Hughes Training, Inc. v. Cook

• Decision Date: 23 October 2000
• Docket Number: No. 4:00-MC0019-E.,4:00-MC0019-E.
• Citation: 148 F.Supp.2d 737
• Parties: HUGHES TRAINING, INC., et al., v. Gracie COOK and Littleton Cook.
• Court: U.S. District Court — Northern District of Texas

148 F.Supp.2d 737

HUGHES TRAINING, INC., et al., v. Gracie COOK and Littleton Cook.

No. 4:00-MC0019-E.

United States District Court, N.D. Texas, Fort Worth Division.

October 23, 2000.

COPYRIGHT MATERIAL OMITTED

Jay Rutherford, Jackson Walker, Fort Worth, TX, for plaintiffs.

Tara S. Tankersley, Lewis & Hutchison, Fort Worth, TX, for defendants.

ORDER

MAHON, District Judge.

Now before the Court is an Application to Vacate Arbitration Award filed by Applicants Hughes Training, Inc., Hughes Electronics Corporation, and Raytheon Company (collectively "Raytheon"). Respondents Gracie Cook and Littleton Cook (collectively "Respondents") have filed an opposition response to the application, and Raytheon has submitted a reply to the response. The application to vacate the arbitration award is now ripe for disposition. After considering the submissions of the parties, the law, and the record in this matter, the Court makes the following determination.

I. FACTUAL SUMMARY¹

Gracie Cook is a former employee of Raytheon who began working in the database engineering department in 1995 under the supervision of Mike Braudaway. The database engineering department is responsible for creating geocells, which use computer simulations to reflect the topography of the countries to whom Raytheon sells its aircraft. The department operated under strict time and budgetary demands. Mr. Braudaway was responsible for the department's completion of projects on time and within or under budget.

Ms. Cook experienced difficulty in performing her job duties. In an apparent attempt to help Ms. Cook improve her performance, Mr. Braudaway paired Ms. Cook with a stronger employee to help train and assist her. Despite her additional training, Ms. Cook's work continued to be viewed as inconsistent and needing improvement.

On May 2, 1996, Ms. Cook was counseled at a meeting called by Mr. Braudaway and attended by two other Raytheon supervisors. At the meeting, Ms. Cook was told of customer complaints regarding her job performance. Later, on May 8, 1996, Mr. Braudaway sent a memorandum entitled "Written Warning" to Ms. Cook describing her deficient job performance and giving her until May 31, 1996 to improve her job skills. Reporter's Record, Respondents' Arbitration Exhibit 15. The "Written Warning" provided that after May 31, 1996, Ms. Cook was to be reevaluated for further corrective action. Id. Ms. Cook testified at the arbitration that prior to the "Written Warning," she had little or no warning that her job might be in jeopardy. Reporter's Record, vol. I, pp. 287-288.

Around the time of the "Written Warning," Mr. Braudaway constructed a "test bed" to allow Ms. Cook to demonstrate that she could adequately perform the duties required of her job. Ms. Cook was to complete the test bed on her own and her cubicle mate was instructed not to assist her in its completion.

After receiving the "Written Warning" and beginning work on the test bed, Cook requested a meeting between herself, Mr. Braudaway, and a representative from Raytheon's Human Resources Department. At the meeting, held on May 14, 1996, Ms. Cook showed signs that she was experiencing "stroke-like" symptoms. She was crying, stuttering, and rubbing her left arm as if she were in pain. Mr. Braudaway helped Ms. Cook to her car, and Ms. Cook left work to go to her doctor's office. After the meeting, Ms. Cook went on medical leave, receiving short-term disability benefits, and did not return to work until early August 1996. Reporter's Record, vol. II, p. 32. Ms. Cook later reported to Raytheon that she had a stroke and that was the reason she was on medical leave.²

According to Ms. Cook's attorney, while on medical leave, Ms. Cook, "wanted to go back [to work at Raytheon]. She was anxious to go back; she liked working. So she talked [her physician] into releasing her to go back to work on August 5." Reporter's Record, vol. I, p. 13. When Ms. Cook returned to work on August 5, 1996, she provided Raytheon with a medical release from her physician containing no restrictions on her normal job duties. Reporter's Record, Raytheon's Arbitration Exhibit 2. Ms. Cook was instructed to resume her normal job duties and complete the test bed designed to establish her competency as a database engineer. Upon learning that she would have to resume her normal job duties and complete the test bed, Ms. Cook again began to cry and complain that she was having stroke-like symptoms. Within a few days thereafter Ms. Cook left the employment of Raytheon. See Reporter's Record, vol. II, pp. 32-33.

II. PROCEDURAL BACKGROUND

On or about April 30, 1998, Ms. Cook brought claims against Raytheon in state court for intentional infliction of emotional distress, and later added claims for race discrimination and retaliation, pursuant to the Texas Labor Code, Title VII of the Civil Rights Act of 1964, and 42 U.S.C. § 1981, all claims arising from her employment at Raytheon. Mr. Cook also brought a claim in state court for loss of consortium.

Upon beginning her employment with Raytheon, Ms. Cook signed a document entitled "Mutual Agreement to Arbitrate Claims" (hereinafter "Arbitration Agreement"). The Arbitration Agreement provided that "any and all employment disputes not resolved internally through the EPRP [Employer Problem Resolution Procedure] shall be submitted to final and binding arbitration." Reporter's Record, Respondents' Arbitration Exhibit 19, p. 1. The agreement further provided that "Arbitration under this Agreement may be completed and enforced according to the Federal Arbitration Act [FAA] and shall be conducted in accordance with `the EPRP Arbitration procedure,' which is incorporated herein by reference." Id. Raytheon therefore filed a petition to compel arbitration, and the parties eventually agreed to arbitrate Respondents' claims, even though Mr. Cook's claim for loss of consortium was arguably not covered under the Arbitration Agreement. See Executone Information Systems, Inc. v. Davis, 26 F.3d 1314, 1323 (5th Cir.1994) ("parties may agree to the arbitration of disputes that they were not contractually compelled to submit to arbitration"). The state court then ordered the parties to arbitration on March 19, 2000. See Appendix to Response to Application to Vacate Arbitration Award at 1.

At the arbitration hearing on February 3 and 4, 2000, Respondents' counsel apparently abandoned the race discrimination and section 1981 claims, leaving only Ms. Cook's claims for retaliation and intentional infliction of emotional distress, and Mr. Cook's claim for loss of consortium to be decided at the arbitration. On April 3, 2000, the Arbitrator issued an award ("Arbitrator's Award") which found insufficient evidence to establish Ms. Cook's retaliation claim, but awarded Ms. Cook $200,000 for her intentional infliction of emotional distress claim, and $25,000 to Mr. Cook for his derivative claim for loss of consortium. The Arbitrator based her finding of intentional infliction of emotional distress on Raytheon's assigning Ms. Cook back to her former job duties after she returned to work when Raytheon knew of Ms. Cook's prior health condition. Arbitrator's Award at 12. Raytheon has initiated this proceeding to challenge the Arbitrator's findings of fact and conclusions of law and is requesting this Court to vacate the Arbitrator's Award and render a final judgment in its favor.

III. DISCUSSION

A. Jurisdiction

The Federal Arbitration Act ("FAA") provides that the local federal court located where the arbitrator's award was made may vacate the arbitration award upon the motion of any party. 9 U.S.C. §§ 10, 11. However, the FAA does not create an independent basis for federal jurisdiction. Specialty Healthcare v. St. Mary Parish Hosp., 220 F.3d 650, 653 n. 5 (5th Cir.2000). Thus, arbitration provisions can be enforced in federal court only where federal jurisdiction is otherwise independently established, such as by diversity jurisdiction. Southland Corp. v. Keating, 465 U.S. 1, 16, 104 S.Ct. 852, 859, n. 9, 79 L.Ed.2d 1 (1984).

In the present case, Raytheon alleges in its Application to Vacate the Arbitration that Hughes Training, Inc. merged into Raytheon in 1998 and Hughes Electronics Corporation merged its defense business into Raytheon in 1997. Application to Vacate Arbitration at 1. Raytheon, the successor-in-interest to both Hughes and the defense portion of Hughes Electronics Corporation, is incorporated in Delaware and has its principal place of business in Massachusetts. See id. Mr. and Ms. Cook are residents of Texas. See id. Since the amount in controversy in this matter exceeds $75,000 and there is a complete diversity of citizenship, this proceeding is properly before this Court.

B. Standard of Review

Typically, a district court's review of an arbitration award is extraordinarily narrow under the FAA. Antwine v. Prudential Bache Securities, Inc., 899 F.2d 410, 413 (5th Cir.1990). Indeed, the Fifth Circuit has stated that ordinarily, arbitration awards will not be vacated unless: (1) the award was procured by corruption, fraud, or undue means; (2) there is evidence of corruption among the arbitrator; (3) the arbitrators were guilty of misconduct which prejudiced the rights of one of the parties; or (4) the arbitrators exceeded their powers. Gateway Technologies, Inc. v. MCI Telecommunications Corp., 64 F.3d 993, 995 (5th Cir.1995).³ However, the parties may agree to a broader judicial review of an arbitration award. See Gateway, 64 F.3d at 996 (agreement that errors of law shall be subject to appeal required court to review de novo legal issues decided by Arbitrator); see also Lapine Technology Corp. v. Kyocera Corp., 130 F.3d 884, 888 (9th Cir. 1997) (courts must honor agreement providing that arbitration award shall be reviewable for errors of fact or law). As recognized by the Fifth Circuit in Gateway, "[t]here is no federal policy favoring arbitration under a certain set of...