Gillispie v. Village of Franklin Park

• Decision Date: 13 December 2005
• Docket Number: No. 04 C 8097.,04 C 8097.
• Citation: 405 F.Supp.2d 904
• Parties: Bennie GILLISPIE, Jr., Plaintiff, v. VILLAGE OF FRANKLIN PARK, and Michael Servini, Defendants.
• Court: U.S. District Court — Northern District of Illinois

405 F.Supp.2d 904

Bennie GILLISPIE, Jr., Plaintiff, v. VILLAGE OF FRANKLIN PARK, and Michael Servini, Defendants.

No. 04 C 8097.

United States District Court, N.D. Illinois, Eastern Division.

December 13, 2005.

Denise M. Mercherson, Denise M. Mercherson, Attorney at Law, Chicago, IL, for Plaintiff.

Patrick John Ruberry, Jeannine Stephanie Gilleran, Philip F. Cuevas, Dowd & Dowd, Ltd, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

COLE, United States Magistrate Judge.

I. BACKGROUND

A. Background Of The Litigation

The plaintiff, an African-American employee of the Village of Franklin Park's Streets and Sanitation Department, filed a two-count complaint in January 2002 under 42 U.S.C. § 1983 and Title VII of the Civil Rights Act, alleging that he was the victim of racial harassment and discrimination at the workplace. Gillispie v. Village of Franklin Park, No. 02 C 0148 (2002). A year later, the parties entered into a written settlement agreement, which provided for binding arbitration of any future employment dispute arising out of his continued employment with the Village, including claims of racial discrimination. The agreement provided that the costs of the arbitration, excluding attorney's fees, would be borne by the loser.

For a time, all was well. But then in late 2004, Mr. Gillispie filed a complaint in the district court against the Village and his supervisor, Michael Servini. An amended complaint followed alleging that in violation of 42 U.S.C. §§ 1981 and 1983 the defendants discriminated against him due to his race by subjecting him to a hostile work environment and by retaliating against him when he complained about it. The Village has moved to dismiss the amended complaint, claiming there is no subject matter jurisdiction.

The motion, which cites not a single case, is based on the ipse dixit that it is "obvious that the claims contained in plaintiff's complaint ... are subject to the arbitration provision contained in the parties' settlement agreement." (Motion to Dismiss, ¶ 4).¹ Mr Gillispie's response is only slightly less laconic. It relies on a single case, which, as will be seen, does not begin to answer the questions raised in this case.

B.

Mr. Gillispie's Settlement Of The Earlier Litigation

Paragraph 3 of the settlement agreement provides:

3. In further consideration of the promises made in this Release, Gillispie agrees to the following conditions:

(a) That any dispute or claim concerning his continued employment with the Village of Franklin Park, or the terms, conditions, or benefits of such employment, such as, or similar to but not exclusive of racial harassment or failure to promote but not based on race, including whether such dispute or claim is arbitrable or not [²], will be settled by binding arbitration, including any and all legal theories that may be applicable, including, but not limited to statutory violations or causes of action which may authorize suit for any such violations, such as or similar to but not necessarily exclusive of, Title VII of the Civil Rights Equal Pay Act or the Illinois Human Rights Act, but do not include dispute involving pensions or worker compensation claims. The arbitration proceeding shall be conducted under the rules of the American Arbitration Association in effect at the time a written demand for arbitration is made. A copy of any written demand for arbitration shall also be served upon the Superintendent of Utilities Department. A decision and award of the arbitrator made under the said rules shall be exclusive, final and binding on both parties, heirs, executors, administrators, successors and assigns. The costs and expenses, not inclusive of attorneys' fees, of arbitration, shall be borne by the party who does not prevail. (Emphasis supplied).³

Mr. Gillispie does not challenge the aspect of the fee-shifting provision that awards costs and expenses to the prevailing party. Nor does he contend that his claims are outside the scope of what he agreed to arbitrate. Rather, his sole argument is that the arbitration provision is unenforceable because Paragraph 3 provides in plain and unambiguous language that he could not be awarded attorney's fees in the arbitration, even if he were to prevail, whereas he would be eligible for a fee award as the prevailing party under the Civil Rights Attorneys' Fee Awards Act of 1976 if the case were heard here.⁴ This argument rests on a cramped interpretation of Paragraph 3 and an impermissible reading of McCaskill v. SCI Management Corporation, 298 F.3d 677 (7th Cir. 2002), the sole case on which he relies.

II. ANALYSIS

A.

The Federal Arbitration Act ("FAA") was enacted in 1925 and then reenacted and codified as Title 9 of the United States Code. The purpose of the FAA is "`to reverse the longstanding judicial hostility to arbitration agreements ... and to place them on the same footing as other contracts.'" Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 89, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000). This aim requires "`rigorous[ ] enforce[ment]'" of agreements to arbitrate in order to give effect to the contractual rights and expectations of the parties. Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 226, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987). Consistent with the declared national policy favoring arbitration, employment discrimination claims of all kinds are arbitrable, as are other kinds of statutory violations. See Green Tree Financial Corp.-Alabama, 531 U.S. at 89, 121 S.Ct. 513; Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 62, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995); Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26-35, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991).⁵

In Gilmer, which involved a claim under the Age Discrimination in Employment Act, the Supreme Court held that there was no reason to treat civil rights statutes any differently than other important statutes that may be the subject of enforceable arbitration agreements and stressed that pre-dispute arbitration clauses should be enforced unless the plaintiff showed that Congress specifically intended to preclude arbitration. 500 U.S. at 26, 111 S.Ct. 1647. After Gilmer, courts began routinely to endorse the arbitration of discrimination claims. See Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361, 364-65 (7th Cir.1999)(collecting cases).

The FAA provides for stays of proceedings in the district court when an issue in the proceeding is referable to arbitration and for orders compelling arbitration when one party has failed or refused to comply with an arbitration agreement. 9 U.S.C. §§ 3 and 4. These provisions, the Supreme Court has stressed time and again, manifest the liberal federal policy favoring arbitration agreements. See Shearson/American Express, Inc., 482 U.S. at 226, 107 S.Ct. 2332. Any doubts with respect to arbitrability therefore should be resolved in favor of arbitration. Green Tree Financial Corp. v. Bazzle, 539 U.S. at 452, 123 S.Ct. 2402; James v. McDonald's Corp., 417 F.3d 672, 677 (7th Cir.2005).

Although the parties have not addressed the issue, the threshold question is the applicability of the FAA to their settlement agreement requiring arbitration of any future employment discrimination claims. In order for a "written provision in any ... contract" providing for the settlement of future disputes by arbitration to be within the scope of the FAA, the contract must evidence "a transaction involving commerce." 9 U.S.C. § 2. Contracts of employment, with certain exceptions not relevant here, are covered by the Act. EEOC v. Waffle House, 534 U.S. 279, 289, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002); Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. at 89, 121 S.Ct. 513; Gilmer, 500 U.S. at 26-35, 111 S.Ct. 1647; Koveleskie v. SBC Capital Markets, Inc., 167 F.3d at 364.

Significantly, the plaintiff does not argue that the settlement agreement is not within the scope of the FAA. Quite apart from any question of waiver, the settlement agreement evidences a transaction involving commerce, for it governs "any dispute or claim concerning [plaintiff's] continued employment with the Village of Franklin Park or the terms, conditions, or benefits of such employment." (Emphasis supplied). A contract that settles a prior federal discrimination suit and that expressly governs certain aspects of an employee's continued employment with the employer, if not itself an employment agreement (or at least a separate component of one), is functionally and analytically indistinguishable from an employment contract for purposes of the FAA, since each regulates, to varying degrees, aspects of the parties' employment relationship. If an employment contract involves commerce within the meaning of § 2 of the Act — as it does — so, too, must the agreement in this case, especially given the Supreme Court's conclusion that the phrase "involving commerce," as employed in the FAA, should be given a broad meaning, extending the federal commerce power "to the full." Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 112, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001); Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265, 277, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995). Cf. McCaskill, 298 F.3d at 678 (the plaintiff was required "as a condition of continued employment" to arbitrate certain disputes).⁶

The inclusion of a choice of law provision in Mr. Gillispie's settlement agreement specifying that the agreement shall be governed by an construed in accordance with the laws of the State of Illinois (¶ 11) does not mean that the FAA is inapplicable. Mastrobuono v. Shearson Lehman Hutton, 514 U.S. at 62, 115 S.Ct. 1212. Cf. James v. McDonald's, supra. But even if the Illinois Uniform Arbitration Act were to control, the analysis and the result would be no different than under the FAA. The language of the FAA and the Illinois Uniform Arbitration Act is essentially the same. See J & K Cement Const., Inc....