CARL J. BARBIER, District Judge.
Before the Court is Defendant, Waffle House Inc. ("Waffle House")'s Motion to Dismiss or Stay the Proceedings and Compel Arbitration.
On September 14, 2012, Plaintiff filed the instant lawsuit against her supervisor, Donald Ballard, and her employer, Waffle House, arising out of Ballard's alleged sexual harassment of Plaintiff while she was employed as a waitress at a Waffle House in Slidell. (Rec. Doc. 1) Plaintiff asserted claims for sex discrimination under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. ("Title VII") and Louisiana state law, La. R.S. 23:301 et seq., as well as claims for sexual assault and threats of bodily harm under Louisiana law. (Rec. Doc. 1, 1). Although it is unclear when Anderson began her initial employment with Waffle House,
(Arbitration Agmt., Rec. Doc. 32-1, p. 1, ¶ 2) (italics added).
Paragraph 12 of the Arbitration Agreement provides "[t]his is the complete agreement of the parties on the subject of arbitration of disputes except for any arbitration agreement in connection with any benefit plan," and that "[e]xcept as provided in paragraph 15 below, this Agreement can only be revoked by a writing signed by both parties which specifically states an intent to revoke this Agreement." (Arbitration Agmt., Rec. doc. 32-1, p. 3, ¶ 12) Paragraph 15 provides in pertinent part:
(Arbitration Agmt., Rec. Doc. 32-1, p. 3, ¶ 15)
Paragraph 12 also expressly provides that "[t]his Agreement shall survive termination of my employment or expiration of any benefit plan." (Arbitration Agmt., Rec. Doc. 32-1, p. 3, ¶ 12) The Arbitration Agreement also expressly specifies that "[t]his is an arbitration agreement, not an employment agreement. This Agreement does not in any way alter the `at-will' status of my employment." (Arbitration Agmt., Rec. Doc. 32-1, p. 3, ¶ 14)
In addition to signing the Arbitration Agreement, Plaintiff initialed the Arbitration Agreement immediately below a provision stating in bold capital letters:
Waffle House moves for an order dismissing or staying Plaintiff's action and compelling arbitration based on the provisions of the Arbitration Agreement between Plaintiff and Waffle House. Waffle House argues that the Arbitration Agreement is valid and enforceable and that the Title VII and Louisiana law violations Plaintiff alleges in this suit are expressly covered by the Arbitration Agreement.
In her opposition, Plaintiff explains that she signed the Arbitration Agreement at issue on September 29, 2009, was subsequently terminated on July 7, 2010, and was thereafter re-hired on March 17, 2011. Although Plaintiff asserts that there is no choice-of-law issue in this case, she implicitly argues that Louisiana law applies to determine whether the parties formed a valid arbitration agreement by citing Louisiana authorities and arguing that she did not consent — as required to form a valid contract under Louisiana law — to arbitration. Specifically, Plaintiff argues that she never consented to arbitrate her claims and that there is no valid Arbitration Agreement in existence, because: (1) her termination on July 7, 2010 extinguished the Arbitration Agreement signed on September 29, 2009, and (2) she never signed a new arbitration agreement subsequent to her rehire on March 17, 2011. (Rec. Doc. 23, p. 3-4) In support of her argument, Plaintiff cites several cases, which she asserts stand for the proposition that an expired contract is unenforceable, including United Teachers of New Orleans v. Orleans Parish School Board, 355 So.2d 899 (La.1978) and Litton Financial Printing Div. v. NLRB, 501 U.S. 190, 111 S.Ct. 2215, 115 L.Ed.2d 177 (1991). Plaintiff also cites Frank v. 84 Components Co., No. 02-14, 2002 WL 1364168, 2002 U.S. Dist. LEXIS 11218 (S.D.Ind.2002), a case in which an Indiana district court denied a motion to stay pending arbitration, and Matterhorn, Inc. v. NCR Corp., 763 F.2d 866 (7th Cir.1985) in support of her argument that the Defendant's motion should be denied.
In reply, Waffle House argues that Plaintiff's extinguishment argument conflicts with the language of the Arbitration Agreement and lacks support in the relevant jurisprudence. Waffle House asserts, relying on multiple provisions of the Arbitration Agreement, that there is ample evidence that the parties did not intend for the Agreement to expire due to any break in the Plaintiff's employment with Waffle House. Moreover, Waffle House argues that Plaintiff was fully aware that the Arbitration Agreement was intended to survive any breaks in her employment with Waffle House based on the presence of her signature and initials on the Arbitration Agreement. Waffle House also argues that the authorities Plaintiff cites in her opposition are inapplicable to this case.
Section 2 of the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq., provides:
9 U.S.C. § 2.
Section 2, "the primary substantive provision of the Act," reflects "a liberal federal policy favoring arbitration agreements" and effectively creates "a body of federal substantive law of arbitrability." Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). The Fifth Circuit has observed that "`[i]n enacting the Federal Arbitration Act, Congress declared a national policy in favor of arbitration. [C]ongress' clear intent, in the Arbitration Act, [was] to move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as possible.'" Snap-on Tools Corp. v. Mason, 18 F.3d 1261, 1263 (5th Cir.1994) (quoting Moses H. Cone Mem. Hosp., 460 U.S. at 22, 103 S.Ct. 927).
Section 3 of the FAA provides:
9 U.S.C. § 3.
"The FAA requires district courts to `compel arbitration of otherwise arbitrable claims, when a motion to compel arbitration is made.'" Harris, 2008 WL 90038, at *1 (quoting Sedco, Inc. v. Petroleos Mexicanos Mexican Nat'l Oil Co., 767 F.2d 1140, 1147 (5th Cir.1985)). In determining motions to compel arbitration, courts conduct a two-step inquiry. Carey v. 24 Hour Fitness, USA, Inc., 669 F.3d 202, 254 (5th Cir.2012); Wash. Mut. Fin. Grp. v. Bailey, 364 F.3d 260, 263 (5th Cir.2004). The Court first inquires whether the parties agreed to arbitrate the dispute at issue. Id. This inquiry consists of two subsidiary questions: "(1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement." Webb v. Investacorp, Inc., 89 F.3d 252, 257-58 (5th Cir.1996). To determine whether the parties formed a valid agreement to arbitrate, the Court applies ordinary principles of state contract law. Am. Heritage Life Ins. Co. v. Lang, 321 F.3d 533, 537-38 (5th Cir.2003); Grigson v. Creative Artists Agency, LLC, 210 F.3d 524, 531 (5th Cir. 2000). "[T]he federal policy favoring arbitration does not apply to the determination of whether there is a valid agreement to arbitrate between the parties." Am. Heritage Life Ins. Co., 321 F.3d at 538. In analyzing arbitrability, courts apply federal substantive law. Grigson, 210 F.3d at 531. Moreover, "as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability." Moses H. Cone, 460 U.S. at 24-25, 103 S.Ct. 927. If the Court finds that there is a valid agreement to arbitrate between the parties and that the dispute in question falls within the scope of the arbitration agreement, the Court inquires whether any federal statute or policy renders the claims nonarbitrable. Wash. Mut. Fin. Grp., 364 F.3d at 263.
Waffle House argues that the Arbitration Agreement was properly formed and is valid and enforceable under both Georgia and Louisiana law.
Under Georgia and Louisiana law, Plaintiff's claims that "no one from Waffle House ever communicated to me that I was bound by any arbitration agreements, nor did I understand the arbitration agreement and that I was waiving my right to jury trial," (Anderson Aff., Rec. Doc. 25-3, ¶ 2) are insufficient to discharge her from her obligations under the Arbitration Agreement she admittedly signed. Under Georgia law, a person who is able to read is bound by the terms of the contracts she signs, unless she can show that she did not read the document, because: (1) "some emergency existed at the time of signing that would excuse her failure to read it," (2) the other party to the contract misled her by an artifice or device that prevented her from reading it, or (3) "a fiduciary or confidential relationship existed between the parties upon which she relied in not reading the contract." Cochran v. Murrah, 235 Ga. 304, 219 S.E.2d 421, 423 (1975). Plaintiff is not claiming that she is unable to read. Moreover, Plaintiff is not claiming that she did not read the contract, only that she does not remember signing it, that she did not understand it, and that no one from Waffle House explained to her that she was bound by it. Under Georgia law, it was Plaintiff's duty, not Waffle House's duty, to ensure that she understood the contents of the Arbitration Agreement before signing it. See Int'l Indem. Co. v. Smith, 178 Ga.App. 4, 342 S.E.2d 4, 5 (1986) (citations omitted) (explaining that even illiterate people who negligently fail to seek out a reliable person to read and explain the contents of a contract before signing it will be estopped from avoiding the contract on the grounds that they were ignorant of its contents). Consequently, under Georgia law, Plaintiff is bound by the terms of the Arbitration Agreement she signed. Cochran, 235 Ga. at 305-06, 219 S.E.2d 421 (concluding that the literate plaintiff was bound by the contract he signed where he could not show that he satisfied one of the three exceptions). Similarly, under Louisiana law, "[i]t is well-settled that a party who signs a written instrument is presumed to know its contents and cannot avoid its obligations by contending that he did not read it, that he did not understand it, or that the other party failed to explain it to him." Coleman v. Jim Walter Homes, Inc., 2008-1221 (La.3/17/09), 6 So.3d 179, 183. Thus, Plaintiff is bound by the terms of the Arbitration Agreement she signed under Louisiana law as well.
Moreover, Plaintiff's argument that she did not understand that she was waiving her right to a jury trial is meritless. See Figueroa v. W-W Automobiles, Inc., No. 402-201, 2002 WL 31992188, at *4 (N.D.Miss. Nov. 5, 2002) (citing Am. Heritage Life Ins. Co. v. Orr, 294 F.3d 702, 710-11 (5th Cir.2002)) (rejecting plaintiff's argument that despite signing an arbitration agreement, he did not knowingly and intelligently waive his right to a jury trial on the grounds that the Seventh Amendment right to trial by jury is limited by a valid arbitration provision waiving the right to resolve a dispute in a judicial forum).
Plaintiff argues that no valid Arbitration Agreement currently exists, because the Arbitration Agreement was extinguished when she was terminated on July 7, 2010, and she never executed a new arbitration agreement with Waffle House when she was rehired on March 17, 2011. Thus, the central issue in this case is not whether Plaintiff consented to arbitrate the claims asserted in this action, whether the parties had a "meeting of the minds," or whether
The Court is not persuaded by Plaintiff's argument that her termination extinguished the Arbitration Agreement. Plaintiff's argument directly contravenes the express language of the Arbitration Agreement, which states that it applies to all future claims and that "[t]his Agreement shall survive termination of my employment." (Arbitration Agmt., Rec. Doc. 32-1, p. 3, ¶ 12) This survival clause unambiguously reflects the parties' intent that the Arbitration Agreement would survive any break in Plaintiff's employment with Waffle House. In addition, the Agreement provides the exclusive mechanisms for revoking the Agreement. In particular, Paragraph 12 provides "this Agreement can only be revoked by a writing signed by both parties which specifically states an intent to revoke this Agreement." (Arbitration Agmt., Rec. doc. 32-1, p. 3, ¶ 12) (emphasis added) Paragraph 15 provides in pertinent part:
(Arbitration Agmt., Rec. Doc. 32-1, p. 3, ¶ 15) (emphasis added). These provisions demonstrate that the parties expressly contemplated the contingency that occurred in this case — Plaintiff's termination — and expressly provided that the contingency would not terminate the Arbitration Agreement. Thus, it was unnecessary for the parties to enter into a new Arbitration Agreement when the Plaintiff was re-hired in March of 2011, because the Arbitration Agreement remained in effect following her termination in July of 2010.
Moreover, as Waffle House points out, the authorities that Plaintiff relies upon are distinguishable and non-binding. For example, in the cases that Plaintiff cites to support her contention that the Arbitration Agreement in this case "expired," United Teachers of New Orleans v. Orleans Parish School Board, 355 So.2d 899 (La.1978) and Litton Financial Printing Division v. NLRB, 501 U.S. 190, 111 S.Ct. 2215, 115 L.Ed.2d 177 (1991), the general issue was whether a party to an expired, fixed-term collective bargaining agreement could be compelled to arbitrate a dispute based on an arbitration clause in the expired collective bargaining agreement. United Teachers of New Orleans, 355 So.2d at 899-900; Litton, 501 U.S. at 205-210, 111 S.Ct. 2215.
Plaintiff also cites, Matterhorn, Inc. v. NCR Corp., 763 F.2d 866 (7th Cir.1985) and Frank v. 84 Components Co., No. 02-14, 2002 WL 1364168 (S.D.Ind. June 18, 2002). Unlike this case, Frank and Matterhorn involved arbitration clauses that were incorporated into other contracts that the parties later cancelled and attempted to supersede. However, here, the Arbitration Agreement stood independent of any other contract,
The Court is aware of one non-binding authority indicating that an independent Arbitration Agreement signed by an employee during one employment period may not apply to claims that arise during subsequent periods of employment if: (1) the arbitration agreement does not clearly encompass all future periods of employment following termination; (2) upon rehire, the employee explicitly refuses to sign an Arbitration Agreement and the employer, as a result of the employee's explicit refusal, waives the requirement; and (3) the events giving rise to the employee's claim occurred after the employee's explicit refusal to sign the arbitration agreement and the employer's waiver. See Mitchell v. J.V. Indus. Cos., Ltd., No. 08-1135, 2008 WL 8444325, at *2-4 (S.D.Tex. Aug. 11, 2008). However, the facts of this case do not satisfy Mitchell's requirements. With respect to condition (1), for example, the instant Arbitration Agreement does clearly encompass all future periods of employment following termination, given that it (a) applies to "all claims ... past, present, and future," (b) "shall survive termination of [Plaintiff's] employment," and (c) "will remain valid and enforceable unless modified by Waffle House pursuant to Paragraph 12 or unless Waffle House and I execute a subsequent arbitration agreement...." With respect to condition (2), although Plaintiff asserts that she "never
The Court finds that all of Plaintiff's claims fall squarely within the scope of the Arbitration Agreement.
Accordingly,
(Arbitration Agmt., Rec. Doc. 28-2, p. 2, ¶ 13)
Waffle House argues that the choice of law provision governs and that Georgia law applies to determine whether the parties formed a valid, enforceable Arbitration Agreement. Alternatively, Waffle House argues that the Arbitration Agreement is also valid under Louisiana law. Plaintiff expressly asserts that there is no choice of law issue (Rec. Doc. 23, p. 4) ("At the outset it must be noted that there is no "conflict of law" issue present in this case"), but then implicitly argues that Louisiana law governs the issue of whether the parties formed a valid Arbitration Agreement by relying on Louisiana authorities. (Rec. Doc. 23, p. 7) ("Under Louisiana law, the consent of both parties is a condition of a valid contract.") Neither party has briefed the Court on the choice-of-law issue, and it is unnecessary for the Court to decide which state's law governs the issue, as the Court finds that the Arbitration Agreement was validly formed whether the issue is analyzed under Louisiana or Georgia law.
