Beery v. Quest Diagnostics, Inc.

• Decision Date: 17 June 2013
• Docket Number: Civ. No. 12–cv–00231 (KM)(MCA).
• Citation: 953 F.Supp.2d 531
• Parties: Erin BEERY, et al., Plaintiffs, v. QUEST DIAGNOSTICS, INC., and AmeriPath, Inc., Defendants.
• Court: U.S. District Court — District of New Jersey

953 F.Supp.2d 531

Erin BEERY, et al., Plaintiffs,
v.
QUEST DIAGNOSTICS, INC., and AmeriPath, Inc., Defendants.

Civ. No. 12–cv–00231 (KM)(MCA).

United States District Court,
D. New Jersey.

June 17, 2013.

[953 F.Supp.2d 534]

Jennifer M. Siegel, Sanford Heisler LLP, New York, NY, for Plaintiffs.

Gregory C. Parliman, Theresa A. Kelly, Day Pitney, LLP, Parsippany, NJ, Richard H. Brown, Day Pitney, LLP, Morristown, NJ, for Defendants.

MEMORANDUM OPINION
KEVIN McNULTY, District Judge.

This matter comes before the Court on a Motion to Compel Arbitration submitted by the Defendants, Quest Diagnostics, Inc. and AmeriPath, Inc. ¹ Plaintiffs Erin Beery, Heather Traeger, and Sandy Cooper have filed an Amended Complaint which alleges that Defendants subjected female employees to a systematic pattern and practice of pay and promotion discrimination. These named Plaintiffs filed this case as a putative class action on behalf of themselves and other female sales representatives.² The Amended Complaint asserts claims under Title VII of the Civil Rights Act of 1964 (“Title VII”), the Equal Pay Act (“EPA”), and the New Jersey Law Against Discrimination (“NJLAD”). Ms. Beery, Ms. Traeger, and Ms. Cooper also assert individual claims for retaliation and sexual harassment.

Defendants contend that this action must be dismissed in favor of arbitration. Each Plaintiff signed an Employment Agreement that contains an Arbitration Clause. The Arbitration Clause requires employees to arbitrate “all claims, disputes or issues” arising out of their employment with Defendants, including “all claims, disputes or issues of harassment, including sexual harassment and/or harassment based on ... sex.” Any such arbitration shall be “governed by the American Arbitration Association's National Rules for the Resolution of Employment Disputes.” Thus, on its face, the Arbitration Clause would appear to require that this action be dismissed pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 4.

Plaintiffs argue, however, that the Arbitration Clause is unenforceable for three reasons: 1) because its restrictive terms impair their vindication of their statutory rights under Title VII and EPA; 2) because it is procedurally and substantively unconscionable; and 3) because Defendants waived arbitration by participating in EEOC proceedings.

For the reasons set forth below, Defendants' Motion to Compel Arbitration will be granted, and the claims of Ms. Beery, Ms. Traeger, and Ms. Cooper will be dismissed

[953 F.Supp.2d 535]

in favor of arbitration. One portion of the Arbitration Clause, containing the 90–day limitations period and certain pre-claim procedures, is unenforceable because it unduly restricts Plaintiffs' vindication of their federal rights; it can, however, be severed. The signing of the employment contract containing the Arbitration Clause, although perhaps marked by a disparity in bargaining power, was not procedurally unconscionable. Finally, as numerous cases have held, an employer's cooperation with or participation in EEOC proceedings does not waive a valid agreement to arbitrate.

I. BACKGROUND

Plaintiffs' claims all arise out of their employment by AmeriPath.

Ms. Beery is an Executive Territory manager in AmeriPath's Anatomical Pathology Sales Division in Indianapolis, Indiana. She began her employment with AmeriPath in February 2004 and has consistently achieved exceptional sales results, winning multiple awards.

Ms. Traeger began her employment with AmeriPath in November 2005 as a Territory Manager of New Business Development of the Anatomical Pathology Sales Division. In June 2010, Ms. Traeger was promoted to Senior Executive Territory Manager in the Anatomical Pathology Sales Division in Bradenton, Florida. Like Ms. Beery, Ms. Traeger has achieved exceptional sales results and received numerous sales awards during her employment with AmeriPath.

Ms. Cooper was initially hired by AmeriPath on May 23, 2001, as a per diem Cytotechnologist in the Company's Youngstown, Ohio laboratory. From March 2004 through May 2005, she worked as a full-time Cytotechnologist in AmeriPath's laboratory in Cleveland, Ohio. In May 2005, Ms. Cooper was promoted to Associate Sales Representative in AmeriPath's laboratory in Youngstown. Between 2007 and 2011, Ms. Cooper was promoted four more times; it was in March 2011 that she achieved her current position of Territory Manager of the Northern Ohio Territory. Ms. Cooper is also a consistently strong performer; her 2011 sales, for example, placed her sixth out of twenty-five territory representatives.

Within days of commencing their employment, Plaintiffs executed essentially identical Employment Agreements.³ The Plaintiffs do not dispute that they signed the Agreement, but allege that the human resources representative forced them to sign it “in a hurry” and did not explain it to them. Paragraph 7 of the Employment Agreement, the Arbitration Clause, provides for arbitration of all disputes relating to employment:

All claims, disputes or issues arising between Employee and the Company, its owners, directors, officers, employees, agents, successors and/or assigns ... shall be resolved in accordance with [the arbitration clause].
Agreement at ¶ 7(a). The Arbitration Clause defines the words “Claim” or “Claims” to include:

[A]ll claims, disputes or issues involving employment discrimination relating to Employee's ... sex ...; all claims disputes or issues of harassment, including sexual harassment and/or harassment

[953 F.Supp.2d 536]

based on ... sex ...; and any other employment related claim, dispute or issue that Employee may have under federal, state, local or common law.

Id. at 4–5 ¶¶ 7(a)(ii), (iii), and (v). The Arbitration Clause goes on to set forth certain pre-claim procedures. Aggrieved Employees are required first to discuss a Claim with their immediate supervisor or the Company's Senior Vice President of Human Resources (in person in Florida or by calling a 1–800 number). Id. at 5 ¶ 7(b)(1). “If the Employee is not satisfied with the [Company's] resolution of the Claim or Claims ... the Employee shall submit the Claim or Claims ... for final and binding mandatory arbitration.” Id. at 5 ¶ 7(b)(ii). Any submission to arbitration—whether by the Employee or the Company—must be made within ninety (90) days after the Claim arises. Id. at 5 ¶ 7(b)(ii). The Arbitration Clause also contains a “loser-pays” provision: “The prevailing party in any proceeding to challenge the validity of this Paragraph 7 [ i.e., the Arbitration Clause] and/or any Arbitration thereunder shall be entitled to an award of attorney's fees and costs through and including any appeals.” Id. at 5 ¶ 7(b)(iii).

The Arbitration Clause states that “[a]rbitration pursuant to this Paragraph 7 is intended to be a substitute for employment related lawsuits that Employee or the Company may consider bringing against one another as a result of the employment relationship between the Employee and the Company.” Id. at 5 ¶ 7(c). It concludes:

Employee and the Company have carefully read this Paragraph 7 and understand that by signing this Agreement, they are agreeing to submit the above-described Claim or Claims to arbitration in lieu of bringing a legal action. Furthermore, Employee and the Company understand that by agreeing to this Paragraph 7, they are giving up substantial legal rights, i.e., the right to sue in federal and state courts, the right to have disputes or claims heard by a jury and the right to have claims of civil rights violations considered by local, state, and/or federal investigatory agencies.

Id. at 6 ¶ 7(d).

A separate, “Miscellaneous” section of the Employment Agreement provides that it shall be construed under Florida law and states that any proceedings relating to the Agreement shall, to the extent permitted by law, be held in Broward County, Florida. Id. at p. 7, ¶ 8(g).

According to the Amended Complaint, all three named Plaintiffs filed “Charges of Discrimination” with the EEOC. Ms. Beery filed her Charge on December 14, 2010, and received her Letter of Right to Sue on October 15, 2011. Ms. Traeger filed hers on January 11, 2011, and received her Letter of Right to Sue on October 17, 2011. Ms. Cooper filed hers on October 4, 2011, and received her Letter of Right to Sue on February 17, 2012.

The Complaint in this action was filed on January 12, 2012, and the Amended Complaint was filed on April 2, 2012. All three named Plaintiffs allege in this action that, despite superior performance, they have been denied promotional opportunities, have received unfair performance reviews, and have been subjected to discriminatory actions that have stalled their careers.

II. DISCUSSION

Federal law is decidedly pro-arbitration. The FAA's purpose is “to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as

[953 F.Supp.2d 537]

other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). Thus the statute makes agreements to arbitrate “valid, irrevocable, and enforceable,” subject only to traditional contract principles. 9 U.S.C. § 2. It provides that contract provisions manifesting the intent of the parties to settle disputes in arbitration shall be binding, allows for the stay of federal court proceedings in any matter referrable to arbitration, and permits both federal and state courts to compel arbitration if one party has failed to comply with an agreement to arbitrate. 9 U.S.C. §§ 2, 3, 4. Cumulatively, those provisions “manifest a liberal federal policy favoring arbitration agreements.” Gilmer, 500 U.S. at 24, 111 S.Ct. 1647 (quotations omitted). Thus, “as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp...