Murphy v. Glencore Ltd.

• Decision Date: 11 February 2018
• Docket Number: Civil Action No. 3:18-cv-01027 (CSH)
• Court: U.S. District Court — District of Connecticut
• Parties: ERIN MURPHY Plaintiff, v. GLENCORE LTD., Defendant.

ERIN MURPHY Plaintiff, v. GLENCORE LTD., Defendant.

Civil Action No. 3:18-cv-01027 (CSH)

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

February 11, 2018

RULING ON DEFENDANT'S MOTION TO COMPEL ARBITRATION

Plaintiff Erin Murphy ("Plaintiff" or "Murphy") brought this action against her employer Glencore Ltd. ("Glencore" or "Defendant") alleging discrimination based on gender and pregnancy, hostile work environment, and retaliation in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1) ("Title VII"), the Connecticut Fair Employment Practices Act, § 46a-60(7)(a) ("CFEPA"), and the Pregnancy Discrimination Act, 42 U.S.C § 2000e (k) ("PDA"). [See Doc. 1 ("Compl.").] Plaintiff also requested declaratory judgment on the matter of mandatory arbitration. [Id.] Defendant moves pursuant to the Federal Arbitration Act, 9 U.S.C § 1, et seq. (the "FAA"), to dismiss or stay these proceedings and compel arbitration of Plaintiff's claims, arguing that Plaintiff agreed in writing as a condition of her employment to submit any such claims to arbitration. For the reasons stated below, Defendant's Motion to Compel Arbitration [Doc. 13] is granted, and the proceedings will be stayed pending resolution of the parties' arbitration. I. Background

The following facts, derived from Plaintiff's Complaint and the parties' briefing on the instant motion, are accepted as true for the purposes of this Ruling. The facts stated here are confined to those relevant to the present motion.

Plaintiff Erin Murphy has a master's degree in Business Administration, Finance, and Marketing from the University of Connecticut. [Compl. ¶ 13.] Prior to working at Glencore, Ms. Murphy worked for Morgan Stanley from 2004 to 2006, Sempra Energy Solutions from 2006 to 2009, and Goldman Sachs from 2009 to 2012. [Doc. 13-3 ("Polzer Aff.") Ex. A.]

On or about July 13, 2012, Murphy applied for a position at Glencore. [Compl. ¶ 200.] In connection with her application, Murphy completed a two-page employment application form (the "Employment Application"). [Id. ¶ 201.] The Employment Application contained the following provision in italics above Plaintiff's signature line:

"In consideration for Glencore's considering my application for employment, I expressly agree that any dispute between Glencore and me, including, without limitation, my application for employment or my employment, if I am hired, will be submitted to final and mutually binding arbitration before the American Arbitration Association ("AAA'') as the sole and exclusive forum, and shall not be brought in any state or federal court for ultimate resolution. Nothing herein shall prohibit me from exercising my statutory right to pursue an administrative charge or complaint, but any subsequent litigation concerning such a charge or complaint shall be subject to this arbitration agreement. Information regarding the American Arbitration Association and its procedures for handling employment disputes may be found at www.adr.org"

[Id.]

Murphy completed, signed, and submitted the Employment Application to Glencore, but does not recall reading the above provision or ever discussing it with any representative of Defendant prior to signing. [Id. ¶¶ 202-204.] Murphy also contends that she completed the Employment Application in about fifteen minutes, while waiting for her scheduled job interview.[Doc. 26 ("Opp. Memo.") at 4.] Murphy began working as an Operator for the Crude Oil Desk at Glencore on or about August 15, 2012, and continues to work there to date. [Polzer Aff. ¶¶ 3-4.]

On May 17, 2018, four months after Murphy filed a dual charge of discrimination against Glencore with the United States Equal Employment Opportunity Commission (the "EEOC") and the Connecticut Commission on Human Rights and Opportunities (the "CHRO"), counsel for Glencore wrote to counsel for Murphy citing the arbitration provision in the Employment Application and advising that "should Murphy decide to pursue her CHRO and/or EEOC claims, such claims must be brought before the AAA and Glencore does not waive its right to arbitrate" (the "May 17 Letter"). [Opp. Memo, Ex. A at 2.] Murphy contends that she first became aware of the mandatory arbitration provision upon receipt of the May 17 Letter. [Opp. Memo. at 4.] On June 18, 2018, Murphy filed the instant lawsuit, asserting claims of discrimination based on gender and pregnancy, hostile work environment, and retaliation under Title VII, the PDA, and the CFEPA. [See Compl. ¶ 1.] On June 21, 2018, Glencore filed the present motion to compel arbitration, alleging that all of Plaintiff's claims are properly subject to arbitration based on her assent to the Employment Application. [See Doc. 13.] Plaintiff opposes Glencore's motion.

III. Discussion

A. Legal Standard

The Federal Arbitration Act ("FAA") codifies a federal policy strongly favoring arbitration as an alternative to litigation. See, e.g., Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016) (the FAA "embod[ies] national policy favoring arbitration" (quoting AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 346 (2011))); JLM Indus., Inc. v. Stolt-Nielsen SA, 387 F.3d 163, 171 (2d Cir. 2004) (the FAA represents "a strong federal policy favoringarbitration as an alternative means of dispute resolution"); Morales v. Rent-A-Center, Inc., 306 F. Supp. 2d 175, 179 (D. Conn. 2003) ("[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."). Consistent with this underlying policy, the FAA "leaves no place for the exercise of discretion by a district court," Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985), instead requiring that a contractual provision to arbitrate disputes arising out of the contract "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); see also Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 840, 844 (2d Cir. 1987) ("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."). Notwithstanding this strong presumption in favor of arbitrability, however, "ordinary principles of contract law apply" to evaluation of an arbitration agreement, Ross v. Am. Express Co., 478 F.3d 96, 99 (2d Cir. 2007), and courts may invalidate arbitration agreements based on "generally applicable contract defenses, such as fraud, duress, or unconscionability," Doctor's Assocs., Inc. v. Hamilton, 150 F.3d 157, 163 (2d Cir. 1998) (citation omitted).

To determine whether to compel arbitration, the Court must consider (1) whether the parties entered into a contractually valid arbitration agreement, and (2) whether the dispute falls within the scope of the arbitration agreement. Nicosia, 834 F.3d at 229. The issue of validity is governed by state law principles of contract formation. Id. Additionally, with respect to federal statutory claims, the Court must consider "whether Congress intended those claims to be nonarbitrable." JLM, 387 F.3d at 169 (citing Oldroyd v. Elmira Sav. Bank, FSB, 134 F.3d 72,75-76 (2d Cir. 1998)). The court applies a standard comparable to the standard for summary judgment:¹ if there is no genuine issue of material fact concerning the formation or scope of the agreement, the court must decide as a matter of law to compel arbitration. See Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003); see also Considine v. Brookdale Senior Living, Inc., 124 F. Supp. 3d 83, 88 (D. Conn. 2015).

B. Validity of the Arbitration Provision

Plaintiff concedes that her claims are within the scope of the arbitration provision at issue. [Opp. Memo. at 5.] The present dispute is therefore limited to two issues: whether the parties entered into a valid agreement to arbitrate and whether Congress intended Title VII claims to be arbitrable. Resolution of these issues in the instant case dictates that Murphy's claims must be submitted to arbitration and this litigation stayed.

Murphy does not contest that she voluntarily signed an Employment Application which stated that she would submit any dispute between herself and Glencore "to final and mutually binding arbitration" in lieu of pursuing her claims in state or federal court. [Compl. ¶ 201; Opp. Memo. at 5.] This establishes a presumption of arbitrablity. See Halligan v. Piper Jaffray, Inc., 148 F.3d 197, 200 n. 2 (2d Cir. 1998) (noting that party's signature on arbitration agreement established a "presumption of arbitrability"), cert. denied, 526 U.S. 1034 (1999). Nor does she dispute that the arbitration provision covers the claims at issue in this case. [See Opp. Memo. at 3, 5.] Instead, the gravamen of Plaintiff's argument is that the arbitration provision isunenforceable because it is "both substantively and procedurally unconscionable," and because she was fraudulently misled into entering into it.² [Opp. Memo. at 1.] "Substantive unconscionability focuses on the 'content of the contract,' as distinguished from procedural unconscionability, which focuses on the 'process by which the allegedly offensive terms found their way into the agreement.'" D'Antuono, 789 F. Supp. 2d at 327 (quoting Cheshire Mortgage Serv., Inc. v. Montes, 223 Conn. 80 n. 14 (1992)).

A trial court looks to state law principles of contract formation to determine whether a valid agreement to arbitrate exists. Meyer v. Uber Techs., Inc., 868 F.3d 66, 73 (2d Cir. 2017) (citing Nicosia, 834 F.3d at 229). In Connecticut,³ "the doctrine of unconscionability, as a defense to contract enforcement, generally requires a showing that the contract was both procedurally and substantively unconscionable when made—i.e., some showing of an absence of...