Taylor v. Berham

Filing 35

OPINION AND ORDER GRANTING 17 MOTION to Dismiss, or in the Alternative to Stay, and to Compel Arbitration filed by Dollar Tree, Bret Bertram. Because all of the issues raised in the Amended Complaint must be submitted to arbitration, it is DISMISSED WITHOUT PREJUDICE. Signed by Judge Theresa L Springmann on 11/3/16. (cc: Curtis D Taylor). (cer)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
CURTIS D. TAYLOR,
Plaintiff,
v.
DOLLAR TREE, and BRET BERTRAM,
Defendants.

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CAUSE NO.: 3:16-CV-2-TLS

OPINION AND ORDER
Curtis D. Taylor, a Plaintiff proceeding pro se, has sued his former employer, the Dollar
Tree, and Bret Bertram (erroneously sued as Bret Berham) for discrimination and retaliation
under Title VII of the Civil Rights Act of 1964. This matter is before the Court on the
Defendants’ Motion to Dismiss, or in the Alternative to Stay, and to Compel Arbitration [ECF
No. 17]. The Defendants request that the Court dismiss all claims against the Defendants or, in
the alternative, stay this action pursuant to the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et
seq. and Rule 12 of the Federal Rules of Civil Procedure, and compel the parties to pursue
arbitration. For the reasons stated herein, the Court dismisses the Plaintiff’s Amended Complaint
[ECF No. 4].

STANDARD OF REVIEW
As evidence in support of its Motion, the Defendants have included the Declarations of
David McDearmon, Steven Pearson, and Steven F. Pockrass, with accompanying exhibits. In the
spirit of Lewis v. Faulkner, 689 F.2d 100, 102 (7th Cir. 1982), the Defendants provided a Notice
[ECF No. 23] to the Plaintiff to explain the nature of its Motion and the Plaintiff’s obligation to
respond, including his obligations if the Court treated the Motion as a summary judgment

motion. The Notice advised the Plaintiff that if he disagreed with the facts in Defendants’
Motion, he was required to submit affidavits or other evidence to dispute those facts.
Additionally, during a combined show cause and status conference held on August 11, 2016, the
Court gave the Plaintiff until October 11, 2016, to response to the Defendants’ Motion.
While the FAA does not expressly identify the evidentiary standard a party seeking to
avoid compelled arbitration must meet, courts have analogized the standard to that required of a
party opposing summary judgment under Rule 56. Tinder v. Pinkerton Sec., 305 F.3d 728, 735
(7th Cir. 2002). That is, “the opposing party must demonstrate that a genuine issue of material
fact warranting a trial exists.” Id. “Just as in summary judgment proceedings, a party cannot
avoid compelled arbitration by generally denying the facts upon which the right to arbitration
rests; the party must identify specific evidence in the record demonstrating a material factual
dispute for trial.” Id. The Court also notes that the summary judgment standard is appropriate
because the Defendants have presented matters outside the pleadings in support of their Motion
to Dismiss. See Fed. R. Civ. P. 12(d). The Plaintiff was given a reasonable opportunity to present
material pertinent to the Defendants’ Motion, but has not filed a response. Accordingly, the
Court will consider whether the facts presented by the Defendants support the conclusion that the
parties have entered into an arbitration agreement that is applicable to the Plaintiff’s claims.

STATEMENT OF FACTS
The Defendants maintain that Dollar Tree and the Plaintiff entered into an arbitration
agreement to arbitrate all claims arising out of or related to the Plaintiff’s employment at Dollar
Tree, including claims against Dollar Tree and against other Dollar Tree employees.

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According to the designated evidence, Dollar Tree implemented an Arbitration Program
in 2014. On April 23, 2015, the Plaintiff electronically accessed information regarding Dollar
Tree’s Arbitration Program, including the Arbitration Agreement. The Plaintiff could choose to
opt out of the Arbitration Program because he was hired before implementation of the Program.1
The opt-out procedures and deadline were communicated to the Plaintiff. For example, page 4 of
the Arbitration Agreement set forth the opt-out procedure, with the opt-out deadline printed in
bold:
Associate is not required to agree to arbitration. Associate may opt out of (that is,
decline to be bound by) this Agreement by (i) completing an electronic Opt-Out
Form at www.dtarbitration.com or (ii) postmarking and mailing (by registered or
certified mail) a paper Opt-Out Form, which can also be found at
www.dtarbitration.com, to Dollar Tree Arbitration c/o Chief Legal Officer, 500
Volvo Parkway, Chesapeake, VA 23320. Associate must opt out by May 31,
2015. Associate’s decision not to opt out by May 31, 2015 constitutes
Associate’s assent to, and agreement to be bound by, this
Agreement.
Once Dollar Tree receives the Opt-Out Form from Associate, either by mail or
electronically, Dollar Tree will acknowledge receipt of it in writing, either by
email or by first class mail, at the address set forth by Associate on the Opt-Out
Form. Associate’s decision not to opt out must be confirmed in writing by Dollar
Tree before the Opt-Out decision can be effective. If Associate files an Opt-Out
Form and does not receive a written acknowledgment from Dollar tree within
three weeks, the Associate should immediately send an email to
[e-mail].
(Pearson Decl. Ex. C, ECF No. 19-2 at 26.) Additionally, a Flyer was distributed to employees.
It advised employees hired before October 6, 2014, of their right to opt out of the Arbitration
Program:
While Dollar Tree believes arbitration is a good idea, Associates hired before

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Employees hired before October 6, 2014, were required to participate in the Arbitration
Program as a condition of employment.

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October 6, 2014 have a one-time right to opt out of (that is, decline to participate
in) Dollar Tree’s Arbitration Program. The deadline for opting out of arbitration
is May 31, 2015. Information about how to opt out is in the Arbitration
Agreement and on Dollar Tree’s arbitration website www.dtarbitration.com
(Id. Ex. A-3, ECF No. 19-2 at 15.) The Plaintiff did not opt out of the Arbitration Agreement.
In the Arbitration Agreement, the parties agreed to arbitrate all claims arising out of or
related to an associate’s employment or termination, including claims of discrimination or
retaliation. This included claims under federal, state, or local law. According to the Agreement,
“[c]laims subject to arbitration include, but are not limited to, claims for . . . retaliation or
discrimination (including, but not limited to, race, sex, sexual orientation, religion, national
origin, age, marital status, physical or mental disability or handicap, or medical condition).” (Id.
Ex. C, ECF No. 19-2 at 23.) The Agreement specifies that the FAA is the governing law.
Before the Plaintiff filed his Amended Complaint, counsel for the Defendants sent the
Plaintiff a letter reminding him that he had entered into a binding arbitration agreement with
Dollar Tree. (Pockrass Decl. ¶ 5 & Ex. A, ECF No. 19-3.) Counsel enclosed a hard copy of the
Plaintiff’s executed Arbitration Agreement, along with the applicable arbitration rules and
procedures. About a month later, the Plaintiff filed his Amended Complaint, alleging that during
his employment, he was subjected to discrimination and retaliation in violation of Title VII. The
Amended Complaint also named his supervisor as a Defendant.

ANALYSIS
The determination of whether parties are contractually bound to arbitrate and what issues
they are bound to arbitrate are matters to be determined by the court. Granite Rock Co. v. Int’l
Bhd. of Teamsters, 561 U.S. 287, 296 (2010); AT&T Techs., Inc. v. Commc’ns Workers of Am.,
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475 U.S. 643, 649, 651 (1986) (stating that “[i]t is the court’s duty to interpret [an] agreement
and to determine whether the parties intended to arbitrate”); Cont’l Cas. Co. v. Am. Nat’l Ins.
Co., 417 F.3d 727, 730 (7th Cir. 2005). The FAA applies to employment agreements. Circuit
City Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001). Although the FAA “‘favors resolution of
disputes through arbitration, its provisions are not to be construed so broadly as to include claims
that were never intended for arbitration.’” Cont’l Cas. Co., 417 F.3d at 730 (quoting Am. United
Logistics, Inc. v. Catellus Dev. Corp., 319 F.3d 921, 929 (7th Cir. 2003)). The parties must have
agreed in advance to submit the disputes to arbitration because the arbitration agreement is the
source of the arbitrator’s authority to resolve those disputes, and a party may not be forced to
arbitrate any dispute that the party did not agree to arbitrate. AT&T Techs., 475 U.S. at 648–49.
Courts must be mindful that the FAA “‘is a congressional declaration of a liberal federal policy
favoring arbitration agreements’ and ‘that questions of arbitrability must be addressed with a
healthy regard for the federal policy favoring arbitration.’” Cont’l Cas. Co., 417 F.3d at 730–31
(quoting Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24 (1983)).
“Under the [FAA], arbitration may be compelled if the following three elements are
shown: a written agreement to arbitrate, a dispute within the scope of the arbitration agreement,
and a refusal to arbitrate.” Zurich Am. Ins. Co. v. Watts Indus., 417 F.3d 682, 690 (7th Cir.
2005). “[T]he party resisting arbitration bears the burden of proving that the claims at issue are
unsuitable for arbitration.” Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91 (2000).
Courts must order arbitration of claims “unless it may be said with positive assurance that the
arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” AT&T
Techs., 475 U.S. at 650.

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Federal courts rely on state contract law to determine whether an arbitration agreement
constitutes a valid contract. See First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995);
Faulkenberg v. CB Tax Franchise Sys., LP, 637 F.3d 801, 809 (7th Cir. 2011). “Indiana courts
apply ordinary contract principles to arbitration agreements.” Gibson v. Neighborhood Health
Clinics, Inc., 121 F.3d 1126, 1130 (7th Cir. 1997). Thus, like other contracts, arbitration
agreements may be invalidated by “generally applicable contract defenses, such as fraud, duress,
or unconscionability.” Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996).
The undisputed facts show that the Plaintiff and Dollar Tree entered into a valid
agreement to arbitrate employment disputes. See Straub v. B.M.T. by Todd, 645 N.E.2d 597, 598
(Ind. 1995) (setting forth the traditional contract elements of an offer, acceptance, and
consideration). The Plaintiff accepted Dollar Tree’s offer to arbitrate all disputes he had with his
employer when he did not exercise his right to opt out of the Arbitration Agreement. See
Johnson v. Harvest Mgmt. Sub TRS Corp.—Holiday Ret., No. 3:15-CV-26-RLY-WGH, 2015
WL 5692567, at *4 (S.D. Ind. Sept. 25, 2015) (stating that assent may be expressed by acts that
manifest acceptance, including not opting out of an arbitration agreement that contains an
opt-out provision) (citing Nationwide Ins. Co. v. Heck, 873 N.E.2d 190, 196 (Ind. Ct. App.
2007)); see also Versmesse v. AT&T Mobility LLC, No. 3:13-CV-171, 2014 WL 856447 (N.D.
Ind. Mar. 4, 2014). The Arbitration Agreement clear stated that any employee who wanted to opt
out could do so, but if the employee did not opt out by the deadline, he would be bound by the
Arbitration Agreement. The Plaintiff accessed the Arbitration Agreement, but did not opt out of
the Agreement by the deadline, and therefore assented to its terms.
Moreover, page 4 of the Arbitration Agreement states: “Consideration: The promises by

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Dollar Tree and by Associate to arbitrate disputes, rather than litigate them before courts or other
bodies, provide consideration for each other.” (Pearson Decl. Ex. C, ECF NO. 19-2 at 26.)
Courts have recognized that “a mutual promise to arbitrate future disputes constitutes
consideration.” Johnson, 2015 WL 5692567, at *4; see also Michalski v. Circuit City Stores,
Inc., 177 F.3d 634, 636 (7th Cir. 1999) (holding that an employer’s “promise to be bound by the
arbitration process itself serves as mutual consideration”); Nuzzi v. Coachmen Indus., Inc., No.
3:09-CV-116, 2009 WL 3851364, at *5 (N.D. Ind. Nov. 16, 2009) (noting that consideration
exists where “the employer is willing to give up its own legal right to defend itself in court, and
submit its defense to arbitration”); Jenks v. Workman, No. IP99-1389, 2000 WL 962821, at *5
(S.D. Ind. June 22, 2000).
The claims raised in the Plaintiffs’ Amended Complaint—race discrimination and
retaliation in violation of Title VII—fall within the scope of the Arbitration Agreement. The
supervisor named in the Amended Complaint, as a third-party beneficiary to the Arbitration
Agreement, may also compel arbitration as long as the relevant state contract law recognizes the
enforceability of an arbitration agreement for the benefit of a third party. Arthur Andersen LLP v.
Carlisle, 556 U.S. 624, 631 (2009); Cont’l Cas. Co., 417 F.3d at 727, 735. Indiana law allows a
third-party beneficiary to enforce a contract, including an arbitration agreement, as long as the
third-party beneficiary was intended to be protected under the agreement by the imposition of a
duty in the beneficiary’s favor. Garco Indus. Equip. Co. v. Mallory, 485 N.E.2d 652, 654 (Ind.
Ct. App. 1986). The intent of the contracting parties “may be demonstrated by specifically
naming the third-party or by other evidence.” Barth Elec. Co. v. Traylor Bros., 553 N.E.2d 504,
506 (Ind. Ct. App. 1990). Here, the terms of the Arbitration Agreement include claims against

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Dollar Tree’s “officers, directors, employees, or agents in any capacity.” (Pearson Decl. Ex. C,
ECF NO. 19-2 at 23.)
The Plaintiff, by filing the Amended Complaint, has demonstrated a refusal to arbitrate
his claims. Because the Plaintiff and Dollar Tree contracted for the process set forth in the
Arbitration Agreement to be the sole avenue of redress for the Plaintiff’s employment
discrimination claims, his claims cannot proceed in this Court but must be resolved through
arbitration.

CONCLUSION
For the foregoing reasons, the Defendants’ Motion [ECF No. 17] is GRANTED. Because
all of the issues raised in the Amended Complaint must be submitted to arbitration, it is
DISMISSED WITHOUT PREJUDICE.
SO ORDERED on November 3, 2016.
s/ Theresa L. Springmann
THERESA L. SPRINGMANN
UNITED STATES DISTRICT COURT
FORT WAYNE DIVISION

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