Forrest v. Waffle House, Inc. et al(JC) (MAG+)
OPINION. Signed by Honorable Judge Myron H. Thompson on 5/22/2012. (cc, )
IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, SOUTHERN DIVISION
WAFFLE HOUSE, INC. and
CIVIL ACTION NO.
Plaintiff Amy Forrest brought this lawsuit against
defendants Waffle House, Inc. and Gary Brackin in June
2005, asserting federal claims and various state-law
The court subsequently granted the defendants’
motion to compel arbitration, which commenced in November
The arbitrator found in favor of Forrest on her
state-law claims, awarding her $ 500,000 in damages, and
in favor of the defendants on the federal claims.
before the court is the defendants’ motion to vacate that
award pursuant to § 10 of the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 10, and Forrest’s motion to confirm.
For the reasons that follow, the defendants’ motion to
vacate the award will be denied, and Forrest’s motion to
(Division Manager Brackin), alleging numerous instances
of sexual harassment and inappropriate touching.
defendants insisted that an arbitrator, rather than this
court, resolve the merits of Forrest’s claims and moved
to compel arbitration.
Although Forrest resisted, the
defendants prevailed and arbitration commenced on June 7,
The arbitration proceedings included nearly three
considering the parties’ arguments, the arbitrator issued
discrimination in violation of Title VII of the Civil
Rights Act of 1964, as amended, 42 U.S.C. §§ 1982a, 2000e
found in her favor on her state claims of invasion of
privacy, assault and battery, and outrage and awarded her
Interim Award 16, attachment to
Defs.’ Mot. to Vacate (Doc. No. 18).
In reaching that conclusion, the arbitrator found
humiliation” as a result of “Brackin’s conduct during
Id. at 15.
That conduct included,
among other things, inappropriate and unwelcomed touching
of a sexual nature.
When Forrest tried to end this
harassment by complaining about Brackin’s conduct through
the appropriate channels, “those efforts went for naught
with [Waffle House] management” and the harassing and
assaultive behavior continued.
Although the defendants moved to compel arbitration,
helped select the arbitrator, and prevailed on Forrest’s
federal claims, they remain unhappy with the arbitrator’s
decision and have asked this court to vacate the award.
In support of that request, they raise two separate
arbitrator exceeded his authority under the arbitration
pursuant to 9 U.S.C. § 10(a)(4).
Second, they submit
that the award was issued with “manifest disregard of the
law” and should therefore be vacated pursuant to Montes
v. Shearson Lehman Brothers, Inc., 128 F.3d 1456 (11th
Forrest has responded by asking the court to
confirm the arbitral award and sanction the defendants
for making frivolous contentions.
Much has been written about the role of courts in
policing arbitral awards.
The common theme in all recent
opinions is that a federal court’s role is “narrowly
Booth v. Hume Publ’g, Inc., 902 F.2d 925, 932
(11th Cir. 1990).
This preserves one of the key benefits
of arbitration: allowing parties to avoid litigation
costs by resolving their disputes outside of the courts.
Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 123
The limited scope of judicial review is embodied in
the FAA, which “presumes that arbitration awards will be
confirmed” and directs courts to do so unless one of the
“four narrow bases” for vacatur enumerated in 9 U.S.C.
§ 10(a) applies.1
Brown v. Rauscher Pierce Refsnses,
1. 9 U.S.C. § 10(a) states that a district court may
vacate an arbitral award:
“(1) where the award was procured by
corruption, fraud, or undue means;
“(2) where there was evident partiality
or corruption ... ;
“(3) where the arbitrators were guilty
of misconduct in refusing to postpone
the hearing[;] ... or in refusing to
Inc., 994 F.2d 775, 778-79 (11th Cir. 1993).
here is 9 U.S.C. § 10(a)(4).
That provision permits
courts to vacate an arbitral award if the arbitrator
exceeds the authority delegated to him by the arbitration
In addition to those four statutory grounds for
vacatur, the Eleventh Circuit Court of Appeals previously
“recognized three non-statutory bases for vacating an
Peebles v. Merrill Lynch, Pierce,
Fenner & Smith Inc., 431 F.3d 1320, 1326 (11th Cir.
While Forrest questions the continuing vitality
hear evidence pertinent and material to
the controversy; or of any other
misbehavior by which the rights of any
party have been prejudiced; or
“(4) where the arbitrators exceeded
their powers, or so imperfectly executed
them that a mutual, final, and definite
award upon the subject matter submitted
was not made.”
2. The three non-statutory grounds permit vacatur if
(1) the award is “arbitrary and capricious,” (2) it
of that jurisprudence, the defendants submit that the
award should be vacated on the non-statutory ground that
it evinces a “manifest disregard of the law.”
Montes, 128 F.3d at 1462.
Scope of the Arbitrator’s Authority
The arbitrator’s role is “to interpret and enforce”
AnimalFeeds Int’l Corp., 557 U.S. ___, ___, 130 S. Ct.
1758, 1767 (2010). When the arbitrator rejects that role
and refuses to comply with the agreement’s provisions,
Schurtenberger, 646 F.3d 836, 843 (11th Cir. 2011).
arbitration agreement with Forrest that they insist were
They argue that the arbitrator (1) ignored
the requirement that he apply Alabama law to Forrest’s
“evinces a manifest disregard of the law,” or (3) its
enforcement would be “contrary to public policy.”
Peebles, 431 F.3d at 1326.
state-law claims; and (2) failed to “render an award and
Arb. Agreement 2, attachment to Defs.’
Mot. to Vacate (Doc. No. 18).
The court will address
those arguments in turn.
First, the defendants surmise that the arbitrator
showing, this court would arguably have no choice but to
circumstantial of evidence to support their theory, and
that evidence is wholly undermined by the arbitrator’s
The arbitral award itself demonstrates both that the
arbitrator understood that Alabama law governed Forrest’s
tort claims and that he applied that law to the best of
3. The arbitrator was formerly a Florida state-court
judge and so the defendants assume that he applied
Florida law, presumably out of habit.
explaining that Forrest raised both “Federal claims ...
for relief under Title VII and State claims for invasion
of privacy under Alabama law, sexual conduct constituting
the tort of outrage and a claim against ... Gary Bracken,
for assault and battery.”
Interim Award 2, attachment to
Defs.’ Mot. to Vacate (Doc. No. 18) (emphasis added).
This clearly demonstrates that the arbitrator knew that
Alabama law applied.
Nowhere does the award mention
anything other than Alabama law governed Forrest’s tort
Indeed, the arbitrator cited only Alabama case law in
support of his decision on the state-law claims.
expressly relied on Baldwin v. Blue Cross/Blue Shield of
Alabama, 480 F.3d 1287 (11th Cir. 2007), to resolve
requires “a plaintiff in Alabama [to] show that the
defendant’s conduct was so outrageous that it caused the
plaintiff mental suffering, shame, or humiliation” in
order to prevail on an invasion of privacy claim.
F.3d at 1308.
Relying on that standard, the arbitrator
Defs.’ Mot. to Vacate (Doc. No. 18).
Given that the
arbitrator specifically stated that Alabama law governed
Alabama law in reaching his decision on those claims,
explicitly referenced the appropriate state-law standard
on Forrest’s invasion of privacy claim, and never once
mentioned the substantive law of any other State, there
can be no doubt that he applied Alabama law in reaching
(presumably the same ones they cited in their submissions
to the arbitrator) that they argue require a different
result from the one announced in the arbitral award.
Forrest counters those cases with citations of her own,
That debate is immaterial: “It is not enough for [the
defendants] to show that the [arbitrator] committed an
error--or even a serious error.”
AnimalFeeds, 130 S. Ct.
As long as he intended to apply Alabama law and
made a reasonable effort in doing so, it simply does not
matter whether this court agrees with the manner in which
he applied it.4
See White Springs Agric. Chems., Inc. v.
4. Even though the precise contours of Alabama law
are immaterial, it is worth pausing for a moment to
highlight the manner in which the defendants chose to
brief this case.
In a subsection of their motion to
vacate entitled “Alabama Does Not Recognize Harassment
Torts,” they quote Machen v. Childersberg Bancorp., 761
So.2d 981, 983 n.1 (Ala. 1999), for the proposition that
“Alabama ‘does not recognize an independent cause of
action for sexual harassment.’” Defs.’ Mot to Vacate 8
(Doc. No. 18).
They then argue that the arbitrator
“based his award on such a claim even though it does not
exist under the law the agreement directs him to apply.”
Id. This argument is frivolous for two reasons, either
one of which would be sufficient to raise suspicion that
the defendants are primarily motivated by the improper
purpose of causing unnecessary delay.
Glawson Invs. Corp., 660 F.3d 1277, 1281 (11th Cir. 2011)
interpretation of Florida law, the FAA does not empower
entire paragraph to which they cite states: “Alabama does
not recognize an independent cause of action for sexual
Instead, claims of sexual harassment are
maintained under common-law tort theories such as assault
and battery, invasion of privacy, ... and outrage.”
Machen, 761 So.2d at 983 n.1 (emphasis added). Far from
precluding Forrest’s state-law claims, which were based
solely on assault and battery, outrage, and invasion of
privacy, Machen makes clear that Alabama law embraces
tort damages for the precise claims raised in this case.
Machen therefore stands for the opposite of what the
defendants allege, and the quotation provided in their
brief appears to have been manipulated in order to
conceal that fact from the court.
sexual-harassment claim. The arbitrator identified the
claims on which Forrest prevailed in the final two
paragraphs of his award where he states: “Having
previously determined that Claimant cannot recover under
Title VII EEOC claims, the Arbitrator turns his attention
to the State claims of Claimant, to-wit: invasion of
privacy, outrage, and assault and battery.”
Award 15, attachment to Defs.’ Mot. to Vacate (Doc. No.
Nowhere in this portion of the award does the
arbitrator so much as mention “sexual harassment.”
Instead, he based his award on the very torts Machen
identifies as the appropriate avenues for relief under
Alabama law. This makes sense, since Forrest’s complaint
did not even allege a state-law harassment claim.
arbitrator’s interpretation of the governing law (and
could convince a court it was right), it would have a
valid claim for vacatur under 9 U.S.C. § 10(a)(4).
would wholly undermine “the promise of arbitration,”
which relies on “the arbitrator being the last decision
maker in all but the most unusual cases,” B.L. Harbert
Int’l, LLC v. Hercules Steel Co., 441 F.3d 905, 913 (11th
Circuit’s admonishment that arbitrators “do not act as
junior varsity trial courts where subsequent appellate
review is readily available to the losing party,” Cat
“instead applied Florida law,” Mot. to Vacate 8 (Doc. No.
18), then they should have pointed this out to the
The arbitration agreement (which Waffle
arbitrator to “reconsider the issues raised by the motion
and, promptly, either confirm or change the decision.”
Arb. Agreement 3, attachment to Defs.’ Mot. to Vacate
(Doc. No. 18).
Had the arbitrator simply “chosen” the
wrong law, he could have corrected that error.
adjudication of Forrest’s claims.
But the defendants
previously insisted that an arbitrator, not this court,
should decide the merits of this dispute, and it must now
live with that decision.
Second, the defendants argue that the arbitrator
failed to “render an award and opinion in the form
Agreement 2, attachment to Defs.’ Mot. to Vacate (Doc.
requirement, the arbitrator should have “explain[ed] how
humiliation from the Respondent, Gary Brackin,’ when the
consequences,” and made an explicit finding “that Waffle
House was responsible for this conduct” before holding it
liable for Brackin’s wrongful behavior.
Defs.’ Mot. to
Vacate 10 (Doc. No. 18) (emphasis and internal citation
That argument is without merit.
Generally speaking, “an arbitrator need not explain
her decision; thus, in a typical arbitration where no
specific form of award is requested, arbitrators may
provide a ‘standard award’ and simply announce a result.”
Cat Charter, 646 F.3d at 844 (citing United Steelworkers
v. Enter. Wheel & Car Corp., 363 U.S. 593, 598 (1960).
However, the parties “may contractually limit or alter
... the form of the award,” and an arbitrator exceeds her
authority by failing to heed any such limitation.
Here, the agreement required the arbitrator to issue
Arb. Agreement 3, attachment to
arbitrator exceeded his authority therefore depends on
the meaning of that phrase.
Unfortunately, the agreement
leaves it undefined, and the defendants have not bothered
to offer evidence regarding the standard practice among
arbitrators in this field.
The court must therefore
decipher that phrase on its own.
The arbitration agreement offers some assistance. It
instruct arbitrators to “provide the written reasons for
identify no reason why the AAA’s standard would be any
arbitrations, and neither party argues that it is.
typically rendered in labor arbitration cases” requires
In Cat Charter, the Eleventh Circuit addressed a
provision requiring a “reasoned award,” 646 F.3d at 843,
which is no doubt akin to an award containing “written
The court noted that the requirement sat
permissible in arbitration disputes and the more exacting
requirement that “the arbitrators make ‘findings of fact
and conclusions of law.’”
Id. at 844.5
Relying on the
dictionary definition of “reasoned,” the court concluded
that such an award is “marked by the detailed listing or
5. This holding defeats the defendants’ attempt to
equate “the form typically rendered in labor arbitration
cases” with a requirement that the arbitrator make
specific findings on every element of every one of
justification of ... the decision.”
Id. (emphasis in
With that definition in hand, the appellate court
turned to the arbitral award itself, the relevant part of
which covers only one column of one page of the federal
reporter and looks more like a bulleted list than a
See id. at 841.
For the vast majority
of claims, the arbitrator identified only the parties and
stated which one prevailed.
For example, one bullet
reads, “On the claim of the Claimant, CAT CHARTER, LLC,
for breach of contract by Respondent MTI, we find that
Claimant, CAT CHARTER, LLC has proven its claim against
MTI by the greater weight of the evidence.”
further explanation is given.
Another bullet simply
states that “All other claims of the Claimants are hereby
All counter-claims of the Respondents, MTI and
SCHURTENBERGER, are denied.”
Only on the issue of
attorney’s fees did the arbitrators provide anything
“the Arbitrators find that Claimants
raised a claim that had substantial fact
and legal support pursuant to Fla. Stat.
More specifically, we
find that the issues relating to missing
resin and the cost of the skiff
presented substantial fact issues raised
by Claimants, justifying denial of any
attorney’s fees for Respondents.”
announced the winner.
Despite the paucity of findings, the Eleventh Circuit
had no trouble confirming the award.
It explained that
“the controversy ... turned primarily upon credibility
panel’s finding regarding the weight of the evidence was
victory ... plain.”
Id. at 844-45.
The panel had
“found the Plaintiffs’ witnesses to be more credible,”
and that was enough to rule in their favor.
Id. at 845.
As for the fee issue, the arbitrators’ brief statements
“clearly provide[d] more than a simple result, and g[a]ve
ample justification for the decision of the Panel.”
That was sufficient for the appellate court to find that
the award “was a reasoned one.”
Cat Charter commands the same result in this case.
Here, too, the primary issue before the arbitrator was
one of credibility.
Forrest alleged numerous instances
of inappropriate conduct, most of which the defendants
Because there were several witnesses on each
side, the “ultimate decision” was based on “whether the
allegations of the Claimant or whether the greater weight
Interim Award 5, attachment to Defs.’ Mot.
to Vacate (Doc. No. 18).
The arbitrator described the
various evidence put forward during the arbitration and
ultimately concluded that “the greater weight of all the
evidence” supported Forrest’s version of the events.
For the most part, no further explanation was
When it was required, however, the arbitrator
fleshed out his reasoning with specific findings, such as
“Brackin touched [Forrest] in such a manner that amounts
to assault and battery,” and Forrest “suffered mental
distress, shame, and humiliation” because of “Brackin’s
conduct during her employment.”
Id. at 15.
When considered in its entirety, the arbitrator’s
summarizing the evidence, and explaining his reasoning is
far more comprehensive than the bulleted points discussed
in Cat Charter.
There can therefore be no doubt that his
award constitutes “more than a simple result” and easily
meets Cat Charter’s standard for a reasoned opinion.
This court therefore declines “to narrowly interpret what
constitutes a reasoned award to overturn an otherwise
apparently seamless proceeding.”
Cat Charter, 646 F.3d
Manifest Disregard of the Law
In what amounts to little more than a rehashing of
the same arguments they put forth in support of vacatur
under 9 U.S.C. § 10(a)(4), the defendants submit that the
arbitrator’s decision demonstrates a manifest disregard
of Alabama law.
Specifically, they argue that (1) their
wrongful acts were insufficiently severe to constitute
outrage under Alabama law and the arbitrator therefore
erred in finding in favor of Forrest on that claim; (2)
complained of behavior and her emotional distress and so
no damages should have been awarded; and (3) Waffle House
should not have been held liable for Brackin’s wrongful
According to the defendants, those purported
legal errors require that the award be set aside.
Brothers, which held that vacatur is appropriate when the
arbitrator is “conscious of the law and deliberately
128 F.3d at 1461.
This exacting standard
misstatement, or misapplication of the law,” Peebles, 431
F.3d at 1326; there must be “clear evidence” that the
arbitrator consciously decided not to follow it, Hercules
Steel, 441 F.3d at 910.
Put another way, “even a showing
of a clear error on the part of the arbitrator is not
The arbitration loser must establish ... that
the arbitrator actually recognized a clear rule of law
and deliberately chose to ignore it.”
Id. at 911-12.
Recent cases strongly suggest that courts should
vacate an award only if four factors are present: (1) the
arbitration winner conceded that the law favored the
other side, but urged the arbitrator not to follow it;
(2) that appeal was noted in the arbitrator’s final
award; (3) the record reveals no indication that the
arbitrator disapproved of the suggestion; and (4) there
was only weak factual and legal support for the award
See Montes, 128 F.3d at 1464 (Carnes, J.,
concurring); Hercules Steel, 441 F.3d at 913.
precisely what occurred in Montes, which stands as the
only Eleventh Circuit opinion vacating an arbitral award
for manifest disregard of the law.
Forrest points out that intervening decisions have
called into question the continuing vitality of this
already-narrow ground for vacatur.
In March 2008, the
Supreme Court decided Hall Street Associates v. Mattel,
Inc., 552 U.S. 576 (2008).
The parties in that case had
contractually agreed to permit a more searching review of
available under the FAA, and the district court had
invoked that standard in vacating the arbitral award.
Id. at 579-80.
The Supreme Court “granted certiorari to
decide whether the grounds for vacatur and modification
provided by §§ 10 and 11 of the FAA are exclusive.”
searching review based on authority outside the statute.”
Id. at 590.
One month later, in Frazier v. CitiFinancial Corp.,
“judicially-created bases for vacatur are no longer valid
in light of Hall Street.”
604 F.3d 1313, 1324 (11th Cir.
Glawson Investments Corp., which cited Frazier for the
proposition that the grounds for vacatur enumerated in
660 F.3d at 1280.
While those two panels appear intent on eliminating
the non-statutory grounds for vacatur, “[t]he law of this
circuit is ‘emphatic’ that only the Supreme Court or [the
circuit] court sitting en banc can judicially overrule a
6. The panel’s reasoning is somewhat strained, given
that, three days before, the Supreme Court noted that it
had yet to “decide whether ‘manifest disregard’ survives
[its] decision in Hall Street ... as an independent
ground for review or as a judicial gloss on the
enumerated grounds for vacatur set forth at 9 U.S.C.
§ 10.” AnimalFeeds, 130 S. Ct. at 1768 n.3.
prior panel decision.”
Cargill v. Turpin, 120 F.3d 1366,
1386 (11th Cir. 1997) (quoting United States v. Woodard,
938 F.2d 1255, 1258 (11th Cir. 1991)); see also Hercules
precedent trumps later decisions”).
In this case, the
Supreme Court has expressly refrained from ruling on the
continued vitality of the manifest disregard of the law
standard, see AnimalFeeds, 130 S. Ct. at 1768 n.3, and
the Eleventh Circuit has yet to overrule Montes en banc.
Shakespear, Macbeth, Act. 4, sc. 1, the court will assume
applicable and address the defendants’ contention on its
The defendants will find no comfort in this court’s
abundance of caution.
Despite having the burden of
persuasion, Peebles, 431 F.3d at 1326, they do not even
attempt to show that any, let alone all, of the four
factors present in Montes apply to the facts of this
Had they tried, they would have found each of them
The arbitration award does not report that
Forrest urged the arbitrator to abandon Alabama law and
apply instead his own brand of justice.
Nor do the
defendants even allege that Forrest so much as implied
Instead, the defendants point to a few instances
where the arbitrator may have gotten the law wrong.
ignores Peebles’s admonition that “there must be some
showing in the record, other than the result obtained,”
that the arbitrator decided not to follow the law before
disregard of the law.
431 F.3d at 1326.
arbitrator clearly erred” and “errors of law are not
enough to justify setting aside an arbitration award.”
Hercules Steel, 441 F.3d at 911-12; see also Montes, 128
F.3d at 1462.
defendants, alleging that they lacked an objectively
reasonable belief that they would prevail on its motion
Pl.’s Reply 40 (doc. No. 27).
offers substantial evidence in support of that motion,
the court finds that sanctions are unwarranted at this
time because, when the defendants filed their briefs in
this case, the Eleventh Circuit had not yet decided Cat
However, with the benefit of that decision, the
court can see no legal basis for further delay: the
defendants should promptly pay Forrest the money that she
The defendants are reminded that courts “can and
should insist that if a party on the short end of an
arbitration award attacks that award in court without any
real legal basis for doing so, that party should pay
continuing to press its claims without a good basis in
the law, the defendants would deprive Forrest of the
benefits she bargained for when signing the arbitration
agreement: this dispute is rapidly becoming more costly,
complicated, and time consuming than it would have been
if it had been handled by the judiciary in the first
alternative to litigation, the parties must be able to
trust that the arbitrator’s decision will be honored
sooner instead of later.”
Sooner, in this case,
* * *
The defendants insisted on arbitration and received
precisely what they had asked for:
a speedy and fair
resolution of this case embodied in a reasoned decision.
To now vacate that award and remand for an entirely new
proceeding would “insufficiently respect the value of
arbitration process than Congress has mandated.”
Charter, 646 F.3d at 846.
That is something the court
simply will not do.
The defendants’ motion to vacate the
arbitral award will therefore be denied, Forrest’s motion
to confirm granted, and the arbitral award issued in this
An appropriate judgment will be entered.
DONE, this the 22nd day of May, 2012.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE
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