Webb v. Baptist Health Centers, Inc

Filing 10

MEMORANDUM OPINION Signed by Judge Karon O Bowdre on 1/4/13. (SAC )

FILED
2013 Jan-04 PM 04:26
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ROSETTA WEBB,
Plaintiff,
v.
BAPTIST HEALTH CENTERS, INC.,
Defendant

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CV-12-BE-3758-S

MEMORANDUM OPINION
This employment discrimination matter comes before the court on "Defendant's Motion
to Stay the Proceeding and Compel Arbitration." (Doc. 4). The court finds that Defendant's
Motion to Stay is due to be DENIED and the Motion to Compel Arbitration is due to be
GRANTED, as further set out in this opinion.
I. PROCEDURAL HISTORY
On October 31, 2012, the pro se Plaintiff filed a Complaint (doc. 1) against Defendant,
her employer, alleging employment discrimination based on race. She also filed a motion for
leave to proceed in forma pauperis (doc. 2), which this court granted (doc. 3). On November 7,
2012, the Defendant filed the instant motion, attaching the following exhibits: Exhibit 1 Dispute Resolution Program; Exhibit 2 - Acknowledgment of Receipt of Dispute Resolution
Program with a signature purporting to be that of Rosetta Webb and dated September 2, 2008;
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Exhibit 3 - Letter from Defendant's counsel to the AAA demanding arbitration and attaching the
Complaint in this case.
On November 13, 2012, the court entered an Order to Show Cause why this court should
not compel arbitration. (Doc. 6). The Plaintiff thereafter filed her response to the Order. (Doc.
7).
II. ANALYSIS
In her response to the court's Show Cause Order, the Plaintiff raises several reasons why
she believes this case should not be sent to arbitration. Four of the six reasons relate to her
financial condition and lack of ability to afford the cost of arbitration. The court notes, however,
that the Dispute Resolution Program provides for the Defendant to pay the costs, stating that
"BHC agrees the pay the administrative and hearing fees attributable to the arbitration (other than
the $50.00 initiation fee) and the Arbitrator's daily rate and expenses unless you object, in which
case the parties will share the cost equally." (Doc. 4-1, at 6). In its letter to the AAA demanding
arbitration, the Defendant, as initiator, paid the $50.00 initiation fee. Therefore, any objections
to arbitration based on Plaintiff's inability to pay for it are moot.
The other two reasons the Plaintiff raises are that "[t]he agreement lacks mutuality of
obligation with respect to the arbitration of disputes" and that "[t]he agreement lacks mutual
assent and leaves details open for further negotiation thus rendering it voidable."
The court must first determine whether the court itself or the arbitrator addresses the
validity of the arbitration agreement. The Plaintiff does not dispute that she signed the
acknowledgment of receipt of the contract, which acknowledgment provides in relevant part as
follows:
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I acknowledge receipt of the Dispute Resolution Program document. I
understand I am obligated to read this document as it governs all future
legal disputes between me and Baptist Health Centers as defined in the
document. I hereby agree that, except as may be provided in the Dispute
Resolution Program, all legal disputes between me and BHC will be
submitted to biding arbitration instead of to a court, a judge, and a jury. . . .
(Doc. 4-2, at 2). The Dispute Resolution Program provides in part as follows.
You and BHC mutually agree to use final and binding arbitration as the sole
and exclusive means of resolving all disputes between you. . . .Claims
subject to arbitration include, but are not limited to those involving . .
.claims under federal; state, or local laws regarding discrimination or
harassment. Your agreement to arbitrate is a condition of your
employment at BHC. . . .This Program precludes both you and BHC
from going to court to have disputes heard by a judge or a jury.
Arbitration will be administered by the American Arbitration Association
("AAA") or a similar, impartial, independent administration. Unless another
administrator is chosen, the arbitration will be conducted pursuant to the
AAA's National Rules for the Resolution of Employment Disputes (the
"Rules").
(Doc. 4-1, at 2-3).
Generally, the validity of the arbitration agreement is an issue for the court, not the
arbitrator, to decide “unless the parties clearly and unmistakably provide otherwise.” Howsam v.
Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002). However, parties may contract around that
general rule by incorporating into the contract a provision that AAA rules apply; because AAA
rules provide that the arbitrator decides the issue of whether the arbitration agreement is valid,
the incorporation of AAA rules clearly and unmistakably evidences the parties’ agreement that
the arbitrator and not the judge decides this issue. See Terminix Int’l Co. v. Palmer Ranch Ltd.
P’ship, 432 F.3d 1327, 1332 (11th Cir. 2005). Specifically, AAA Rules 7(a) & 7(b) provide:
(a) The arbitrator shall have the power to rule on his or her own jurisdiction,
including any objections with respect to the existence, scope, or validity of
the arbitration agreement.
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(b) The arbitrator shall have the power to determine the existence or validity
of a contract of which an arbitration clause forms a part. Such an arbitration
clause shall be treated as an agreement independent of the other terms of the
contract. A decision by the arbitrator that the contract is null and void shall
not for that reason alone render invalid the arbitration clause.
AAA Commercial Arbitration Rules and Mediation Procedures Rule 7(a) & (b).
Applying the Terminix decision to the facts of the instant case, and keeping in mind the
text of the AAA rules, the parties’ incorporation of AAA rules into the Dispute Resolution
Program at issue means that the parties did indeed contract around the general rule, clearly and
unmistakably evidencing their agreement that the arbitrator – and not this court – should decide
the issues the Plaintiff raised about its validity.
Therefore, the court finds that Defendant's motion to compel arbitration is due to be
GRANTED. However, the court will DENY Defendant’s motion to stay the proceeding, and,
rather than stay the case, the court will DISMISS it WITHOUT PREJUDICE to reopening this
case if necessary and appropriate based on the arbitration proceedings.
The court will enter a separate Order contemporaneously with this Memorandum Opinion.

Dated this 4th day of January, 2013.

____________________________________
KARON OWEN BOWDRE
UNITED STATES DISTRICT JUDGE

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