Parrish v. Valero Retail Holdings, Inc.

• Decision Date: 15 July 2010
• Docket Number: No. CIV 10-0398 JB/LFG,CIV 10-0398 JB/LFG
• Parties: Rozik PARRISH, Plaintiff, v. VALERO RETAIL HOLDINGS, INC., Defendant.
• Court: U.S. District Court — District of New Mexico

727 F.Supp.2d 1266

Rozik PARRISH, Plaintiff,

v.VALERO RETAIL HOLDINGS, INC., Defendant.

No. CIV 10-0398 JB/LFG.

United States District Court, D. New Mexico.

July 15, 2010.

Jason Michael Burnette, Vogel and Burnette, Albuquerque, NM, for Plaintiff.

Virginia C. Honeyman, Valero Retail Holdings, Inc., San Antonio, TX, Jeffrey L. Lowry, Rodey, Dickason, Sloan, Akin & Robb, P.A., Albuquerque, NM, for Defendant.

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on the Defendant's Motion to Compel Arbitration and Dismiss or Stay Proceedings, filed April 30, 2010 (Doc. 5). The Court held a hearing on June 11, 2010. The primary issue is whether the arbitration agreement that Plaintiff Rozik Parrish signed as part of Defendant Valero Retail Holdings, Inc.'s ("Valero") employment application is enforceable, if the consideration was based upon an offer of at-will employment and on a mutuality of obligation to arbitrate. Because the Court finds that adequate consideration supports the agreement to arbitrate, the Court willgrant the motion to compel arbitration and will stay the case.

FACTUAL BACKGROUND

Valero hired Parrish as an employee on September 6, 2001. See Motion at 1. Parrish worked as an area manager and was responsible for overseeing eight of Valero's retail stores in Albuquerque, New Mexico. See Notice of Appeal and Complaint for Damages ¶ 4, at 6, filed April 23, 2010 (Doc. 1-1). Her responsibilities included direct oversight and involvement with, among other activities, receiving merchandise from out-of-state vendors; selling the merchandise; maintaining store equipment manufactured by out-of-state suppliers; and selling gasoline and merchandise to out-of-state customers. See Affidavit of Karen Pena ¶ 11, at 2 (executed April 29, 2010), filed March 30, 2010 (Doc. 5-1) ("Pena Aff."). Valero engages in interstate commerce in many ways, including by: (i) selling products that out-of-state vendors supply; (ii) advertising in other states; (iii) operating retail stores in Arizona, California, Colorado, Louisiana, New Mexico, Oklahoma, Texas, and Wyoming; (iv) being insured by out-of-state insurance carriers; and (v) conducting business through the use of interstate mail and telephone calls. See Pena Aff. ¶ 10, at 2.

Included in Valero's Application for Employment, which Parrish completed and signed on August 27, 2001, is an arbitration clause, stating:

I agree to be bound by and accept as a condition of employment the terms of the Dialogue Dispute Resolution Plan and Rules (except if my employment is governed by an applicable collective bargaining agreement), which are incorporated in this application by reference. I understand that Employer also agrees to be bound by the terms of the Dialogue plan. I understand that the Dialogue plan requires me to submit all legal claims arising from my employment or termination of my employment, including disputes regarding legally protected rights, the Work Injury Program, or benefits claims, to binding arbitration instead of a lawsuit in state or federal court.

Pena Aff. ¶ 8, at 2. See Pena Aff. Exhibit A1, Rozik Parrish's Application for Employment at 2 (signed August, 27, 2001), filed March 30, 2010 (Doc. 5-2). The Dialogue plan is a dispute resolution process that includes a mutually binding agreement to arbitrate all disputes arising out of an individual's employment with Valero, including but not limited to claims of discrimination based on disability. See Pena Aff. ¶ 5, at 1; Pena Aff. Exhibit A2, Dialogue Plan and Rules at 2-5, filed April 30, 2010 (Doc. 5-3). In accordance with the Federal Arbitration Act ("FAA"), the Dialogue plan provides for the exclusive, final, and binding resolution of all employment disputes. See Pena Aff. ¶ 6, at 1; Pena Aff. Exhibit A2, Dialogue Plan and Rules at 4 ("The [Federal Arbitration] Act shall apply to this Plan, the Rules, and any proceedings under the Plan or the Rules, including any actions to compel, enforce, vacate, or confirm proceedings, awards, orders of a Referee, or settlements under the Plan or the Rules."). Eligible disputes subject to the Dialogue plan include "any legal or equitable claim, demand, or controversy, whether in tort, in contract, [or] under statute ... which relates to, arises from concerns, or involves in any way ... [t]he employment or potential reemployment of an Employee, including the compensation, terms, conditions, or termination of such employment...." Pena Aff. Exhibit A2, Dialogue Plan and Rules at 3. Covered disputes are further defined in relevant part as "[a]ny other matter related to the relationship between the Employee and the Company, including, by way of example and without limitation, allegationsof ... [p]rohibited forms of employment discrimination such as discrimination based on race, religion, color, sex [or] age...." Pena Aff. Exhibit A2, Dialogue Plan and Rules at 3. The Dialogue Plan and Rules provide: "This plan may be amended by Sponsor at any time by giving at least 10 days notice to current employees. However, no amendment shall apply to a Dispute for which a proceeding has been initiated pursuant to the Rules." Pena Aff. Exhibit A2, Dialogue Plan and Rules at 3.

Once Parrish's employment with Valero began, she signed an Acknowledgment Form stating that she acknowledged that she had received a copy of the Dialogue plan and understood that all claims arising out of her employment or termination of her employment are required to be submitted to final and binding arbitration, as set forth in the Dialogue plan. See Pena Aff. ¶ 9, at 2; Pena Aff. Exhibit A1, Acknowledgment Form at 3 (Doc. 5-2). Valero terminated Parrish's employment on December 16, 2008. See Complaint ¶ 21, at 10. Parrish alleges that Valero discriminated against her based on age, sex, and national origin when it terminated her employment. Valero denies that Parrish suffered discrimination on the basis of any protected characteristic.

PROCEDURAL BACKGROUND

Parrish filed her Notice of Appeal and Complaint for Damages in the Second Judicial District Court, Bernalillo County, New Mexico, on March 25, 2010. See Doc. 1-1. In her Complaint, Parrish alleges that, when Valero terminated her, she suffered discrimination under: (i) the Age Discrimination in Employment Act, 29 U.S.C. § 621 through § 634 ("ADEA"); (ii) Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e; and (iii) the New Mexico Human Rights Act, NMSA 1978, § 28-1-1 through § 28-1-15. See Complaint ¶¶ 25-45, at 10-13. She also brings actions for breach of contract, and for breach of the implied covenant of good faith and fair dealing. See Complaint ¶¶ 46-56, at 13-14. Valero removed the case to federal court on April 23, 2010. See Notice of Removal, filed April 23, 2010 (Doc. 1).

On April 30, 2010, Valero filed its motion to compel arbitration. See Defendant's Motion to Compel Arbitration and Dismiss or Stay Proceedings (Doc. 5). Valero argues that, as evidenced by her signed employment application, Parrish agreed to be bound by the Dialogue plan, including its binding arbitration agreement, and argues that the claims that she brought in her Complaint are within the scope of that arbitration agreement. See Motion at 3-4. Valero contends that the Court should compel Parrish to arbitrate her claims, if she should choose to continue to pursue them. See Motion at 5.

Parrish disputes that a binding arbitration agreement exists and thus argues that the Court should dismiss Valero's motion. See Plaintiff's Response to Defendant's Motion to Compel Arbitration and Dismiss or Stay Proceedings at 1, filed May 18, 2010 (Doc. 9). She argues that the agreement to arbitrate that she signed is an illusory promise based upon continued at-will employment, and thus is unenforceable. See Response at 3-4. Parrish also argues that an agreement to arbitrate based upon either continued at-will employment or a reciprocal promise to submit to arbitration lacks sufficient consideration to support a finding of a binding agreement to arbitrate. See Response at 5.

In reply, Valero argues that two different acts or promises constitute sufficient consideration for the arbitration agreement in this case: (i) Parrish's employment was conditioned on her acceptance of the Dialogue plan-it was a pre-hire agreement; and (ii) there is a mutualpromise to arbitrate that binds and applies to both the employee and to the company. See Defendant's Reply Brief at 1-2, filed June 1, 2010 (Doc. 12). Valero argues that the arbitration agreement that Parrish signed, which was a condition of her becoming employed by Valero, is distinct from an arbitration agreement signed after employment has commenced. See Reply at 2.

At the hearing, Jeffrey Lowry, Valero's attorney, argued that, if Parrish's contention, that an offer of at-will employment is not sufficient consideration, is a correct statement of the law in New Mexico, it may raise a constitutional question under the FAA's supremacy clause provision, especially if New Mexico law treats arbitration agreements less favorably than other agreements. See Transcript of Hearing at 2:17-3:5 (taken June 11, 2010) ("Tr.") (Lowry).¹ Mr. Lowry argued that the Court need not reach the constitutional issue in this case, however, because New Mexico case law has not found that an offer of at-will employment is insufficient consideration for an arbitration agreement. See Tr. at 3:10-15 (Lowry). He contended that there does not appear to be a dispute that an offer of employment is valuable to a person or that an offer of employment constitutes consideration for a contract. See Tr. at 3:16-4:4 (Lowry). Mr. Lowry argued that Valero must also comply with the arbitration agreement and has no right to not comply with it. See Tr. at 4:5-25 (Lowry). He requested that, if the Court compels arbitration, the Court stay the proceeding. See Tr. at 5:3:4 (Lowry). In response, Jason Burnette, Parrish's counsel, conceded that the sole...