Morales v. Rent-a-Center, Inc.

• Decision Date: 03 November 2003
• Docket Number: No. 3:03-CV-1319 (EBB).,3:03-CV-1319 (EBB).
• Parties: Santiago MORALES, Petitioner v. RENT-A-CENTER, INC., Respondent
• Court: U.S. District Court — District of Connecticut

306 F.Supp.2d 175

Santiago MORALES, Petitioner v. RENT-A-CENTER, INC., Respondent

No. 3:03-CV-1319 (EBB).

United States District Court, D. Connecticut.

November 3, 2003.

COPYRIGHT MATERIAL OMITTED

Christopher N. Parlato, Bethlehem, CT, Joseph Mulshine, Law Office of Joseph Mulshine, Avon, CT, for Plaintiff.

David S. Warner, Littler Mendelson, New York, NY, Andrea A. Hewitt, John M. Wolfson, Scott J. Wenner, Feiner Wolfson, Hartford, CT, for Defendant.

RULING ON PLAINTIFF'S MOTION TO COMPEL ARBITRATION

ELLEN BREE BURNS, District Judge.

Introduction

Plaintiff Santiago Morales (hereinafter "Plaintiff" or "Morales") brings this action against his employer, Rent-A-Center (hereinafter "Defendant" or "RAC"), alleging unlawful employment discrimination based on his race, national origin, and sexual orientation. Defendant has moved to stay the judicial proceedings and compel arbitration pursuant to the Federal Arbitration Act (FAA). Plaintiff cross moved pursuant to Section Four of the FAA, demanding a jury trial on any triable issues concerning the making of the arbitration agreement.

STATEMENT OF RELEVANT FACTS

Plaintiff was employed as an assistant manager for Rentown, LLC, at 566 West Main Street, Meriden Connecticut, which is owned and managed by Rent-A-Center, Inc. (RAC). On July 3, 2002, Plaintiff signed a "Mutual Agreement to Arbitrate Claims" (hereinafter "arbitration agreement") in the presence of the manager of the Meriden RAC store, Dan White. Plaintiff contends that he was informed that, if he did not sign the arbitration agreement, he would lose his job. In response, Mr. White asserts that, during their meeting, the Plaintiff did not convey any misgivings about signing the agreement, did not request additional time to consider the agreement, and did not ask to consult with an attorney.

The arbitration agreement contains the following relevant terms:

The Company and I mutually consent to the resolution by arbitration of all claims or controversies ("claims"), past, present, or future, whether or not arising out of my application for employment, assignment/employment, or the termination of my assignment/employment that the Company may have against me or that I may have against any of the following: (1) the Company, (2) its officers, directors, employees, or agents in their capacity as such or otherwise...

The only claims that are arbitrable are those that, in the absence of this Agreement, would have been justiciable under applicable state or federal law. The claims covered by this Agreement include, but are not limited to...claims for discrimination (including, but not limited to race, sex, sexual harassment, sexual orientation, religion, national origin, age, workers' compensation...); and claims for violation of any federal, state, or governmental law, statute, regulation, or ordinance...

Except as otherwise provided in this agreement, both the company and I agree that neither of us shall initiate or prosecute any lawsuit or administrative action (other than an administrative charge of discrimination to the Equal Employment Opportunity Commission, or a similar fair practices agency...) in any way related to any claim covered by this agreement.

The Agreement also contains an acknowledgment provision that states:

I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT; THAT I UNDERSTAND ITS TERMS; THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND ME RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED IN IT; AND THAT I HAVE ENTERED INTO THE AGREEMENT AND NOT IN RELIANCE ON ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS AGREEMENT ITSELF. I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO A JURY TRIAL. I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.

Mutual Agreement to Arbitrate Claims, July 03, 2002

Plaintiff alleges that, soon after he signed the agreement, a new supervisor at RAC, Phil Mele, began to discriminate against him on the basis of his race, national origin and sexual orientation. Plaintiff is an openly gay Hispanic male. Plaintiff contends that, on or about September 17, 2002, Mr. Mele confronted Plaintiff and said to him "I heard about you," ostensibly referring to his race, national origin and sexual orientation. Subsequently, Plaintiff claims he was subjected to verbal abuse regarding his sexuality, spoken to in a "rude" and "brutal" manner, was disallowed breaks as mandated by law, and was expected to complete new and more difficult job functions. Plaintiff eventually resigned, which he attributes to the nature and severity of the discrimination he was subject to at work.

On October 25, 2002, Plaintiff filed a charge of discrimination against RAC with the Connecticut Commission on Human Rights and Opportunities (hereinafter "CHRO"). On June 5, 2003, the CHRO issued a right to sue letter to Plaintiff. Thereafter, on or about June 26, 2003, Plaintiff filed this lawsuit against RAC, asserting multiple discrimination claims pursuant to Conn. Gen.Stat. §§ 46a — 81(c)(1) (2001), the Connecticut Fair Employment Practices Act, as well as a negligence claim. Defendant has now moved to compel Romero to arbitrate his grievances, and Plaintiff seeks a jury trial on whether an enforceable contract was formed.

Legal Analyses

I. Standard

The Federal Arbitration Act (the "FAA") creates a "body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the [FAA]." Oldroyd v. Elmira Savings Bank, FSB, 134 F.3d 72, 76 (2d Cir.1998) (citing Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)). Arbitration agreements affecting interstate commerce are subject to the FAA. Id. Neither party disputes the applicability of the FAA to the arbitration agreement at issue in this case. The FAA provides, in pertinent part, that "an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 USCS § 2 (2003)

The Second Circuit instructs us that "[a]ny analysis of a party's challenge to the enforcement of an arbitration agreement must begin by recognizing the FAA's strong policy in favor of rigorously enforcing arbitration agreements." Doctor's Assocs. v. Hamilton, 150 F.3d 157, 162-63 (2d Cir.1998) (citing Perry v. Thomas, 482 U.S. 483, 490, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987)). See also Dean Witter Reynolds v. Byrd, 470 U.S. 213, 221, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985) (observing "the preeminent concern of Congress in passing the Act was to enforce private agreements into which parties had entered.").

In determining whether to compel arbitration pursuant to the FAA, the court looks to four factors: 1) whether the parties agreed to arbitrate their dispute; 2) whether the asserted claims fall within the scope of the arbitration agreement; 3) whether Congress intended the federal statutory claims asserted by the plaintiff, if any, to be non-arbitrable, and 4) if the court concludes that some, but not all, of the claims in the case are arbitrable, it must then decide whether to stay the remaining claims pending arbitration. Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840, 844 (2d Cir.1987); Topf v. Warnaco, Inc., 942 F.Supp. 762, 762 (D.Conn.1996).

Section Three of the FAA provides for a stay of proceedings where the court is satisfied that the issue before it is arbitrable under the agreement. Under Section Four, the FAA instructs federal courts to compel arbitration if "there has been a `failure, neglect, or refusal' of any party to honor an agreement to arbitrate." Scherk v. Alberto-Culver Co., 417 U.S. 506, 511, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974) (quoting 9 U.S.C § 3). The Supreme Court has declared that "by its terms, 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 Reynolds Inc., 470 U.S. at 218, 105 S.Ct. 1238 (1985).

However, Section Four of the FAA also instructs that a court may be required to proceed to trial "when parties disagree about whether they entered into an arbitration agreement subject to the FAA." U.S. Titan, Inc. v. Guangzhou Zhen Hua Shipping Co., Ltd., 241 F.3d 135, 145 (2d Cir.2001); quoting 9 U.S.C. § 4. Courts have interpreted Section Four as mandating that, "before a party can be required to submit to arbitration, it is entitled to a judicial determination of the threshold question of whether it entered into an agreement which obliges it to consent to arbitration." PMC, Inc. v. Atomergic Chemetals Corp., 844 F.Supp. 177, 181 (S.D.N.Y.1994). Hence, a summary judgment standard is applied to a motion for jury trial, requiring the plaintiff to show a genuine issue of material fact regarding the making or scope of the agreement, such that a jury could find no agreement. Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d. Cir.2003); Stamford Holding Co. v. Clark, No. 3:02CV1236, 2003 WL 1597206, 2003 U.S. Dist. LEXIS 4542 (D.Conn.2003). See also Almacenes Fernandez, S.A. v. Golodetz, 148 F.2d 625, 628 (2d Cir.1945) ("To make a genuine issue entitling the plaintiff to a trial by jury, an unequivocal denial that the agreement had been made was needed, and some evidence should have been produced to substantiate the denial."). Thus, in order to receive a trial on the existence of an enforceable contract, Plaintiff must show genuine factual issues regarding his allegations that the making of the agreement was void.

II. Analysis

In response to Defendant's motion to...