First Tower Loan, LLC et al v. Broussard
Filing
24
ORDER AND REASONS: ORDERED that Defendant's Motion to Compel Arbitration, Appoint Arbitrator and to Stay Proceedings (Rec. Doc. 85 filed in CA 15-1161) is GRANTED. FURTHER ORDERED that the Court appoints the American Arbitration Association a s the arbitral forum to administer arbitration of the dispute between Broussard and Tower. FURTHER ORDERED that Defendant's Motion to Stay EEOC Claims Pending Arbitration (Rec. Doc. 96 in CA 15-1161) is GRANTED. FURTHER ORDERED that all proce edings in this matter shall be STAYED pending the outcome of the arbitration between Broussard and Tower. The Clerk of Court shall mark this action closed for statistical purposes. FURTHER ORDERED that the Court shall retain jurisdiction and that t he case shall be restored to the trial docket upon motion of a party if circumstances change, so that it may proceed to final disposition. This order shall not prejudice the rights of the parties to this litigation. Signed by Judge Carl Barbier on 12/9/15.(sek)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
TRISTAN BROUSSARD
CIVIL ACTION
VERSUS
NO: 15-1161
c/w 15-2500
FIRST TOWER LOAN, LLC
SECTION: “J”(1)
ORDER & REASONS
Before the Court is a Motion to Compel Arbitration, Appoint
Arbitrator
and
to
Stay
Proceedings
(Rec.
Doc.
85)
filed
by
Defendant, First Tower Loan, LLC (“Tower”); an opposition thereto
(Rec.
Doc.
99)
filed
by
Intervenor,
the
United
States
Equal
Employment Opportunity Commission (“EEOC”); an opposition (Rec.
Doc. 102) filed by Plaintiff, Tristan Broussard (“Broussard”); and
Defendant’s
reply
(Rec.
Doc.
107).
Also
before
the
Court
is
Defendant’s Motion to Stay EEOC Claims Pending Arbitration (Rec.
Doc. 96), the EEOC’s opposition (Rec. Doc. 100), Plaintiff’s
opposition (Rec. Doc. 103), and Defendant’s reply (Rec. Doc. 110).
Having considered the motion and legal memoranda, the record, and
the applicable law, the Court finds that the motions should be
GRANTED for the reasons set forth more fully below.
FACTS AND PROCEDURAL BACKGROUND
This
litigation
derives
from
Broussard’s
employment
with
Tower and subsequent termination. Broussard is a twenty-one-yearold resident of Lake Charles, Louisiana. (Rec. Doc. 1 at 2.) Tower
is a consumer loan company, headquartered in Mississippi, with
branches in five states, including Louisiana. Id. at 3. Broussard
is a transgender man, meaning he outwardly appears to be male and
his gender identity is male. Id. at 4. However, his birth sex is
female. Id.
In early February 2013, Broussard applied for a job as a
Manager Trainee in Tower’s Lake Charles office. Id. at 1. Leah
Sparks, the manager of Tower’s Lake Charles office, interviewed
Broussard for the position on February 25, 2013. Id. at 4. Later
that same day, Sparks called Broussard to offer him the position.
Id. Broussard accepted the position and began working for Tower on
March 4, 2013. Id.
When Broussard arrived for his first day of work, Sparks
presented him with the paperwork required to be completed by new
employees. These materials included Tower’s Employment Agreement,
which contains the following arbitration provision: “Except for
the injunctive relief authorized by the foregoing paragraph, 1 all
other disputes, legal or otherwise, relating to the employment
relationship shall be submitted to binding arbitration by the
1 Paragraph 4 of the Employment Agreement permits Tower to seek injunctive
relief in the Chancery Court of Rankin County, Mississippi: “Upon actual or
threatened breach of this Agreement, Tower shall be entitled to a temporary
restraining order, preliminary injunction, and permanent injunction restraining
and prohibiting any conduct prohibited by this Agreement. . . . The parties
agree that the Chancery Court of Rankin County, Mississippi, shall have personal
jurisdiction over the parties for enforcement of this agreement . . . . The
parties further agree that the venue for purposes of obtaining an injunction is
Rankin County Chancery Court, such venue is mandatory, and to the exclusion of
all other venues in Mississippi or elsewhere.” (Rec. Doc. 85-2, at 4.)
2
parties.” (Rec. Doc. 85-2, at 4) (emphasis added). The Employment
Agreement also states, “Signature by the employee on this contract
constitutes an offer of employment by the employer, which offer is
not accepted, and neither an employment relationship nor contract
is formed or consummated until Tower signs this contract at its
corporate
headquarters
in
Rankin
County,
Mississippi.”
Id.
Broussard signed the Employment Agreement in Sparks’s presence on
March 4, 2013. Id.
In
addition,
the
paperwork
included
a
separate
document
extending an offer of employment to Broussard “(Acceptance Form”),
which Sparks signed on behalf of Tower. Id. at 3. The Acceptance
Form states, “We are pleased to make you an offer of employment.
. . . Please indicate your acceptance of our offer by signing your
name at the bottom of this page.” Id. Further, it provides that
“[t]he terms of your employment offer are governed by the terms
outlined in the employment agreement you will sign.” Id. Broussard
signed the Acceptance Form in Sparks’s presence on March 4, 2013.
Id.
Sparks
then
forwarded
Broussard’s
paperwork
to
Tower’s
headquarters in Mississippi. Id. at 2. Tower received Broussard’s
Employment
Agreement
and
other
new-hire
materials
at
its
headquarters on March 7, 2013, and stamped them as “received” with
that date. (Rec. Doc. 85-3, at 2.)
Tower also required Broussard to provide a valid form of
identification.
(Rec.
Doc.
1,
at
3
5.)
Broussard
provided
his
driver’s license. Id. As Broussard completed the paperwork for his
employment with Tower, Sparks noticed that his driver’s license
listed his sex as female. Id. at 5. When Sparks asked Broussard
about the listed sex, he explained that he is a transgender man.
Id.
On March 11, 2013, Tower Loan Vice President David Morgan
visited the Lake Charles office. Id. at 6. Morgan gave Broussard
a copy of the company’s dress code for female employees and
informed Broussard that the company would require him to dress as
female.
Id.
Morgan
also
presented
Broussard
with
a
written
statement and told him that he must sign the statement in order to
continue working at Tower. Id. at 7. The statement expressed that
Broussard’s “preference to act and dress as male” was not “in
compliance with Tower Loan’s personnel policies.” Id. Further, the
statement indicated that when an overnight room is required for
out-of-town meetings, Broussard would be assigned to a room with
a female. Id. Broussard refused to sign the statement, and his
employment terminated. 2 Id.
After
Broussard’s
new-hire
paperwork
arrived
at
Tower’s
headquarters on March 7, 2013, it was processed in the regular
course
of
business.
(Rec.
Doc.
85-3,
at
2.)
The
Employment
2
The parties dispute whether Tower affirmatively terminated Broussard’s
employment or Broussard resigned. However, this dispute is immaterial. Whether
Broussard was fired, quit, or was constructively discharged has no bearing on
the motions presently before the Court.
4
Agreement and other forms were reviewed by administrative staff
for completeness and were thereafter presented to J. Lynne Card,
Tower’s Vice President and Director of Human Resources, for her
signature on behalf of Tower. Id. Card reviewed Broussard’s file
and signed the Employment Agreement no later than March 26, 2013. 3
Broussard filed a charge of discrimination with the EEOC on
August 27, 2013. (Rec. Doc. 1, at 8.) The EEOC determined that
Broussard’s claim was meritorious and issued a Notice of Right to
Sue on January 20, 2015. Id. at 8-9. Broussard filed the instant
action on April 13, 2015, asserting claims against Tower for
discrimination on the basis of sex in violation of Title VII of
the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e, et
seq. (Rec. Doc. 1, at 9.) In response, on April 23, 2015, Tower
filed suit against Broussard in the Chancery Court of Rankin
County, Mississippi, seeking to compel Broussard to arbitrate the
claims asserted in his action against Tower. (No. 15-2500, Rec.
Doc. 1.) On May 26, 2015, Broussard removed Tower’s suit to the
United
States
District
Court
for
the
Southern
District
of
3 Card determined that she signed the Employment Agreement no later than March
26 based on the data reflected in Tower’s electronic business record. (Rec.
Doc. 85-3, at 3.) Specifically, Tower’s payroll data system reflects that
Broussard’s employment was entered as “Approved,” and a date notation for this
data filed indicates that the form was last updated on March 26, 2013. Id.
However, based on the regular flow of new-hire paperwork in the office, and
given that March 26 was a Tuesday, Card believes that she signed Broussard’s
Employment Agreement on either Monday, March 25, or Friday, March 22. Id. The
exact date that Card signed the agreement is immaterial. Whether Card signed
agreement on March 22, March 25, or March 26 has no bearing on the motions
presently before the Court.
5
Mississippi. Id. Upon Broussard’s motion, on July 7, 2015, the
Southern District of Mississippi transferred Tower’s suit to this
Court, where it was consolidated with Broussard’s case. (No. 152500, Rec. Doc. 18.) Thereafter, on September 8, 2015, the EEOC
filed a motion to intervene, which the Court granted. (Rec. Doc.
70.)
Tower filed the instant Motion to Compel Arbitration, Appoint
Arbitrator and to Stay Proceedings (Rec. Doc. 85) on November 5,
2015, and Motion to Stay EEOC Claims Pending Arbitration (Rec.
Doc. 96) on November 16, 2015. The EEOC and Broussard filed their
oppositions on November 24, 2015. With leave granted from the
Court, Tower filed a reply in support of its motion to compel
arbitration on December 2, 2015, and a reply in support of its
motion to stay on December 3, 2015. The motions are before the
Court on the briefs, without oral argument.
PARTIES’ ARGUMENTS
A.
Motion to Compel Arbitration
Tower contends that all of the Title VII claims asserted in
Broussard’s complaint are subject to and within the scope of a
mandatory
arbitration
agreement
between
Broussard
and
Tower.
First, Tower argues that a valid arbitration agreement exists
within the Employment Agreement signed by both parties. (Rec. Doc.
85-1, at 5-6.) As Tower points out, the Agreement makes clear that
Broussard’s signature on the document constituted an “offer of
6
employment by the employee.” Id. at 7. Because the Agreement did
not contain an expiration date, Tower claims it was a revocable
offer. Id. at 8. Tower maintains that it accepted the offer in a
reasonable amount of time, and therefore the agreement to arbitrate
became effective when Card signed the Agreement on its behalf. Id.
Next, Tower argues that Broussard’s termination does not
constitute a revocation or rejection of the offer. Id. at 8-9.
According to Tower, termination of employment merely signifies an
end to the employment relationship that is governed by the terms
of the Employment Agreement. Id. at 8. Moreover, Tower claims that
termination of Broussard’s employment is irrelevant. Id. at 10.
Because the Agreement plainly covers disputes regarding allegation
of wrongful discharge, which cannot be alleged where an employee
is
still
employed,
Tower
insists
that
the
Agreement
clearly
contemplates that the arbitration provision will survive potential
termination. Id. at 11.
Tower further submits that Broussard would be bound to the
arbitration provision even if Tower had never signed the Agreement.
Id. at 9. Tower claims that “under Louisiana law, where one party
drafts and presents a contract and the other party signs it, the
contract is valid and binding upon the signing party, even where
the other party fails to sign the contract.” Id. Additionally,
Tower argues that because Broussard accepted the benefits of the
7
Agreement, the ability to begin employment with Tower, he is bound
by all of the terms of the Agreement. Id.
In addition, Tower contends that the Acceptance Form, by which
Tower offered and Broussard accepted Tower’s offer of employment,
constitutes a valid agreement to arbitrate, irrespective of the
timing of when Tower eventually signed the Employment Agreement.
Id. at 10. Tower asserts that the Acceptance Form incorporated the
terms of the Employment Agreement by reference, including the
arbitration provision. Id. For this reason, Tower argues Broussard
independently agreed to arbitrate all employment disputes based on
his signature on the Acceptance Form. Id.
Next, Tower asserts that Broussard’s claims fall within the
scope
of
the
arbitration
provision,
which
requires
that
any
employment-related disputes be subject to arbitration. Id. at 16.
According to Tower, the “any dispute” language in an arbitration
clause is permissible and, as is the case here, can encompass Title
VII claims in the context of an employment dispute. Id. at 17.
Moreover, because the arbitration clause is broad, Tower argues
that any dispute regarding whether Broussard’s claims fall within
the scope of the arbitration clause should be resolved by the
arbitrator. Id.
Lastly,
because
Tower’s
efforts
to
reach
agreement
with
Broussard’s counsel on an arbitrator have been unsuccessful, Tower
requests
that
the
Court
appoint
8
the
American
Arbitration
Association (“AAA”) to conduct the arbitration pursuant to its
protocol for resolution of employment disputes. Tower explains
that the AAA has a process by which the parties can select a wellqualified employment law arbitrator from among a panel randomly
proposed by the AAA. Id. at 20.
Broussard presents several arguments in opposition to Tower’s
motion.
(Rec.
Doc.
102.)
First,
Broussard
argues
that
Tower
rejected his “offer of employment” on March 11, 2013, when it fired
him. Id. at 1. Broussard maintains that Tower could not later
revive that offer by signing the Employment Agreement. Id. at 2.
Second, because Tower fired him, Broussard claims no consideration
to
create
a
binding
agreement
existed
when
Tower
signed
the
Employment Agreement. Id. Third, Broussard argues that the express
terms
of
the
Agreement,
which
provide
that
no
“employment
relationship” existed unless and until Tower signed the Agreement,
preclude arbitration of any events that occurred prior to March
22, 2013. Id. Fourth, Broussard asserts that Tower’s insistence
that he agree to present himself as a female at work constituted
a counteroffer to the Employment Agreement, which he promptly
rejected. Id. Fifth, Broussard contends that Tower waived any
present right to force arbitration because of its “aggressive
litigation” of this case. Id. In addition, Broussard insists that
the
Acceptance
Form
does
not
create
a
binding
contract
to
arbitrate. Id. at 16. If the Acceptance Form incorporates the terms
9
of the Employment Agreement, Broussard argues it would necessarily
incorporate
the
term
specifying
that
the
proposed
employment
agreement constituted an offer of employment by Broussard that was
not
accepted
until
signed
by
Tower’s
representative
at
its
corporate headquarters. Id. at 16-17.
Similar to Broussard, the EEOC presents several arguments in
opposition to Tower’s motion. (Rec. Doc. 99.) As an initial matter,
the EEOC claims that the Court must treat Tower’s motion to compel
as
a
motion
for
summary
judgment,
thereby
construing
all
ambiguities in the facts in the light most favorable to Broussard
and the EEOC. Id. at 2 nn.3-4. Many of the EEOC’s arguments
concerning the formation of an arbitration agreement are analogous
to Broussard’s arguments discussed above; however, the EEOC raises
two additional arguments. First, the EEOC contends that even if
there had been a contract, Tower has not established that Broussard
knowingly and voluntarily waived his right to a trial by jury. Id.
at 11-16. Although the Fifth Circuit has never expressly decided
the issue, the EEOC argues that Tower bears the burden of showing
that a voluntary and knowing waiver occurred. Id. at 13 & n.11.
Second, the EEOC argues that the arbitration provision at issue
violates section 707 of Title VII because it purports to foreclose
the filing of an EEOC charge. Id. at 16-18. For this reason, the
EEOC claims the contract would be unenforceable as against public
policy. Id. at 18.
10
In response, Tower claims that Broussard’s arguments have no
merit for several reasons. (Rec. Doc. 107.)
First, Tower argues
that the EEOC’s claim that the motion before the Court is a type
of
motion
for
summary
judgment
is
incorrect.
Id.
at
2
n.2.
According to Tower, disputes of fact here are not automatically
resolved in favor of the nonmoving party, but instead are to be
resolved by the Court based on the evidence. Id. Second, Tower
claims that Broussard offers no evidence that it rejected the
Employment Agreement. Id. at 3. To contrary, Tower repeats that it
is
undisputed
Furthermore,
that
Tower
it
signed
maintains
the
that
Employment
termination
Agreement.
of
Id.
Broussard’s
employment is not inconsistent with and does not constitute a
rejection
of
the
Employment
Agreement
as
to
that
period
of
employment that had already taken place as of the date it was
signed by Tower. Id. Similarly, Tower claims that there is no
evidence that Broussard withdrew his offer before it was accepted
by Tower and nothing in the Agreement imposed a deadline for Tower
to sign it. Id.
Further, Tower contests the argument that the memorandum
presented to Broussard concerning the dress code and lodging issues
was a counteroffer. Id. at 4. According to Tower, the memorandum
“did not seek to start a new employment relationship, but instead
clarified the terms and conditions of continued at-will employment
which Broussard declined.” Id. Next, Tower explains that Louisiana
11
law does not require “consideration,” but instead looks to whether
there is a lawful “cause” to support the existence of the contract.
Id. at 5. Tower maintains that proceeding with an employment
relationship was indisputably a lawful cause sufficient to support
a valid employment-related agreement. Id. Further, Tower notes
that Broussard did in fact commence employment with the company as
contemplated, such that this cause was not illusory. Id.
Tower also contends that Broussard fails to avoid the binding
effects of the Acceptance Form, a separate agreement that was
executed
by
the
parties
prior
to
the
start
of
Broussard’s
employment with the company. Id. at 5. Moreover, Tower responds
that Broussard’s argument that incorporation of the arbitration
provision by reference into the Acceptance Form included the
requirement that the Employment Agreement be signed by Tower
ignores the fact that the Agreement was in fact signed by Tower.
Id.
Next, Tower asserts that the Fifth Circuit has expressly
rejected the EEOC’s argument that requiring a plaintiff to submit
claims to arbitration violates the plaintiff’s Seventh Amendment
right to a trial by jury. Id. at 9. According to Tower, Broussard
voluntarily agreed to submit claims against Tower to arbitration
by
signing
the
Employment
Agreement
containing
the
valid
arbitration provision and, by doing so, he relinquished his right
to demand that his claims be heard by a jury. Id. In response to
12
the EEOC’s argument that the Agreement is void under Title VII
because it did not expressly reserve Broussard’s right to file an
EEOC charge, Tower argues that the EEOC fails to cite any authority
for this assertion. Id. at 10. Moreover, Tower insists that it
never
attempted
such
a
waiver
in
the
Employment
Agreement,
Acceptance Form, or otherwise. Id. To the contrary, Tower points
out it is undisputed that an EEOC charge was filed on Broussard’s
behalf and fully processed by the EEOC. Id.
Lastly, Tower rejects Broussard’s argument that it waived the
right to compel arbitration. Id. at 6. According to Tower, there
is a presumption against waiver of arbitration and Broussard bears
the heavy burden of proving that Tower waiver its right. Id.
Furthermore, Tower claims it asserted its right to arbitration in
its Answer to the Complaint and has at all times expressed to
counsel for Broussard and the EEOC that it considered Broussard’s
claims to be subject to arbitration. Id. at 7. Additionally, Tower
points
out
that
the
purpose
of
the
state
court
action
in
Mississippi was solely to compel Broussard to arbitrate the claims
he seeks to assert in this action. Id.
B.
Motion to Stay Pending Arbitration
In its second motion, Tower moves the Court to stay the claims
asserted by the EEOC in this case pending the final outcome of the
anticipated arbitration of Broussard’s claims. (Rec. Doc. 96-1, at
1-2.)
First,
Tower
contends
that
13
section
3
of
the
Federal
Arbitration Act mandates a stay of the EEOC’s action in the present
case. Id. at 6. Although the EEOC is not a signatory to an
arbitration agreement with Tower, Tower argues that “exceptional
circumstances”
exist
to
support
a
mandatory
stay.
Id.
at
7.
According to Tower, the claims asserted by the EEOC are identical
to the claims subject to arbitration asserted by Broussard. Id.
Because the issues to be litigated by the EEOC are identical to
the issues that will likely be arbitrated in Broussard’s case,
Tower claims “allowing the litigation to proceed would harm the
parties’ rights to arbitrate.” Id.
Further,
Tower
identifies
three
factors
present
in
the
instant case that warrant a stay of the EEOC’s claims. Id. First,
Tower maintains that the EEOC’s claims and the underlying facts
supporting their claims are identical to Broussard’s claims. Id.
at 7-8. Second, Tower argues that Broussard’s claims are inherently
inseparable from the claims of the EEOC. Id. at 8. Third, Tower
asserts that litigation of the EEOC’s claims will have a “critical
impact” on the anticipated arbitration. Id. For these reasons,
Tower insists that a stay of the litigation is required in this
case.
Finally, Tower contends that, even if a stay is not mandatory
under the Federal Arbitration Act, the Court has the discretion to
stay proceedings between Tower and the EEOC pending the outcome of
arbitration of Broussard’s claims. Id. In deciding whether to
14
exercise its discretion to stay the case, Tower claims that the
Court should consider whether there is an overlap of facts and
claims of the litigation and the arbitration and the likely impact
of
the
litigation
on
arbitration.
Id.
According
to
Tower,
Broussard’s anticipated arbitration necessarily overlaps with the
litigation of the EEOC’s claims because the EEOC seeks to recovery
identical, victim-specific relief on behalf of Broussard. Id. at
9. As a result, Tower claims the discovery that may take place in
the arbitration is likely to be the same or similar discovery that
will take place in the litigation of the EEOC’s claims. Id.
Moreover,
Tower
contends
that
the
resolution
of
Broussard’s
victim-specific claims by an arbitrator will serve as res judicata
barring the EEOC from seeking the same individual, victim specific
relief in a subsequent proceeding. Id. at 10. Consequently, Tower
argues that the only claims left for the EEOC to pursue would be
claims for general injunctive relief, which can only be decided by
the Court rather than a jury. Id. at 11. In sum, Tower maintains
that the Court should exercise its discretion and grant a stay as
a mean of controlling and managing its docket.
The EEOC opposes Tower’s motion for three reasons. 4 (Rec. Doc.
100, at 2-3.) First, the EEOC claims that a stay would thwart its
authority to enforce Title VII in the public’s interest. Id.
4 Broussard presents arguments in opposition to Tower’s motion to stay that are
substantially similar to the EEOC’s and do not warrant separate discussion.
(See Rec. Doc. 103.)
15
Although the EEOC seeks to enforce Title VII by intervening rather
than by bringing a direct action, it insists that it acts “to
vindicate
the
discrimination.”
public
Id.
interest
The
EEOC
in
preventing
maintains
that
employment
staying
the
litigation of its claims would severely hamper its public interest
role in this litigation. Id. at 10. Second, the EEOC contends that
the Federal Arbitration Act provides no authority to stay its
claims because it is not a party to the purported arbitration
agreement. Id. at 3. Third, the EEOC argues that the Court’s
discretionary power to control and manage its docket is better
served by moving forward with litigation of the EEOC’s claims
because
the
Court
can
directly
manage
the
litigation.
Id.
Furthermore, contrary to Tower’s argument, the EEOC contends that
an arbitrator’s decision will not have any preclusive effect on
the EEOC; therefore, the EEOC argues it would be free to pursue
its claims regardless of the outcome of arbitration. Id. at 16.
In reply to the EEOC’s and Broussard’s opposition, Tower
maintains that if the Court compels Broussard to arbitrate his
claims
and
does
not
stay
the
EEOC’s
claims
pending
such
arbitration, then Tower “will simultaneously be defending two
separate proceedings in two separate forums involving identical
allegations.
It
is
very
likely
that
the
same
discovery,
depositions, and motions will take place in both forums, increasing
case expenses, disruptions and inconvenience, and the likelihood
16
of inconsistent rulings.” (Rec. Doc. 110, at 7.) Further, Tower
clarifies that it does not claim that the EEOC’s public interests
claims will be barred by res judicata; rather, it argues that the
EEOC’s ability to seek individual relief for Broussard will be
barred
by
the
anticipated
arbitration.
Id.
Otherwise,
Tower
insists that Broussard would get “two bites at the apple—one before
the arbitrator and another by the EEOC on his behalf in this
litigation.” Id. at 8.
LEGAL STANDARD
The Fifth Circuit has observed that “[i]n enacting the Federal
Arbitration Act, Congress declared a national policy in favor of
arbitration.” Snap-on Tools Corp. v. Mason, 18 F.3d 1261, 1263
(5th Cir. 1994) (citing Southland Corp. v. Keating, 465 U.S. 1, 10
(1984)). Section 2 of the Federal Arbitration Act (“FAA”), 9 U.S.C.
§ 1, et seq., provides, in relevant part, “A written provision in
. . . a contract evidencing a transaction involving commerce to
settle by arbitration a controversy thereafter arising out of such
contract or transaction . . . shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity
for revocation of any contract.” 9 U.S.C. § 2. Congress has
therefore mandated the enforcement of arbitration agreements.
Considered to be “the primary substantive provision of the
Act,” Section 2 reflects “a congressional declaration of a liberal
federal policy favoring arbitration agreements.” Moses H. Cone
17
Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). In
effect, Section 2 creates “a body of federal substantive law of
arbitrability.” Id. “[C]ongress’ clear intent, in the Arbitration
Act, [was] to move the parties to an arbitrable dispute out of
court and into arbitration as quickly and easily as possible.”
Snap-on Tools Corp., 18 F.3d at 1263 (alterations in original)
(quoting Moses H. Cone Mem. Hosp., 460 U.S. at 22). Thus, there is
a strong presumption in favor of arbitration.
The FAA requires district courts to “compel arbitration of
otherwise arbitrable claims, when a motion to compel arbitration
is made.” Sedco, Inc. v. Petroleos Mexicanos Mexican Nat’l Oil
Co., 767 F.2d 1140, 1147 n.20 (5th Cir. 1985). Section 3 of the
FAA provides:
If any suit or proceeding be brought in any of the courts
of the United States upon any issue referable to
arbitration under the agreement in writing for such
arbitration, the court in which such suit is pending,
upon being satisfied that the issue involved in such
suit or proceeding is referable to arbitration under
such an agreement, shall on application of one of the
parties stay the trial of the action until such
arbitration has been had in accordance with the terms of
the agreement, providing the applicant for the stay is
not in default in proceeding with such arbitration.
9 U.S.C. § 3. This provision is mandatory and demands a stay of
the proceedings, at the request of a party, if the dispute is
arbitrable and referred to arbitration. Tittle v. Enron Corp., 463
F.3d 410, 417 n.6 (5th Cir. 2006).
18
Courts employ a two-step analysis to determine whether a party
may be compelled to arbitrate. Jones v. Halliburton Co., 583 F.3d
228, 233 (5th Cir. 2009); Wash. Mut. Fin. Grp. v. Bailey, 364 F.3d
260, 263 (5th Cir. 2004); Webb v. Investacorp, Inc., 89 F.3d 252,
257-58 (5th Cir. 1996). The Court first inquires whether the party
has agreed to arbitrate the dispute at issue. Jones, 583 F.3d at
233-34.
This
question
considerations:
“(1)
itself
whether
is
further
there
is
a
subdivided
valid
into
agreement
two
to
arbitrate between the parties; and (2) whether the dispute in
question falls within the scope of that arbitration agreement.”
Webb, 89 F.3d at 257-58. To determine whether the parties formed
a
valid
agreement
to
arbitrate,
the
Court
applies
ordinary
principles of state contract law. Am. Heritage Life Ins. Co. v.
Lang, 321 F.3d 533, 537-38 (5th Cir. 2003); Grigson v. Creative
Artists Agency, LLC, 210 F.3d 524, 531 (5th Cir. 2000). “[T]he
federal
policy
favoring
arbitration
does
not
apply
to
the
determination of whether there is a valid agreement to arbitrate
between the parties.” Am. Heritage Life Ins. Co., 321 F.3d at 538.
In analyzing arbitrability, courts apply federal substantive law.
Grigson, 210 F.3d at 531. Thus, “any doubts concerning the scope
of arbitrable issues should be resolved in favor of arbitration,
whether the problem at hand is the construction of the contract
language itself or an allegation of waiver, delay, or a like
defense to arbitrability.” Moses H. Cone, 460 U.S. at 24-25. If
19
the Court finds that there is a valid agreement to arbitrate
between the parties and that the dispute in question falls within
the scope of the arbitration agreement, the second step is to
determine whether any federal statute or policy renders the claims
nonarbitrable. Wash. Mut. Fin. Grp., 364 F.3d at 263.
DISCUSSION
A.
Motion to Compel Arbitration
The Court must first apply ordinary principles of state
contract law to determine whether there is a valid agreement to
arbitrate between Broussard and Tower. Under Louisiana law, 5 “[a]
contract is an agreement by two or more parties whereby obligations
are created, modified, or extinguished.” La. Civ. Code art. 1906.
Four elements are required for a valid contract: (1) capacity to
contract; (2) mutual consent; (3) a lawful cause; (4) and an object
that is lawful, possible, and determined or determinable. Granger
v. Christus Health Cent. La., 144 So. 3d 736, 760-61 (La. 2013);
see also La. Civ. Code arts. 1918, 1927, 1966 1971. The party
claiming the existence of a contract has the burden of proving
that the contract was perfected. La. Civ. Code art. 1831.
5
The Employment Agreement at issue contains a choice-of-law provision that
provides, in pertinent part, “The interpretation and application of this
contract (as well as choice of law principles) . . . is governed by Mississippi
law.” (Rec. Doc. 85-2, at 4.) Yet, none of the parties briefed the Court on the
choice-of-law issue, and the parties’ memoranda apply Louisiana law.
Consequently, the Court applies Louisiana law to determine whether Broussard
and Tower formed a valid agreement to arbitrate. However, the Court’s conclusion
would be the same under Mississippi law.
20
The element critical to the issue before the Court is the
element of mutual consent. Article 1927 of the Louisiana Civil
Code explains that “[a] contract is formed by the consent of the
parties established through offer and acceptance.” Id. art. 1927.
Unless the law requires a certain formality for a type of contract,
offer and acceptance may be made orally, in writing, or by action
or inaction that clearly indicates consent. Id. However, in the
absence of a legal requirement, when the parties have contemplated
a certain form, it is presumed that they do not intend to be bound
until the contract is executed in that form. Id. art. 1947. In
addition, an acceptance not in accordance with the terms of the
offer is not an acceptance at all, but rather a counteroffer which
must be accepted in order to become a binding contract. Id. art.
1943. Thus, to constitute a contract, an offer must be accepted as
made.
An offer to make a contract is good, generally speaking, until
revoked by the offeror or rejected by the offeree. An offer that
neither specifies a period of time for acceptance nor manifests an
intent to give the offeree a delay within which to accept is a
revocable offer, which may be revoked before it is accepted. Id.
arts. 1928, 1930. Furthermore, a revocable offer expires if not
accepted within a reasonable time. Id. art 1931. A purported
acceptance
made
after
the
expiration
21
of
the
initial
offer
constitutes a new counteroffer, which must be accepted in order to
form a binding contract.
In the instant case, Tower argues that both the Employment
Agreement and the Acceptance Form, which incorporates the terms of
the Employment Agreement, constitute valid contracts to arbitrate
employment-related disputes. The Court first considers whether the
Acceptance
Form
constitutes
a
binding
contract
with
a
valid
arbitration agreement.
The Acceptance Form is a written contract between Broussard
and Tower. The Acceptance Form clearly states that it is an “offer
of employment” from Tower for Broussard to accept. (Rec. Doc. 852, at 3.) Before beginning work at Tower, Broussard signed the
Acceptance Form below the statement, “I accept this offer of
employment.” Id. The Acceptance Form provides that the terms of
the offer “are governed by the terms outlined in the employment
agreement you will sign.” Id. “As a general rule of contract law,
separate
documents
may
be
incorporated
into
a
contract
by
attachment or reference thereto.” Arthur J. Gallagher & Co. v.
Babcock, 703 F.3d 284, 289 (5th Cir. 2012); AWC, Inc. v. CSF
Const., Inc., 931 So. 2d 382, 386 (La. App. 4 Cir. 2006). Further,
the Louisiana Second, Third, Fourth, and Fifth Circuit Courts of
Appeal have held: “The incorporation of an arbitration clause by
reference to another written contract is a suitable method of
evidencing
the
parties’
intent
22
to
arbitrate
as
long
as
the
arbitration clause in the contract that is referred to has ‘a
reasonably
clear
and
ascertainable
meaning.’”
Aeneas
Williams
Imports, L.L.C. v. Carter, 131 So. 3d 894, 896 (La. App. 2 Cir.
2012); accord Woodson Const. Co. v. R.L. Abshire Const. Co., 459
So. 2d 566, 569 (La. App. 3 Cir. 1984); Regions Bank v. Weber, 53
So. 3d 1284, 1290 (La. App. 4 Cir. 2010); Russellville Steel Co.
v. A & R Excavating, Inc., 624 So. 2d 11, 13 (La. App. 5 Cir.
1993).
Therefore,
it
is
accepted
practice
to
incorporate
by
reference an arbitration provision not shown on the face of the
document.
It is undisputed that the Employment Agreement contained an
arbitration provision. Moreover, the arbitration clause in the
Employment Agreement is clear. As mentioned above, the arbitration
provision provides that “all . . . disputes, legal or otherwise,
relating to the employment relationship shall be submitted to
binding arbitration by the parties.” (Rec. Doc. 85-2, at 4.)
Further, the arbitration provision contains a nonexhaustive list
of
arbitrable
Broussard’s
issues,
argument
including
that
the
wrongful
Acceptance
discharge.
Form
Id.
necessarily
incorporates the provision of the Agreement stating that the
Broussard’s signature on the Agreement is an offer of employment
which must be accepted by Tower is untenable. To reach that
conclusion, the Court would be required to disregard the express
language in the Acceptance Form, which clarifies that Broussard
23
may accept Tower’s offer of employment. While the Acceptance Form
mentions
the
Employment
Agreement
and
contemplates
Broussard
signing it, the Acceptance Form indicates that Broussard may accept
the offer and form an employment relationship immediately: “The
terms of your employment offer are governed by the terms outlined
in the employment agreement you will sign. However, if you are
ready to be a member of the Tower Loan team . . ., just sign below
indicating . . . your acceptance of our offer.” Id. (emphasis
added). Broussard signed both the Employment Agreement and the
Acceptance Form. Id. at 3-4. Thus, there is a valid arbitration
agreement.
Broussard’s argument that the agreement lacks consideration
is misplaced. As an initial matter, the common law concept of
consideration
is
not
relevant
to
a
contractual
analysis
in
Louisiana. See La. Civ. Code art. 1967 cmt. (c) (“Under this
Article, ‘cause’ is not ‘consideration.’”); Unkel v. Unkel, 699
So. 2d 472, 475 (La. App. 2 Cir. 1997)
(“Consideration, in the
common-law sense, is not a prerequisite for a valid contract in
Louisiana,
and
is
distinguished
from
cause.”).
Instead
of
consideration, under Louisiana law, a contract requires a lawful
cause and object. Cause is the reason a party obligates himself,
not the terms of the obligation. See La. Civ. Code art. 1967. The
objects of a contract are the specific actions the parties must
undertake to comply with the contract. See id. art. 1971. Here,
24
Broussard signed the Acceptance Form as a condition of employment.
“Employment [is a] valid cause of [a] contract.” Cellular One,
Inc. v. Boyd, 653 So. 2d 30, 34 (La. App. 1 Cir. 1995). Moreover,
such an agreement is supported by valid consideration. See Hadnot
v. Bay, Ltd., 344 F.3d 474, 477 (5th Cir. 2003) (holding offer of
at-will
employment
was
adequate
consideration
to
support
arbitration agreement and was not illusory “because any eventual
arbitration will, of necessity, relate to conduct that occurred
during the term of employment”); New S. Fed. Sav. Bank v. Anding,
414 F. Supp. 2d 636, 643 (S.D. Miss. 2005) (“Under Mississippi
law, any mutual promises, such as mutual promises to arbitrate
certain
claims,
Acceptance
Form
constitute
signed
by
consideration.”).
Broussard
Accordingly,
contains
a
the
consensual
agreement to arbitrate which is binding and valid under Louisiana
law and therefore Broussard is bound to that agreement and the
dictates of the Federal Arbitration Act.
Having determined that Broussard and Tower formed a valid
arbitration agreement, the Court must now consider whether the
dispute in question falls within the scope of the arbitration
provision. When determining whether a dispute is covered by the
scope of an arbitration agreement, the Supreme Court has held that
“any doubts concerning the scope of arbitrable issues should be
resolved in favor of arbitration.” Moses H. Cone, 460 U.S. at 2425. The Fifth Circuit has likewise stated that doubts concerning
25
the scope of an arbitration agreement should be resolved in favor
of arbitration. Safer v. Nelson Fin. Grp., Inc., 422 F.3d 289, 294
(5th
Cir.
2005).
Moreover,
the
Fifth
Circuit
has
repeatedly
emphasized the strong federal policy in favor of arbitration. Thus,
“arbitration should not be denied ‘unless it can be said with
positive
assurance
that
[the]
arbitration
clause
is
not
susceptible of an interpretation which would cover the dispute at
issue.’” Id. (alteration in original) (quoting Pers. Sec. & Safety
Sys. Inc. v. Motorola Inc., 297 F.3d 388, 392 (5th Cir. 2002)).
In addition, the Fifth Circuit distinguishes between broad
and narrow arbitration clauses. “If the clause is broad, the action
should be stayed and the arbitrators permitted to decide whether
the
dispute
falls
within
the
clause.”
Complaint
of
Hornbeck
Offshore (1984) Corp., 981 F.2d 752, 754 (5th Cir. 1993). On the
other hand, if the clause is narrow, the matter should not be
referred to arbitration or the action stayed, unless the court
determines that the dispute falls within the clause. Id. at 755.
Arbitration clauses containing the “all dispute” language, such as
the one presently before the Court, are of the broad type. See id.
Here, the dispute at issue falls squarely within the scope of
the arbitration agreement. The arbitration provision applies to
all
disputes
“relating
to
the
employment
relationship,”
and
includes claims based on “sexual” matters and claims for “wrongful
termination.”
Further,
the
arbitration
26
clause
is
broad.
The
arbitration clause makes it clear that the “scope of arbitration”
is to be decided by the arbitrator. Accordingly, the Court is
required to grant a stay under 9 U.S.C. § 3 and permit the
arbitrator to decide whether Broussard’s claims fall within the
scope of the arbitration clause.
Having found that there is a valid arbitration agreement
between the parties and that the dispute in question falls within
the scope of the arbitration provision, the second step is to
determine whether any federal statute or policy renders the claims
nonarbitrable. Although the EEOC’s opposition does not mention the
Acceptance Form, it argues that a contract compelling arbitration
would be unenforceable in this case. First, the EEOC argues that
Tower has not established a knowing and voluntary waiver of the
right to a trial by jury. However, the valid agreement to arbitrate
is itself a knowing and voluntary waiver of the right to a jury
trial. As the Fifth Circuit has noted, “The Seventh Amendment does
not confer the right to a trial, but only the right to have a jury
hear the case once it is determined that the litigation should
proceed before a court. If the claims are properly before an
arbitral forum pursuant to an arbitration agreement, the jury trial
right vanishes.” Am. Heritage Life Ins. Co. v. Orr, 294 F.3d 702
(5th Cir. 2002) (quoting Cremin v. Merrill Lynch, Pierce, Fenner
& Smith, Inc., 957 F. Supp. 1460, 1471 (N.D. Ill. 1997)). In short,
“[t]he Seventh Amendment right to a trial by jury is limited by a
27
valid arbitration provision that waives the right to resolve a
dispute through litigation in a judicial forum.” Id.; see also
Garza Nunez v. Weeks Marine, Inc., No. 06-3777, 2007 WL 496855, at
*7 n.14 (E.D. La. Feb. 13, 2007) (“If he indeed entered into an
arbitration agreement, the Plaintiff would be deemed to have waived
his right to a jury trial.”).
The EEOC also argues that the arbitration provision at issue
is unenforceable under Title VII because it purports to foreclose
the filing of an EEOC charge. “A waiver of the right to file a
charge is void as against public policy.” EEOC v. Cosmair, Inc.,
L'Oreal Hair Care Div., 821 F.2d 1085, 1090 (5th Cir. 1987).
However, an unenforceable provision of an arbitration clause will
not render the entire arbitration provision void. See Hadnot v.
Bay,
Ltd.,
344
F.3d
474,
478
(5th
Cir.
2003)
(severing
unenforceable provision in arbitration clause barring any award of
punitive damages and upholding remainder of arbitration clause
that authorized arbitration of any and all disputes arising out of
employment
relationship);
Cosmair,
Inc.,
821
F.2d
at
1091
(“[C]ourt may enforce remainder of agreement unenforceable in part
as
against
public
policy
when
‘performance
as
to
which
the
agreement is unenforceable is not an essential part of the agreed
exchange.’”). Here, there is no evidence that Tower attempted to
prohibit Broussard from filing an EEOC charge in the Acceptance
Form, Employment Agreement, or otherwise. In fact, it is undisputed
28
that an EEOC charge was filed on Broussard’s behalf and fully
processed by the EEOC. (Rec. Doc. 1, at 8-9.) Accordingly, the
Court rejects the EEOC’s arguments.
Lastly, Broussard argues that Tower waived its right to compel
arbitration because of its “aggressive litigation” in this matter.
The right to arbitration, like any contractual right, may be
waived. Price v. Drexel Burnham Lambert, Inc., 791 F.2d 1156, 1158
(5th Cir. 1986). The party seeking to prove a waiver of arbitration
bears a heavy burden: “Waiver of arbitration is not a favored
finding, and there is a presumption against it.” Miller Brewing
Co. v. Fort Worth Distrib. Co., 781 F.2d 494, 496 (5th Cir. 1986).
“A party waives its right to arbitration only when participation
in
the
litigation
has
been
so
substantial
that
compelling
arbitration would prejudice the other party.” Cargill Ferrous
Int'l v. SEA PHOENIX MV, 325 F.3d 695, 700 (5th Cir. 2003). For
example, in Price v. Drexel Burnham Lambert, Inc., the court held
that the party moving for arbitration had waived that right because
it
had
“initiated
extensive
discovery,
answered
twice,
filed
motions to dismiss and for summary judgment, filed and obtained
two
extensions
of
pre-trial
deadlines,
all
without
demanding
arbitration.” 791 F.2d at 1159-62. On the other hand, where the
party seeking arbitration asserts the right to demand arbitration
in answer to a complaint, “the burden of proving waiver falls even
more heavily on the shoulders of the party seeking to prove
29
waiver.” Tenneco Resins, Inc. v. Davy Int'l, AG, 770 F.2d 416, 420
(5th Cir. 1985).
In the instant case, Broussard fails to meet the heavy burden
of
proving
waiver.
Broussard
claims
that
Tower
substantially
invoked the judicial process by filing its own countersuit in
Mississippi; however, Broussard fails to mention that Tower filed
suit in Mississippi solely to compel arbitration. Tower filed its
lawsuit according to the specific provision in the Employment
Agreement that authorizes Tower to file suit seeking injunctive
relief in the Chancery Court of Rankin County, Mississippi. Tower
filed its suit to compel arbitration within ten days of Broussard
filing suit in this Court. For this reason, Tower’s filing of its
lawsuit against Broussard in Mississippi strongly supports the
conclusion
that
Tower
did
not
waive
its
rights
to
compel
arbitration. Moreover, Tower has repeatedly expressed that it
considers Broussard’s claims to be subject to binding arbitration.
For example, as its first defense in its Answer, Tower stated that
Broussard’s
claims
are
subject
to
arbitration
and
should
be
dismissed or stayed. (Rec. Doc. 46, at 1.) Therefore, Broussard
had notice that Tower planned to compel arbitration and has not
shown that compelling arbitration would prejudice him.
Tower further requests that the Court appoint the AAA to
conduct
the
arbitration
in
accordance
with
its
protocol
for
resolution of employment disputes. Under the FAA, courts may
30
intervene into the arbitral process to select an arbitrator upon
application of a party, if the arbitration agreement does not
provide a method for selecting arbitrators. BP Expl. Libya Ltd. v.
ExxonMobil Libya Ltd., 689 F.3d 481, 490-91 (5th Cir. 2012).
Section 5 dictates that when an agreement to arbitrate does not
provide a method for appointment of an arbitrator, “upon the
application of either party to the controversy the court shall
designate and appoint an arbitrator or arbitrators or umpire, as
the case may require, who shall act under the said agreement with
the same force and effect as if he or they had been specifically
named therein.” 9 U.S.C. § 5 (emphasis added). Neither Broussard
nor the EEOC have objected to the Court appointing the AAA to
conduct the arbitration. Accordingly, unless Broussard and Tower
reach an agreement on an arbitrator, 6 the Court directs that the
arbitration proceed before the AAA, with the parties to select an
arbitrator pursuant to the provisions of the AAA’s Employment
Dispute Resolution Rules.
6 Tower notes, “During earlier discussions between Tower Loan’s Mississippi
counsel and certain of Plaintiff’s attorneys the parties reached what appeared
to be a tentative agreement for submitting Broussard’s claims to arbitration
before one of two Mississippi employment attorneys, J. William Manuel (Bradley
Arrant) or Peyton S. Irby, Jr. (Kullman Firm) (both located in Jackson
Mississippi).” (Rec. Doc. 85-1, at 19 n.19.) However, Broussard’s counsel have
since declined to take a position regarding whether these attorneys are
agreeable arbitrators. Id. Tower states that it would be agreeable to conducting
the arbitration before either of these attorneys pursuant to the AAA protocols
for resolution of employment disputes. Id.
31
B.
Motion to Stay Pending Arbitration
Under section 3 of the FAA, a district court must stay a
lawsuit when a party demonstrates that any issue involved in the
lawsuit is “referable to arbitration under an agreement in writing
for such arbitration.” 9 U.S.C. § 3. This provision is mandatory
and demands a stay of legal proceedings “whenever the issues in a
case are within the reach of an arbitration agreement.” Complaint
of Hornbeck Offshore (1984) Corp., 981 F.2d at 754. When these
circumstances are present, a district court “has no discretion
under section 3 to deny the stay.” Id.
The first issue the Court must address in determining whether
the
mandatory
defendant
in
agreement,
stay
this
may
provision
matter
invoke
and
the
applies
a
is
whether
to
signatory
provision
Tower,
arbitration
the
against
the
EEOC,
the
the
intervenor, who is a nonsignatory to the arbitration agreement.
Historically, invocation of the mandatory stay provision was
limited to signatories of the arbitration agreement and was not
effective against any nonsignatory parties present in the lawsuit.
Adams v. Ga. Gulf Corp., 237 F.3d 538, 540 (5th Cir. 2001)
(“Generally,
this
section
applies
only
to
parties
to
the
arbitration agreement.”). However, in recent years, courts have
expanded the applicability of the mandatory stay provision. For
example,
in
Adams
v.
Georgia
Gulf
Corp.,
the
Fifth
Circuit
summarized two cases where the court “applied the stay provision
32
to non-parties because the issues presented in the nonparty-party
litigation
if
litigated
would
have
rendered
the
arbitration
redundant and thwarted the federal policy favoring arbitration.”
Id. at 540-41 (citing Harvey v. Joyce, 199 F.3d 790 (5th Cir.2000);
Subway Equip. Leasing Corp. v. Forte, 169 F.3d 324 (5th Cir.1999)).
Because the court was confronted with “exceptional circumstances,”
it diverged from the general rule requiring party status for the
mandatory stay provision to apply. Id. at 541. Similarly, in Waste
Management, Inc. v. Residuous Industriales Multiquim, S.A. de
C.V., the Fifth Circuit held that a nonsignatory to an arbitration
agreement could invoke the mandatory stay provision. 372 F.3d 339,
342 (5th Cir. 2004). The court found that the signatory’s claims
in the litigation were so closely related to the arbitration and
would have such an impact on the arbitration as to make a stay
mandatory under section 3. Id. at 345.
In Waste Management, the Fifth Circuit articulated three
factors that courts must consider in determining whether the
mandatory stay provision applies: “1) the arbitrated and litigated
disputes must involve the same operative facts; 2) the claims
asserted in the arbitration and litigation must be ‘inherently
inseparable’; and 3) the litigation must have a ‘critical impact’
on the arbitration.” Id. at 343. “The question is not ultimately
one of weighing potential harm to the interests of the nonsignatory, but of determining whether proceeding with litigation
33
will destroy the signatories’ right to a meaningful arbitration.”
Id. (citing Adams, 237 F.3d at 541).
When a mandatory stay under section 3 is not warranted, the
court
may
nonetheless
exercise
its
discretion
to
stay
the
litigation pending the outcome of the arbitration, even as to
claims
between
nonarbitrating
parties,
simply
as
a
means
of
controlling its docket. Complaint of Hornbeck Offshore (1984)
Corp., 981 F.2d at 755 (citing Moses H. Cone, 460 U.S. at 20 n.23;
Matter of Talbott Big Foot, Inc., 887 F.2d 611, 614 (5th Cir.
1989)). The court’s discretionary authority to issue a stay is
“incidental to the power inherent in every court to control the
disposition of the causes on its docket with economy of time and
effort for itself, for counsel, and for litigants.” Landis v. N.
Am. Co., 299 U.S. 248, 254 (1936); accord Ambraco, Inc. v. Bossclip
B.V., 570 F.3d 233, 243 (5th Cir. 2009) (citing Coastal (Bermuda)
Ltd. v. E.W. Saybolt & Co., 761 F.2d 198, 204 n.6 (5th Cir. 1985)).
Determining whether to issue a discretionary stay “calls for the
exercise of judgment, which must weigh competing interests and
maintain and even balance.” Landis, 299 U.S. at 255.
Considering the three Waste Management factors, the Court
finds that a discretionary, if not a mandatory, stay is warranted.
First,
the
EEOC’s
claims
and
Broussard’s
claims
undoubtedly
involve the same operative facts. Notably, in its Notice of Intent
to Intervene, the EEOC stated, “The nexus of factual circumstances
34
central to the EEOC’s claims will be those at issue in Mr.
Broussard’s suit against First Tower Loan, LLC.” (Rec. Doc. 51, at
1.)
Moreover,
the
EEOC’s
complaint
and
Broussard’s
complaint
allege the same operative facts. (Compare Rec. Doc. 1, at 3-7,
with Rec. Doc. 71, at 4-8.) “The close relationship between the
facts involved in the federal court claims and the arbitration
claims counsels in favor of staying this litigation.” Suzlon
Infrastructure, Ltd. v. Pulk, No. H-09-2206, 2010 WL 3540951, at
*8 (S.D. Tex. Sept. 10, 2010).
Second, although the subject matter of the EEOC’s claims and
Broussard’s
claims
are
similar,
they
are
not
“inherently
inseparable.” When the EEOC chooses to bring an enforcement action
in a particular case, or chooses to intervene in an aggrieved
employee’s action as it did here, “the agency may be seeking to
vindicate a public interest, not simply provide make-whole relief
for the employee.” EEOC v. Waffle House, Inc., 534 U.S. 279, 296
(2002). Here, some of the EEOC’s claims are brought to vindicate
a public interest and, therefore, are not inherently inseparable
from Broussard’s personal claims. However, the facts and claims
“significantly overlap.” Suzlon, 2010 WL 3540951, at *8. Indeed,
litigating the EEOC’s claims will involve much of the same evidence
developed in the arbitration.
Finally, the litigation would likely have a “critical impact”
on the arbitration. Several of the EEOC’s claims seek victim35
specific relief “to make Mr. Broussard whole,” such as backpay,
reinstatement,
and
damages.
Broussard
seeks
the
same
relief.
Consequently, resolving these claims of the EEOC would resolve
issues that the arbitrator will decide. Given the binding effect
of a federal judgment, as well as the factual similarities in the
EEOC’s
claims,
the
arbitrator
would
necessarily
be
strongly
influenced to follow the Court's determination. See Waste Mgmt.,
372 F.3d at 345. Thus, “[a]llowing the instant litigation to
proceed
would
risk
inconsistent
results,
and
‘substantially
impact’ the arbitration.” Id.
A discretionary stay of this litigation will also enable the
Court
and
the
parties
to
benefit
from
the
outcome
of
the
arbitration. For example, Tower argues that if Broussard’s claims
for victim-specific relief are resolved by the arbitrator, then
the only claims left for the EEOC to pursue would be claims for
general injunctive relief, which must be decided by the Court
rather than a jury. The EEOC vigorously opposes this argument,
relying on the Supreme Court’s holding in EEOC v. Waffle House,
Inc., 534 U.S. 279 (2002). In Waffle House, the Supreme Court held
that an agreement between an employer and an employee to arbitrate
employment-related disputes does not bar the EEOC from pursuing
victim-specific judicial relief, such as backpay, reinstatement,
and damages, in an enforcement action. Id. at 287-88. However, in
Waffle House, the EEOC filed an enforcement action and the employee
36
was not a party to the case. Id. at 283. Moreover, the employee
had not sought arbitration of his claim. Id. at 297. Therefore,
the Court did not consider what effect, if any, arbitration of the
employee’s claim would have on the EEOC’s claims. Id. In this
regard, the Court stated:
It is an open question whether a settlement or
arbitration judgment would affect the validity of the
EEOC's claim or the character of relief the EEOC may
seek. The only issue before this Court is whether the
fact that [the employee] has signed a mandatory
arbitration agreement limits the remedies available to
the EEOC.
Id. Further, the Court noted that it “goes without saying that the
courts can and should preclude double recovery by an individual”
and “ordinary principles of res judicata, mootness, or mitigation
may apply to EEOC claims.” Id. at 297-98.
In the instant case, Tower does not dispute that the EEOC may
seek victim-specific relief in an enforcement action, even if a
valid
arbitration
agreement
exists
between
the
employer
and
employee. Thus, the EEOC’s reliance on Waffle House is misplaced.
Instead, Tower asserts that the principles of res judicata may
apply to the EEOC’s claims and, therefore, an arbitration judgment
could affect the validity of the EEOC’s claims or the character of
relief the EEOC may seek. The Fifth Circuit supports Tower’s
assertion. In EEOC v. Jefferson Dental Clinics, PA, the Fifth
Circuit held that the EEOC was barred from seeking make-whole
relief for employees who had already litigated their claims in
37
state court. 478 F.3d 690, 699 (5th Cir. 2007) (applying Texas
law). 7 The court’s holding was based on the res judicata effect of
the prior state court judgment in the employees’ case. Id. The
court reasoned that “[i]n the context of make-whole relief, . . .
the interests of the EEOC stack up poorly against the principles
of res judicata.” Similarly, the court explained that “[t]he EEOC’s
public interest does not justify giving the plaintiffs two chances
to receive make-whole relief.” Id. (citing Waffle House, 534 U.S.
at 296-97.) However, “given the divergence of interests between
the charging parties and the EEOC when it seeks injunctive relief,”
the court allowed the EEOC’s injunctive relief claims to proceed.
Id. at 698. Thus, in this case, the EEOC’s ability to seek makewhole
relief
on
behalf
of
Broussard
may
be
limited
by
the
arbitration.
Lastly, the EEOC relies on Harris v. Amoco Production Co.,
768 F.2d 669 (1985), to support its argument that a stay would
thwart its authority to enforce Title VII in the public’s interest.
7
The EEOC argues that Tower’s reliance on EEOC v. Jefferson Dental Clinics, PA
is improper because it is inconsistent with the Supreme Court’s decision in
Taylor v. Sturgell, 553 U.S. 880 (2008), and because it applied Texas law rather
than federal law. However, the EEOC does not point to any inconsistencies
between Jefferson Dental and Taylor, and courts have cited Jefferson Dental
with approval since Taylor. See Jackson v. Deutsche Bank Trust Co., 583 F. App'x
417, 418 (5th Cir. 2014). Further, although Jefferson Dental applied Texas law
rather than federal law, there is nothing to indicate that federal law would
require a different conclusion. Compare Jefferson Dental, 478 F.3d at 695-99
(analyzing the representation-of-interests inquiry under Texas law), with
Taylor, 553 U.S. at 894-900 (discussing the representation-of-interests inquiry
under federal law). Nevertheless, the issue of res judicata is not presently
before the Court and the Court need not decide whether any of the EEOC’s claims
would be barred by res judicata at this time.
38
In
Harris,
dismissal
the
of
Fifth
the
Circuit
EEOC’s
reversed
claims
when
the
the
district
original
court’s
plaintiffs
settled. Id. at 682. Reasoning “from the premise that the EEOC
exists
to
represent
the
public
interest
in
equal
employment
opportunity,” the court held that the EEOC, which had intervened
in the case, had the authority to continue litigating after the
main plaintiffs had settled out of the lawsuit. Id. Here, although
Tower opposed the EEOC’s initial motion to intervene, Tower does
not dispute that Title VII grants the EEOC the statutory right to
intervene under certain circumstances. Nor does Tower seek to
dismiss the EEOC’s claims at this time. Rather, Tower seeks a stay
of the EEOC’s claims pending the final outcome of the arbitration
between Broussard and Tower. Accordingly, the EEOC’s reliance on
Harris is misplaced.
Considering the factors set out in Waste Management, the Court
concludes that a stay in this matter is warranted. The operative
facts
are
identical,
the
claims
significantly
overlap,
and
allowing the litigation to proceed would risk inconsistent results
and substantially impact the arbitration. Moreover, the Court and
the parties may benefit from the outcome of the arbitration. In
sum, even if these factors do not require a mandatory stay under
section
3,
those
factors,
on
the
discretionary stay.
39
present
record,
support
a
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Defendant’s Motion to Compel
Arbitration, Appoint Arbitrator and to Stay Proceedings (Rec. Doc.
85) is GRANTED.
IT IS FURTHER ORDERED that the Court appoints the American
Arbitration
Association
as
the
arbitral
forum
to
administer
arbitration of the dispute between Broussard and Tower.
IT IS FURTHER ORDERED that Defendant’s Motion to Stay EEOC
Claims Pending Arbitration (Rec. Doc. 96) is GRANTED.
IT IS FURTHER ORDERED that all proceedings in this matter
shall be STAYED pending the outcome of the arbitration between
Broussard and Tower. The Clerk of Court shall mark this action
closed for statistical purposes.
IT IS FURTHER ORDERED that the Court shall retain jurisdiction
and that the case shall be restored to the trial docket upon motion
of a party if circumstances change, so that it may proceed to final
disposition. This order shall not prejudice the rights of the
parties to this litigation.
New Orleans, Louisiana, this 9th day of December, 2015.
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
40
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