Jorge-colon v. Mandara Spa P.R. Inc

• Decision Date: 18 February 2010
• Docket Number: Civil No. 09-1571 (SEC).
• Citation: 685 F.Supp.2d 280
• Parties: Delia E. JORGE-COLON, Plaintiffs v. MANDARA SPA PUERTO RICO, INC.; John Doe and ABC Insurance Co., Defendants.
• Court: U.S. District Court — District of Puerto Rico

685 F.Supp.2d 280

Delia E. JORGE-COLON, Plaintiffs

v.MANDARA SPA PUERTO RICO, INC.; John Doe and ABC Insurance Co., Defendants.

Civil No. 09-1571 (SEC).

United States District Court,

D. Puerto Rico.

Decided: Feb. 18, 2010.

Richard Schell-Asad, San Juan, PR, for Plaintiffs.

Bayoan Muniz-Calderon, Lizette C. Velez-Rive, Velez Rive Law Offices, PCS San Juan, PR, for Defendants.

OPINION AND ORDER

SALVADOR E. CASELLAS, District Judge.

Pending before this Court is Co-defendant Mandara Spa Puerto Rico, Inc.'s ("Defendant" or "Mandara") Motion to Compel Arbitration and Stay Proceedings (Docket # 4), Plaintiff Delia E. Jorge-Colon's ("Plaintiff) opposition thereto (Docket # 7), and Defendant's reply (Docket #10). After reviewing the filings, and the applicable law, Defendant's request to compel arbitration is GRANTED.

Factual Background

On June 23, 2009, Plaintiff filed the present suit under Title VII of the Civil Rights Act of 1964 (Title VII), as amended by the Pregnancy Discrimination Act of 1978, 42 U.S.C. § 2000e et seq, the Family Medical Leave Act ("FMLA"), 29 U.S.C § 2601 et seq, Puerto Rico Law No. 3 of March 13, 1942, 29 L.P.R.A. § 469, and Law No. 80 of May 30, 1976, 29 L.P.R.A § 185a, et seq.¹ According to Plaintiff Defendant discriminated against her because of her pregnancy, and failed to adequately notify her about her rights under the FMLA. On August 5, 2009, Defendant filed a motion to compel arbitration and requesting a stay of the proceedings. Docket # 4. Therein, Defendant contends that pursuant to Mandara's Employee Dispute Resolution Policy ("DRP"), which was signed by Plaintiff on October 25, 2004, the present case should be referred to arbitration, and stayed pending resolution of the same. Plaintiff opposes, arguing that labor disputes arising under Title VII and analogous statutes may be raised directly before the federal courts, without first resorting to arbitration. Defendant replied reasserting its prior arguments. Applicable Law and Analysis [1] In Puerto Rico, arbitration is strongly favored as an alternative conflictresolution mechanism. Quinones-Gonzdlez v. Asoc. Cond. Playa Azul II, 161 D.P.R. 668 (2004). Puerto Rico's Arbitration Act, P.R. Laws Ann. tit. 32, § 3201 provides that two or more parties:

may agree in writing to submit to arbitration any dispute which may be the object of an existing action between them at the time they agreed to the arbitration, or they may include in a written agreement a provision for the settlement by arbitration of any dispute which may arise in the future between them from such settlement or in connection therewith. Such an agreement shall be valid, enforceable and irrevocable except for the grounds prescribed by law or equity for the reversal of an agreement.

See also Federal Arbitration Act, 9 U.S.C. § 2.

Similarly, Congress has set forth a policy favoring arbitration. See Soto-Alvarez v. AIMCO, 561 F.Supp.2d 228, 230 (D.P.R.2008). In fact, "Congress enacted the FAA in order '[t]o overcome judicial resistence to arbitration, '" Garrison v. Palmas del Mar Homeowners Ass'n, 538 F.Supp.2d 468, 472 (D.P.R.2008) (citing Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006)), "'... encourage speedy resolution of disputes and to bind parties to their voluntary agreements.'" Id. (citing Ideal Unlimited Services Corp. v. Swift-Eckrich, Inc., 727 F.Supp. 75, 76 (D.P.R.1989)). Likewise, it sought to "overrule the judiciary's longstanding refusal to enforce agreements to arbitrate, " and to "place arbitration agreements 'upon the same footing as other contracts, '" De Jesus-Santos v. Morgan Stanley Dean Witter, Inc., No. 05-1336, 2006 WL 752997, *4, 2006 U.S. Dist. LEXIS 24327, *13 (D.P.R. Mar. 22, 2006) (citing Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 219220, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985), and Scherk v. Alberto-Culver Co., 417 U.S. 506, 511, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974)). In so doing, Congress set forth that "arbitration is simply a matter of a contract between the parties; it is a way to resolve those disputes—but only those dis- putes—that the parties have agreed to submit to arbitration." First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995).

Pursuant to the Federal Arbitration Act ("FAA"), ² a written arbitration agreement is "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Accordingly, "[t]he FAA mandates the district court to compel arbitration when the parties have signed a valid arbitration agreement governing the issues in dispute, removing the district court's discretion over whether to compel arbitration or provide a judicial remedy to the parties." Soto-Alvarez, 561 F.Supp.2d at 230.³ On this issue, the Supreme Court has held that "the Act leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." Dean Witter, 470 U.S. 213, 218, 105 S.Ct. 1238 (1985).

In interpreting the FAA, the First Circuit has held that a party who attempts to compel arbitration must show that (1) a valid agreement to arbitrate exists, (2) that the movant is entitled to invoke the arbitration clause, (3) that the other party is bound by that clause, and (4) that the claim asserted comes within the clause's scope. InterGen N.V. v. Grind, 344 F.3d 134, 142 (1st Cir.2003); see also Soto-Alvarez, 561 F.Supp.2d 228, 230 (D.P.R.2008); Sanchez-Santiago v. Guess, Inc., 512 F.Supp.2d 75, 78 (D.P.R.2007); Milliman, Inc. v. Health Medicare Ultra, Inc., 641 F.Supp.2d 113, 117 (D.P.R.2009).⁴If there is a valid arbitration clause, and the controversy falls under its scope, the court will direct the parties to proceed to arbitration unless the party compelling arbitration has waived the right to do so, or there exists grounds for revocation of the contractual agreement. See Combined Energies v. CCI Inc., 514 F.3d 168, 171 (1st Cir.2008) (citations omitted).

In general, agreements to arbitrate are "generously construed." Mitsubishi Motors Corp. v. Soler ChryslerPlymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985). As such, "questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration..., " and "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." Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); see also AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 650, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (citations omitted); Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 62, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995); Mun. Of San Juan v. Corp. para el Fomento Economico, 415 F.3d 145 (1st Cir.2005). This presumption of arbitrability was originally developed in cases dealing with labor relations arbitration controversies, but has since been extended to cover all other cases under the FAA. Kaplan, 514 U.S. at 943, 115 S.Ct. 1920.

Considering the foregoing, this Court must first determine whether the DRP and Handbook are enforceable. As mentioned earlier, "arbitration is a matter of contract," therefore, "a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." InterGen, 344 F.3d at 142 (citing AT & T, 475 U.S. at 648, 106 S.Ct. 1415); see also Wright v. Universal Maritime Serv. Corp., 525 U.S. 70, 80, 119 S.Ct. 391, 142 L.Ed.2d 361 (1998) (holding that a collective-bargaining agreement must contain a clear and unmistakable waiver of the employees' rights to a judicial forum for federal discrimination claims); Kaplan, 514 U.S. at 945, 115 S.Ct. 1920 (finding that a party can be forced to arbitrate only those issues he specifically agreed to submit to mediation); Mun. Of San Juan, 415 F.3d at 149 (citations omitted). As a result, "a party seeking to substitute an arbitral forum for a judicial forum must show, at a bare minimum, that the protagonists have agreed to arbitrate some claims." Id. (citing McCarthy v. Azure, 22 F.3d 351, 35455 (1st Cir.1994)).

Courts have held that "state contract law principles govern the validity of an arbitration agreement." Sato-Alvarez, 561 F.Supp.2d at 230; see also AlliedBruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265, 281, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995). Under Puerto Rico law, "the elements of a valid contract are the following: (1) the consent of the contracting parties; (2) a definite object of the contract; and (3) the cause for the obligation." Id. (citing P.R. Laws Ann. tit. 31, § 3391). A party's consent is not valid if " 'given by error, under violence, by intimidation, or deceit.'" Soto-Alvarez, 561 F.Supp.2d at 230; see also Sanchez-Santiago, 512 F.Supp.2d at 79.

In the present case, Plaintiff does not question the arbitration agreement's existence, nor does she allege error, violence, intimidation or deceit that would invalidate her consent to the terms of Mandara's DRP, and Policies and Procedure Handbook ("Handbook").⁵ Instead the record shows that Plaintiff signed Mandara's DRP and the Handbook, attesting that she read and agreed to their contents. See Dockets ##4-2 & 4-3. Both the DRP and Handbook provide, in pertinent part, that arbitration is "the required and exclusive forum for the resolution of all disputes relating to and arising out of [the employees'] employment or the termination of employment (and which are not resolved by the internal dispute resolution procedure), including but not limited to claims, demands or actions under ...