Patrick v. RAI Service Company
MEMORANDUM OPINION that it is ORDERED that the Motion to Dismiss is DENIED and this action is STAYED pending resolution through arbitration; the parties are DIRECTED to file a notice with the court upon settlement of the case or the conclusion of arbitration as more fully set out in order. Signed by Magistrate Judge Harwell G Davis, III on 9/9/2016. (AHI)
2016 Sep-09 PM 12:51
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SHAWN CHRISTOPHER PATRICK,
RAI SERVICE COMPANY,
) Case No. 3:16-cv-00852-HGD
Defendant has filed a Motion to Dismiss and Compel Arbitration. (Doc. 6).
Plaintiff filed a response, defendant filed a reply, and plaintiff filed a sur-reply.
(Docs. 10, 11 & 14). A hearing on the motion was held on September 7, 2016.
Present were plaintiff Shawn Christopher Patrick, proceeding pro se, and Tamula
Yelling for defendant. Defendant presented testimony from Scott Lefelar, in-house
counsel for defendant’s Human Resources Department.
Plaintiff commenced this action by filing a complaint alleging defendant
violated the Americans With Disabilities Act and the Age Discrimination in
Employment Act in connection with his employment and termination. The complaint
in this action and the testimony at the hearing reflect that plaintiff was working for
defendant in 2012, when defendant implemented an arbitration agreement for its
employees.1 Continued eligibility for bonus payments which had been paid to
employees such as plaintiff prior to 2012 was conditioned upon acceptance of the
arbitration agreement. Plaintiff refused to sign the agreement in 2012; therefore, he
was deemed ineligible for any bonus payments from 2012, which would have been
paid in 2013. In fact, plaintiff did not receive any bonus in 2013 for 2012.
Mr. Lefelar testified that on February 22, 2013, he reached out by email to any
employees who had failed to sign the arbitration agreement, including plaintiff. (Doc.
11-3, Emails). Plaintiff did not respond to the February 2013 email. Lefelar sent
another email to plaintiff on August 5, 2013, again giving plaintiff an opportunity to
sign the arbitration agreement and reminding plaintiff he would be eligible for 2013
The arbitration agreement provides in relevant part:
2. Covered Claims.
a. Except as expressly provided in Sections 2(b) and 2(c), this Agreement
covers all disputes, claims and/or controversies between or among the Parties,
including but not limited to all claims arising from or relating to: (i) the Employee’s
employment relationship with the Employer; or (ii) the termination of the
Employee’s employment relationship (collectively, the “Covered Claims”). Covered
Claims include, but are not limited to statutory claims, contractual claims, tort claims
and common law claims. Statutory claims include, but are not limited to, Title VII
of the Civil Rights Act of 1964, the Fair Labor Standards Act, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, the Family
and Medical Leave Act, as well as state and local laws prohibiting discrimination,
harassment and retaliation in the workplace.
(Doc. 6, Rigsby Decl. ¶¶ 3, 7 & Ex. A).
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bonus payments in 2014 only if he did so. Plaintiff responded on August 12, 2013,
asking when the deadline for signing would be. After Lefelar advised plaintiff that
the deadline was October 1, 2013, plaintiff emailed Lefelar that he would make his
decision after he took “the CBT” which was due around the same time. Lefelar
testified that he emailed plaintiff a PDF version of the arbitration agreement with a
blank signature line. Plaintiff testified that he went to Winston-Salem, North
Carolina, for business during the week encompassing September 30, 2013, and
believed that he might be fired over his failure to sign the arbitration agreement. He
also testified he was in meetings 12 to 14 hours a day during this time and does not
recall asking Lefelar to send him a copy of the arbitration agreement.
On September 30, 2013, at 9:16 p.m., an email was sent by plaintiff from his
work email account to Lefelar. The email read:
Scott, I did not get your e-mail until I got back to the room tonight. I
signed the document the only way I could. I will call you tomorrow to
see if this will work if not, I will sign the hard copy like you suggested.
(sic) (DX 1; Doc. 6, Ex. A). Attached to the email was a document entitled
“Arbitration Agreement (Live Sig) (3).pdf.”
Lefelar testified that the
attachment to the email was a copy of the arbitration agreement, showing a typed
signature in a box, “Shawn Patrick,” on the “Employee Signature” line and a typed
signature in a box, “Shawn Patrick,” on the “Print Name” line. The document further
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contains a statement at the end, reading “YES-By answering ‘Yes,’ I acknowledge
that I have read the Arbitration Agreement for Employees of RAI and Its Affiliated
Companies and agree to be bound by its terms.” Beside that statement is a line on
which appears a box containing the typed word “Yes.”2 Plaintiff testified that after
he sent the email, Lefelar told him on the telephone, “I’ll take care of it,” a comment
plaintiff denies understanding. Lefelar does not recall telling plaintiff this. Plaintiff
did not call Lefelar on October 1, 2013, or after about signing a hard copy of the
arbitration agreement, nor was he ever contacted about affixing his signature to a hard
copy of the arbitration agreement.3
Plaintiff testified that he had a Topaz “signature gem,” which he described as
an electronic pen provided by defendant that could be used to sign a signature on a
computer screen, and the signature appears like a handwritten signature. He also
testified that his pen was not working on September 30, 2013. Plaintiff further
testified that he engaged in a strategy to delay and avoid signing the arbitration
agreement, on advice of counsel. Plaintiff denied that he “wilfully and voluntarily”
Immediately below that statement is another statement preceded by a line, which reads
“NO-I understand that if I answer ‘No’ I will NOT be eligible for AIAP bonus payments.” There
is nothing on the line next to that statement.
A copy of plaintiff’s personnel file was provided to the court for in camera review. All
documents after 2005 that bear a signature have a typed signature rather than a handwritten one, for
plaintiff and for other employees of defendant who signed the documents.
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signed the arbitration agreement and stated that at no time did he ever type his name
on any arbitration agreement. Lefelar also denied signing the arbitration agreement
on plaintiff’s behalf and testified he is unaware of anyone else signing the agreement
The evidence reflects that plaintiff received bonuses of $14,704 in 2014 and
$13,874 in 2015. (Doc. 11-2). He would not have received the bonuses had
defendant not considered him to have signed the arbitration agreement. Plaintiff
became aware of the bonus payments when they were deposited in his bank account.
However, he never asked defendant about why he was receiving the bonuses, and he
did not reject or refund the bonus payments. Lefelar testified that the first time he
became aware that plaintiff denied signing the arbitration agreement was when he
saw plaintiff’s response to the Motion to Compel Arbitration filed in this litigation.
Plaintiff stated he told defendant he did not sign the arbitration agreement during a
company investigation of him in 2015. Plaintiff was terminated by defendant on
June 10, 2015.
Validity of Arbitration Agreement
The Federal Arbitration Act (FAA), 9 U.S.C. § 1, et seq., provides that a
written arbitration agreement in certain contracts “shall be valid, irrevocable, and
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enforceable, save upon such grounds as exist at law or in equity for the revocation of
any contract.” 9 U.S.C. § 2. Because of the FAA, federal courts are required to place
arbitration clauses on equal footing with other contracts. Rent-A-Center, West, Inc.
v. Jackson, 561 U.S. 63, 67 (2010); Janiga v. Questar Capital Corp., 615 F.3d 735,
740 (7th Cir. 2010) (“[F]ederal law places arbitration clauses on equal footing with
other contracts, not above them.”). Nonetheless, federal courts interpret arbitration
clauses broadly where possible. AT&T Techs., Inc. v. Communications Workers of
Am., 475 U.S. 643, 649-50 (1986). The result of such broad interpretation is that “any
doubts concerning the scope of arbitral issues should be resolved in favor of
arbitration.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 945 (1995)
(internal citation and quotation marks omitted); AT&T Techs., Inc., 475 U.S. at 650
(“Doubts should be resolved in favor of coverage.”) (quotation omitted). “[A]s with
any other contract, the parties’ intentions control, but those intentions are generously
construed as to issues of arbitrability.” Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985) (alteration supplied).
However, “the presumption of arbitrability only [applies] where a validly
formed and enforceable arbitration agreement is ambiguous about whether it covers
the dispute at hand.” Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 301
(2010). See also Applied Energetics, Inc. v. NewOak Capital Mkts., LLC, 645 F.3d
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522, 526 (2d Cir. 2011) (holding that “while doubts concerning the scope of an
arbitration clause should be resolved in favor of arbitration, the presumption does not
apply to disputes concerning whether an agreement to arbitrate has been made”).
“The party seeking to compel arbitration has the initial burden of proving the
existence of a contract calling for arbitration and proving that the contract evidences
a transaction substantially affecting interstate commerce. ‘[A]fter a motion to compel
arbitration has been made and supported, the burden is on the nonmovant to present
evidence that the supposed arbitration agreement is not valid or does not apply to the
dispute in question.’” American Gen. Fin., Inc. v. Morton, 812 So.2d 282, 284 (Ala.
2001), quoting Jim Burke Auto., Inc. v. Beavers, 674 So.2d 1260, 1265 n.1 (Ala.
1995)). See also Kenworth of Birmingham, Inc. v. Langley, 828 So.2d 288, 290 (Ala.
2002); Fleetwood Enters., Inc. v. Bruno, 784 So.2d 277, 280 (Ala. 2000).
The existence of a valid contract to arbitrate is determined by state law. See
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). There are two
prerequisites for a valid arbitration contract under Alabama law: “(1) there must be
a written agreement calling for arbitration[;] and (2) the contract in which the
arbitration agreement appears must relate to a transaction involving interstate
commerce.” Prudential Sec. v. Micro-Fab, Inc., 689 So. 2d 829, 832 (Ala. 1997)
(citing Maxus, Inc. v. Sciacca, 598 So. 2d 1376 (Ala. 1992)) (alteration supplied).
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Defendant contends plaintiff electronically signed the arbitration agreement
dated September 30, 2013. An electronic signature has the same effect as a
handwritten signature; however, the signature still must be attributed to that person
before it can be established as the act of that person. Ala. Code § 8-1A-9 (2015).
Whether an electronic signature is attributable as an act of that person “may be shown
in any manner, including a showing of the efficacy of any security procedure. . . [and]
from the context and surrounding circumstances at the time of its creation, execution,
or adoption, including the parties’ agreement, if any, and otherwise as provided by
In Granite Rock Co., the Supreme Court held that issues concerning contract
formation are generally reserved for the courts to decide. 561 U.S. at 296. Indeed,
it found that such a determination is the threshold question in any dispute involving
arbitration. Id. at 295. Therefore, the district court must first “resolve any issue that
calls into question the formation or applicability of the specific arbitration clause that
a party seeks to have the court enforce.” Id. at 297. In other words, arbitration of a
dispute should only be ordered where “the court is satisfied that neither the formation
of the parties’ arbitration agreement nor . . . its enforceability or applicability to the
dispute is in issue. Where a party contests either or both matters, the court must
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resolve the disagreement.” Id. at 299-300 (quotation marks omitted) (alteration in
In this case, plaintiff has denied signing the agreement, either physically or
electronically, “in any manner recognized by proper electronic signature laws and
agreements such as the Uniform Electronic Transactions Act (UETA) and the ESIGN
Act . . . which requires both parties to agree to conduct an engagement
electronically.” (Doc. 14 at 2). Scott Lefelar also denied signing the agreement on
plaintiff’s behalf. This leaves the question of how plaintiff’s typed signature
appeared on the agreement. Plaintiff’s testimony was that his signature gem was not
working. Taken in conjunction with his email to Lefelar, stating he signed the
agreement the only way he could, it is reasonable to infer that plaintiff indeed signed
the agreement by typing his name into the signature lines and typed “Yes” next to the
line for acknowledgment of signing. While the court finds that it is more likely that
plaintiff signed the agreement, because he then started receiving and retaining
bonuses, it is not necessary to make a credibility determination because the issue can
be decided on another ground.
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Assuming, without deciding, that plaintiff did not sign the arbitration
agreement, there still may exist a constructive or implied contract to arbitrate based
on plaintiff’s actions.
Under the doctrine of quasi-contract, the law implies a contract, based upon the
principles of equity, to prevent the unjust enrichment of one who knowingly accepts
and retains a benefit provided at the detriment of another, who has a reasonable
expectation of compensation or other benefit. Utah Foam Prods., Inc. v. Polytec,
Inc., 584 So.2d 1345 (Ala. 1991); Opelika Prod. Credit Ass’n v. Lamb, 361 So.2d 95
(Ala. 1978); Hendrix, Mohr & Yardley, Inc. v. City of Daphne, 359 So.2d 792 (Ala.
1978). “The remedy of quasi-contract is based upon the established principle of
avoiding unjust enrichment. For this remedy to apply, there must be a detriment and
a resulting benefit, and the two must be related.” G.S. Gothard & Son Contractors,
Inc. v. Mansel, 611 So. 2d 1101, 1103 (Ala.Civ.App. 1992) (citations omitted).
The benefit conferred need not be strictly monetary. “A person may be
considered to have conferred a benefit upon another if he has given him possession
of, or an interest in, land, chattels, or choses in action, or if he performs some service
which is beneficial to or at the request of the other person, or if he satisfies a duty [or]
a debt of the other. Whenever one person adds to the other’s advantage in any form,
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whether by increasing his holdings or saving him from expense or loss, he has
conferred a benefit upon the other.” Opelika Prod. Credit Ass’n, 361 So.2d at 99.
“There are two kinds of implied contracts—those implied in fact and those implied
in law. Contracts implied in law are more properly described as quasi or constructive
contracts where the law fictitiously supplies the promise [to pay for the labor or
services of another] to prevent a manifest injustice or unjust enrichment.” Green v.
Hospital Bldg. Auth. of the City of Bessemer, 294 Ala. 467, 470, 318 So.2d 701, 704
(1975). “The rule is that if one knowingly accepts services rendered by another, and
the benefit and result thereof, the law implies a promise on the part of the one who
so accepts with knowledge, to pay the reasonable value of such services rendered.”
Richards v. Williams, 231 Ala. 450, 453, 165 So. 820, 823 (1936).
In this case, plaintiff accepted a benefit from defendant in the form of bonus
payments to which he otherwise would not have been entitled, in exchange for an
implied agreement to arbitrate most issues related to his employment with defendant.
He knew that he was ineligible to receive bonus payments in the absence of
agreement to the arbitration provisions, yet he never questioned defendant about the
reason he was receiving the payments, never notified defendant he had not signed the
agreement, and did not refund or reject the payments. Under these circumstances, the
court finds that there is an implied or constructive contract between plaintiff and
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defendant to submit employment-related matters to arbitration, which arguably
benefits defendant, in exchange for which plaintiff received the benefit of bonus
Further, it is clear that plaintiff had received a copy of the arbitration agreement
and was aware of its contents. The arbitration agreement covers plaintiff’s claims in
this action related to his employment. Therefore, there is a binding contract between
plaintiff and defendant to submit his claims in this action to arbitration.
Based on the foregoing, it is ORDERED, ADJUDGED and DECREED that
defendant’s Motion to Compel Arbitration is due to be and hereby is GRANTED.
In addition to requesting that this court compel arbitration, defendant requests
that the court dismiss the action. That aspect of defendant’s motion is due to be and
Although there is legal authority from other circuits supporting the
proposition that courts have discretionary authority under 9 U.S.C. § 3 to dismiss
cases when compelling arbitration, the Eleventh Circuit adheres to a more literal
interpretation of the statute. See Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698,
699 (11th Cir. 1992). See also Musnick v. King Motor Co. of Ft. Lauderdale, 325
F.3d 1255, 1261 (11th Cir. 2003); Pitchford v. Amsouth Bank, 285 F. Supp.2d 1286,
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1297 (M.D.Ala. 2003); Wright v. Circuit City Stores, Inc., 82 F. Supp.2d 1279, 1288
(N.D.Ala. 2000); Bradford v. KFC Nat’l Mgmt. Co., 5 F.Supp.2d 1311, 1315
(M.D.Ala. 1998); Nazon v. Shearson Lehman Bros., Inc., 832 F.Supp. 1540, 1543
(S.D.Fla. 1993). Accord Lloyd v. Hovensa, L.L.C., 369 F.3d 263, 268-271 (3d Cir.
In Bender, for example, the Eleventh Circuit concluded that district courts do
not have the power to choose dismissal over a stay:
The district court properly found that the state law claims were subject
to arbitration, but erred in dismissing the claims rather than staying
them. Upon finding that a claim is subject to an arbitration agreement,
the court should order that the action be stayed pending arbitration. 9
U.S.C. § 3. If the parties do not proceed to arbitration, the court may
compel arbitration. 9 U.S.C. § 4. Therefore, we vacate the dismissal of
the state law claims and remand with instructions that judgment be
entered staying all claims pending arbitration.
Bender, 971 F.2d at 699. In Lloyd, the Third Circuit expressed a similar stance on the
issue, primarily basing its reasoning upon the clear statutory language, but also
providing some practical justifications for entering a stay rather than an order of
dismissal. Lloyd, 369 F.3d at 268-271. The court noted that a stay “relieves the party
entitled to arbitrate of the burden of continuing to litigate the issue while the
arbitration process is on-going, and it entitles that party to proceed immediately to
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arbitration without the delay that would be occasioned by an appeal of the District
Court’s order to arbitrate.”4 Id. at 269.
For those reasons, it is ORDERED that the Motion to Dismiss is DENIED, and
this action is STAYED pending resolution through arbitration.
Even so, the Clerk is DIRECTED to close this file for administrative and
statistical purposes. See, e.g., Taylor v. Citibank U.S.A., N.A., 292 F.Supp.2d 1333,
1346 (M.D.Ala. 2003) (closing file administratively after entering stay but advising
parties of their right to request reinstatement); Pitchford, 285 F.Supp.2d at 1297
(same); Nazon, 832 F.Supp. at 1543 (same); Brown v. Terminix Int’l Co., L.P., 2006
WL 181678, at *5 (S.D.Ala. Jan. 24, 2006) (same). That action shall have no effect
on the court’s retention of jurisdiction, and the file may be re-opened, on either
party’s motion, for an appropriate purpose, such as dismissal following settlement,
entry of judgment, vacatur, or modification of an arbitrator’s award. See 9 U.S.C. § 9;
Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193, 201-02 (2000).
The parties are DIRECTED to file a notice with the court upon settlement of
the case or the conclusion of arbitration, whichever event shall first occur.
The Eleventh Circuit also recognizes the fact that stays, unlike dismissals, are unappealable,
interlocutory decisions. The court in Bender observed, “[i]f the district court had stayed the state law
claims and compelled arbitration under 9 U.S.C. §§ 3-4, this order would not have been appealable
under 9 U.S.C. §§ 16(b)(1) and (2).” Bender, 971 F.2d at 699 (alteration supplied). See also
Campbell v. Dominick & Dominick, Inc., 872 F.2d 358, 360 (11th Cir. 1989).
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DONE and ORDERED this 9th day of September, 2016.
HARWELL G. DAVIS, III
UNITED STATES MAGISTRATE JUDGE
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