Deleon v. Dollar Tree Stores, Inc.
RULING (see attached) granting Defendant's 15 Motion to Dismiss the Complaint or Stay the Proceedings and Compel Arbitration. For the reasons explained in the attached Ruling, the Court grants Defendants motion to compel arbitration and dismiss this case. The clerk is directed to administratively close the case. Signed by Judge Charles S. Haight, Jr. on January 30, 2017. (Kahl, A)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT
DOLLAR TREE STORES, INC.,
JANUARY 30, 2017
RULING ON DEFENDANTS' MOTION TO DISMISS THE COMPLAINT OR STAY
PROCEEDINGS AND COMPEL ARBITRATION
HAIGHT, Senior District Judge:
Plaintiff Bethzaida Deleon brings this action against Defendant Dollar Tree Stores, Inc., her
former employer, alleging state-law gender discrimination, sexual harassment/hostile work
environment, and retaliation claims pursuant to the Connecticut Fair Employment Practices Act,
Conn. Gen. Stat. § 46a-60(a)(1) et seq. See Doc. 1, Ex. A. Plaintiff initially filed the action in state
court, but Defendant removed it to this Court on May 19, 2016 on the grounds of diversity
jurisdiction. Doc. 1. Defendant then filed a motion to compel arbitration and dismiss Plaintiff's
Complaint pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq, or in the alternative, to stay
the proceedings and compel arbitration. Docs. 15-16. This Ruling resolves that motion.
Plaintiff was initially hired by Defendant at its Waterford, CT store on or about August 10,
2014. Doc. 1, Ex. A at 1 ¶ 4. In August 2015, Plaintiff alleges that an incident occurred between
her, Tiffany Griffin, and Rafael Rosado, both managers of the store. Id. at 1-2 ¶¶ 5-9. The next day,
a coworker informed Plaintiff about a derogatory sexual comment made by Tiffany Griffin about
Plaintiff and Rafael Rosado. Id. at 1-2 ¶ 7. Plaintiff contacted a Human Resources employee, who
eventually came to the store to meet with Plaintiff but did not focus on resolving or otherwise
addressing the incident. Id. at 2-3 ¶¶ 9-15. Plaintiff called out of work the next scheduled day after
this meeting and was told by an assistant manager that Defendant would contact her. Id. at 3
¶¶ 16-18. Plaintiff was thereafter not given any shifts by Defendant while Defendant continued to
employ Tiffany Griffin. Id. at 3 ¶¶ 19-20.
Defendant implemented an arbitration program in 2014. Doc. 16-1, Declaration of Steven
Pearson ("Pearson Decl.") ¶¶ 4-5. Associates hired on or after October 6, 2014 were required to
participate in the arbitration program as a condition of employment. Id. ¶ 6. All associates, like
Plaintiff, hired prior to October 6, 2014, were required to submit an opt-out form either
electronically or by mail to avoid being including in the arbitration program. Id. ¶ 7. The deadline
to opt-out was May 31, 2015. Id. In April 2015, Defendant sent each store manager detailed
instructions and information regarding the arbitration program and the steps to be taken with regard
to associates that had a right to opt-out (i.e. associates hired prior to October 6, 2014). Id. ¶ 8.
Pursuant to these instructions, every associate was required to access the arbitration program's
website, which had all of the information regarding the arbitration program including the Mutual
Agreement to Arbitrate Claims ("Arbitration Agreement"). Id. ¶¶ 9-10; Pearson Decl. Ex. A-2. A
flyer was required to be placed in each store that also contained express information regarding how
to opt-out and the deadline for opting-out, May 31, 2015. Pearson Decl. ¶ 10; Pearson Decl. Ex.
Associates also had to acknowledge receipt of the Arbitration Agreement by accessing the
website and clicking a box by April 24, 2015. Pearson Decl. ¶ 12; Pearson Decl. Ex. A-2.
Defendant's records reveal that Plaintiff electronically accessed the information regarding the
arbitration program twice on April 16, 2015.1 Pearson Decl. ¶ 13; Pearson Decl. Ex. B. Plaintiff
did not opt-out of the Arbitration Agreement.
The Arbitration Agreement expressly provides that: "The Parties agree to the resolution by
arbitration of all claims or controversies . . . arising out of or related to Associate's employment (or
its termination) . . . that Dollar Tree may have against Associate or that the Associate may have
against . . . (1) Dollar Tree." Pearson Decl. Ex. C at 1. This expressly included "claims for . . .
retaliation or discrimination (including . . . sex)." Id. The last page of the Arbitration Agreement
contains clauses detailing that the associate acknowledges that he or she has carefully read the
agreement, been given the opportunity to discuss it with legal counsel, and understands that he or
she is giving up the right to a jury trial. Id. at 4. It also states that the "[c]onsideration" for the
agreement is "[t]he promises by Dollar Tree and by Associate to arbitrate disputes, rather than
litigate them before courts or other bodies," which "provide[s] consideration for each other." Id.
Finally, the Arbitration Agreement provides that the Federal Arbitration Act ("FAA") will govern
the interpretation and enforcement of the agreement. Id. at 1.
Plaintiff, however, accessed the Arbitration Agreement pertaining to associates signing
at the time of hire, which is why the records reveal that Plaintiff's employment status was hired
on or after October 6, 2014. Doc. 16 at 2 n.1. It is also why the agreement she electronically
accessed, the one applying to those at the time of hire, was submitted to this Court as Pearson
Decl. Ex. C as opposed to the agreement that was actually meant to be applied to Plaintiff, the
one that detailed the opt-out procedures in the agreement itself, see, e.g., Taylor v. Dollar Tree,
No. 16-2, 2016 WL 6523442, at *2 (N.D. Ind. Nov. 3, 2016) (detailing paragraphs in that
agreement explicitly setting out the opt-out procedures that were not in the agreement viewed by
Standard of Review
"The FAA creates a 'body of federal substantive law of arbitrability, applicable to any
arbitration agreement within the coverage of the Act." In re Am. Express Fin. Advisors Sec.
Litig., 672 F.3d 113, 127 (2d Cir. 2011) (quoting Moses H. Cone Mem'l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 24 (1983)). It "establishes a national policy favoring arbitration when
the parties contract for that mode of dispute resolution" and "calls for the application, in state as
well as federal courts, of federal substantive law regarding arbitration." Id. (quoting Preston v.
Ferrer, 552 U.S. 346, 349 (2008)) (internal quotation marks omitted). The FAA generally
applies to employment agreements. Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119
(2001). There is a liberal policy favoring arbitration agreements, but parties cannot submit to
arbitration disputes they did not so agree to submit. Am. Express, 672 F.3d at 127. However,
any doubts concerning the scope of an agreement to arbitrate "should be resolved in favor of
arbitration" and courts are required "to construe arbitration clauses as broadly as possible." Id. at
128 (internal quotation marks and citations omitted).
In the context of a motion to compel arbitration brought pursuant to the FAA, this Court
"applies a standard similar to that applicable for a motion for summary judgment." Bensadoun v.
Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003). "If there is an issue of fact as to the making of the
agreement for arbitration, then a trial is necessary." Id. (citing 9 U.S.C. § 4). The Second Circuit
follows a two-part test to determine whether claims are subject to arbitration. Am. Express, 672 F.3d
at 128. First, a court considers "whether the parties have entered into a valid agreement to arbitrate."
Id. (citations omitted). Second, if the parties have entered into such an agreement, the court
considers "whether the dispute at issue comes within the scope of the arbitration agreement." Id.
Although the FAA creates a body of federal substantive law regarding arbitration, "in
evaluating whether the parties have entered in a valid arbitration agreement, the court must look to
state law principles." Cap Gemini Ernst & Young, U.S., LLC v. Nackel, 346 F.3d 360, 364 (2d Cir.
2003); see also Hottle v. BDO Seidman LLP, 268 Conn. 694, 704-05 (2004) (quoting and citing,
inter alia, Cap Gemini, 346 F.3d at 364). Under Connecticut law,2 in order for a contract to be valid
there must be a meeting of the minds. Helenese v. Oracle Corp., No. 09-351, 2010 WL 670172, at
*3 (D. Conn. Feb. 19, 2010) (citing Gibbs v. Conn. Gen. Life Ins., 97-0567009, 1998 WL 123010,
at *2 (Conn. Super. Ct. March 3, 1998)). "For a promise to be enforceable against the promisor, the
promisee must have given consideration for the promise, defined as 'a benefit to the party promising,
or a loss or detriment to the party to whom the promise is made.'" Id. (quoting Gibbs, 1998 WL
123010, at *2).
Even without a written contract, such "a legally binding agreement may be inferred from the
parties' conduct when that conduct shows a tacit understanding," given the circumstances.
D'Antuono v. Serv. Road Corp., 789 F. Supp. 2d 308, 324 (D. Conn. 2011) (citing Sandella v. Dick
Corp., 53 Conn. App. 213, 219 (1999)). Moreover, "[t]he FAA generally requires federal courts to
enforce even implied agreements to arbitrate, so long as they are set forth in some writing." Id.
(citing 9 U.S.C. § 2 and Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840, 845 (2d Cir. 1987)).
Thus, if an employee is presented with a written arbitration agreement, it may be irrelevant that the
employee never actually signed it if the employee's consent can be reasonably inferred from the
employee's conduct. See id.
The parties appear to agree that Connecticut law applies to the Arbitration Agreement.
The Court now addresses each of the two-parts of the inquiry required by this Circuit to
determine if this action must be dismissed or arbitration compelled: (1) whether this Arbitration
Agreement is valid, and (2) whether the disputes at issue are the subject of the Arbitration
Agreement. See Am. Express, 672 F.3d at 128. The Court then addresses Plaintiff's additional
arguments and whether to stay or dismiss this action.
Validity of the Arbitration Agreement
It is undisputed that Plaintiff accessed the Arbitration Agreement on two occasions on April
16, 2015, Pearson Decl. ¶ 13 and Ex. B, and Plaintiff did not terminate her employment or opt-out
of Defendant's arbitration program despite materials provided to Plaintiff and to Plaintiff's store
explaining the right to opt-out of the program, Pearson Decl. ¶¶ 8-11 and Ex. A. The materials made
clear that associates would be bound by the Arbitration Agreement if they did not opt-out. Id.
Plaintiff does not take issue with these facts, instead, Plaintiff argues that there was no consideration
supporting the Arbitration Agreement. Doc. 18 at 3-6.3
Plaintiff asserts that under Connecticut law, continued employment is not sufficient
consideration for the employee's promise to arbitration claims. Doc. 18 at 4-5. Defendant responds
by stating that the mutual promise to arbitrate all disputes is the consideration. Doc. 19 at 1-3.
According to Defendant, such mutual promises are sufficient to support an arbitration agreement.
Id. Plaintiff contends that this is "circular logic," but does not cite any case finding that such mutual
agreement cannot support consideration. Doc. 18 at 5.
Plaintiff also does not make any argument addressing the fact that Plaintiff viewed, and
according to Defendant, is bound by an agreement that appears to pertain to employees hired
after October 6, 2014 by its title.
Defendant is correct that mutual promises have been held sufficient to support consideration.
See Topf v. Warnaco, Inc., 942 F. Supp. 762, 767 n.2 (D. Conn. 1996) (explaining that "[m]utual
promises to arbitrate are sufficient to support an arbitration agreement" (citing Robert Lawrence Co.
v. Devonshire Fabrics, Inc., 271 F.2d 402, 411 (2d Cir. 1959)); see also Doctor's Assocs., Inc. v.
Distajo, 66 F.3d 438, 452 (2d Cir. 1995) ( “[W]e [have] suggested that mutual promises to arbitrate
could constitute sufficient consideration to support an arbitration agreement, [though] we did not
exclude the possibility that other consideration could support the agreement.”); Manzin v. United
Bank & Trust Co., 6 Conn. App. 513, 516 (1986) (("[M]utual promises qualify as sufficient
consideration for a binding contract." (citing, inter alia, Gordon v. Indusco Mgmt. Corp., 164 Conn.
262, 267-68 (1973))). Although a number of the cases cited by Defendant apply to when a contract
is modified, see, e.g., Manzin, 6 Conn. App. at 516, other courts have recognized the principle is
equally applicable to agreements to arbitrate in the first instance. See, e.g., Bassett v. Elec. Arts,
Inc., 93 F. Supp. 3d 95, 104-05 (E.D.N.Y. 2015) (applying New York law) (collecting cases). The
Court sees no reason to reach a different conclusion here. Thus, the promise by Defendant to litigate
any disputes it has against Plaintiff in arbitration is sufficient consideration for Plaintiff's promise
to litigate any disputes she has against Defendant in arbitration.4
In any event, even if this mutual promise is not considered adequate consideration Plaintiff's
continued employment does provide such consideration. A number of courts in this District have
held that "[w]here an individual's employment is at-will, continued employment is sufficient
consideration to render an arbitration agreement binding." Comfort v. Mariner Health Care, Inc.,
Plaintiff cites no caselaw supporting her argument that such consideration is "circular"
and fails to elaborate. The Court does not view it as "circular," given that both the employer and
the employee are sacrificing rights related to bringing any claims before a court of law.
No. 04-2142, 2005 WL 977062, at *2 (D. Conn. April 26, 2005) (citing Fahim v. Cigna Invs., Inc.,
No. 98-232, 1998 WL 1967944, at *2 (D. Conn. Sept. 10, 1998)); see also Capone v. Elec. Boat
Corp., 06-1249, 2007 WL1520112, at *6 (D. Conn. May 18, 2007) (same).
The two cases cited by Plaintiff for the opposite conclusion are distinguishable insofar as in
both of those cases, no manifestation of assent had taken place by the employee and/or no clear
arbitration agreement was present. See Helenese, 2010 WL 670172, at *4-5 (holding that
employee's use of an online course and test to alter employment agreement to provide for arbitration
insufficient and where employer made no specific promise to continue employment, this cannot
constitute consideration); Gibbs, 1998 WL 123010, at *3-4 (finding that interoffice memorandum
announcing change in policy, where employee for twenty-five years was never asked to
acknowledge receipt of said change in policy, did not give rise to an enforceable arbitration
agreement). The circumstances are much different here, where there was a specified period to optout, all information was provided to Plaintiff, Plaintiff implicitly assented to the agreement by not
opting-out in the required time period, and Plaintiff continued her employment following the
expiration of the opt-out period.5
Scope of the Agreement
Plaintiff does not dispute that its claims fall within the scope of the Arbitration Agreement.
Indeed, the Arbitration Agreement clearly covers Plaintiff's claims. See Pearson Decl. Ex. C at 1
Plaintiff cites a number of cases in Connecticut that demonstrate that continued
employment is not adequate consideration for a covenant not to compete entered into after
employment has commenced, see, e.g., Cost Mgmt. Incentives, Inc. v. London-Osborne, No. 020463081, 2002 WL 31886860 (Conn. Super. Ct. Dec. 5, 2002). The Court finds such cases
distinguishable based on the circumstances presented here, including the fact that a mutual
promise was made as well as on the authority of the decisions cited above in this District.
(covering "all claims or controversies . . . related to Associate's employment (or its termination)"
including "claims for . . . retaliation or discrimination"). Moreover, the Arbitration Agreement
contains a prototypical broad arbitration clause subjecting a wide array of claims to arbitration,
clearly including these claims. See Peerless Importers, Inc. v. Wine, Liquor & Distillery Workers
Union Local One, 903 F.2d 924, 927 (2d Cir. 1990) ("Where the arbitration clause is broad we have
directed courts to compel arbitration whenever a party has asserted a claim, however frivolous, that
on its face is governed by the contract."); Morales v. Rent-A-Center, Inc., 306 F. Supp. 2d 175, 18283 (D. Conn. 2003) (noting that a clause submitting to arbitration "all claims arising out of Plaintiff's
employment and the termination of employment" is a "prototypical broad arbitration clause" that
presumptively encompasses a plaintiff's discrimination and tort claims (internal quotation marks and
Plaintiff argues that the Arbitration Agreement is unenforceable because it is procedurally
unconscionable. Doc. 18 at 6-7. Defendant responds that because the parties agreed to delegate all
questions of arbitrability, including unconscionability, to an arbitrator that the arbitrator must decide
this particular issue. Doc. 19 at 4-5.6 Alternatively, Defendant argues it is not unenforceable. Id.
Defendant did not make the argument regarding this delegation provision in its initial
brief and does not argue that Plaintiff's argument regarding lack of consideration, addressed by
the Court in Part III(A) of this Ruling, should have been submitted to the arbitrator in the first
instance. Generally, a court need not consider an argument raised first in a reply brief that
should have been raised initially. See Evergreen Nat'l Indem. Co. v. Capstone Bldg. Corp.,
No. 07-01189, 2008 WL 926520, at *2 (D. Conn. March 31, 2008) (citing United States v.
Pepin, 514 F.3d 193, 203 n.13 (2d Cir. 2008)). The Court will consider Defendant's argument
here, made only as it applies to unconscionability, because, regardless of any delegation to the
arbitrator, Plaintiff's arguments fail.
When assessing arbitrability, "'[t]he proper inquiry is whether 'there is clear and
unmistakable evidence from the arbitration agreement, as construed by the relevant state law, that
the parties intended that the question of arbitrability shall be decided by the arbitrator[s].'" Murray
v. UBS Sec., LLC, No. 12-5914, 2014 WL 285093, at *12 (S.D.N.Y. Jan. 27, 2014) (quoting Alliance
Bernstein Inv. Research & Mgmt., Inc. v. Schaffran, 445 F.3d 121, 125 (2d Cir. 2006)) (emphasis
in original). The Second Circuit has held that if parties explicitly incorporate rules that provide for
an arbitrator to resolve the issues of arbitrability, then that incorporation is sufficient "clear and
unmistakable evidence" of the intent to delegate such issues. Id. (citing Schneider v. Kingdom of
Thailand, 688 F.2d 68, 72 (2d Cir. 2012)). The same is likely true in Connecticut which also
requires clear evidence of the parties' intention to arbitrate arbitrability. See id. (citing Bell v.
Cendant Corp., 293 F.3d 563, 567-68 (2d Cir. 2002) and AFSCME, Council 4, Local 1303-325 v.
Town of Westbrook, 309 Conn. 767, 773 (2013)).
The Arbitration Agreement contains a provision which incorporates the "then-current JAMS
Employment Arbitration Rules & Procedures," Pearson Decl. Ex. C at 2, which provide that
"[j]urisditional and arbitrability disputes, including disputes over the formation, existence, validity,
interpretation or scope of the agreement . . . shall be submitted to and ruled on by the Arbitrator."
See JAMS Employment Arbitration Rules & Procedures, Rule 11(b), accessible at
http://www.jamsadr.com/rules-employment-arbitration (last visited January 26, 2017). The JAMS
rules, explicitly incorporated into this Arbitration Agreement, empower an arbitrator to decide the
gateway issues of arbitrability. The Second Circuit and courts in this District have recognized that
an arbitration agreement providing that JAMS Rules apply may be sufficient to conclude that the
arbitrator has been delegated the task of deciding all issues relating to arbitrability. See Emilio v.
Sprint Spectrum LP, 508 F. App'x 3, 5-6 (2d Cir. 2013) (summary order); Slidell v. Structured
Settlement Invs., LP, No. 08-00710, 2009 WL 103518, at *2-3 (D. Conn. Jan. 14, 2009).
Thus, the parties agreed to allow the arbitrator to decide issues relating to arbitrability
disputes, including the current dispute over unconscionability. See Doctor's Assocs., Inc. v. Pahwa,
No. 16-00446, 2016 WL 7635748, at *18 (D. Conn. Nov. 3, 2016) (noting that the Supreme Court
has recognized that parties can agree to arbitrate gateway questions of arbitrability including
whether the agreement is unconscionable), aff'd, adopted & ratified, 2016 WL 7410782 (D. Conn.
Dec. 2, 2016). Such a conclusion is warranted in light of the fact that the incorporation demonstrates
the parties' clear and unmistakable intention to arbitrate arbitrability. See, e.g., Murray, 2014 WL
285093, at *12.
In any event, regardless of whether an arbitrator should decide this issue, Plaintiff's
arguments on the merits are wholly inadequate. Plaintiff fails to allege or argue that the Arbitration
Agreement is substantively unconscionable. Under Connecticut law, Plaintiff was required to show
that the contract is "both procedurally and substantively unconscionable." D'Antuono, 789 F. Supp.
2d at 327 (citing Bender v. Bender, 292 Conn. 696, 732 (2009)) (emphasis added). Because Plaintiff
makes no argument as the substantive unconscionability of the Arbitration Agreement, Plaintiff's
claim that the Arbitration Agreement is unenforceable fails.
Stay or Dismissal of Action
Having concluded that all of Plaintiff's claims must be submitted to arbitration, the Court will
dismiss Plaintiff's Complaint without prejudice to her right to replead when arbitration has been
completed. Although the FAA directs district courts to enter stays where the asserted claims are
referable to arbitration, 9 U.S.C. § 3, courts nevertheless may dismiss actions where all of the claims
asserted must be submitted to arbitration. See Pingel v. Gen. Elec. Co., No. 14-00632, 2014 WL
7334588, at *11 (D. Conn. Dec. 19, 2014) (collecting cases).
For the foregoing reasons, the Court hereby grants Defendants' Motion to Dismiss the
Complaint or to Stay the Proceedings and Compel Arbitration (Doc. 15). Specifically, the Court
GRANTS Defendant's Motion to Dismiss the Complaint and to Compel Arbitration and DENIES
AS MOOT Defendant's alternative Motion to Stay the Proceedings and Compel Arbitration. The
clerk is directed to administratively close the case. Parties will have the right to re-open this case
if further action by the Court is necessary after arbitration.
It is SO ORDERED.
Dated: New Haven, Connecticut
January 30, 2017
/s/ Charles S. Haight, Jr.
CHARLES S. HAIGHT, JR.
SENIOR UNITED STATES DISTRICT JUDGE
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