CONTI, Chief Judge.
On October 8, 2013, plaintiff Jennifer Masoner ("plaintiff" or "Masoner") filed a three-count complaint against her employer, Education Management Corporation ("defendant" or "EDMC"), alleging sex discrimination in violation of 42 U.S.C. § 2000e-2 (count I), retaliation in violation of 42 U.S.C. § 2000e-3 (count II), and retaliation in violation of the Equal Pay Act, 29 U.S.C. § 206(d), and the Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq. ("FSLA"), (count III). On December 6, 2013, EDMC filed a motion to dismiss the complaint for lack of subjectmatter jurisdiction and a brief in support of the motion. (ECF Nos. 12, 13.) On January 7, 2014, Masoner filed a response in opposition to the motion to dismiss and a brief in support of the response. (ECF Nos. 16, 17.)
On January 21, 2014, the court held a hearing with respect to EDMC's motion to dismiss. After consideration of the submissions by the parties and the arguments presented at the hearing, the court determined EDMC's motion to dismiss would be granted and the complaint would be dismissed with prejudice. This opinion sets forth the court's reasoning for that decision.
Masoner was hired by EDMC in 2005, and is currently employed by EDMC. (ECF No. 1 ¶¶ 7, 38, 85.) Masoner alleges that in May and June 2012, she discussed, and then was punished for discussing, gender-based compensation at EDMC. (Id. ¶ 66.) On May 16, 2012, Masoner requested a meeting with Colleen Schaefer ("Schaefer"), Masoner's human resources representative, to discuss the issues she was having in the workplace, including issues she had with her supervisor, Dr. Hilbelink ("Hilbelink"). (Id. ¶ 54.) On May 21, 2013, Masoner met with Schaefer and Jaclyn Mitchell ("Mitchell"), EDMC's senior human resources generalist. (Id. ¶ 58.) On May 22, 2013, Masoner met with Schaefer to discuss Masoner's concerns with respect to Hilbelink. (Id. ¶ 62.) On May 23, 2012, Masoner again met with Schaefer and Mitchell. (Id. ¶ 64.)
On June 12, 2012, Masoner completed an intake questionnaire with the Equal Employment Opportunity Commission (the "EEOC"). (ECF No. 17-1; ECF No. 1 ¶ 106.) Two days later, on June 14, 2012, Schaefer called Masoner on the telephone and told Masoner that she closed the investigation with respect to Hilbelink. (Id. ¶ 70.)
In or around July 2012, EDMC adopted a new Alternative Dispute Resolution Policy
(ECF No. 13-1 at 8-9.)
On or about July 10, 2013, Masoner received a Dismissal and Notice of Rights letter (the "letter") from the EEOC. (ECF No. 17-4.)
On September 25, 2012, at 8:00 a.m., Jennifer Swenson ("Swenson"), EDMC's vice president of human resources for online higher education, sent an email to Masoner's work email address, i.e., jmasoner@southuniversity.edu. (Id. ¶ 6.) The email provided:
(ECF No. 13-1.) On the same day at 12:10 p.m., Masoner forwarded the email from Swenson with respect to the A DR Policy to her private email address, i.e., lascokk6@hotmail.com. (Earls' Decl. (ECF No. 13-1) ¶ 7.)
On October 8, 2013, Masoner filed the complaint in this case. (ECF No. 1.)
On November 5, 2012, at 11:14 a.m., Swenson sent Masoner another email with respect to the ADR Policy. (ECF No. 13-1 at 18.) The email provided:
(ECF No. 13-1 at 18.)
Effective December 2, 2013, EDMC promoted Masoner and increased her salary. (Earls' Decl. (ECF No. 13-1) ¶ 10.) Masoner accepted and agreed to abide by all EDMC's then-existing policies, including the ADR Policy at issue in this case. (Id.)
Masoner never asked any questions about the ADR Policy, expressed a desire to reject or challenge the terms of the ADR Policy, indicated that she found the terms of the ADR Policy to be unfair or oppressive, or made any effort to rescind her acceptance of the ADR Policy and its terms. (Earls' Decl. (ECF No. 13-1) ¶ 11.)
EDMC asserts its motion to dismiss for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). Rule 12(b)(1), however, is not the correct rule of law under which to assert a contract-based defense requiring arbitration. The Third Circuit Court of Appeals has explained:
Liberty Mutual Fire Insurance Co. v. Yoder, 112 Fed.Appx. 826, 828 (3d Cir.2004). In other words, the existence of a valid contract compelling arbitration between the parties does not strip the court of its subject-matter jurisdiction. In this case, the court has federal claim jurisdiction, pursuant to 28 U.S.C. § 1331, because Masoner sued EDMC under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., The Equal Pay Act of 1963, 29 U.S.C. § 206(d), and The Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (ECF No. 1 ¶ 1.) This court's jurisdiction over Masoner's claims will not be compromised if EDMC is able to show Masoner agreed to arbitrate her claims against EDMC; rather, if EDMC is able to show Masoner agreed to arbitrate her claims against EDMC, the court will dismiss Masoner's action because EDMC will have meritoriously asserted a defense in this case.
In Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 772 (3d Cir.2013), the court of appeals reconciled its precedent in which it applied Federal Rule of Civil Procedure 12(b)(6) to motions to compel arbitration with its precedent in which it applied Federal Rule of Civil Procedure 56, i.e., the summary judgment standard, to motions to compel arbitration. The court held that depending on the case before it, either standard may be appropriate. With respect to the Rule 12(b)(6) standard, the court held:
Guidotti, 716 F.3d at 773-74. With respect to the Rule 56 standard, the court held:
Guidotti, 716 F.3d at 774. Here, because EDMC attached documents to its motion to dismiss and Masoner responded by attaching documents to her response in opposition, the Rule 56 standard is appropriate to resolve the motion pending before this court.
Federal Rule of Civil Procedure 56(a) provides that summary judgment shall be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A motion for summary judgment will not be defeated by the mere existence of some disputed facts, but will be defeated when there is a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In determining whether the dispute is genuine, the court's function is not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the nonmoving party. Id. at 249, 106 S.Ct. 2505. The court is to draw all reasonable inferences in favor of the nonmoving party. El v. Se. Pa. Transp. Auth., 479 F.3d 232, 238 (3d Cir.2007) ("In considering the evidence, the court should draw
The United States Court of Appeals for the Third Circuit has stated:
Id. The court may consider material evidence that would be admissible or usable at trial in deciding the merits of a motion for summary judgment. Horta v. Sullivan, 4 F.3d 2, 8 (1st Cir.1993) (citing 10A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 2721, at 40 (2d ed.1983)); Pollack v. City of Newark, 147 F.Supp. 35, 39 (D.N.J.1956), aff'd, 248 F.2d 543 (3d Cir.1957) ("[I]n considering a motion for summary judgment, the court is entitled to consider exhibits and other papers that have been identified by affidavit or otherwise made admissible in evidence.").
EDMC argues Masoner's claims are covered by a mandatory arbitration agreement entered into by the parties, and, therefore, Masoner's complaint should be dismissed because this court lacks subjectmatter jurisdiction to hear the present dispute under the Federal Arbitration Act (the "FAA").
The FAA "was enacted in 1925 in response to widespread judicial hostility to arbitration agreements." AT & T Mobility LLC v. Concepcion, ___ U.S. ___, 131 S.Ct. 1740, 1745, 179 L.Ed.2d 742 (2011). Section 2
In In re Mintze, 434 F.3d 222, 229 (3d Cir.2006), the Third Circuit Court of Appeals explained:
In re Mintze, 434 F.3d at 229. "[T]he threshold questions a district court must answer before compelling or enjoining arbitration are these: (1) Did the parties seeking or resisting arbitration enter into a valid arbitration agreement? (2) Does the dispute between those parties fall within
To decide the first question, i.e., whether the parties entered into a valid agreement to arbitrate, "[a] federal court must generally look to the relevant state law on the formation of contracts to determine whether there is a valid arbitration agreement under the FAA." Blair v. Scott Specialty Gases, 283 F.3d 595, 603 (3d Cir.2002). The parties agree the applicable state law in this case is Pennsylvania law, and "[w]hen applying state law contract principles to arbitration agreements, courts look to the laws of the involved state or territory." Marotta v. Toll Bros., Inc., Civ. Action No. 09-2328, 2010 WL 744174, at *3 n. 3 (E.D.Pa. March 3, 2010) (citing Gay v. CreditInform, 511 F.3d 369, 388 (3d Cir.2007)). Here, according to the complaint, Masoner, a resident of Pennsylvania, was employed by EDMC, a corporation with a business address in Pennsylvania. (ECF No. 1 ¶¶ 5, 6.) Pennsylvania is, therefore, the state "involved" in this action.
In Blair, the Third Circuit Court of Appeals noted:
Id. (quoting ATACS Corp. v. Trans World Communications, Inc., 155 F.3d 659, 666 (3d Cir.1998)). Masoner argues there is no valid arbitration agreement in this case because (1) she did not manifest an intention to be bound by the ADR Policy until she accepted the promotion on December 2, 2013, and (2) there was no consideration for the acceptance of the ADR Policy prior to that date. Each of these arguments will be addressed below.
"In assessing intent, the object of inquiry is not the inner, subjective intent of the parties, but rather the intent a reasonable person would apprehend in considering the parties' behavior." Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 582 (3d Cir.2009) (citing Ingrassia Constr. Co., Inc. v. Walsh, 337 Pa.Super. 58, 486 A.2d 478, 483 (1984)); see Cal. Sun Tanning USA, Inc. v. Elec. Beach, Inc., 369 Fed.Appx. 340, 346 (3d Cir.2010); 1 R. LORD, WILLISTON ON CONTRACTS § 4:1 (4th ed. 2007) ("In the formation of contracts... it was long ago settled that secret, subjective intent is immaterial, so that mutual assent is to be judged only by overt acts and words rather than by the hidden, subjective or secret intention of the parties."). Accordingly, "the inquiry will focus not on the question of whether the subjective minds of the parties have
"Consideration `confers a benefit upon the promisor or causes a detriment to the promisee and must be an act, forbearance or return promise bargained for and given in exchange for the original promise.'" Channel Home Centers v. Grossman, 795 F.2d 291, 299 (3d Cir.1986) (quoting Curry v. Thompson, 332 Pa.Super. 364, 481 A.2d 658, 661 (1984)). Masoner argues her continued employment did not constitute consideration for the ADR Policy. EDMC argues federal courts in Pennsylvania have held continued employment constitutes consideration. EDMC cites various decisions from the District Court for the Eastern District of Pennsylvania.
In Blair v. Scott Specialty Gases, 283 F.3d 595, 604 n. 3 (3d Cir.2002), the plaintiff argued her continued employment was not adequate consideration for her agreement to arbitrate. The court did not decide whether continued employment may be sufficient to serve as adequate consideration because it found that there was adequate consideration in that case based upon both parties agreeing to arbitrate the claims between them. In other words, each party offered its promise to arbitrate as consideration for the other party's promise to arbitrate. Here, it is clear from the language in the ADR Policy that the ADR Policy applies with equal force to claims brought by either the employee or the employer. Therefore, when Masoner agreed to the ADR Policy on December 2, 2013, EDMC also agreed to arbitrate, and there was adequate consideration existed to support that agreement. Based upon the foregoing analysis, the undisputed evidence of record shows that Masoner and EDMC entered into a valid agreement to arbitrate, i.e., the ADR Policy. Whether Masoner's claims are covered the by ADR Policy will be addressed in section B below.
"In determining whether the particular dispute falls within a valid arbitration agreement's scope, `there is a presumption of arbitrability[:] an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'" Century Indemnity Co. v. Certain Underwriters at Lloyd's, London, 584 F.3d 513, 527 (3d Cir.2009) (quoting AT & T Technologies, Inc. v. Communications Workers of Am., 475 U.S. 643, 650, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986)).
Masoner does not dispute that she agreed to abide by the ADR Policy on December 2, 2013. Masoner argues that agreeing to the A DR Policy on December 2, 2013, did not have any effect on this case because (1) the parties' dispute arose prior to the effective date of the ADR Policy; and (2) Masoner filed her claims prior to the effective date of the ADR Policy. (ECF No. 17 at 9-12.) Masoner argues
Masoner argues the ADR Policy "did not contain a provision making it applicable to events occurring before it became effective," and therefore, her claims, which arose in May and June 2012 when she was punished for discussing gender-based compensation, are not covered by the policy. In support of her argument, Masoner points to the language of the ADR Policy providing "[t]his Policy is effective on and after July 1, 2012" and applies to employees "employed on or after the Effective date of this Policy." (ECF No. 17 at 10.)
In light of the presumption in favor of arbitration, however, Masoner's arguments are not persuasive. The ADR Policy does not contain a retroactivity provision, but it does not preclude retroactive application. The purpose of the policy is to "create the exclusive means by which all work-related disputes between [EDMC] ... and its employees will be promptly addressed and fairly resolved." (ECF No. 13-1 at 7) (emphasis added.) There is no temporal limit on the claims covered by the ADR Policy, i.e., there is no provision making the ADR Policy applicable only to claims arising after the effective date of the policy, and the language of the ADR Policy must be read in accordance with the FAA presumption in favor of arbitration. Under those circumstances, the ADR Policy is susceptible of an interpretation that covers Masoner's claims in this case. in other words, the ADR Policy agreed to by Masoner on December 2, 2013, applies to all claims between Masoner and EDMC, including claims that arose prior to the effective date of the ADR Policy. See Century Indemnity Co., 584 F.3d at 527. In light of the foregoing analysis, Masoner's argument that the ADR Policy does not cover her claims because they arose prior to the effective date of the ADR Policy lacks merit and is not a basis for the court to deny EDMC's request to compel Masoner to arbitrate.
Masoner — without citation to legal authority — argues that her claims are not covered by the ADR Policy because she initiated this lawsuit prior to the formation of the parties' agreement on December 2, 2013, by filling out the intake questionnaire with the EEOC on June 12, 2012, and filing the complaint with this court on October 8, 2013. The ADR Policy, however, does not contain language precluding the application of the policy to claims addressed by a complaint filed with a court or an intake questionnaire submitted to the EEOC prior to the parties entering into the agreement.
Based upon the foregoing, a reasonable jury could only find that the claims asserted by Masoner against EDMC in this case are subject to the arbitration agreement entered into by the parties on December 2, 2013. EDMC successfully asserted a defense to Masoner's lawsuit. EDMC's motion to dismiss (ECF No. 12) will be granted, and Masoner's complaint (ECF No. 1) will be dismissed with prejudice. An appropriate order will follow.
9 U.S.C. § 2.