Parilla v. Iap Worldwide Services, VI, Inc.
| Decision Date | 13 May 2004 |
| Docket Number | No. 03-2009.,No. 03-2308.,03-2009.,03-2308. |
| Citation | 368 F.3d 269 |
| Parties | Virgen PARILLA v. IAP WORLDWIDE SERVICES VI, INC.; Worldwide Services, Inc.; Gene Ludlow; Roy Varner Appellants Parilla Appellant v. IAP Worldwide Services VI, Inc.; IAP Worldwide Services, Inc.; Gene Ludlow; Roy Varner. |
| Court | U.S. Court of Appeals — Third Circuit |
Francis J. D'Eramo (Argued), Nichols, Newman, Logan & D'Eramo, Christiansted, St. Croix, USVI, for Appellants.
Lee J. Rohn, K. Glenda Cameron (Argued), Law Offices of Lee J. Rohn, Christiansted, St. Croix, USVI, for Appellant.
Before NYGAARD, BECKER and STAPLETON, Circuit Judges.
IAP Worldwide Services VI, Inc. ("IAPVI"), IAP Worldwide Services, Inc. ("IAP"), Gene Ludlow, and Roy Varner (collectively, "Appellants") appeal from an order of the District Court of the Virgin Islands denying their motion to compel arbitration pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq. Appellee Virgen Parilla, a former employee of IAPVI, brought suit against Appellants alleging, inter alia, discriminatory conduct in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Invoking the provisions of an arbitration agreement in Parilla's employment contract, Appellants filed a motion to compel arbitration of Parilla's claims. The District Court denied Appellants' motion, holding that the agreement to arbitrate was unenforceable. For the reasons that follow, we will reverse the District Court's order and will remand to the District Court for further proceedings consistent with this opinion.
On June 6, 2000, IAPVI hired Parilla as an administrative assistant. Upon the commencement of her employment, Parilla entered into an Hourly Employment Agreement ("the Agreement") with IAPVI. The Agreement addressed such employment-related matters as compensation, overtime, insurance, vacation, sick pay, promotions and discipline. Additionally, ¶¶ 16, 17, 19, and 20 of the Agreement pertained to arbitration. Paragraph 16 provides, in relevant part:
Any controversy or claim arising out of or relating in any way to this Agreement, to the breach of this Agreement, and/or to Employee's employment with Employer, or to the suspension or termination of Employee's employment with Employer, including claims against Employer, its owners or subsidiary or parent or affiliated companies, and its or their officers, directors, employees, and agents (including any person or company that manages any portion of the Facility) (all of the foregoing shall be collectively referred to as "Employer" for purposes of sections 16-20) shall be resolved by arbitration and not in a court or before an administrative agency.
App. at 44. Paragraph 17 of the Agreement sets forth all matters that are subject to arbitration, including "[a]ll claims or matters arising out of or relating in any fashion to this Agreement, to the breach of this Agreement, or to Employee's dealings with Employer, Employee's employment or the suspension or termination of Employee's employment with Employer." App. at 44.1
Paragraph 19 sets forth numerous procedures governing an arbitration proceeding. It requires that "[a]rbitration shall take place pursuant to the Federal Arbitration Act, and in accordance with the Rules governing arbitration set forth in the National Rules for the Resolution of Employment Disputes of the American Arbitration Association [(`AAA Rules')], as they shall be amended from time to time." App. at 45. Paragraph 19 also contains a thirty-day notice provision in order for an employee to bring a claim:
Employee must present Employee's claim in written form to the Company within thirty (30) calendar days of the event which forms the basis of the claim, unless a different time for presentation of the claim is provided for by the National Rules for the Resolution of Employment Disputes of the American Arbitration Association. For the purposes of this time limitation, the event forming the basis of a claim arising from discharge of Employee shall be the date of discharge. In no event may Employee bring a claim of any nature against Employer unless the claim is filed as set forth in this paragraph and within the time set forth in this paragraph. The written notice submitted by the Employee shall describe the event forming the basis of the claim, a description of the claim, the relief sought by Employee, and an address and telephone number where Employee can be reached. Notice must be given to the Project/Camp Manager by hand delivery or by certified mail, return receipt requested, and must be received by the Project/Camp Manager on or before the expiration of the thirty (30) calendar days from date of the event forming the basis of the claim, unless a different time for presentation of the claim is provided for by the National Rules for the Resolution of Employment Disputes of the American Arbitration Association. If notice is given by hand delivery, Employee must retain a receipted copy of the notice. If notice is given by certified mail, Employee must retain a copy of the return receipt. In the event that timely notice is not provided to the Company as set forth herein, it is agreed that the Employee has waived Employee's right to assert the claim, and shall have no further remedy against Employer. It is further agreed that this time limitation is to be strictly enforced by the arbitrator.
App. at 45-45A. With respect to the selection of an arbitrator, ¶ 19 provides:
Within fifteen (15) calendar days of receipt of timely notice of a claim from Employee, the Company shall submit a request to the American Arbitration Association to furnish a list of five (5) impartial arbitrators. The parties specifically agree that the list of arbitrators shall consist of individuals who do not reside in the U.S. Virgin Islands or Puerto Rico. The arbitrators shall be selected by the Company and by the aggrieved Employee by alternately striking a name from the list provided. In the event that either party refuses to cooperate in this process of selection, the other party may select any name from the list to serve as arbitrator.
App. at 45A. Paragraph 19 also allocates the costs of arbitration:
Unless Employee elects otherwise, the Company shall advance the arbitrator's fees and expenses and, if the Company is successful in the arbitration, the Employee agrees to reimburse the Company for the arbitrator's fees and expenses if so directed by the arbitrator. Provided, however, that the Company agrees to pay for the arbitrator's transportation and lodging costs incurred. Other than arbitrator's fees and expenses, each party shall bear its own costs and expenses, including attorney's fees.
App. at 45A-45B. Finally, ¶ 20 governs the venue of the arbitration hearing and the arbitration decision:
The arbitration hearing shall take place in St. Croix, U.S. Virgin Islands. The arbitrator, in rendering a decision, may uphold the actions of the Company or may grant relief to Employee. If the arbitrator finds that disciplinary action was merited, the arbitrator may not alter or amend the form of disciplinary action imposed by the Company. The arbitrator shall provide the parties with, at minimum, a written, concise explanation of the basis for the award.
In July 2002, Parilla's employment with IAPVI was terminated. She subsequently commenced a civil action against IAPVI, its parent corporation IAP, and two of its employees, Gene Ludlow and Roy Varner. The suit alleged violations of Title VII, Titles 10 and 24 of the Virgin Islands Code, wrongful discharge, breach of contract, misrepresentation, negligent and/or intentional infliction of emotional distress, and sought punitive damages. Invoking the arbitration provisions of the Agreement, Appellants filed a motion to compel arbitration pursuant to § 4 of the FAA, 9 U.S.C. § 4. Parilla opposed this motion.
The District Court denied the motion to compel arbitration. It held that the Agreement was identical in all material respects to an employment agreement that the District Court had examined in a previous case, Plaskett v. Bechtel International, Inc., 243 F.Supp.2d 334 (D.Vi.2003). Adopting its reasoning in Plaskett, the District Court held that certain terms within the arbitration provisions of ¶¶ 16, 17, 19, and 20 of the Agreement were unconscionable. The District Court further held that the unconscionable terms permeated the arbitration provisions and that such terms therefore could not be severed from the remainder of the arbitration provisions. Accordingly, the District Court declined to enforce the whole of the arbitration provisions. Appellants filed a timely notice of appeal, and Parilla filed a timely notice of cross-appeal.
On appeal, Appellants argue that the District Court erred in each of the three instances in which it found arbitration provisions of the Agreement to be unconscionable: (1) the thirty-day notice requirement in order for an employee to bring a claim; (2) the agreement by the parties to bear their own costs, expenses, and attorney's fees as applied to a federal Title VII claim; and (3) Rules 17, 18, and 34 of the AAA Rules regarding confidentiality, which were incorporated into the Agreement. Alternatively, Appellants argue that the District Court erred in refusing to sever the terms it found unconscionable from the remainder of the arbitration provisions. In response, Parilla argues that we should affirm the District Court's conclusion that the three terms are unconscionable and that the entire agreement to arbitrate is accordingly unenforceable. Parilla further urges that, as an alternative basis for upholding the District Court's judgment, we hold three additional terms of the arbitration agreement unconscionable: (4) the agreement that all covered claims are to be resolved through arbitration rather than before an...
To continue reading
Request your trial
-
Clerk v. First Bank of Del.
...a party with excessive bargaining power and presented to the other party on a "take-it-or-leave-it" basis. Parilla v. IAP Worldwide Servs., VI, Inc., 368 F.3d 269, 276 (3d Cir.2004); Rudolph v. Pennsylvania Blue Shield, 553 Pa. 9, 717 A.2d 508, 511-12 (1998) (Nigro, J., concurring). Often t......
-
Gay v. Creditinform
...indicated that courts may look in particular to the laws of the involved state or territory. See, e.g., Parilla v. IAP Worldwide Servs. VI, Inc., 368 F.3d 269, 276 (3d Cir.2004) (applying Virgin Islands law to determine whether arbitration agreement was enforceable in lawsuit based on Title......
-
Puleo v. Chase Bank U.S.A.
...that such arbitration proceed in the manner provided for in such agreement.” 9 U.S.C. § 4; see also Parilla v. IAP Worldwide Servs., VI, Inc., 368 F.3d 269, 275-76 (3d Cir.2004). Although the Supreme Court has continuously reinforced the “liberal federal policy favoring arbitration Moses H.......
-
Rory v. Continental Ins. Co.
...Alcazar v. Hayes, 982 S.W.2d 845 (Tenn., 1998), Andry v. New Orleans Saints, 820 So.2d 602 (La.App., 2002), Parilla v. IAP Worldwide Services VI, Inc., 368 F.3d 269 (C.A.3, 2004), and Iberia Credit Bureau, Inc. v. Cingular Wireless LLC, 379 F.3d 159 (C.A.5, 99. The majority accuses the Herw......
-
Between rights and contract: arbitration agreements and non-compete covenants as a hybrid form of employment law.
...but the lower courts have assumed that the same standard applies in employment cases, as in Parilla v. IAP Worldwide Services, VI, Inc., 368 F.3d 269, 283-84 (3d Cir. (128) See Bradford v. Rockwell Semiconductor Sys., Inc., 238 F.3d 549, 557-58 (4th Cir. 2001). (129) See Clyde W. Summers, M......