Patterson v. Red Lobster, 3:99CV155LN.
| Decision Date | 06 October 1999 |
| Docket Number | No. 3:99CV155LN.,3:99CV155LN. |
| Citation | 81 F.Supp.2d 681 |
| Parties | John PATTERSON, Felicia Berry and Jerry Robinson, Plaintiffs, v. RED LOBSTER aka GMRI, Inc., Defendant. |
| Court | U.S. District Court — Southern District of Mississippi |
Lynda Carol Robinson, Robinson Law Firm, P.A., Jackson, MS, Ermea J. Russell, Equal Employment Opportunity Commission, Jackson, MS, William F. Jordan, Jordan, Daniels & Goree, PLLC, Jackson, MS, for plaintiffs.
Herbert C. Ehrhardt, Butler, Snow, O'Mara, Stevens & Cannada, Jackson, MS, Robert M. Williams, Jr., Devon L. Gosnell, Ford & Harrison, LLP, Memphis, TN, for defendant.
This cause is before the court on motion of defendant Red Lobster, aka GMRI, Inc., to dismiss or, alternatively, to stay the action and compel arbitration of Patterson's and Robinson's Title VII, § 1981 and state law causes of action. Plaintiffs Patterson and Robinson have responded in opposition.1 The court, having considered the memoranda and submissions of the parties, concludes that defendant's motion is not well taken and should be denied.
John Patterson, a black male, has been employed by Red Lobster for almost thirty years. He has held various positions within the restaurant, but began working as a bartender around 1991. Jerry Robinson, also a black male, was employed by Red Lobster from around 1995 to 1997 and likewise held several positions, including that of bartender.
The plaintiffs claim that they were first alerted to potential racial discrimination sometime around May of 1997 when they were informed by Felicia Berry that Al Seagers, a white male who had only recently begun training as a bartender, was hired by Red Lobster at a rate of $10.00 per hour,2 while they were being paid "substantially less," despite their greater experience as bartenders.3 After the pay discrepancy was brought to the manager's attention, Patterson received a $.40 pay increase, but was still earning less than the $10.00 an hour that Seagers was being paid. Robinson, who had been transferred to server after having been told that business could not justify allotting him more hours at the bar, was transferred back to the bar at a rate of $10.00 an hour, but only after he questioned the pay and full-time hire of Seagers.
Shortly thereafter, around June of 1997, plaintiffs filed a complaint with the EEOC, alleging unlawful employment practices. After the filing of their complaint, the plaintiffs were "subjected to a barrage of harassment by the manager of Red Lobster," including being publicly denounced as incompetent, working reduced hours while the hours of white employees increased or remained the same, working overtime without additional compensation while other employees were paid for overtime, and receiving disciplinary actions and threats of termination for actions that went undisciplined when performed by other employees. Additionally, Seagers was "put `in charge'" of the bar, Patterson was removed from bartending, and the manager repeatedly suggested that the plaintiffs should leave Red Lobster. As a result, both Patterson and Robinson filed retaliation charges with the EEOC against Red Lobster.
During the same month that the plaintiffs filed their initial complaint with the EEOC, June 1997, Red Lobster adopted a Dispute Resolution Procedure (DRP) to become effective for all employees on October 27, 1997. Under the company's DRP, once it becomes obvious that a dispute cannot be resolved through the company's "Open Door Policy," an employee is to present his or her complaint to a peer review panel made up of two co-workers and one manager. After the panel has received the complaint, both the manager who made the adverse decision and the employee are allowed to present their cases to the panel, which will investigate the complaint and arrive at a final decision. If either the employee or the company is dissatisfied with the panel's conclusion, the matter may be submitted to mediation, or it may proceed directly to binding arbitration.
The DRP was presented by Red Lobster as the exclusive means by which employees could resolve disputes with the company. In order to familiarize the employees with the company's new procedure, Red Lobster conducted a training session, called "the Dispute Resolution Procedure Employee Roll-Out Meeting," on August 16, 1997. The training lasted approximately thirty minutes and consisted of an oral presentation and video explaining the DRP. Employees were also given handouts explaining the procedure.
At the meeting, the employees were asked to sign a sign-in sheet to indicate that they had attended the training. Although both Patterson and Robinson attended the training session, they refused to sign in. In fact, according to the defendant, the plaintiffs refused to sign any documents during this time relating to their employment with Red Lobster.
After having exhausted their administrative remedies with the EEOC, but without first invoking the company's DRP, the plaintiffs filed this action on February 26, 1999, charging Red Lobster with racial discrimination and retaliation against them for opposing the restaurant's unlawful employment practices. They allege violations of Title VII and § 1981, as well as state law causes of action for breach of contract and intentional or negligent infliction of emotional distress. They seek declaratory injunctive and equitable relief, along with compensatory and punitive damages, costs and attorneys fees.
Defendant moves to dismiss plaintiffs' action, contending that because plaintiffs' claims are subject to mandatory, final and binding arbitration, which was not invoked within the one-year period provided in defendant's DRP, they have failed to state a claim upon which relief can be granted. Alternatively, defendant urges that plaintiffs' claims are subject to the DRP, which requires employees to submit any and all claims against Red Lobster to arbitration, and that the court should therefore compel arbitration and issue a stay of the case pending arbitration of the claims of Patterson and Robinson.
The Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-14, was passed in an effort to "ameliorate perceived judicial hostility to arbitration" and has "clearly established a federal policy in favor of arbitration." Bhatia v. Johnston, 818 F.2d 418, 421 (5th Cir.1987). The Act was intended to enforce private agreements between parties4 and provides that "[a] written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."5 9 U.S.C. § 2.
Section 3 of the Act permits the court to stay proceedings pending arbitration if the court is "satisfied that the issue involved ... is referable to arbitration" under an arbitration agreement. Under § 4 if a party to an agreement refuses to arbitrate, the opposing party may bring an action to compel arbitration, and after hearing the parties the court "being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue," shall direct the parties to arbitrate. Further, § 4 declares that "[i]f the making of the arbitration agreement or the failure ... to perform the same be in issue, the court shall proceed summarily to the trial thereof."
Bhatia, 818 F.2d at 421 (quoting 9 U.S.C. §§ 3-4).
In Webb v. Investacorp, Inc., 89 F.3d 252, 257-58 (5th Cir.1996), the Fifth Circuit outlined the framework for adjudicating a motion to compel arbitration under the Federal Arbitration Act. The process involves a two-step inquiry:
The first step is to determine whether the parties agreed to arbitrate the dispute in question. This determination involves two considerations: (1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement. When deciding whether the parties agreed to arbitrate the dispute in question, "courts generally ... should apply ordinary state-law principles that govern the formation of contracts." First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985 (1995). In applying state law, however, "due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself must be resolved in favor of arbitration." Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 475-76, 109 S.Ct. 1248, 1253-54, 103 L.Ed.2d 488 (1989). The second step is to determine "whether legal constraints external to the parties' agreement foreclosed the arbitration of those claims." Mitsubishi Motors [Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 3353-54, 87 L.Ed.2d 444 (1985)].
Id. (additional citations omitted).6 See also Alamria v. Telcor Int'l, Inc., 920 F.Supp. 658, 662 (D.Md.1996) ().
In the case at bar, the focus of plaintiffs' objection to defendant's motion is on step one of this process, in that they maintain that there is no agreement between them and defendant to arbitrate any dispute, nor to arbitrate this particular dispute. More to the point, they argue that there has never been a valid agreement between the parties to arbitrate but rather the unilateral implementation by defendant of an arbitration policy to which plaintiffs never manifested their assent. They urge further that even if it could somehow be concluded that the company's unilateral adoption of an arbitration policy to which they never agreed constituted an arbitration agreement which would apply to disputes which might have arisen...
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