Mangu v. Clifton Gunderson LLP, Civ. 13-00187 LH/CG
| Decision Date | 19 August 2013 |
| Docket Number | No. Civ. 13-00187 LH/CG,Civ. 13-00187 LH/CG |
| Parties | JOHNNY I. MANGU, Plaintiff, v. CLIFTON GUNDERSON LLP, k/n/a Clifton Larson Allen LLP, a foreign corporation, Defendant. |
| Court | U.S. District Court — District of New Mexico |
On March 25, 2013, Defendant Clifton Gunderson LLP ("Defendant") filed a Motion to Dismiss and to Compel Arbitration (ECF No. 10). Defendant requests an order dismissing Plaintiff's claims for constructive discharge and retaliation for failure to exhaust his administrative remedies and an order compelling arbitration of all remaining claims. Plaintiff objects to the entry of the requested orders, arguing that he did exhaust his administrative remedies as to his retaliation and constructive discharge claims when he supplemented his record to the EEOC. Plaintiff also contends that the arbitration agreement should not be enforced because it is unconscionable and illusory. The Court, having considered the motion, briefs, evidence, and applicable law, concludes that Defendant's Motion to Dismiss and to Compel Arbitration will be denied in its entirety.
Plaintiff, of Romanian national origin, began working for Defendant as a Staff Accountant on or about December 18, 2006. Compl. (ECF No. 1) ¶¶ 6-7. During his tenure, Plaintiff received average or above average performance evaluations. See id. ¶ 8.
On March 26, 2007, Plaintiff and Defendant signed an Employment Agreement. Def.'s Am. Ex. B (ECF No. 13) at 4-8 of 8. Paragraph 11 of the Employment Agreement contained the following provision:
Attorney Fees/Arbitration. The Employee agrees to reimburse Clifton Gunderson for any attorney fees, costs and expenses incurred in its successfully enforcing any part of this Agreement against the Employee in any state or federal court lawsuit and/or in its successfully defending all or part of any state or federal court lawsuit that the Employee may file against Clifton Gunderson and/or any individual in their capacity as an agent of Clifton Gunderson. Additionally, at Clifton Gunderson's election, the Employee agrees to submit any claim asserted in a state or federal court lawsuit against Clifton Gunderson and/or any individual in their capacity as an agent of Clifton Gunderson to binding arbitration pursuant to the then current employment dispute resolution rules of the American Arbitration Association.
Id. at 7 of 8. Paragraph 12(e) stated: Id. at 8 of 8.
In 2010, Plaintiff reported to a high level managing partner that many foreign national employees were being passed over for promotions and not given opportunities for advancement. Compl. (ECF No. 1) ¶ 9. In early 2010, two other foreign national employees approached Plaintiff and told him that they had complained to Defendant about the lack of promotional opportunities and the way foreigners were being treated in the Albuquerque/Lenexa office. Id. ¶ 10. In the spring of 2010, Plaintiff complained to his manager about the work environment, informing him that he and other foreign national employees were being treated differently by the management in the Albuquerque office, including being passed over for promotions, being segregated from American employees, being ostracized and left out of important meetings, being treated with disrespect and working extreme amounts of overtime without compensation. Id. ¶ 11. Plaintiff was not aware of Defendant implementing any changes to address his and otherforeign national employees' concerns about their disparate treatment. See id. ¶¶ 10, 12.
On April 9, 2011, Plaintiff filed an EEOC Charge of Discrimination. Id. ¶ 14; Def.'s Mot., Ex. A (ECF No. 11-1) at 5 of 6. Plaintiff amended the Charge of Discrimination on May 11, 2011. Def.'s Mot., Ex. A (ECF No. 11-1) at 5 of 6. Plaintiff checked the box for discrimination based on "National Origin" only. Id. He alleged that the earliest the discrimination took place was November 1, 2007, and the latest was April 5, 2011; and he checked the box for "Continuing Action." Id. His amended charge contained the following allegations:
After he filed his charge, Plaintiff was completely ostracized and shunned by the management of the Albuquerque Office, which became aggressive and hostile with him. Compl. (ECF No. 1) ¶ 15. On or around May 15, 2011, Plaintiff was forced to resign from Defendant because of the hostile work environment. See id. ¶ 16; Pl.'s Resp., Ex. A (ECF No. 16) at 9 of 11.
On May 27, 2011, Defendant submitted to the EEOC its response to the Charge ofDiscrimination. See Pl.'s Resp., Ex. B (ECF No. 16) at 8-11 of 11. In its response, Defendant noted, among other things, that Plaintiff submitted an "Initial Statement" to Defendant three weeks after his initial charge that rambles on for seven pages. Id., Ex. B (ECF No. 16) at 8 of 11. Although Defendant asserts that the Initial Statement lacks substance and supporting evidence, making the allegations difficult to rebut, Defendant proceeds in its response letter to point out the absences of substance and deny the charges. Id., Ex. B (ECF No. 16) at 8-9 of 11. Significantly, Defendant explains in detail how Plaintiff resigned abruptly from Defendant after taking a new position, and concludes that "[t]here is and could not be any claim of constructive discharge by Mr. Mangu." Id., Ex. B (ECF No. 16) at 9 of 11.
On February 26, 2013, Plaintiff filed suit against Defendant for discrimination on the basis of his national origin in violation of Title VII and the New Mexico Human Rights Act ("NMHRA"). Compl. (ECF No. 1) ¶ 20. He further alleges that Defendant "discriminated against Plaintiff by denying him promotional opportunities, subjecting him to a hostile work environment and forcing him to resign." Id. ¶ 21. Plaintiff contends he has suffered damages "as a result of Defendant's retaliatory practices." Id. ¶ 23.
The Federal Arbitration Act ("FAA") provides:
A written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, . . . shall be 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 (emphasis added). Arbitration agreements may thus be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability. Rent-A-Center, West,Inc. v. Jackson, __ U.S. _, 130 S.Ct. 2772, 2776 (2010).
Congress's purpose in enacting the FAA was "to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as other contracts." Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991). The FAA thus "creates a body of federal substantive law establishing and regulating the duty to honor an agreement to arbitrate." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625 (1985) (quoting Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n.32 (1983)).
The FAA "provides two parallel devices for enforcing an arbitration agreement: a stay of litigation in any case raising a dispute referable to arbitration, 9 U.S.C. § 3, and an affirmative order to engage in arbitration, § 4." Moses H. Cone Memorial Hosp., 460 U.S. at 22. Under Section 4 of the FAA, a court may order the parties to arbitrate "upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue." 9 U.S.C. § 4. A court should only decide as a matter of law whether the parties entered into an agreement to arbitrate when there is no genuine issue of material fact concerning the formation of the agreement. See Avedon Engineering, Inc. v. Seatex, 126 F.3d 1279, 1283 (10th Cir. 1997); Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., Ltd., 636 F.2d 51, 54 (3d Cir. 1980).
In enacting the FAA, Congress did not intend to force parties to arbitrate in the absence of an agreement, and therefore the "existence of an agreement to arbitrate is a threshold matter which must be established before the FAA can be invoked." Avedon, 126 F.3d at 1286-87. When the parties dispute the existence of a valid arbitration agreement, the presumption in favor of arbitration disappears. Dumais v. American Golf Corp., 299 F.3d 1216, 1220 (10th Cir.2002). Consequently, a federal court looks to state law principles of contract formation to determine whether an agreement to arbitrate had been reached:
In applying state law, [a] court may not . . . construe [an arbitration] agreement in a manner different from that in which it otherwise construes...
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