Pitt v. Wells Fargo Bank

• Decision Date: 01 April 2022
• Docket Number: Civil Action 3:21-cv-3428-JFA-TER
• Parties: ANNZALA PITT, Plaintiff, v. WELLS FARGO BANK, National Assoc., Defendant.
• Court: U.S. District Court — District of South Carolina

ANNZALA PITT, Plaintiff, v. WELLS FARGO BANK, National Assoc., Defendant.

Civil Action No. 3:21-cv-3428-JFA-TER

United States District Court, D. South Carolina, Columbia Division

April 1, 2022

REPORT AND RECOMMENDATION

Thomas E. Rogers, III United States Magistrate Judge

I. INTRODUCTION

This action arises out of Plaintiff's employment with Defendant. Plaintiff alleges race discrimination, hostile work environment, and retaliation in violation of Title VII of the Civil Rights Act of 1964 (Title VII), 42 U.S.C. § 2000(e) et seq. and 42 U.S.C. § 1981. Presently before the Court is Defendant's Motion to Compel Arbitration (ECF No. 16). Plaintiff filed a Response (ECF No 19), and Defendant filed a Reply (ECF No. 22). All pretrial proceedings in this case were referred to the undersigned pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and (B) and Local Rule 73.02(B)(2)(g), DSC. This report and recommendation is entered for review by the district judge.

II. FACTUAL ALLEGATIONS

Plaintiff is an African-American female over the age of forty with extensive experience as a Teller and Personal Banker. Am. Compl. ¶¶ 20-21 (ECF No. 5). She worked with Defendant as a Teller and Personal Banker until 2007 when she enlisted in the United States Army. Am. Compl. ¶ 21. Plaintiff served in the United States Army from 2007 until 2014, when she became disabled. Am. Compl. ¶ 22. In 2014, she returned to Defendant to continue her career in banking. Am. Compl. ¶ 23. From 2014-2018, Plaintiff worked in the legal and fraud departments. Am. Compl. ¶¶ 26-27. In June of 2018, she returned to a position as Personal Banker at the Shaw Air Force Base branch. Am. Compl. ¶¶ 27-28. The Branch Manager who hired her, Robert Tillman, resigned in October of 2018. Am. Compl. ¶¶ 28-29. Denise Coleman-Smith returned to her position as Teller Manager in October of 2018 following maternity leave. Am. Compl. ¶ 30. Coleman-Smith subjected Plaintiff to unfair treatment, a hostile work environment, retaliation for reporting ColemanSmith's conduct to the District Manager, and ultimately termination. Am. Compl. ¶¶ 31-59.

III. CONTRACTUAL AGREEMENT

On June 7, 2018, Plaintiff signed a document entitled “Wells Fargo Mutual Arbitration Agreement.” Arbitration Agreement (ECF No. 16-2). The Arbitration Agreement provides that

Wells Fargo and I mutually agree that any legal Claims arising out of my application for employment, employment, or separation from employment with Wells Fargo shall be resolved by final and binding arbitration. Except as noted below, Wells Fargo and I agree to waive our rights to pursue any Claims in court before a jury. This Agreement is subject to the Federal Arbitration Act.

See Arbitration Agreement. It further provides that “the Claims covered by this Agreement . . . include, but are not limited to, claims for discrimination, harassment, retaliation, tortious conduct, wrongful discharge, . . . or claims for violations of any federal, state, or local statute, regulation, or common law, including, but not limited to, Title VII of the Civil Rights Act of 1974 . . . .” See Arbitration Agreement.

IV. STANDARD OF REVIEW

Defendant did not specifically set forth the standard of review applicable to its motion. The Fourth Circuit has found that a motion to dismiss and compel arbitration is most properly considered under Rule 12(b)(3) for improper venue, noting that the Supreme Court has characterized an arbitration clause as “a specialized kind of forum-selection clause.” Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355, 365 n.9 (4th Cir. 2012) (citing Scherk v. Alberto-Culver Co., 417 U.S. 506, 519, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974)); Sucampo Pharm., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 550 (4th Cir.2006) (“A motion to dismiss based on a forum-selection clause should be properly treated under Rule 12(b)(3) as a motion to dismiss on the basis of improper venue.”); see also Brown v. Five Star Quality Care, Inc., No. 2:15-CV-4105-RMG, 2016 WL 8710474, at *2 (D.S.C. Jan. 8, 2016) (applying Rule 12(b)(3)). “The party seeking to compel arbitration bears the burden of establishing the existence of an arbitration provision that purports to cover the dispute.” Scales v. SSC Winston-Salem Operating, Co., LLC, No. 1:17CV539, 2017 WL 4467278, at *2 (M.D. N.C. Oct. 5, 2017) (internal quotation marks and citation omitted). “If the party makes this evidentiary showing, the party opposing arbitration must come forward with sufficient facts to place the entitlement to arbitration in dispute.” Id. (citing Chorley Enters., Inc. v. Dickey's Barbecue Rests., Inc., 807 F.3d 553, 564 (4th Cir. 2015)). When considering a motion under Rule 12(b)(3), the Court may consider evidence outside the pleadings, but the facts are viewed in the light most favorable to the plaintiff because a plaintiff need only make a prima facie showing of proper venue to survive a motion to dismiss. Id. at 365-66.

V. DISCUSSION

Defendant argues that dismissal of this action is proper because all of the claims raised by Plaintiff are subject to mandatory arbitration pursuant to the Arbitration Agreement between it and Plaintiff. Plaintiff argues that the motion should be denied because Defendant unreasonably delayed the presentation of the Arbitration Agreement, and because the Arbitration Agreement is unenforceable. In deciding whether to compel arbitration, the trial court is tasked with determining two gateway issues. Howsam v. Dean Witter Reynolds, 537 U.S. 79, 83-84 (2002). Courts should “engage in a limited review to ensure that the dispute is arbitrable - i.e., that a valid agreement to arbitrate exists between the parties and that the specific dispute falls within the substantive scope of that agreement.” Hooters of America, Inc. v. Phillips, 173 F.3d 933, 938 (4^th Cir. 1999). In deciding whether the parties have an enforceable agreement to arbitrate, courts apply state law principles governing the formation of contracts. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995).

As set forth above, the arbitration agreement contained within the Contract provides that the Federal Arbitration Act (FAA)^[1], 9 U.S.C. § 3, et seq. is applicable here. The FAA “creates a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act.” Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985). While Congress considered the advantage of expeditious resolution of disputes through arbitration in enacting the FAA, its primary purpose was to enforce agreements into which parties have entered. Volt Information Sciences, Inc. v. Board of Trustees of the Leland Stanford Junior University, 489 U.S. 468, 478 (1989).

“[Q]uestions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration.” Gilmer, 500 U.S. at 26. The “liberal federal policy favoring arbitration agreements manifested by this provision and the Act as a whole, is at bottom a policy guaranteeing the enforcement of private contractual arrangements; the Act simply ‘creates a body of federal substantive law establishing and regulating the duty to honor an agreement to arbitrate.'” Mitsubishi, 473 U.S. at 625 (citing Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983). However, the presumption in favor of arbitration “applies only when ‘a validly formed and enforceable arbitration agreement is ambiguous about whether it covers the dispute at hand,' not when there remains a question as to whether an agreement even exists between the parties in the first place.” Raymond James Fin. Servs. v. Cary, 709 F.3d 382, 385-386 (4th Cir. 2013).

The Supreme Court has directed that we “apply ordinary state law principles that govern the formation of contracts, ” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995), and the “federal substantive law of arbitrability.” Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). Thus state law determines questions “concerning the validity, revocability, or enforceability of contracts generally, ” Perry v. Thomas, 482 U.S. 483, 493 n. 9, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987), but the Federal Arbitration Act, 9 U.S.C. § 2 (1994), “create[s] a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act.” Moses H. Cone Mem'l Hosp., 460 U.S. at 24, 103 S.Ct. 927.

Plaintiff argues that (1) Defendant unreasonably delayed presenting the Arbitration Agreement, (2) it was not presented to her until after she had been employed with Defendant for years and, thus, lacks consideration, (3) it is unconscionable because was not explained to her, (4) it is procedurally unfair because it not does specifically set forth the procedure applicable to the arbitration, and (5) it is not covered by the FAA because the parties' transactions do not relate to interstate commerce.

Plaintiff filed this action on October 20, 2021, and then filed an Amended Complaint, changing only the spelling of her name, on October 25, 2021. Am. Compl. (ECF No. 5). On December 10, 2021, Defendant filed its Answer to the Amended Complaint. Answer (ECF No. 7). On January 14, 2021, Plaintiff served Defendant with Plaintiff's First Set of Interrogatories and First Set of Requests for Production of Documents. Certificate of Service (ECF No. 16-1). In the process of preparing its response to Plaintiff's discovery requests, Defendant located the Arbitration Agreement that was entered into by the Parties on June 7, 2018. Arbitration Agreement (ECF No. 16-2).

Defendant's counsel presented the...