Foss v. Circuit City Stores, Inc.

• Decision Date: 05 February 2007
• Docket Number: No. 06-CV-153-P-S.,06-CV-153-P-S.
• Citation: 477 F.Supp.2d 230
• Parties: Andrew FOSS, Plaintiff, v. CIRCUIT CITY STORES, INC., Defendant.
• Court: U.S. District Court — District of Maine

477 F.Supp.2d 230

Andrew FOSS, Plaintiff, v. CIRCUIT CITY STORES, INC., Defendant.

No. 06-CV-153-P-S.

United States District Court, D. Maine.

February 5, 2007.

Guy D. Loranger, Nichols & Webb, PA, Saco, ME, for Plaintiff.

Richard G. Moon, Moon, Moss, & Shapiro, P.A., Portland, ME, Susan Childers North, Leclair Ryan, PC, Richmond, VA, for Defendant.

ORDER ON MOTION TO COMPEL ARBITRATION AND TO STAY THE PROCEEDINGS

SINGAL, Chief Judge.

Before the Court are Defendant Circuit City Stores, Inc.'s Motions to Compel Arbitration and to Stay the Proceedings (Docket # s 5 & 6). Plaintiff Andrew Foss ("Foss") objects to Defendant's Motion on the grounds of infancy and unconscionability of the agreement to arbitrate. For the reasons stated below, Defendant's Motions to Compel Arbitration and to Stay the Proceedings are DENIED.

I. BACKGROUND

Circuit City Stores, Inc. ("Circuit City") is a national retailer of name brand consumer electronics, entertainment software and related goods. Headquartered in Richmond, Virginia, Circuit City operates over six hundred stores in forty-seven states, including a store in South Portland; Maine. Since September of 2003, Circuit City has maintained an online application system. As an individual progresses through the application; he or she is required to provide information and consent to various agreements. The initial screen provides: "Before beginning the employment application, we will ask for your Social Security Number, contact information, consent to arbitration, and consent to perform a background check." (Ex. A to Docket # 16.) At numerous times throughout the application, applicants are provided with opportunities to withdraw their application and exit the system.

After consenting to proceed electronically, the applicant is presented with Circuit City's Dispute Resolution Agreement ("the Agreement"). The Agreement provides in pertinent part:

[B]oth Circuit City and I agree to settle any and all previously unasserted claims, disputes or controversies arising out of or relating to my application or candidacy for employment, employment and/or cessation of employment with Circuit City, exclusively by final and binding arbitration before a neutral Arbitrator. By way of example only, such claims include claims under federal, state and local statutory or common law, such as the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, including the amendments of the Civil Rights Act of 1991, the Americans with Disabilities Act, the Family Medical Leave Act, the law of contract and law of tort. I understand that if I do file a lawsuit regarding a dispute arising out of or relating to my application or candidacy for employment, employment or cessation for employment, Circuit City may use this Agreement in support of its request to the court to dismiss the lawsuit and require me instead to use arbitration.

Id. at 4. The applicant is then required to consent to the Agreement. When an applicant is less than eighteen years of age, the applicant is directed to obtain parental consent to the Agreement. Without parental consent, a person under eighteen is exited from the system. Throughout the application process, the applicant is given numerous opportunities to review and print a copy of the Agreement. Notably, an applicant must read and consent to the Agreement in order to be considered for employment.

On October 7, 2004, Foss applied for a non-management position with the Circuit City store in South Portland, Maine via the online application system. Foss was born on February 4, 1987 and thus was under eighteen at the time he applied for employment with Circuit City. As a result, when Foss reached the Agreement, he was directed to obtain a parent's consent. Foss's employment application reflects that the name "Sharon Foss" was entered and that this person consented to the Agreement. Id. at 6-7. Sharon Foss is Andrew Foss's mother. Sharon Foss, however, has declared: "I never signed the Circuit City Dispute Resolution Agreement or gave my consent to Andrew to enter into the Agreement." (Aff. of Sharon Foss, Attach. 3 to Docket # 8.) Esten Foss, Andrew Foss's father, likewise maintains that he never signed or consented to the Agreement. (Aff. of Esten Foss Jr., Attach. 2 to Docket # 8.) Furthermore, through an affidavit, Foss states that neither parent signed or consented to the Agreement. (Aff. of Andrew Foss, Attach. 1 to Docket # 8.) On October 14, 2004, before Foss was actually hired by Circuit City, he was presented with and signed a hard copy of the Agreement. Notably, Circuit City did not require a parent's signature on this hard copy.

Foss began working for Circuit City in South Portland in October of 2004. Foss turned eighteen on February 4, 2005. In October 2005, Foss was transferred to the Circuit City in Keene, New Hampshire. While employed at the Keene Circuit City, Foss alleges that his supervisor created a hostile work environment. In December 2005, Foss provided two weeks' notice that he was going to terminate the employment. He was asked to stay for another week and was promised a transfer to the store in South Portland. Foss maintains that as a result of informing management of the hostile environment, including calling the Human Resources Department of Circuit City, he was terminated on December 15, 2005. The reason provided to Foss for the termination was "improperly punching in." Foss alleges that this reason was a pretext and claims retaliation motivated his termination.

Foss filed this lawsuit on September 15, 2006 claiming a hostile work environment and retaliation in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et. seq., and the Civil Rights Act of 1991, 42 U.S.C. § 1981(a). Circuit City has moved to compel arbitration and to stay the proceedings pursuant to sections 2 and 4 of the Federal Arbitration Act ("FAA").¹ 9 U.S.C. §§ 2 & 4 (2006).

II. DISCUSSION

A. The Federal Arbitration Act

The FAA embodies a "liberal federal policy favoring arbitration agreements." Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991); Campbell v. General Dynamics Gov't Sys. Corp., 407 F.3d 546, 551 (1st Cir.2005). Congress passed the FAA "to reverse the long-standing judicial hostility to arbitration agreements" and "to place arbitration agreements upon the same footing as other contracts." Gilmer, 500 U.S. at 24, 111 S.Ct. 1647. Thus, section 2 of the FAA guarantees that:

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

9 U.S.C. § 2. In addition, section 4 provides a mechanism to compel arbitration by a party aggrieved by another party's refusal to arbitrate. Id. § 4. Section 4 directs that "upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement." Id. Section 3 allows a court to stay the proceedings until the arbitration is complete. Id. § 3.

Circuit City petitions the Court to compel arbitration pursuant to section 4 on the ground that the parties have agreed to arbitrate "any and all previously unasserted claims, disputes or controversies arising out of or relating to my application or candidacy for employment, employment and/or cessation of employment with Circuit City." Foss resists the motion to compel arbitration for two reasons. First, Foss asserts that because he was under eighteen when he signed the Agreement and he never ratified the Agreement in writing, no valid contract was ever formed. Second, Foss claims that even if there is a binding contract, the Agreement is unconscionable and therefore unenforceable. Because the Court finds the issue of infancy determinative, it does not reach the claim of unconscionability. At the threshold, the Court must determine whether the proper decision-maker for the claim of infancy is the court or the arbitrator.

B. The Appropriate Decision-Maker

The Supreme Court has noted that "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." Howsam v. Dean Witter Reynolds Inc., 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002) (quoting United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)). Thus, a party seeking to invoke the protections of sections 3 or 4 of the FAA must demonstrate, at a minimum, that "a valid agreement to arbitrate exists." Campbell, 407 F.3d at 552 (quoting InterGen N.V. v. Grina, 344 F.3d 134, 142 (1st Cir.2003)). Furthermore, "the purpose of Congress in 1925 was to make arbitration agreements as enforceable as other contracts but not more so." Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404 n. 12, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967). Thus, the determination of whether the court or the arbitrator is the proper decision-maker to resolve initial disputes turns on questions of contract formation and interpretation.

In Prima Paint Corp., the Supreme Court articulated two types of threshold challenges to an agreement to arbitrate. Id. at 403-04, 87 S.Ct. 1801. The first category encompassed challenges to the validity of the contract generally. See id. The second category encompassed challenges to the arbitration clause specifically. See id. The first category of challenges is for the arbitrator to decide, but the second, challenges to the arbitration clause, are for the court to decide and thus present a "question of arbitrability."² See id. This distinction...