ibid.

However, all other issues, such as disputes over terms in the arbitration agreement itself, should be decided by an arbitrator, rather than a court. See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84, 123 S.Ct. 588, 592, 154 L. Ed. 2d 491, 498 (2002) (noting that there is a presumption that an arbitrator should decide claims of waiver, delay, or similar defenses to arbitrability) (internal quotation marks and citation omitted).

Here, the trial court correctly determined that the parties had entered into a binding agreement to arbitrate employment-related claims, according to the terms of the Program. As noted previously, plaintiff signed an electronic acknowledgement of the Program in 2012 and 2013, and she signed the Associate's Agreement and Consent form in September 2014. The trial court correctly determined that plaintiff's claims under the NJLAD of unlawful discrimination and retaliation are "claims" as that term is defined in the Program.

Plaintiff argues that the dispute between the parties concerning the arbitration raises issues that the parties agreed should be decided by the court, not an arbitrator. In support of this argument, plaintiff relies upon the provision of the Program which states that "disputes about the validity, enforceability or scope of [the] Program" are claims "for a court or agency and not an arbitrator to decide."

However, the dispute between the parties concerning the terms of the arbitration agreement is not an issue that pertains to the validity, enforceability or scope of the Program. As noted previously, after plaintiff executed the Associate's Agreement and Consent form, she filed her demand for arbitration with JAMS, which is an "Administrator" named in the Program.

JAMS took the position that the Program's 180-day limitations period for claims was inconsistent its Minimum Standards. RF refused to waive the limitations period, and plaintiff insisted upon application of JAM's Minimum Standards. JAMS advised the parties that because RF's Program did not conform to its Minimum Standards, it would not administer the case. RF then sought arbitration by AAA, which is also identified in the Program as a potential "Administrator."

Plaintiff claims that RF breached the arbitration agreement. She alleges that she alone had the authority to choose the "Administrator" for her claims, and she chose JAMS. Plaintiff asserts that RF acted in bad faith "to avoid a racially diverse panel" and to avoid application of JAMS's Minimum Standards. She alleges that, by doing so, RF waived its rights under the arbitration agreement.

However, plaintiff's claim that RF breached the agreement and waived its rights thereunder is not an issue that pertains to the validity, enforceability or scope of the arbitration agreement. It is a claim that relates to the manner in which the arbitrators are selected and whether JAMS's Minimum Standards prevail over the terms of RF's program, which includes the requirement that claims be asserted within 180 days after they arise.

The trial court correctly determined that those issues do not fall under the definition of excluded claims in the Program. The court correctly decided that these issues, which pertain to the manner in which the arbitration proceeding should be conducted, are issues for the arbitrator, not the court.

In support of her argument, plaintiff relies upon Brown v. Dillard's, Inc., 430 F.3d 1004 (9th Cir. 2005). In that case, the plaintiff had agreed to arbitrate employment-related claims. Id. at 1006-07. When the plaintiff demanded arbitration, the defendant ignored the demand and refused to participate in arbitration. Id. at 1005. The plaintiff then filed a lawsuit in the Superior Court, which was ultimately removed to the Federal District Court. Id. at 1005-06.

The Court of Appeals affirmed the denial of the defendant's motion to compel arbitration noting that the defendant had breached the agreement by refusing to participate in the arbitration proceeding. Id. at 1009-10. Here, however, RF did not ignore the arbitration demand or refuse to arbitrate. Rather, there was a dispute as to the terms upon which the arbitration would be administered. Thus, Brown does not support plaintiff's argument on appeal.

Plaintiff also relies upon McKeeby v. Arthur, 7 N.J. 174 (1951). There, the parties had agreed to arbitrate and began the arbitration process. Id. 176-77. Before the arbitrators made their decision, the plaintiff filed a complaint in the trial court. Id. at 177. The defendant filed an answer, counterclaims, and a motion to stay the lawsuit, arguing that the arbitrator's award, which had been issued after the complaint was filed, was a bar to the action. Ibid. The trial court vacated the arbitration award. Id. at 178. The case was tried and judgment entered in favor of the plaintiff. Ibid.

The Supreme Court held that, under the circumstances, the arbitration proceedings were not a bar to the lawsuit because the parties had unsuccessfully attempted to resolve their dispute by arbitration. Id. at 179. The Court noted that the arbitration award had been set aside, and the parties had not made a timely application to reinstate the arbitration proceedings. Id. 180. Accordingly, the parties were "relegated to their former rights and remedies" and the plaintiff could pursue an action based on its "underlying demand." Ibid.

The circumstances presented here are significantly different from those in McKeeby. In this case, the parties disagreed as to the manner in which the arbitration proceeding would be conducted, but they did not abandon the agreement to arbitrate. Indeed, as noted, after JAMS refused to administer the matter, R.F. sought arbitration through the AAA. Thus, plaintiff's reliance upon McKeeby is misplaced.

Plaintiff further argues that RF's Program, as applied here, violates New Jersey's public policy. Plaintiff contends that the Program allows R.F. to reject an Administrator "merely because that Arbitrator provided a racially diverse Panel."

Plaintiff's argument is without sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). Suffice it to say, however, that JAMS withdrew as "Administrator" because of the dispute over the application of its Minimum Standards. R.F did not refuse to arbitrate with JAMS because it had provided a more racially-diverse panel of prospective arbitrators.

Affirmed.

FootNotes


1. JAMS is an alternate dispute resolution provider, that specializes in mediating and arbitrating complex disputes.
Source:  Leagle

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