Smith v. Ironworks Dev.
| Decision Date | 14 October 2022 |
| Docket Number | 3:22-cv-20 |
| Parties | RHONDA SMITH, Plaintiff, v. IRONWORKS DEVELOPMENT LLC, Defendant. |
| Court | U.S. District Court — Western District of Virginia |
This case concerns Plaintiff Rhonda Smith, a former employee for Defendant Ironworks Development LLC. Defendant suspended and then terminated Plaintiff from her position for failure to comply with its COVID-19 vaccination policy. This came after she submitted an accommodation based on sincerely held religious beliefs. Plaintiff brings the following claims: (1) disparate treatment discrimination under Title VII, (2) disparate impact discrimination under Title VII, (3) disparate impact from failure to reasonably accommodate under Title VII, (4) disparate treatment from failure to reasonably accommodate under Title VII, (5) disparate treatment discrimination under the Virginia Values Act, (6) disparate treatment from failure to reasonably accommodate under the Virginia Values Act, and (7) discriminatory classification on the basis of sincerely held religious beliefs under the Virginia Values Act.
The issue now before the Court is whether Plaintiff's employment agreement requires these claims be submitted to arbitration. The Court construes Defendant's motion to dismiss because of Plaintiff's agreement to arbitrate as a motion to stay litigation and compel arbitration. Due to the arbitration provision in the employment agreement, this motion will be granted.
i the complaint The following facts are alleged in Plaintiff's Complaint and assumed true for purposes of resolving this motion. See King v. Rubenstein, 825 F.3d 206, 212 (4th Cir. 2016) (reiterating the appropriate standard of review).
Plaintiff seeks damages, declaratory relief, and injunctive relief under Title VII of the Civil Rights Act of 1991 and the Virginia Values Act, Va. Code § 2.2-3905. Dkt. 1 (“Compl.”) ¶ 4. Plaintiff “was formerly employed with Defendant as an executive assistant.” Id. ¶ 1. “At all times relevant herein, Defendant was an employer as defined in 42 U.S.C. § 2000e and Va. Code § 2.23905.” Id. ¶ 3.
Plaintiff worked remotely for Defendant starting in March 2020, because of COVID-19. Id. ¶ 8. In 2021, Defendant chose “to adopt a policy requiring COVID vaccination of all of its employees on or before July 1, 2021.” Id. Defendant's chief executive officer announced the policy during a January 2021 meeting, at which Plaintiff and Defendant's executives were in attendance. Id. ¶ 9. Defendant's chief executive officer had been “advised that [the policy] violated the law,” and “[h]e told the group he did not care if an employee sued.” Id. Defendant “denied every accommodation request received from approximately 13 employees.” Id. ¶ 10. And Defendant “failed to engage in the interactive process required by law.” Id.
Plaintiff submitted an accommodation request to Defendant, based in her “sincerely held religious belief that compelled her to reject the COVID vaccines available as the emergency use authorization vaccines that were available [which] to that point all employed in their development or testing fetal cells derived from an aborted fetus.” Id. ¶ 11. She also “told Defendant that she would get a vaccine that was not so compromised once it became available and would comply with personal protective equipment, social distancing, and testing in the interim.” Id. Defendant rejected Plaintiff's request without providing any reason. Id. ¶ 12.
Defendant “made no effort to engage in the interactive process with Plaintiff.” Id. Defendant also “presented no justification that Plaintiff's reasonable accommodation request presented an undue hardship.” Id. ¶ 13.
Due to Plaintiff refusing to receive a COVID vaccination “Defendant suspended Plaintiff on July 1, 2021, and then terminated her on July 14, 2021.” Id. ¶ 14.
At the time Plaintiff was suspended and terminated, Defendant had no physical office space. Id. ¶ 15. Consequently “there was no physical location from whence Plaintiff could work and her work was fully remote.” Id. Further, at that time, all of Defendant's employees based in Virginia, like Plaintiff, “were working remotely, had been working remotely, and would be working remotely for the foreseeable future.” Id. ¶ 16. Plaintiff also alleges that “Defendant still does not have a physical office location, and all of its Virginia-based employees continue to work remotely.” Id. ¶ 17. Moreover, “[a]fter Plaintiff's termination, Defendant advertised her position and described it as a fully remote position.” Id. ¶ 18.
Plaintiff claims that she suffers damages from the above occurrences. These include “emotional pain and suffering, wounded feelings and mental anguish, loss of wages, future pecuniary loss, and other damages.” Id. ¶ 21.
II. RELEVANT CONTRACTUAL PROVISIONS
Plaintiff asserts claims arising out of her former employment with Defendant. Defendant argues that these claims are subject to a binding arbitration agreement included in Plaintiff's employment agreement. Article V, Section 6(a) of the employment agreement, Dkt. 19, Ex. A at 8, addresses arbitration. It states:
Any dispute, claim, or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation, or validity of this Agreement, including the determination of the scope or applicability of this agreement to arbitrate, will be determined by binding arbitration held in the State of Virginia before a neutral arbitrator. The arbitration will be administered by JAMS under its Streamlined Arbitration Rules and Procedures. Judgment on the award may be entered in any court having jurisdiction. This clause will not preclude the Parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction, including without limitation those for injunctive relief. In resolving the dispute, the arbitrator will apply the substantive laws of the State of Virginia or the United States where applicable. The arbitrator will have authority to award attorneys' fees, costs, and expenses to the prevailing Party. Notwithstanding the prior, Company agrees to pay for the cost of the arbitration itself. THE PARTIES UNDERSTAND THAT BY AGREEING TO ARBITRATE DISPUTES UNDER THIS SECTION 6 THEY ARE GIVING UP CERTAIN RIGHTS OTHERWISE AFFORDED TO THEM BY CIVIL COURT ACTIONS, INCLUDING BUT NOT LIMITED TO THE RIGHT TO A JURY TRIAL.
Dkt. 19, Ex. A at 8 (emphasis in original).
Plaintiff contends that the employment agreement's severability and attorneys' fees provisions contribute to the arbitration provision being unenforceable. Article V, Section 5, the severability provision, states:
If any provision of this Agreement is held to be illegal, invalid, or unenforceable, that provision is fully severable and this Agreement will be construed and enforced as if the illegal, invalid, or unenforceable provision had never been a part of it, with the remaining provisions remaining in full force and effect. Furthermore, in place of any illegal, invalid, or unenforceable provision, there will be added automatically as a part of this Agreement a provision as similar in terms to the questioned provision as possible and still be legal, valid, and enforceable.
Id. The attorney's fees provision, as presented in Article V, Section 7 of the employment agreement, dictates:
The non-prevailing Party in arbitration or any judicial or other legal proceeding for breach or enforcement of this Agreement will be fully responsible for and pay the prevailing Party's reasonable attorneys' fees, costs, and expenses, including, without limitation, those incurred preliminary to the institution of any action or proceeding, to quantify or obtain recovery of the amount of such recoverable attorneys' fees, costs, or expenses, and those incurred in connection with any confirmation or appellate proceedings arising from any such action or proceeding. The Parties specifically agree that the determination of any attorneys' fees, costs, or expense awards permitted will not be limited by any attorney fee schedule or method of computation of fees or definition of recoverable costs established by statute or court rule.
As Plaintiff also argues that Defendant has waived its right to compel arbitration, the Court notes the employment agreement's waiver provision, Article V, Section 4: [1] Id. at 8.
III. LEGAL STANDARD
The Fourth Circuit has indicated that a party's motion to dismiss because of an arbitration agreement should be treated as a motion to stay litigation and compel arbitration. Choice Hotels Int'l, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 709-10 (4th Cir. 2001). The Circuit recognized that a “hypertechnical reading” of a motion to dismiss in favor of arbitration “would be inconsistent with the ‘liberal federal policy favoring arbitration agreements.'” Id. at 710 (quoting Moses H. Cone Mem. Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24 (1983)); see also Green v. Zachry Indus., Inc., 36 F.Supp.3d 669, 627 (W.D.Va. 2014). The Court thus construes the motion to dismiss, Dkt. 19, as a motion to stay litigation and compel arbitration
The Federal Arbitration Act (“FAA”) establishes a presumption of validity for arbitration agreements, the overarching federal policy regarding arbitration, and the procedural...
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