Reed v. Darden Rests., Inc.

• Decision Date: 03 October 2016
• Docket Number: CIVIL ACTION NO. 3:16-3872
• Citation: 213 F.Supp.3d 813
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Tyrone Henry REED, Plaintiff, v. DARDEN RESTAURANTS, INC., d/b/a Olive Garden, Defendant.

213 F.Supp.3d 813

Tyrone Henry REED, Plaintiff,

v.DARDEN RESTAURANTS, INC., d/b/a Olive Garden, Defendant.

CIVIL ACTION NO. 3:16-3872

United States District Court, S.D. West Virginia, Huntington Division .

Signed October 3, 2016

D. Adrian Hoosier, II, The Hoosier Law Firm, Hurricane, WV, for Plaintiff.

Alyesha A. Dotson, Charles A. Linn, Littler Mendelson, Morgantown, WV, for Defendant.

MEMORANDUM OPINION AND ORDER

ROBERT C. CHAMBERS, CHIEF JUDGE

Pending before the Court is Defendant Darden Restaurants, Inc., d/b/a Olive Garden's Motion to Compel Arbitration and to Dismiss or, in the Alternative, to Stay this Proceeding Pending Arbitration.¹ (ECF No. 2). For the following reasons, the Court GRANTS the Motion to Compel Arbitration and DISMISSES this case without prejudice pending arbitration.

I. FACTUAL AND PROCEDURAL BACKGROUND

This action was brought by Plaintiff Tyrone Reed under diversity jurisdiction. See 28 U.S.C. § 1332 (providing, in part, that "district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different States"). Plaintiff filled out and electronically signed an employment application for Olive Garden as a line cook on November 25, 2013. See Employment Application , ECF No. 2-6, at 11. Plaintiff was hired by Defendant in December and worked through August of 2014 before voluntarily terminating his position. See Def.'s Mem. of Law in Support , ECF No. 3, at 3-4. In his Complaint, Plaintiff alleges that Defendant "intentionally exposed Plaintiff to [an] unsafe working condition" and that Defendant wrongfully terminated Plaintiff for his race and as retaliation for filing a workman's compensation claim in violation of the West Virginia Human Rights Act (WVHRA). Pl.'s Compl. , ECF No. 1-2, at ¶¶ 14, 18-19. As a result of Defendant's actions, Plaintiff seeks compensatory damages for lost income and pain and suffering, punitive damages for intentional injury, damages caused by an intentional infliction of emotional distress, and other remedies afforded under the WVHRA. Id. at ¶¶ 1-10 following "wherefore" clause.

II. DISCUSSION

Defendant now moves the Court to compel arbitration pursuant to Plaintiff's agreement to a Dispute Resolution Process (DRP) found in a booklet provided to all employees at orientation and referenced to in the employment application and employee handbook. See Def.'s Mem. of Law in Support , ECF No. 3, at 3-5. The DRP provides a four-step resolution process in which the final step is binding arbitration.

See Dispute Resolution Process , ECF No. 2-2, at 8. The arbitration section specifies that "[a]rbitration shall be the only remedy for resolving any dispute related to the interpretation or application of the DRP or its rules..." Id. The DRP also incorporates the Employment Dispute Resolution Rules of the American Arbitration Association (AAA). Id. The AAA, in turn, specifies that "[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement." Employment Arbitration Rules & Mediation Procedures , ECF No. 2-5, at 2. Moreover, the employee handbook explains how employees should address workplace issues, referencing the DRP directly. See Olive Garden Team Member Handbook , ECF No. 2-1, at 2. The handbook also alerts employees of a DRP poster hanging in the restaurant and provides ways to obtain additional copies of the DRP. See id.

Plaintiff argues that the arbitration requirement should not be enforced because Plaintiff did not sign any of the documents and, even if he had, the arbitration agreement is unconscionable. Pl.'s Resp. to Def.'s Motion , ECF No. 8, at 2. Regarding unconscionability, Plaintiff points to a variety of concerns, including: a boilerplate, "take it or leave it" contract for employment; unequal bargaining power between the parties; denial of the constitutional right to a jury; denial of attorney's fees provided for in WVHRA; lack of mutuality of obligation; and a host of other factors regarding substantive unconscionability. Id. at 8-12. Plaintiff also suggests that the instant dispute falls outside the DRP's enforcement. Id. at 4.

a. Contract formation

The threshold issue for this Court to decide is whether an arbitration agreement exists between Plaintiff and Defendant. In Granite Rock v. International Brotherhood of Teamsters , the Supreme Court specified that a challenge to whether an arbitration agreement was validly formed is a determination for the district court, not an arbitrator. 561 U.S. 287, 296, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010). To compel arbitration, a party must demonstrate to the court that both the parties agreed to arbitrate the dispute. See Whiteside v. Teltech Corp. , 940 F.2d 99, 102 (4th Cir. 1991) (explaining that a "plaintiff must allege (1) the existence of a dispute between the parties, (2) a written agreement that includes an arbitration provision which purports to cover the dispute, (3) the relationship of the transaction ... to interstate or foreign commerce, and (4) the failure, neglect or refusal of the defendant to arbitrate the dispute").

"When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), 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, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995) ; see also Arrants v. Buck , 130 F.3d 636, 640 (4th Cir. 1997) ("Even though arbitration has a favored place, there still must be an underlying agreement between the parties to arbitrate."). This Court thus looks to West Virginia's law on contract formation. West Virginia law requires an offer, acceptance, and consideration for a contract to be formed between parties. See Cook v. Heck 's, Inc. , 176 W.Va. 368, 342 S.E.2d 453, 458 (1986).

Plaintiff makes two arguments that challenge the existence of a valid contract under state law: the first focusing on the alleged lack of signature; and the second focusing on the lack of mutuality. See Pl.'s Resp. , ECF No. 8, at 2, 12. The Court does not find either of these arguments persuasive based on the record.

First, Plaintiff continuously points to the fact that Defendant cannot produce a DRP document with Plaintiff's signature. See id. at 2, 3, 4, 9, 11. However, other evidence within the attached documents to Defendant's Motion demonstrates that Plaintiff either signed the DRP or at least acknowledged its enforcement. In the Case Detail Report, the personnel file indicates that Plaintiff's signature for both the DRP and employee handbook had been verified. Case Detail Report , ECF No. 2-8, at 4. Plaintiff also hit "accept" to a statement explaining that Darden uses a DRP in his employment application. Employment Application , ECF No. 2-6, at 6 ("I further acknowledge and agree that if I am offered and accept employment, any dispute between me and any of the Darden Companies relating in my employment and/or my separation from employment ... shall be resolved pursuant to the terms and conditions of the DRP."); see also Decl. of Melissa Ingalsbe , ECF No. 2-4, at ¶ 3. This document is electronically signed by Plaintiff. Id. at 7. A signature on an application that includes an arbitration clause has been upheld as an enforceable agreement. See Circuit City Stores v. Adams , 532 U.S. 105, 109, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001) ; Johnson v. Circuit City Stores , 148 F.3d 373, 377 (4th Cir. 1998) (finding a signed employment agreement containing an arbitration clause enforceable against employee); see also Evans v. Bayles , 237 W.Va. 269, 787 S.E.2d 540, 544 (2016) (explaining that "an unsigned document [can] be incorporated into a signed document as long as the signed paper specifically refers to the unsigned document and the unsigned document is available to the parties" (internal quotation marks and citation omitted)).

Plaintiff even recognizes that Defendant "has all employees sign in every State of operation" the DRP and other documents upon hiring, so it appears unlikely that Plaintiff would have been hired by Defendant without having signed the same documentation. Pl.'s Resp. , ECF No. 8, at 1. The Director of Dispute Resolution and HR Compliance for Defendant, Melissa Ingalsbe, also declared that "there is no indication, and I have no knowledge that [Plaintiff] ever objected to any provisions of the DRP." Decl. of Melissa Ingalsbe , ECF No. 2-4, at ¶ 13. Notably, Plaintiff does not deny that he signed any of the documents referencing the DRP or that he received the DRP booklet. Instead Plaintiff focuses only on the fact that Defendant cannot produce a signed copy of the DRP or employee handbook. Although Defendant cannot produce the signed copy of the DRP, the Court concludes that Plaintiff did in fact sign documentation incorporating the DRP and thus accepted its enforcement.

Even if there was no other evidence that Plaintiff signed and accepted the DRP, however, West Virginia recognizes unilateral contracts in which "one party makes a promissory offer and the other accepts by performing an act rather than by making a return promise." Schultz v. AT & T Wireless Servs., Inc. , 376 F.Supp.2d 685, 691 (N.D.W. Va. 2005) (finding an unsigned agreement enforceable when plaintiff continued service with defendant after receiving terms and conditions); see also Citynet, LLC v. Toney , 235 W.Va. 79, 772 S.E.2d 36, 41 (2015). Defendant's provision of the DRP constitutes an offer to be accepted by an employee. Defendant hired Plaintiff in December of 2013, and Plaintiff walked off his shift in August 2014, terminating his employment. See Def.'s Mem. of Law in Support , ECF No. 3, at 3-4. During his eight months of employment, Plaintiff must have been aware of the DRP as it was included within the employee...