Tapley v. Cracker Barrel Old Country Store, Inc.
| Citation | 448 F.Supp.3d 1143 |
| Decision Date | 25 March 2020 |
| Docket Number | Case No. 3:19-cv-01543-HZ |
| Parties | Margaret TAPLEY, Plaintiff, v. CRACKER BARREL OLD COUNTRY STORE, INC., Defendant. |
| Court | U.S. District Court — District of Oregon |
Michael O. Stevens, Stevens & Legal, LLC, 3699 NE John Olsen Avenue, Hillsboro, OR 97124, Attorney for Plaintiff.
Shane P. Swilley, Amber A. Beyer, Cosgrave Vergeer Kester LLP, 900 SW Fifth Avenue, 24th Floor, Portland, OR 97204, Attorneys for Defendant.
Plaintiff Margaret Tapley brings this sex discrimination and whistleblower retaliation action against her former employer, Defendant Cracker Barrel Old Country Stores, Inc. Defendant now moves to compel arbitration pursuant to an alternative dispute resolution agreement that Plaintiff signed as a condition of her employment. For the following reasons, the Court grants Defendant's Motion to Compel Arbitration.
Defendant hired Plaintiff on January 31, 2018. Roberts Decl. ¶ 3, ECF 7. As a condition of her employment, Plaintiff signed the "Cracker Barrel Alternative Dispute Resolution Agreement" ("Agreement"). Id. at ¶ 4. The Agreement mandates that covered disputes, including claims of harassment, retaliation, and termination, be arbitrated:
Without limitation, Cracker Barrel and I agree that any legal dispute arising out of or related to my employment (including those related to my application for employment, my employment or the termination of my employment) must be resolved using informal conciliation and final and binding arbitration and not by a court or jury trial . Such legal claims may include, but are not limited to, disputes concerning wage and hour law, compensation, leave, harassment, discrimination, retaliation, breaks or rest periods, uniform maintenance, expense reimbursement, training, discipline, termination, defamation, transfer, demotion, promotion and termination. It also includes, but is not limited to, any claims that come about through Title VII of the Civil Rights Act of 1964...and any federal, state or local laws or regulations covering the same or similar matters or any aspect of the employment relationship[.]
Roberts Decl. Ex. 1 at ¶ 1 (emphasis added). "[T]he parties agree[d] that arbitration is the required and exclusive forum for the resolution of all disputes (other than disputes which by statute are not arbitrable) arising out of or in any way related to employment[.]" Roberts Decl. Ex. 1 at ¶ 4. The agreement further states, in bold, just above the signature line: "I understand that, by entering into this Dispute Resolution Agreement, I am waiving my right to a jury trial [.]" Roberts Decl. Ex. 1 at 5.
Plaintiff now brings this sex discrimination and whistleblower retaliation action against Defendant. Am. Compl., ECF 4. Plaintiff alleges that during her employment with Defendant, her supervisor made "derogatory and sexually harassing remarks towards Plaintiff, [and] impl[ied] that Plaintiff would receive a promotion in exchange for sexual intercourse." Id. at ¶¶ 12–16, 28. Plaintiff reported this conduct to her managers. Id. at ¶ 17. Subsequently, Plaintiff experienced "an overall decrease in scheduled hours; removal from previously scheduled shifts; and last-minute schedule changes." Id. at ¶ 20. Plaintiff was then terminated on June 8, 2018. Roberts Decl. ¶ 3. Plaintiff alleges these actions constitute unlawful retaliation for reporting harassment. Am. Compl. ¶¶ 32–34. Plaintiff also contends that Defendant is liable for the actions of her supervisor, "which led to a hostile work environment," in violation of state law. Id. at ¶¶ 25–30.
The Federal Arbitration Act ("FAA") provides that arbitration agreements "shall be valid, irrevocable, and enforceable[.]" 9 U.S.C. § 2 (2018). Courts may decline to enforce an arbitration agreement if grounds "exist at law or in equity for the revocation of any contract." Id. Otherwise, courts must place arbitration agreements upon the same footing as other contracts.
Gilmer v. Interstate/Johnson Lane Corp. , 500 U.S. 20, 24, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). "Courts strongly favor arbitration and broadly construe arbitration clauses." Sanders v. Concorde Career Colls., Inc. , 3:16-CV-01974-HZ, 2017 WL 1025670 at *2 (D. Or. Mar 16, 2017) (citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. , 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985) ). "The standard for demonstrating arbitrability is not high." Simula, Inc. v. Autoliv, Inc. , 175 F.3d 716, 719 (9th Cir. 1999).
Under the FAA, when evaluating a motion to compel arbitration, courts should determine: "(1) whether a valid agreement to arbitrate exists, and if it does, (2) whether the agreement encompasses the dispute at issue." Chiron Corp. v. Ortho Diagnostic Sys. , 207 F.3d 1126, 1130 (9th Cir. 2000). "If the response is affirmative on both counts, then the [FAA] requires the court to enforce the arbitration agreement in accordance with its terms." Id.
Section 2 of the FAA allows arbitration agreements to be invalidated by generally applicable contract defenses, such as duress or unconscionability, but not by defenses that only apply to arbitration agreements. AT & T Mobility LLC v. Concepcion , 563 U.S. 333, 339, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) ; Doctor's Assoc. Inc. v. Casarotto , 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996). When determining the validity of an agreement to arbitrate, the courts "should apply ordinary state-law principles that govern the formation of contracts." First Options of Chi. Inc. v. Kaplan , 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995).
Defendant moves to compel arbitration pursuant to the parties' Agreement. Plaintiff makes four arguments in opposing Defendant's motion. First, Plaintiff argues that the FAA does not apply to this case because Defendant is engaged in interstate commerce. Second, Plaintiff argues that the Agreement is invalid under Oregon law. Third, Plaintiff argues that enforcement of the Agreement is unconscionable. Finally, Plaintiff contends that Defendant has waived its right to arbitrate this dispute. The Court finds Plaintiff's arguments unavailing. Because the Agreement is valid and encompasses the claims at issue here,1 the Court grants Defendant's motion.
Plaintiff first argues that the FAA does not govern the Agreement, citing the exclusion for employees engaged in interstate commerce under § 1 of the FAA. Pl. Resp. 2, ECF 10. Section 1 provides: "[N]othing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 9 U.S.C. § 1. The Supreme Court has held that this clause only exempts contracts of employment for transportation workers. Circuit City Stores, Inc. v. Adams , 532 U.S. 105, 119, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001). The Court has also found that employment contracts are generally covered by the FAA.
EEOC v. Waffle House, Inc. , 534 U.S. 279, 289, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002). Because Plaintiff is not a transportation worker, the Agreement is not exempt from the application of the FAA under § 1.
Plaintiff next argues that the Agreement is invalid because Oregon law requires specific language in any employment-related arbitration clause, which this Agreement fails to include. Pl. Resp. 3 . The Federal Arbitration Act (FAA) provides that arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2 (2007). However, "[c]ourts may not invalidate arbitration agreements under state laws applicable only to arbitration provisions." Doctor's Assoc. Inc. , 517 U.S. at 687, 116 S.Ct. 1652. In passing the FAA, "Congress intended to foreclose state legislative attempts to undercut the enforceability of arbitration agreements." Southland v. Keating , 465 U.S. 1, 16, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984). Thus, the FAA preempts Oregon law where Oregon law imposes additional enforceability conditions not applicable to other contracts. Hermida v. JP Morgan Chase Bank, N.A. , 3:15-CV-00810-HZ, 2015 WL 6739129, at *3 (D. Or. Nov 3, 2015) ; see also Bettencourt v. Brookdale Senior Living Comms., Inc. , No. 09-CV-1200-BR, 2010 WL 274331, at *6–7 ().
The Oregon statute Plaintiff cites applies only to arbitration agreements. O.R.S. 36.620 is titled "Validity of Agreement to Arbitrate" and can be found in Oregon's Uniform Arbitration Act in Chapter 36 of the Oregon Revised Statutes. The subsection at issue here requires arbitration agreements to include a specific, bold-faced acknowledgement that the employee has read the arbitration agreement and understands that the agreement requires the employee to arbitrate certain disputes. In sum, the additional conditions imposed by the statute are only applicable to arbitration agreements and are therefore preempted by the FAA.
Pursuant to § 2 of the FAA, arbitration agreements may be invalidated under generally applicable contract defenses, such as duress or unconscionability. AT & T Mobility LLC , 563 U.S. at 339, 131 S.Ct. 1740. When determining the validity of an agreement to arbitrate the courts "should apply ordinary state-law principles that govern the formation of contracts." First Options of Chi. Inc. , 514 U.S. at 944, 115 S.Ct. 1920. Under Oregon law, "[c]ontract formation requires ‘a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.’ " Ken Hood Const. Co. v. Pac. Coast Const., Inc. , 201 Or. App. 568, 578, 120 P.3d 6 (2005) (quoting Restatement (Second) of Contracts § 17(1) (1981) ). Neither party has argued that this contract was improperly...
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