Wright v. Circuit City Stores, Inc.

• Decision Date: 09 February 2000
• Docket Number: No. CV-97-P-0776-S.,CV-97-P-0776-S.
• Parties: Reginald WRIGHT, Ruth Burden, Mark Kerce, Donald Opie, Frank Barmore and Angela Whitter, on behalf of themselves and all others similarly situated, Plaintiffs, v. CIRCUIT CITY STORES, INC., Defendant.
• Court: U.S. District Court — Northern District of Alabama

82 F.Supp.2d 1279

Reginald WRIGHT, Ruth Burden, Mark Kerce, Donald Opie, Frank Barmore and Angela Whitter, on behalf of themselves and all others similarly situated, Plaintiffs, v. CIRCUIT CITY STORES, INC., Defendant.

No. CV-97-P-0776-S.

United States District Court, N.D. Alabama, Southern Division.

February 9, 2000.

Abigail P. Van Alstyne, Kell A. Simon, Gordon Silberman Wiggins & Childs, Robert L. Wiggins, Jr, Abigail P. Van Alstyne, Kell A. Simon, Gordon Silberman Wiggins & Childs, Birmingham, AL, for Plaintiffs.

Terry Price, Stephen A. Brandon, Lehr Middlebrooks Price & Proctor PC, Birmingham, AL, David E. Nagle, Leclair Ryan, Richmond, VA, Brent L. Crumpton, Crumpton Edge PC, Birmingham, AL, for Defendant.

Opinion

POINTER, Senior District Judge.

Before the Court is a Motion to Stay Proceedings and Compel Arbitration filed by Defendant Circuit City Stores on October 27, 1997. For the reasons expressed below, the Motion is due to be granted.

I. Facts

Plaintiff Frank Barmore, a black male, began his employment with Circuit City as a sales counselor on March 28, 1988. Plaintiff Ruth Burden, a black female, was hired by Circuit City as a cashier on July 31, 1990. In March of 1995, Circuit City adopted an alternative dispute resolution program known as the "Associate Issue Resolution Program." This program provides a process, including final and binding arbitration, through which applicants, employees, and former employees of Circuit City (all described as "Associates") may resolve employment-related disputes. In the spring of 1995, Circuit City implemented the program through meetings at all store locations, including those in which Burden and Barmore worked. At the meetings, in addition to viewing a video presentation explaining the arbitration program, each employee received the comprehensive written materials contained in the "Associate Issue Resolution Package."

Circuit City did not impose the arbitration program upon all then-current employees as a condition of continued employment. Rather, associates who were employed by Circuit City at the time of the implementation of the program, including Burden and Barmore, were given the option of whether or not to participate. Associates who did not wish to participate were allowed to opt-out through the completion and mailing of an "Arbitration Opt-Out Form" within 30 days of their receipt of the package. This process was explained at the meetings and in the written materials contained in the package. As the materials made clear, those employees who received the package and elected not to opt-out of the program were agreeing to be bound by its provisions requiring final and binding arbitration of all employment-related claims. Neither Burden nor Barmore submitted an opt-out form to Circuit City within 30 days of their receipt of the package.

The Circuit City "Dispute Resolution Rules and Procedures," provided to Burden and Barmore as part of the package, clearly identify those claims which are subject to arbitration. Among the covered claims are those arising under "Title VII of the Civil Rights Act of 1964, as amended, including amendments of the Civil Rights Act of 1991" and claims arising under 42 U.S.C. § 1981. On July 29, 1997, Plaintiffs Burden and Barmore joined in this class action against Defendant Circuit City. In this lawsuit, brought pursuant to 42 U.S.C. § 1981, Burden and Barmore each claim to have been subjected to employment discrimination based on their race during their employment with Circuit City. On October 27, 1997, Circuit City filed a Motion to Stay Proceedings and Compel Arbitration with respect to the claims of Burden and Barmore. On November 23, 1999, the case was reassigned to this court. Defendant's motion was taken under submission on January 20, 2000.

II. Discussion

In opposition to Defendant's Motion to Stay Proceedings and Compel Arbitration, Plaintiffs make the following arguments in support of their contention that Circuit City's arbitration agreement is unlawful and unenforceable: (1) the recent Supreme Court decision of Kimel v. Florida Bd. of Regents calls into question the arbitrability of Plaintiffs' claims; (2) the Federal Arbitration Act does not apply because the arbitration agreement was an employment contract, and the Plaintiffs are engaged in interstate commerce; (3) the arbitration agreement is void under ordinary contract principles for lack of consideration, lack of mutuality of obligation, and lack of an affirmative acceptance of Circuit City's offer; and (4) the agreement defeats the remedial functions of Section 1981, thereby denying Plaintiffs the opportunity to effectively vindicate their statutory rights.

A. Arbitrability of Employment Discrimination Claims

In Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991), the United States Supreme Court addressed the arbitrability of federal statutory employment claims. In that case, the Supreme Court unequivocally ratified existing judicial support for arbitration of employment discrimination matters and held that a claim arising under the Age Discrimination in Employment Act can be subjected to compulsory arbitration pursuant to a written arbitration agreement. Subsequent to the Gilmer decision, the Eleventh Circuit and other United States Courts of Appeals have acknowledged the strong federal policy favoring arbitration and the corresponding presumption in favor of the validity of agreements requiring arbitration of employment claims. Specifically, in Bender v. AG Edwards & Sons, Inc., 971 F.2d 698 (11th Cir.1992), the Eleventh Circuit upheld the validity of an agreement to arbitrate employment-related disputes involving Title VII sexual harassment claims. In so holding, the Court found Gilmer's reasoning to be dispositive of agreements to arbitrate all employment discrimination claims, not just those arising under the ADEA. Bender, 971 F.2d at 700 ("We see no reason to distinguish between ADEA claims and Title VII claims").

While acknowledging the controlling nature of the Bender holding, Burden and Barmore argue that recent developments in the law call into question the reasoning behind the Bender decision or, at least, limit the application of its holding. In support of their argument, Plaintiffs cite the recent Supreme Court case of Kimel v. Florida Board of Regents, ___ U.S. ____, 120 S.Ct. 631, 145 L.Ed.2d 522 (2000), in which the Court drew a basic distinction between those discrimination cases based upon age and those based upon race or gender. The Kimel Court's holding that the ADEA's attempt to abrogate states' Eleventh Amendment immunity exceeded Congress' authority under the enforcement clause of the Fourteenth Amendment suggests that Title VII and Section 1981, to the extent that they involve discrimination based upon "suspect" classifications such as race or gender, stand on more fundamental Constitutional footing than the ADEA. Kimel, ___ U.S. at ____, 120 S.Ct. at 645. However, despite the distinction drawn between apparent claims brought under Section 1981 or Title VII and the ADEA, nothing in the Kimel decision suggests that compulsory arbitration pursuant to a written arbitration agreement is inconsistent with the underlying purposes of Title VII or Section 1981. Furthermore, the text of The Civil Rights Act of 1991 explicitly encourages the use of alternative dispute resolution, including arbitration, where appropriate. Pub.L. 102-166, § 118. In light of the text of this statute, the strong federal policy favoring arbitration, and the Eleventh Circuit's binding precedent in Bender v. AG Edwards & Sons, Inc., this court finds no reason why Plaintiff's § 1981 claims in this case should not be subjected to arbitration pursuant to Circuit City's arbitration agreement.

B. Applicability of the Federal Arbitration Act to Plaintiff's Claims

Originally enacted in 1925, the purpose of the FAA was to reverse the longstanding judicial hostility toward arbitration agreements and to place them upon equal footing with other contracts. Gilmer v. Interstate/Johnson Lane Corporation, 500 U.S. 20, 24, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). In furtherance of this objective, Section 2 of the FAA establishes the validity of any written provision for arbitration in any contract evidencing a transaction involving commerce. The FAA also provides for stays of proceedings when issues in the proceeding are referable to arbitration (Section 3) and for orders compelling arbitration when one party has failed or refused to comply with an arbitration agreement (Section 4). As the Supreme Court has repeatedly recognized, these provisions manifest a "liberal federal policy favoring arbitration agreements." Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).

In the present case, Plaintiffs contend that the FAA's enforcement provisions and the federal policy favoring arbitration agreements are not applicable to them, arguing that they "are not covered by the Federal Arbitration Act because they are employees engaged in interstate commerce." Section 1 of the Act provides, in pertinent part, that "nothing 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 (1994). While the Supreme Court has not decided the proper scope of the § 1 exclusion, the majority of the circuits that have addressed the issue have concluded that it should be read narrowly to apply only to contracts of employment of those workers actually engaged in the movement of goods in interstate or foreign commerce. See, e.g., Cole v. Burns Int'l Security Servs., 105 F.3d 1465, 1470 (D.C.Cir.1997); Rojas v. TK Communications, Inc., 87 F.3d 745, 748 (5th Cir.1996); Asplundh Tree Expert Co. v. Bates, 71 F.3d 592, 598 (6th Cir.1995); Dickstein v. duPont, 443 F.2d 783, 785 (1st...