Spencer v. XPO Logistics
Filing
27
ORDER Granting 19 Motion to Dismiss And/or Compel Arbitration. Signed by District Judge Victoria A. Roberts. (LVer)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
TINA SPENCER,
Plaintiff,
Case No. 17-14084
District Judge Victoria A. Roberts
Magistrate Judge Mona K. Majzoub
v.
XPO LOGISTICS,
Defendant.
_________________________________/
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND/OR COMPEL
ARBITRATION (Doc. #19)
I.
INTRODUCTION
At issue is whether Plaintiff Tina Spencer (“Spencer”) can proceed in federal court
on her claim: that Defendant XPO Logistics (“XPO”) discriminated against her in
violation of both the Age Discrimination in Employment Act (“ADEA”) and Title VII of the
Civil Rights Act of 1964, or whether Spencer must proceed to arbitration.
For the reasons below, XPO’s motion to dismiss is GRANTED.
II.
BACKGROUND
Spencer brought this action under the Age Discrimination in Employment Act and
Title VII of the Civil Rights Act of 1964. Spencer filed two charges of discrimination with
the Equal Employment Opportunity Commission (“EEOC”). Her first charge alleged
discrimination and retaliation based on age, in violation of the ADEA, arising out of
XPO’s denial of a pay raise. After reviewing the first charge, the EEOC issued a right to
sue letter.
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In her second charge with the EEOC, Spencer alleges that XPO terminated her
employment in retaliation for the first charge. The second charge is still pending; the
EEOC continues its investigation.
After filing charges with the EEOC, Spencer brought this action. XPO contends that
Spencer’s employment agreement contained an arbitration provision that bars her from
seeking judicial relief. Spencer does not dispute the plain language of the arbitration
provision. Rather, Spencer contends that the arbitration provision is unenforceable
because it: (1) does not impose a mutual obligation to arbitrate; (2) does not specify
which party is responsible for costs; (3) interferes with the EEOC’s jurisdiction and
enforcement powers; and (4) provides for arbitration in an unreasonable forum.
III.
STANDARD OF REVIEW
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests a
complaint’s legal sufficiency. Although the federal rules only require that a complaint
contain a “short and plain statement of the claim showing that the pleader is entitled to
relief,” see Rule 8(a)(2), the statement of the claim must be plausible. Indeed, “[t]o
survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim
is plausible where the facts allow the Court to infer that the defendant is liable for the
misconduct alleged. Id. This requires more than “bare assertions of legal conclusions”; a
plaintiff must provide the “grounds” of his or her “entitlement to relief.” League of United
Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007).
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In deciding a motion under Rule 12(b)(6), the Court must construe the complaint in
the light most favorable to the plaintiff and accept as true all well-pled factual
allegations. Id. The Court “may consider the Complaint and any exhibits attached
thereto, public records, items appearing in the record of the case and exhibits attached
to defendant’s motion to dismiss so long as they are referred to in the Complaint and
are central to the claims contained therein.” Bassett v. Nat’l Collegiate Athletic Ass’n,
528 F.3d 426, 430 (6th Cir. 2008).
IV.
DISCUSSION
Spencer contends that the arbitration provision of her employment agreement is
unenforceable for several reasons.
A. A Mutual Obligation to Arbitrate is not a Prerequisite to Enforceability
Spencer first argues that the arbitration provision is unenforceable because it does
not impose a mutual obligation to arbitrate. Specifically, Spencer says that the
arbitration provision is unenforceable because it mandates that she submit her claims to
arbitration, while XPO is free to file an action in court.
Contrary to Spencer’s assertions, the Sixth Circuit does not require that an
arbitration provision contain mutual obligations. In fact, the Sixth Circuit held that an
arbitration provision need not contain mutual obligations “so long as the contract as a
whole imposes mutual obligations on both parties.” Ozormoor v. T-Mobile USA, Inc.,
354 F.App’x 972, 975 (6th Cir. 2009) (citing Glazer v. Lehman Brothers, Inc., 394 F.3d
444, 452–54 (6th Cir. 2005)).
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XPO was required to pay Spencer in exchange for her work. There is no doubt that
the employment agreement “impose[d] mutual obligations on both parties.” Id. As such,
the arbitration provision cannot be held unenforceable for lack of mutuality.
B. An Arbitration Provision Need Not Specify Which Party is Responsible for
Costs
Spencer next argues that the arbitration provision is unenforceable because it does
not address who bears the costs of arbitration. Spencer says that commercial arbitration
in North Carolina is cost prohibitive; for example, she contends that the minimum initial
filing fee for arbitration under the American Arbitration Association’s (“AAA”)
Commercial Rules is $925. Spencer says that she only makes $700 a month; given
that, she says she cannot afford the costs of conducting commercial arbitration in North
Carolina, meaning that the arbitration provision would essentially prevent her from
vindicating her federal statutory rights.
Spencer grossly overestimates the potential costs associated with arbitration in this
instance. Spencer cites to the AAA’s Commercial Arbitration Rules; however, her claim
would fall under the AAA’s Employment/Workplace Fee Schedule. Under that schedule,
Spencer’s initial filing fee would be capped at $300; moreover, the remainder of the
AAA’s fees would be paid by the employer. The Employment/Workplace Fee Schedule
also allows claimants to apply for a hardship waiver, reduction, or deferral of costs.
Although Spencer contends that travel and lodging costs contribute to cost
prohibitive arbitration in North Carolina, the record is completely devoid of actual figures
relating to the costs Spencer would incur should arbitration occur. Indeed, Spencer
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merely asserts that “the likely costs of arbitration would be measured in the many
thousands of dollars.”
The fact that an arbitration agreement is silent as to costs is insufficient, on its own,
to render that agreement unenforceable. See Green Tree Financial Corp.-Alabama v.
Randolph, 531 U.S. 79, 91 (2000). Moreover, at this time, “the ‘risk’ that [plaintiff] will be
saddled with prohibitive costs is too speculative to justify the invalidation of the
arbitration agreement.” Id. Indeed, to invalidate this arbitration agreement based on so
speculative a risk “would undermine ‘the liberal federal policy favoring arbitration
agreements.’” Id. (citing Moses H. Cone Memorial Hospital v. Mercury Construction
Corp., 460 U.S. 1, 24 (1983)). Further, it would also “conflict with [the Supreme Court’s]
prior holdings that the party resisting arbitration bears the burden of proving that the
claims at issue are unsuitable for arbitration.” Id.
The arbitration provision cannot be held unenforceable based on costs.
C. The Arbitration Provision Does Not Interfere with the EEOC’s Jurisdiction
Spencer also contends that this action should not be dismissed because her second
EEOC charge is still pending. The EEOC may decide to bring an action on behalf of
Spencer; the potential that the EEOC may file suit, Spencer argues, renders the
arbitration provision unenforceable as it relates to her second charge, mandating the
Court not dismiss this action. Spencer is simply wrong.
As a threshold matter, “questions of arbitrability must be addressed with a healthy
regard for the federal policy favoring arbitration.” Moses H. Cone Memorial Hospital v.
Mercury Construction Corp., 460 U.S. at 24. Further, the United States Supreme Court
specifically found that arbitration does not undermine the role of the EEOC in enforcing
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the ADEA. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991). In Gilmer,
the plaintiff argued that his age discrimination claim was not subject to compulsory
arbitration because arbitration would interfere with the EEOC’s jurisdiction over ADEA
claims. Id. at 21. The Court disagreed, noting that “nothing in the ADEA indicates that
Congress intended that the EEOC be involved in all employment disputes . . . the mere
involvement of an administrative agency in the enforcement of a statute is not sufficient
to preclude arbitration.” Id. at 28-29.
It is true, however, that the arbitration provision does not preclude the EEOC from
bringing a claim on behalf of Spencer. See E.E.O.C. v. Frank’s Nursery & Crafts, Inc.,
177 F.3d 438, 459-60 (6th Cir. 1999) (noting that the EEOC is an individual claimant
representing an interest broader than that of a particular plaintiff; while an individual
plaintiff may agree to arbitrate, this does not bind the EEOC where the agency is not a
party to that agreement).
The Frank’s Court further clarified the relationship between the EEOC and an
individual claimant, noting that:
Presumably, under Gilmer, if an individual subject to an
arbitration agreement filed a charge with the EEOC and
ultimately received a “right to sue” letter, that individual
would have a private cause of action that she waived by her
prospective agreement to arbitrate. However, if an individual
subject to an arbitration agreement filed a charge with the
EEOC and put the EEOC on notice of employment practices
violative of Title VII, and the EEOC in turn exercised its right
to sue, that individual would no longer possess a private
cause of action subject to her prior agreement to arbitrate.
Rather, the EEOC would have a cause of action on behalf of
that individual and the public interest that would fall outside
the arbitration agreement.
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Id. at 462. Given the Sixth Circuit’s interpretation of Gilmer, Spencer’s argument fails;
regardless of whether the EEOC sues on behalf of Spencer, this action must be
dismissed. If the EEOC sues, it would bring its own cause of action on behalf of
Spencer and the public at large. Id. If the EEOC issues a right to sue letter, Spencer
would not be able to file suit because she waived that right by agreeing to arbitrate. Id.
Either way, Spencer does not have a private cause of action that can bypass the
arbitration provision.
Dismissal of Spencer’s claim does not interfere with the EEOC’s jurisdiction. The
EEOC is free to file suit on behalf of Spencer should it choose to do so. While the
EEOC can avoid the arbitration provision, Spencer cannot.
D. The Court Cannot Compel Arbitration in the Eastern District of Michigan
Finally, Spencer argues that the arbitration provision is unenforceable because it
provides for arbitration in an unreasonable location—Charlotte, North Carolina. Spencer
says that arbitration in North Carolina is unreasonable because she lives in Michigan
and the events giving rise to the case occurred in Michigan. She argues that the Court
should stay this case to allow the parties to proceed with arbitration in the Eastern
District of Michigan.
Section 4 of the Federal Arbitration Act provides that a party may petition the Court
to order arbitration to proceed “in the manner provided for in such agreement”; however,
Section 4 also provides that arbitration shall be within the Court’s district. Alpert v.
Alphagraphics Franchising, Inc., 731 F.Supp. 685, 689 (D.N.J. 1990). Because the
arbitration agreement provides for arbitration in North Carolina, and this Court is in the
Eastern District of Michigan, compliance with both provisions of Section 4 is impossible.
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Id. See also Econo-Car Intern., Inc. v. Antilles Car Rentals, Inc., 499 F.2d 1391, 1394
(3d Cir. 1974) (“In a case like the present . . . Section 4 can create a perplexing
dilemma: a district court might not be able to order arbitration strictly in accordance with
the terms of the agreement, as one portion of Section 4 seems to require, without
contravening a second portion of Section 4.”).
Spencer cites Alpert in support of her assertion that this Court should stay this action
so that the parties can proceed with arbitration in the Eastern District of Michigan.
However, in Alpert, the United States District Court for the District of New Jersey stayed
the action so that the parties could pursue arbitration in a different jurisdiction, in
accordance with the terms of their agreement. Importantly, the Court only refrained from
dismissing the action because there was a legitimate question concerning whether the
defendant waived its right to arbitrate. Alpert, 731 F.Supp. at 689. Here, there is no
basis on which the arbitration provision could be deemed unenforceable. Moreover,
Spencer voluntarily agreed to arbitrate her claims in North Carolina. As such, Alpert is
inapposite, and this action must be dismissed.
V.
CONCLUSION
For the foregoing reasons, XPO’s motion to dismiss is GRANTED. Spencer’s
complaint is DISMISSED WITHOUT PREJUDICE.
IT IS ORDERED.
s/ Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: December 28, 2018
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The undersigned certifies that a copy of this
document was served on the attorneys of record
and Tina Spencer by electronic means or U.S.
Mail on December 28, 2018.
s/Linda Vertriest
Deputy Clerk
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