Hooters of America, Inc. v. Phillips
| Decision Date | 12 March 1998 |
| Docket Number | No. 4:96-3360-22.,4:96-3360-22. |
| Citation | 39 F.Supp.2d 582 |
| Court | U.S. District Court — District of South Carolina |
| Parties | HOOTERS OF AMERICA, INC., Plaintiff, v. Annette R. PHILLIPS, Defendant. Annette R. Phillips, individually and on behalf of all others similarly situated, Counterclaim Plaintiff, v. Hooters of America, Inc., and Hooters of Myrtle Beach, Inc., Counterclaim Defendants. |
Vance J. Bettis, Gignilliat Savitz and Bettis, Columbia, SC, pro se.
Armand Georges Derfner, Charleston, SC, pro se.
William D. Deveney, Elarbee, Thompson and Trapnell, Atlanta, GA, pro se.
Brenda H. Feis, Seyfarth, Shaw, Fair-weather & Geraldson, Chicago, II, pro se.
Robert J. Gregory, Equal Employment Opportunity Commission, Washington, DC, pro se.
Mark D. Halverson, Elarbee, Thompson, & Trapnell, Atlanta, GA, pro se.
John S. Kiernan, Debevoise & Plimpton, New York City, pro se.
Peter G. Kilgore, National Restaurant Association, Washington, DC, pro se.
Sandra C. McCallion, Debevoise & Plimpton, New York City, pro se.
Lori Peterson, Minneapolis, MN, pro se.
Terry Ann Rickson, Charleston, SC, pro se.
Justin S. Weddle, Debevoise & Plimpton, New York City, pro se.
Stanford G. Wilson, Elarbee, Thompson & Trapnell, Atlanta, GA, pro se.
This is a declaratory judgment and Title VII case involving a former "Hooters Girl," who complains of sexual harassment by Hooter's managers and the brother of the company's CEO. The case is unusual for several reasons. Unlike the party alignment in the typical employment discrimination case, the plaintiff here is the former employer, Hooters of America, Inc. ("hereinafter HOA") and the employee, Ms. Phillips, is the defendant (hereinafter "Phillips"). Second, the case includes both an individual and a class counterclaim brought by Phillips and all other similarly situated Hooters Girls against HOA and its Myrtle Beach, South Carolina, facility, "Hooters of Myrtle Beach," (hereinafter "HOMB"), which is alleged to be the former joint employer of Phillips.1
The matter is before the court on HOA's "Motion for Preliminary Injunction," filed November 8, 1996, treated as a motion to compel arbitration under 9 U.S.C. § 3. Also before the court is Hooters' Motion to Stay Proceedings, filed February 25, 1997, which seeks to stay the non-arbitrable Rule 23, FRCP, allegations of the counterclaim under 9 U.S.C. § 3. The court has had extensive briefing and oral argument, and has conducted an evidentiary hearing on factual issues pertinent to the motions. The matter is ripe for adjudication. For the reasons given below, the court finds that both HOA's motion to compel arbitration and Hooters' motion to stay should be DENIED.
This case has a long and convoluted procedural history. An understanding of this procedural history is, however, essential to understanding the present posture of the case.
The case commenced when HOA filed a complaint on November 4, 1996, seeking a declaratory judgment, 28 U.S.C. § 2201, that the November 25, 1994, and April 23, 1995, arbitration agreements signed by Phillips were valid and enforceable. Jurisdiction was alleged to be based on diversity of citizenship, 28 U.S.C. § 1332. HOA also sought injunctive relief restraining Phillips from pursuing legal proceedings in state or federal court arising from her former employment at HOMB. On November 8, 1996, HOA filed a motion for preliminary injunction. This motion asked the court to restrain Phillips from filing any state or federal court action relating to her former employment, and to compel arbitration of Phillips' claims under 9 U.S.C. § 4. This motion is hereinafter referred to as "the § 4 motion."
On January 15, 1997, Phillips filed her initial opposition to the § 4 motion. The next day she filed an answer to the complaint, and interposed a counterclaim against HOA, and additional counterclaim defendant HOMB. The answer denied that Phillips had entered into an enforceable arbitration agreement covering her dispute with HOA. Phillips asserted that the agreements were neither knowingly nor voluntarily entered into, and were unconscionable adhesion contracts violative of public policy. Moreover, the answer asserted that the alleged arbitration agreements were not supported by adequate consideration and were illusory. Finally, Phillips' last defense contended that HOA's purported "arbitration" plan did not constitute bona fide arbitration within the meaning of the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., because the procedures deprived Phillips of due process, substantive protection against sexual harassment, and statutory remedies under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.
Phillips' counterclaim is comprised of two parts. The first part is an individual action by Phillips seeking damages and injunctive relief against Hooters for violations of Title VII, based on the alleged hostile environment and harassing behavior, culminating in a constructive discharge. Although Phillips' individual counterclaim enumerates several incidents of hostile behavior,2 the primary complaint concerned a June 19, 1996, incident between Phillips and Gerald Brooks, the brother of the Hooters CEO. Robert Brooks.3 While Phillips was bartending at HOMB, Gerald Brooks allegedly grabbed and slapped Phillips' buttocks while in the presence of HOMB management and customers. Phillips responded that Brooks should not touch her, to which he allegedly responded that "he would cram her shorts down her face." Phillips...
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...Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 670-71 (6th Cir.2003); and curtailed judicial review, Hooters of America, Inc. v. Phillips, 39 F.Supp.2d 582, 614 (D.S.C.1998). Essentially, an arbitration provision is substantively unconscionable if it "create[s] an arbitration procedur......
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...upon which a fraudulent concealment action can spring." 267 F.Supp.2d 61, 80 (D.D.C.2003) (quoting Hooters of Am., Inc. v. Phillips, 39 F.Supp.2d 582, 607 (D.S.C.1998)). In Dorsey & Whitney, however, the plaintiff argued that the defendant employer had an affirmative obligation to make sure......
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Holloman v. Circuit City, 53, September Term, 2005.
...of the agreement. Id. at 378-79. The cases to which Holloman cites do not support her position. She relies on Hooters of America, Inc. v. Phillips, 39 F.Supp.2d 582 (D.S.C.1998), aff'd, 173 F.3d 933 (4th Cir.1999), in which the parties' arbitration agreement provided: "These Rules and Proce......
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Anthony v. Atl. Grp., Inc., Civil Action Nos. 8:09–cv–02383–JMC, 8:09–cv–02942–JMC.
...contract should read it and avail himself of every opportunity to understand its content and meaning.” Hooters of America, Inc. v. Phillips, 39 F.Supp.2d 582, 607 (D.S.C.1998); see also Doub v. Weathersby–Breeland Ins. Agency, 268 S.C. 319, 326, 233 S.E.2d 111, 114 (1977). This court's rece......
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The Mandatory Arbitration of Employees' Statutory Claims
...employment arbitrators and require that they receive some specialized training in the field. 28. Hooters of America, Inc. v. Phillips, 39 F.Supp.2d 582 (D.S.C. 1998) (allowing only one deposition in a case in which the employee was asserting claims against three parties rendered procedure u......