Hull v. NCR Corp.

• Court: U.S. District Court — Eastern District of Missouri
• Writing for the Court: HAMILTON
• Citation: Hull v. NCR Corp., 826 F.Supp. 303 (E.D. Mo. 1993)
• Decision Date: 14 July 1993
• Docket Number: No. 4:92CV002496 JCH.,4:92CV002496 JCH.
• Parties: Norma J. HULL, Plaintiff, v. NCR CORPORATION, Defendant.

826 F. Supp. 303

Norma J. HULL, Plaintiff, v. NCR CORPORATION, Defendant.

No. 4:92CV002496 JCH.

United States District Court, E.D. Missouri, E.D.

July 14, 1993.

Mary Anne Sedey, Mary Anne Sedey, P.C., St. Louis, MO, for plaintiff.

Eric M. Trelz, Sonnenschein and Nath, St. Louis, MO, for defendant.

ORDER

HAMILTON, District Judge.

This matter is before the Court on Defendant's Motion to Stay Action and Compel Arbitration. The motion was filed March 15, 1993.

Plaintiff filed this suit alleging that, during her employment with Defendant, Defendant discriminated against her in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.; the Missouri Human Rights Act (MHRA), Mo.Rev.Stat. § 213 et seq.; and the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq. When Plaintiff began employment with Defendant on July 8, 1985, Plaintiff signed a document entitled "Employment Contract." The Employment Contract contains an arbitration provision which states:

Any controversy or claim arising out of or relating to this contract, or breach thereof, shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

Defendant moves the Court to stay this action and compel arbitration of Plaintiff's claims.

As a preliminary matter, the Court rejects Plaintiff's contention that the arbitration clause is unenforceable because the Employment Contract is not a valid contract under Missouri law. Plaintiff contends that the Contract is invalid because Plaintiff was terminable at will and a specified duration of employment is necessary for a valid employment contract. In support of her contention, Plaintiff cites cases which pertain to the cause of action for wrongful discharge. Defendant counters that the enforcement of an arbitration clause is more analogous to the enforcement of a covenant not to compete clause contained in an employment contract than to the tort of wrongful discharge. The Court agrees with Defendant. An employment contract containing a covenant not to compete does not lack mutuality and is enforceable where employment is terminable at will by either party. Deck and Deck Personnel Consultants, Ltd. v. Pigg, 555 S.W.2d 705, 707-08 (Mo.App.1977). The Court finds that Plaintiff's employment contract is enforceable because her employment was terminable at will by either Plaintiff or her employer. The Court further finds that the Contract was not illusory and that Defendant did not unilaterally terminate the agreement during Plaintiff's employment.

The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., provides that "a written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract ... shall be valid, irrevocable, and enforceable...." 9 U.S.C. § 2. Defendant has shown and Plaintiff does not dispute that Plaintiff's employment responsibilities involved commerce.

The Supreme Court has established a two-step inquiry for consideration of whether to enforce an arbitration agreement. "The first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that dispute." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 3353, 87 L.Ed.2d 444 (1985). "The court is to make this determination by applying the `federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act.'" Id. (quoting Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983)). The federal substantive law of arbitrability counsels that courts are to resolve any doubts concerning the scope of arbitrable issues in favor of arbitration.

Questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration.... The Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.

Id. (citing Moses H. Cone Memorial Hospital, 460 U.S. at 24-25, 103 S.Ct. at 941).

In light of the broad arbitration provision in the Employment Contract (any "claim arising out of or relating to this contract") and because the FAA mandates that courts liberally construe the scope of arbitration agreements, the Court finds that the parties have agreed to arbitrate the claims in this suit.

The second inquiry is whether the claims at issue are within any category of claims as to which agreements to arbitrate are held unenforceable. Id., 473 U.S. at 627, 105 S.Ct. at 3354. Courts must rely on congressional intention expressed in some other statute to identify categories of nonarbitrable claims. Id. "Having made the bargain to arbitrate, the party should be held to it unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue." Id. at 628, 105 S.Ct. at 3355.

Claims under ADEA are arbitrable because there is no congressional intent to preclude arbitration of these claims. Gilmer v. Interstate Johnson Lane Corp., ___ U.S. ___, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991).

Whether claims under Title VII are arbitrable is, however, unclear in this Circuit. Prior to Gilmer, the Court of Appeals for the Eighth Circuit wrote that Congress intended to preclude arbitration of Title VII claims under the FAA. Swenson v. Management Recruiters Int'l, Inc., 858 F.2d 1304 (8th Cir.1988), cert. denied 493 U.S. 848, 110 S.Ct. 143, 107 L.Ed.2d 102 (1989). The Court of Appeals reasoned that "Congress has articulated an intent through the text and legislative history of Title VII to preclude waiver of judicial remedies for violation of both federal Title VII rights and parallel state statutory rights." Id. 858 F.2d at 1309. On the basis of the congressional intent to preclude waiver, the Court held that Title VII and parallel state statutes were exempt from the FAA. Id. The Court relied heavily on Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974), where the Supreme Court held that arbitration of a grievance under a collective bargaining agreement did not foreclose an employee's statutory right to also pursue a Title VII claim based on the same incident.

The Eighth Circuit's holding in Swenson is undermined by Gilmer. There, the Supreme Court distinguished the holding in Gardner-Denver from the issue in Gilmer which was whether a statutory claim could be subjected to arbitration pursuant to an agreement. Gilmer, ___ U.S. at ___, 111 S.Ct. at 1657. The Supreme Court wrote:

There are several important distinctions between the Gardner-Denver line of cases and the case before us. First, those cases did not involve the issue of the enforceability of an agreement to arbitrate statutory claims. Rather, they involved the quite different issue whether arbitration of contract-based claims precluded subsequent judicial resolution of statutory claims. Since the employees there had not agreed to arbitrate their statutory claims, and the labor arbitrators were not authorized to resolve such claims, the arbitration in those cases understandably was held not to preclude subsequent statutory actions. Second, because the arbitration in those cases occurred in the context of a collective-bargaining agreement, the claimants there were represented by their unions in the arbitration proceedings. An important concern therefore was the tension between collective representation and individual statutory rights, a concern not applicable to the present case. Finally, those cases were not decided under the FAA, which, as discussed above, reflects a "liberal federal policy favoring arbitration agreements." Mitsubishi, 473 U.S. at 625 105 S.Ct. at 3353. Therefore, those cases provide no basis for refusing to enforce Gilmer's agreement to arbitrate his ADEA claim.

Id. Because the Supreme Court has stated that its holding in Gardner-Denver is inapplicable to the issue of whether statutory claims are arbitrable, the rationale supporting the Eighth Circuit's decision in Swenson has been eroded. The Court, therefore, finds it inappropriate to follow Swenson.

Because Title VII and ADEA are similar in their aims and their substantive provisions, Lorillard v. Pons, 434 U.S. 575, 584, 98 S.Ct. 866, 872, 55 L.Ed.2d 40 (1978), and in light of Gilmer, this Court concludes that Title VII claims, like ADEA claims, are subject to arbitration under the FAA. Accord Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698 (11th Cir.1992) (Title VII claims are subject to arbitration.); Mago v. Shearson Lehmann Hutton, Inc., 956 F.2d 932 (9th Cir.1992) (The Supreme Court's treatment of Gardner-Denver in Gilmer "is dispositive here." Plaintiff did not meet burden of showing that Congress, in enacting Title VII, intended to preclude arbitration of those claims under the FAA.); Willis v. Dean Witter Reynolds, Inc. 948 F.2d 305 (6th Cir. 1991) (Title VII claims are arbitrable.); Alford v. Dean Witter Reynolds, Inc., 939 F.2d 229 (5th Cir.1991) (Supreme Court remanded case for further consideration in light of Gilmer; on remand, Title VII claims held subject to arbitration under the FAA.).

The Court also finds that Plaintiff's claims under the MHRA, a parallel state statutory right to Title VII, are subject to arbitration under the FAA.

The final issue concerning the enforcement of the arbitration agreement is whether the exclusionary clause of the FAA applies. The last sentence of section 1 of the FAA states "nothing herein contained shall apply to contracts of employment of seamen, railroad employees,...