Johnson v. Hubbard Broadcasting, Inc.
| Decision Date | 03 September 1996 |
| Docket Number | Civil No. 4-96-107. |
| Citation | 940 F.Supp. 1447 |
| Parties | Natonia JOHNSON, Plaintiff, v. HUBBARD BROADCASTING, INC., Defendant, Equal Employment Opportunity Commission, Amicus Curiae. |
| Court | U.S. District Court — District of Minnesota |
John A. Fabian, III, of Nichols, Kaster & Anderson, Minneapolis, MN, for Plaintiff.
Gregory J. Stenmoe, of Briggs and Morgan, Minneapolis, MN, for Defendant.
Robert J. Gregory, of the Equal Employment Opportunity Commission, Office of the General Counsel, Washington, DC, for the Equal Employment Opportunity Commission, as Amicus Curiae.
Based upon the Recommendation by United States Magistrate Judge Jonathan Lebedoff dated July 29, 1996, and all the files and records herein, and no objections having been filed to said Recommendation,
IT IS HEREBY ORDERED that Defendant Hubbard Broadcasting Inc.'s Motion to Compel Arbitration and Stay Proceedings is GRANTED and this case shall be STAYED pending the outcome of the arbitration; the Court shall retain jurisdiction over this matter.
This matter came on for hearing before the undersigned Magistrate Judge of District Court on April 23, 1996, on Defendant Hubbard Broadcasting, Inc.'s ("HBI") motion for an Order to compel arbitration and stay proceedings pursuant to the Federal Arbitration Act ("FAA"), 9 United States Code §§ 3 and 4 (1994), and the Minnesota Uniform Arbitration Act ("MUAA"), Minn.Stat. § 572.09 (1994). On May 17, 1996, the Equal Employment Opportunity Commission ("EEOC") requested leave to participate in this matter as amicus curiae.
The Court has jurisdiction to issue a Report and Recommendation and Order pursuant to 28 U.S.C. § 636 and Local Rule 72.1.
The Court now grants the EEOC's motion for leave to participate in this matter as amicus curiae. Furthermore, for the reasons discussed below, the Court recommends that HBI's motion to compel arbitration and stay proceedings be granted.
According to the Complaint, Plaintiff Natonia Johnson ("Johnson"), an African-American woman, began work as an Associate Producer for KSTP Television ("KSTP"), a division of HBI, approximately five months after she graduated with honors from Howard University in Washington, D.C. See Complaint, Docket No. 1, at ¶¶ 7-9. Before joining HBI, Johnson gained experience in the field of broadcast journalism by serving as an intern at various radio and television stations within the industry. Id., at ¶ 10. When HBI hired Johnson on September 28, 1994, the company presented her with a one-page Agreement of Hire ("Agreement") which she subsequently signed. See Exhibit A to Affidavit of Margaret J. Batemen, Docket No. 7.
The last paragraph of the Agreement, located directly above Johnson's signature, provides in relevant part that:
In further consideration of my employment, I agree that[,] to the extent permitted by law, all claims and disputes between the company and myself arising out of federal, state, or local statutes or ordinances shall be decided by arbitration in accordance with the rules of the American Arbitration Association currently in effect unless the parties, in writing, mutually agree otherwise.
Exhibit A to the Affidavit of Margaret J. Batemen.
Furthermore, the arbitration agreement purports to cover "all disputes governed by the Employment Retirement Income Security Act, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and all state and local anti-discrimination laws and ordinances." Id. In addition, the arbitration agreement imposes the following conditions upon the arbitration process:
Notice of the demand for arbitration shall be filed in writing with the other party to this agreement and with the American Arbitration Association and shall be made within 180 days after the dispute has arisen. To the extent permitted by law, any award shall be limited solely to the claimant's out-of-pocket damages. Regardless of the award, each party shall be responsible for that party's own fees for arbitration. The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with the applicable law in the court having jurisdiction thereof. The agreement herein among the parties to this agreement to arbitrate shall be specifically enforceable under applicable law in any court having jurisdiction thereof.
In the face of this express agreement, Johnson commenced the present action in the United States District Court for the District of Minnesota on February 1, 1996. See Complaint, Docket No. 1. In her Complaint, Johnson asserts claims under Title VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq. (1994), 42 U.S.C. § 1981 (1994), and the Minnesota Human Rights Act ("MHRA"), Minn.Stat. § 363.01 et seq. (1994 and Supp. 1996). Complaint, at ¶¶ 22-44. Specifically, Johnson alleges that HBI, through its employees, not only harassed and discriminated against her on the basis of her race, but also engaged in a pattern of retaliatory conduct, and ultimately discharged her when she tried to bring the problem to the attention of her superiors. Complaint, at ¶¶ 13-21.
Instead of filing an answer, HBI moves for an Order to compel arbitration and to stay proceedings, pursuant to the FAA and the MUAA. In support of its motion, HBI argues that "the parties entered into and executed an express written agreement to arbitrate" which "covers all claims stated in the Complaint" and is therefore "binding according to its terms under applicable law." See Defendant's Memorandum in Support of its Amended Motion to Compel Arbitration and Stay Proceedings ("Memorandum in Support of Motion to Compel"), Docket No. 6, at 1.
In opposition to HBI's motion, Johnson avers that she neither knowingly nor voluntarily entered into the arbitration agreement. In particular, Johnson represents that HBI never explained any of the provisions of the Agreement to her, especially the one discussing arbitration. See Plaintiff's Memorandum in Support of its Motion in Opposition to Defendant's Motion to Compel Arbitration and Stay Proceedings ("Memorandum in Opposition"), Docket No. 8, at 1. See also Affidavit of Natonia Johnson, Docket No. 9, at ¶¶ 2-4. Moreover, Johnson claims that HBI never advised her of the importance of reading and understanding all of the provisions of the Agreement or asked her if she had, in fact, read and understood those provisions. Id. Consequently, Johnson argues, HBI's failure to explain the provisions of the Agreement, when coupled with the superior bargaining power which it exercised as an employer within the marketplace, amounts to the use of overwhelming economic power by the company and thus serves to invalidate the arbitration agreement. Plaintiff's Memorandum in Opposition, at 4-5. In the alternative, Johnson claims that insufficient consideration supports the Agreement, rendering it invalid. Id., at 5-6.
Also, Johnson contends that the terms of the arbitration provision amount to an effective waiver of her statutory rights and remedies under Title VII, 42 U.S.C. § 1981, and the MHRA. Id., at 2-3. Specifically, Johnson claims that the terms of the arbitration agreement:
1. require her to file a written demand for arbitration "within 180 days after [her] dispute has arisen" and thus severely diminish the statutes of limitations provided under Title VII, 42 U.S.C. § 1981, and the MHRA;
2. limit her award solely to "out-of-pocket damages" and thus deny her the far-reaching remedial rights afforded by Title VII, 42 U.S.C. § 1981, and the MHRA; and
3. obligate her to pay the fees which she incurs during arbitration and thus prevent her statutory right to recover attorneys' fees and costs in the event that she prevails on any or all of her claims.
Plaintiff's Memorandum in Opposition, at 2-3.
In response to these arguments, HBI argues that, in the absence of fraud, duress, or coercion, mere inequality of bargaining power between contracting parties will not suffice to invalidate an agreement. Defendant's Reply Brief, Docket No. 10, at 4-6. Moreover, HBI claims that since it presented Johnson with the Agreement before she began work at KSTP, adequate consideration supports the Agreement. Id., at 6-7. Finally, HBI contends that, under applicable law, the mere limitation of remedial measures in an arbitration agreement does not constitute a waiver of substantive statutory rights and that the limitations imposed by the arbitration agreement fail to invalidate the Agreement either in whole or in part. Id., at 2-3.
On May 17, 1996, the EEOC requested leave to file a brief as amicus curiae in this matter. This motion is granted. Echoing several of Johnson's concerns, the EEOC claims that enforcing the arbitration provision would severely diminish, if not outright abrogate, many of Johnson's statutory rights. EEOC's Brief as Amicus Curiae in Opposition to Defendant's Motion to Compel Arbitration and Stay Proceedings ("Amicus Brief"), Docket No. 15, at 4. In particular, the EEOC expresses concern with two provisions of the arbitration agreement. First, the EEOC notes that the provision requiring Johnson to assert her claim "within 180 days after [her] dispute has arisen" significantly and, perhaps, impermissibly impedes Johnson's ability to file a timely complaint in this matter. Id., at 7-8. Secondly, the EEOC contends that the provision limiting Johnson's recovery solely to out-of-pocket expenses prevents her from securing a series of statutory remedies — namely, back pay, compensatory and punitive damages, and attorney's fees. Id., at 7. Taken together, the EEOC argues, these provisions bind Johnson to a prospective waiver of her statutory rights which, by definition, is neither knowing nor voluntary. Id., at 8. The EEOC submits that, by preventing...
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