Reed v. Royal Sonesta Inc.

• Decision Date: 30 June 2020
• Docket Number: CIVIL ACTION NO. 20-384-WBV-KWR SECTION: D (4)
• Parties: ARIKA REED v. ROYAL SONESTA INC., ET AL.
• Court: U.S. District Court — Eastern District of Louisiana

ARIKA REED v. ROYAL SONESTA INC., ET AL.

CIVIL ACTION NO. 20-384-WBV-KWR SECTION: D (4)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

June 30, 2020

ORDER AND REASONS

Before the Court is Defendant Royal Sonesta Inc.'s Motion to Dismiss Complaint and Compel Arbitration.¹ The Motion is opposed,² and Defendants have filed a Reply.³ After careful consideration of the parties' memoranda and the applicable law, the Motion is GRANTED.

I. FACTUAL AND PROCEDURAL BACKGROUND

On February 4, 2020, plaintiff, Arika Reed, filed a Complaint in this Court against her former employer, Royal Sonesta, Inc., and her former supervisor, Kenneth Jackson (collectively, "Defendants"), asserting claims for unlawful employment discrimination, harassment and retaliation under Section 1981 of the Civil Rights Act of 1866, 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq., as well as claims for intentional discrimination in employment under La. R.S. 23:332 and intentional infliction of emotional distressunder La. Civ. Code art. 2315.⁴ Plaintiff alleges that she was employed with Royal Sonesta, Inc. for 13 years and was the head of housekeeping at the time of her constructive discharge on October 5, 2019.⁵ Plaintiff asserts that in August 2019, Royal Sonesta, Inc. implemented a Performance Improvement Plan ("PIP"), after eight months of harassment from her supervisor, Kenneth Jackson, regarding her allegedly poor work performance.⁶ Plaintiff claims the harassment began in January 2019, shortly after Jackson was hired and after Plaintiff made several complaints about her working conditions.⁷ Plaintiff alleges that the harassment included requirements to keep Jackson updated on every aspect of her day-to-day work, copy Jackson on all emails, ensure Jackson was present for all meetings that Plaintiff conducted with her staff, and -accusations by Jackson that Plaintiff was trying to undermine him.⁸

Plaintiff asserts that she was placed on the PIP in August 2019 despite not receiving any progressive discipline from Royal Sonesta, Inc., and that the areas that allegedly needed improvement were things outside of her control.⁹ Plaintiff asserts that she had to 60 days from the PIP to improve those areas or face possible termination.¹⁰ Plaintiff alleges that Royal Sonesta, Inc. implemented the PIP to ensure she could not be successful in her job and in an effort to force Plaintiff to quitor to terminate her.¹¹ Plaintiff asserts that she began to suffer from severe emotional distress and began to see a therapist, but ultimately resigned after 10 months because her work environment became too hostile to tolerate.¹² As a result, Plaintiff filed this suit, asserting claims under federal and state law for employment discrimination, harassment, retaliation and intentional infliction of emotional distress.¹³

On March 25, 2020, Defendants filed the instant Motion, asserting that this matter should be dismissed under Fed. R. Civ. P. 12(b)(6) and referred to arbitration because Plaintiff entered into a binding arbitration agreement that encompasses the claims raised in her Complaint.¹⁴ Defendants assert that Plaintiff was employed by Sonesta International Hotels Corporation (hereafter, "Sonesta"), from approximately April 2004 until November 2008, and again from July 2010 until she resigned on September 20, 2019.¹⁵ Defendants attached to their Motion an affidavit from Jennifer Rausch, the Vice President of Human Resources at Sonesta.¹⁶ Rausch states that in 2012, Sonesta introduced a new dispute resolution policy entitled, "Mutual Agreement to Resolve Disputes and Arbitrate Claims" (hereafter, the "Agreement"), which provided for resolution of employees' employment-related disputes withSonesta through a grievance process and binding arbitration.¹⁷ Rausch declares that existing employees were allowed to opt-out of the Agreement by filling out a form and sending it to Sonesta's Human Resources department in Massachusetts.¹⁸ The Agreement provides the following:

All Company employees are automatically covered by the grievance process explained in Section II(A) below by continuing a job with the Company unless they are qualified to opt out as described below. That means that all employees agree, as a condition of employment, to arbitrate any and all disputes, including statutory and other claims, not resolved through the grievance process. However, the company is electing to allow employees employed by the Company prior to the effective date of this Agreement to exclude themselves from the arbitration process by notice given to the Company within thirty (30) days after their receipt of a copy of this Agreement. ACCORDINGLY, UNLESS YOU EXCLUDE YOURSELF FROM THE ARBITRATION PROCESS BY MAILING TO THE COMPANY BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AN OPT OUT ELECTION FORM WITHIN SUCH THIRTY (30) DAY PERIOD, YOU WILL BE COVERED BY THIS AGREEMENT. The Opt Out Election Form is available by contacting a member of the Company's Human Resources Department, Two Newton Place, 255 Washington Street, Newton, MA 02458, telephone no. (617) 421-5400. Whether you choose to remain covered by this Agreement or to exclude yourself has no negative effect on your employment.

. . . .

Unless you elect to exclude yourself from this Agreement, thisAgreement is effective as of the date written above and applies to claims which are asserted on or after that date.¹⁹

Rausch declares in her affidavit that Plaintiff did not opt out of the Agreement, and instead signed and returned the Receipt and Acknowledgment Form, which is attached to Rausch's affidavit.²⁰ The Receipt and Acknowledgment Form signed by Plaintiff on May 19, 2012, provides the following:

IMPORTANT NOTICE REGARDING YOUR EMPLOYMENT

WITH SONESTA INTERNATIONAL HOTELS CORPORATION

RECEIPT AND ACKNOWLEDGEMENT FORM

YOU MUST CAREFULLY READ THE ATTACHED MUTUAL

AGREEMENT TO RESOLVE DISPUTES AND ARBITRATE

CLAIMS.

Sonesta International Hotels Corporation ("Sonesta") is introducing a new dispute resolution policy that will affect the way disputes in connection with your employment are resolved. The attached Mutual Agreement to Resolve Disputes and Arbitrate Claims (the "Agreement") describes the new program in detail, including:

? Your and Sonesta's agreement to attempt to resolve grievances related to your employment through an informal grievance and dispute resolution process;

? Your and Sonesta's agreement to use binding arbitration, instead of a court action or jury trials, to resolve disputes related to your employment if the grievance is not satisfactorily resolved through the informational grievance and dispute resolution procedure;

? Your and Sonesta's agreement to pursue claims on an individual basis, and not through a class or collective action; and waiver of the right to bring, or be a party to, class or collective actions;? The benefits of individual dispute resolution, including potentially quicker resolution of disputes related to your employment, Sonesta's agreement not to use a lawyer in the proceedings if you choose not to use a lawyer, Sonesta's agreement to pay all filing costs associated with arbitration and Sonesta's agreement to waive any rights it might have to recover costs or fees from you; and

? Steps you must take if you wish to decline to participate in the new program.

You should take the time to carefully review this important document. If you have any questions, please contact a member of the Human Resources team at . . . . You also have the right to ask a lawyer about the effect and meaning of the Agreement.

I acknowledge receipt of the Mutual Agreement to Resolve Disputes and Arbitrate Claims[.]²¹

Defendants also submitted an affidavit from Virginia Blake, who was the Director of Human Resources for Sonesta from 2005 to 2015.²² Blake states that she and her staff were responsible for presenting the Agreement to all employees at Sonesta, and that she advised employees of their right to opt-out of the Agreement.²³ Blake also confirms that Plaintiff did not opt out, but instead signed and returned the Receipt and Acknowledgement Form.²⁴

Relying upon the affidavits of Rausch and Blake, as well as the Receipt and Acknowledgment Form signed by Plaintiff, Defendants argue that Plaintiff did not opt out of the Agreement and, therefore, is bound by its terms. Defendants also point out that another section of this Court has reviewed the Agreement in a separatematter and, after a thorough analysis, found the Agreement at issue to be valid and enforceable, and granted a motion to compel the matter to arbitration.²⁵

Defendants assert that, in determining whether to compel arbitration, courts must determine: (1) whether the parties agreed to arbitrate the dispute; and (2) whether any federal statute or policy renders the claims non-arbitrable.²⁶ Defendants contend that the first inquiry requires the Court to consider the following two factors: (1) whether there is a valid agreement to arbitrate; and (2) whether the dispute in question is covered by the valid agreement.²⁷ Defendants argue that a valid arbitration agreement exists because Plaintiff agreed to arbitrate her employment claims when she accepted continued employment with Sonesta in 2012 and signed the Agreement.²⁸ Defendants assert that all of Plaintiff's claims fall within the scope of the Agreement because the Agreement states that it applies to, "any and all disputes, claims or controversies arising out of your employment or the termination of your employment," specifically, "including, but not limited to, claims under . . . Title VII of the Civil Rights Act of 1964 . . . state and local anti-discrimination laws; and any other federal, state, or local law, ordinance or regulation, and claims . . . ."²⁹

Turning to the second inquiry, Defendants assert that Plaintiff's claims are not rendered non-arbitrable by any federal statute or policy, and that it is well settledthat agreements to arbitrate...