Snow v. Be & K Const. Co., 00-CV-90-B.

• Decision Date: 03 January 2001
• Docket Number: No. 00-CV-90-B.,00-CV-90-B.
• Citation: 126 F.Supp.2d 5
• Parties: Monica SNOW, Plaintiff, v. BE & K CONSTRUCTION CO., Defendant.
• Court: U.S. District Court — District of Maine

126 F.Supp.2d 5

Monica SNOW, Plaintiff, v. BE & K CONSTRUCTION CO., Defendant.

No. 00-CV-90-B.

United States District Court, D. Maine.

January 3, 2001.

John P. Gause, Berman & Simmons, P.A., Lewiston, ME, for plaintiff.

Leonard W. Langer, Marshall J. Tinkle, Tompkins, Clough, Hirshon & Langer, Portland, ME, for defendant.

ORDER AND MEMORANDUM OF DECISION

SINGAL, District Judge.

Plaintiff, Monica Snow, has brought claims against her former employer, Defendant, BE & K Construction Company, for sexual harassment and constructive discharge pursuant to Title VII. Before the Court is Defendant's Motion asking the Court to dismiss Plaintiff's Complaint for failure to state a cause of action pursuant to Fed.R.Civ.P. 12(b)(6), or, in the alternative, to order Plaintiff to participate in arbitration and stay the proceedings pending the completion of such arbitration pursuant to sections three and four of the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16. (See Docket # 6.)

Pursuant to Fed.R.Civ.P. 12(b), the Court treats the motion to dismiss as a motion for summary judgment because Defendant has presented matters outside of the pleadings and the Court has considered them. It is within the Court's discretion to convert the 12(b)(6) motion to a summary judgment motion because Plaintiff has had an opportunity to respond to the relevant factual allegations raised by Defendant. See Whiting v. Maiolini, 921 F.2d 5, 6 (1st Cir.1990) (district courts have discretion to convert 12(b)(6) motions to Rule 56 motions without prior notice to parties if nonmovant has had opportunity to respond to movant's affidavits and factual allegations). For the reasons discussed below, Defendant's Motion is DENIED in its entirety.

I. STANDARD OF REVIEW

When a party opposes a motion to stay pending arbitration on the ground that the parties never agreed to arbitrate, a federal court should apply the summary judgment standard. See Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., 636 F.2d 51, 54 (3rd Cir.1980). A court, "when considering a motion to compel arbitration which is opposed on the ground that no agreement to arbitrate had been made between the parties, should give to the opposing party the benefit of all reasonable doubts and inferences that may arise." Id. The Third Circuit reasoned that district courts should apply the summary judgment standard in such circumstances because an "order to arbitrate is in effect a summary disposition of the issue of whether or not there had been a meeting of the minds on the agreement to arbitrate." See id. at 54 n. 9.

This reasoning is sound because under the FAA, a party may be entitled to a jury determination of whether or not the parties have entered into an agreement to arbitrate their dispute. The FAA states that

upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.... If the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof.

9 U.S.C. § 4; see, e.g., Doctor's Assocs. Inc. v. Distajo, 107 F.3d 126, 129 (2nd Cir.1997) ("a party may demand a jury trial when issues respecting arbitrability are `in issue'"); Dillard v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 961 F.2d 1148, 1154 (5th Cir.1992) ("the Act allows the party resisting arbitration to demand a jury trial."). Numerous courts have followed Par-Knit. See, e.g., Medtronic, Inc. v. Advanced Cardiovascular Systems, Inc., No. 99-3188, 2000 WL 637045, at *1, 2000 U.S.App. LEXIS 10945, at *3 (8th Cir. May 18, 2000) ("because [party moving to stay case pending arbitration] has created no genuine issue of fact concerning its theories for [compelling nonmovant to arbitrate] the district court properly decided the issue without a trial"); Avedon Eng'g, Inc. v. Seatex, 126 F.3d 1279, 1283 (10th Cir.1997) ("When parties dispute the making of an agreement to arbitrate, a jury trial on the existence of the agreement is warranted unless there are no genuine issues of material fact regarding the parties' agreement."); Reibstein v. CEDU/Rocky Mountain Academy, No. 00-1781, 2000 WL 1858718, at *1, 2000 U.S.Dist. LEXIS 18206, at *6-*7 (E.D.Pa. Dec. 19, 2000) ("A motion to compel arbitration is viewed as a summary judgment motion if the parties contest the making of the agreement."); Endriss v. Eklof Marine Corp., 1999 A.M.C. 556, 559 (S.D.N.Y.1998) (applying summary judgment standard to motion to compel arbitration when nonmovant argues that contract featuring arbitration provision is invalid).

In the present case, Plaintiff raises as a defense that the alleged arbitration agreement between her and Defendant is not a valid contract. Additionally, she argues that even if the agreement is binding upon her, it does not include a requirement to arbitrate claims rather than litigate them. Because both of these arguments go to whether the parties have agreed to arbitrate, the making of the arbitration agreement is "in issue" and therefore, the Court applies the summary judgment standard. See, e.g., Par-Knit, 636 F.2d at 54.

Regarding summary judgment, the Court grants such motions "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). The Court must view the facts "in the light most amicable to the party contesting summary judgment, indulging all reasonable inferences in that party's favor." Pagano v. Frank, 983 F.2d 343, 347 (1st Cir.1993). Following this standard, the Court makes the following findings of fact.

II. FINDINGS OF FACT

Because a stay pending arbitration is an interlocutory injunction, the Court must make findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a). See Fogarty v. Piper, 767 F.2d 513, 515 (8th Cir.1985) (remanding denial of motion to stay and compel arbitration because district court failed to make findings of fact and conclusions of law). The essential facts are undisputed.

1. Plaintiff, Monica Snow, is a resident of Maine who worked for Defendant, BE & K Construction Company ("BE & K"), from August 1989 until November 1998.

2. Prior to her alleged wrongful discharge, Snow worked as BE & K's office manager at a paper mill in Jay, Maine.

3. Snow reported directly to the project superintendent, Kenneth Morgan.¹

4. Snow alleges that Morgan sexually harassed her, inducing her to quit her job. Thereafter, Snow filed a complaint with the Equal Employment Opportunity Commission ("EEOC"), which issued her a right-to-sue letter.

5. Subsequently, she filed a lawsuit with this Court alleging sexual harassment, hostile work environment and constructive discharge under both the federal Civil Rights Act, 42 U.S.C. §§ 1981-2000h-6, and the Maine Human Rights Act, 5 M.R.S.A. §§ 4551-4633.

6. In September 1996, BE & K promulgated its "Employee Solution Program" for resolving work-related disputes. The company outlined the program in a six-page booklet and BE & K mailed each employee a copy of the booklet along with a cover letter introducing the program. Additionally, the company placed posters on employee bulletin boards discussing the program.

7. Because Snow was a BE & K employee at the time the company instituted the program in 1996, she received a booklet and a cover letter and she would have seen the posters.

8. BE & K's Employee Solution Program provides for five options for dispute resolution: (1) an "open door policy," which allows employees to talk about their problems with supervisors without retaliation, (2) an employee hotline that employees can call anonymously to discuss their concerns, (3) a conference between the employee and a company representative, (4) mediation between both sides, and (5) arbitration.

9. Snow never signed a document assenting to the booklet's terms. In fact, there is no evidence that Snow ever signed any employment-related contract with BE & K 10. Snow and BE & K never had a dialogue or entered into negotiations regarding the booklet or the Employee Solution Program.

11. A provision within the booklet reads:

Effective September 1, 1996, this Program will be the exclusive means of resolving workplace disputes. If you accept or continue your job at BE & K after that date, any employment problems must proceed through the Employee Solution Program before proceeding through the court system. This document is a summary of the Program, and complete details are available from your Human Resources Department or Personnel office. This document in no way effects [sic] any other terms or the nature of your employment, and is not an employee agreement. The Company reserves the right to modify or discontinue this program at any time.

(Emily Rose Aff., Attach. A, "The BE & K Employee Solution Program" at 4 (Docket # 8).)

12. Another provision of the booklet reads:

If your dispute is based on a legally protected right, such as protection against sexual harassment or discrimination based on age, race, or sex, and has not been resolved in Options One, Two, or Three, you or the Company may request Mediation. If either party requests Mediation, the other party is required to participate.

(The BE & K Employee Solution Program at 2.)

13. Another provision of the booklet reads:

If the dispute has not been resolved in Options One, Two, Three, or Four, you or the Company may request Arbitration.

Arbitration is a process in which a dispute is presented to an arbitrator, for a final decision, which may be binding. (The BE & K Employee Solution Program at 2.)

14. A "questions and answers" segment of the booklet reads:

... What happens if I file a lawsuit against the...