Hughes v. Charter Commc'ns, Inc.
| Decision Date | 02 March 2020 |
| Docket Number | C/A No. 3:19-cv-01703-SAL |
| Parties | Vanessa Hughes, Plaintiff, v. Charter Communications, Inc., d/b/a Spectrum Defendant. |
| Court | U.S. District Court — District of South Carolina |
Through this action, Plaintiff Vanessa Hughes ("Plaintiff") alleges sexual harassment and retaliation in violation of Title VII of the Civil Rights Act of 1964, as amended ("Title VII"), 42 U.S.C. § 2000e, et seq., and retaliation in violation of the Family and Medical Leave Act ("FMLA"), 29 U.S.C. § 2601, et seq., against Defendant Charter Communications, Inc. d/b/a Spectrum ("Defendant"). This matter is before the court on Defendant's motion to dismiss and compel arbitration or, in the alternative, to stay proceedings pending arbitration (the "motion"). [ECF No. 13.] For the reasons outlined herein, the court is compelling the case to arbitration and dismissing the matter.
Plaintiff is a former employee of Defendant who claims she was subjected to sexual harassment and retaliation in violation of Title VII and the FMLA. According to the allegations in the Amended Complaint, Plaintiff began working for Spectrum in its customer service department in December 2011 and, from 2013 until her resignation in June 2018, served as a retention representative. [ECF No. 10.] She alleges that she was subjected to unwanted and harassing conduct by the retention supervisor, beginning in January 2018. Plaintiff claims that once she reported the inappropriate conduct, she received disparate treatment by her supervisors and co-workers. Plaintiff resigned in June 2018 and filed this lawsuit.
On June 13, 2019, Defendant removed the action to this court pursuant to 28 U.S.C. §§ 1331, 1332. [ECF No. 1.] On July 2, 2019,1 Defendant filed the motion that is the subject of this Order. Defendant asks the court to compel arbitration under Section 4 of the Federal Arbitration Act ("FAA") and dismiss or, in the alternative, stay the proceedings. Defendant argues that a valid and enforceable agreement to arbitrate exists between the parties and that the dispute falls within the scope of the agreement. [ECF No. 13.]
Defendant implemented its employee arbitration agreement through a program called Solution Channel. [ECF No. 13-1.] On October 6, 2017, the program was announced to employees via email from Paul Marchand, Executive Vice President, Human Resources, sent to the employees' company email accounts. [ECF No. 13-2, Aff. of Tammie Knapper, at ¶¶ 5-7.]2 The email's subject line was "Charter's Code of Conduct and Employee Handbook." Id. at Ex. A. The text of the email included a discussion of a "refresh" to the employee handbook, as well as the implementation of a new dispute resolution process—arbitration. With respect to arbitration, it stated that "[b]y participating in Solution Channel, you and Charter both waive the right to initiate or participate in court litigation . . . involving a covered claim and/or the right to a jury trialinvolving any such claim" and that "[u]nless you opt out of participating in Solution Channel within 30 days, you will be enrolled." Id. at ¶¶ 7-8; Ex. A. The email further informed employees that "[i]nstructions for opting out of Solution Channel are also located on Panorama."3 Id. at ¶ 8; Ex. A.4 The email also included a link to the Solution Channel webpage, which was likewise accessible to employees via Panorama. Id. at ¶¶ 9-10. The Solution Channel webpage included a link to a copy of the arbitration agreement. Id. at ¶ 10. Panorama also included the opt out information. Id. at ¶ 11; see also Ex. A ( ).
To opt out of the program, employees would select a box next to the phrase "I want to opt out of Solution Channel" and then enter their name in the text field. Id. at ¶ 14; see also Ex. D. Employees who did not opt out of the program by November 5, 2017, were enrolled. Id. at ¶ 16. According to the Affidavit of Tammie Knapper, Plaintiff was on the list of email recipients for the October 6, 2017 email announcement, Plaintiff was employed on October 6, 2017, and Plaintiff did not opt out of the program by November 5, 2017. Id. at ¶¶ 20-21. According to Defendant, because Plaintiff failed to timely opt out of the program, she is bound by the arbitration agreement.
The arbitration agreement provides that the parties "mutually agree that, as a condition of . . . employment with [Defendant], any dispute arising out of or relating to . . . employment with [Defendant] or the termination of that relationship, . . . must be resolved through binding arbitration." Id. at Ex. C, ¶ A. The arbitration agreement further provides that it covers:
all disputes, claims, and controversies that could be asserted in court or before an administrative agency or for which [Plaintiff] or [Defendant] have an alleged cause of action related to pre-employment, employment, employment termination or postemployment-related claims, whether the claims are denominated as . . . unlawful discrimination or harassment (including such claims based upon . . . sex, . . . and any other prohibited grounds), [or] claims for unlawful retaliation, [or] claims arising under the Family Medical Leave Act[.]
Id. at ¶ B. Defendant further argues that Plaintiff's claims fall within the scope of the agreement.
Here, Plaintiff does not dispute the fact that her claims fall within the scope of the arbitration agreement. The sole issue is whether the parties made an agreement to arbitrate. Plaintiff argues that the arbitration agreement is not "valid under state contract law due to lack of actual notice and lack of mutual assent." [ECF No. 16 at p.8.] As to "lack of actual notice," Plaintiff argues that the company-wide email is insufficient to establish that she was on notice of the agreement given her affidavit testimony that she does not "remember receiving or reviewing that email during [her] employment with [Defendant]." [ECF No. 16-2, Aff. of Vanessa Hughes, at ¶¶ 8-9.] Plaintiff also claims there is no "mutual assent" or "meeting of the minds" regarding arbitration. Plaintiff argues that without evidence that she received, opened, and read the arbitration agreement, the opt-out provision is unenforceable. [ECF No. 16 at pp.10-11.]
On October 24, 2019, United States Magistrate Judge Shiva V. Hodges entered a Report and Recommendation ("Report") on the motion in accordance with 28 U.S.C. § 636(b) and Local Civ. Rule 73.02(B)(2)(g) (D.S.C.). The Report applied the two-part test to determine whether the dispute is arbitrable. [ECF No. 18.] Specifically, the Report inquired as to (1) whether a valid agreement to arbitrate existed between the parties; and (2) whether the specific dispute fell withinthe scope of the agreement. Id. (referencing Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 937-38 (4th Cir. 1999)). The Report looked to South Carolina law to determine whether Plaintiff had sufficient notice to establish a meeting of the minds under South Carolina law and whether Plaintiff's failure to opt out of the arbitration agreement indicated her acceptance of the terms.
The Report found that an email is deemed received when it enters the recipient's email system in a readable format. Id. at pp.5-6 (citing S.C. Code Ann. § 26-6-150). Further, just as evidence of mailing constitutes a rebuttable presumption of receipt, the Report concluded that the undisputed evidence that the email was sent from an employer to the employee's company email address also would create a rebuttable presumption of receipt. Id. at p.6. The Report further found that Plaintiff's affidavit, stating that she did not remember receiving the email, was insufficient to rebut the presumption. Id. at pp.6-7. And, because Plaintiff continued her employment with Defendant after receipt of the email and failing to opt out, the Report found that she assented to the terms of the arbitration agreement.
For the reasons outlined above, the Report recommends that the court grant the motion and retain jurisdiction over the parties for all matters relating to the action after arbitration. The Magistrate Judge advised the parties of the procedures and requirements for filing objections to the Report and the serious consequences if they failed to do so. Plaintiff filed objections to the Report on November 7, 2019 [ECF No. 21], and Defendant filed a response on November 21, 2019 [ECF No. 23]. The matter is now ripe for resolution.
The Magistrate Judge makes only a recommendation to this court. The recommendation has no presumptive weight and the responsibility to make a final determination remains with this court.Mathews v. Weber, 423 U.S. 261, 270-71 (1976). The court is charged with making a de novo determination of those portions of the Report to which specific objection is made, and the court may accept, reject, or modify, in whole or in part, the recommendation of the Magistrate Judge or recommit the matter with instructions. 28 U.S.C. § 636(b)(1).
Section 4 of the FAA provides that a "party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in such agreement." 9 U.S.C. § 4. The FAA reflects "a liberal federal policy favoring arbitration agreements." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). "Courts will compel arbitration under Section 4 if: (1) the parties entered into a valid agreement to arbitrate claims;...
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