Banks v. Remington College - BCL, Inc.
Filing
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Opinion and Order signed by Judge James S. Gwin on 10/6/11. The Court, as set forth in this entry, grants defendant's motion to compel arbitration and dismisses this case. (Related Doc. 6 ) (M,G)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
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CURTIS BANKS,
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Plaintiff,
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vs.
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REMINGTON COLLEGE – BCL, INC.,
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Defendant.
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CASE NO. 1:11-CV-1267
OPINION & ORDER
[Resolving Doc. No. 6]
JAMES S. GWIN, UNITED STATES DISTRICT JUDGE:
Remington College – BCL, Inc. (“Remington”), the Defendant in this employment
discrimination case, has moved to compel arbitration of its former employee’s claims of racial
discrimination. [Doc. 6.] Curtis Banks, the Plaintiff and former employee, opposes Remington’s
motion. Because the Court concludes that Banks has agreed to arbitrate the claims he makes in this
lawsuit, and because that agreement is enforceable, the Court grants Remington’s motion.
I.
On this much the parties agree: In June 2009, Banks applied for a job with Remington. As
part of that application process, Remington required Banks to complete and sign a two-page-long
employment application.
The second page of that application contains nine paragraphs of
conditions, two of which are relevant here. The first, paragraph seven, reads in part:
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Case No. 1:11-CV-1267
Gwin, J.
I further recognize that if employed by the Company, I agree, in partial consideration
of my employment, to file a demand for arbitration to resolve any disputes arising
from my employment, as required under Paragraph 8 below.
[Doc. 6-3.]
Paragraph eight (the only paragraph printed entirely in capital letters) follows:
Any statutory or non-statutory claims arising out of or in connection with any aspect
of my employment or any termination thereof (including by way of example . . . ,
disputes concerning alleged civil rights violations, employment discrimination of any
kind including on the basis of any protected category under federal or state law . . . ),
shall be exclusively subject to binding arbitration under the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association . . . .
I understand that my agreement herein constitutes a waiver of my right to adjudicate
claims against the company in court, and that I am opting instead to arbitrate any
such claims.
Id. (emphasis omitted). Banks signed and dated the back of the application, just below the
end of paragraph eight.
Remington hired Banks, but later fired him. Banks then filed this lawsuit, claiming racial
discrimination in violation of federal and state law. See [Doc. 1.] Remington now seeks to enforce
the arbitration provision contained in Banks’s employment application.1/
II.
“Before compelling an unwilling party to arbitrate, the court must engage in a limited review
to determine whether the dispute is arbitrable; meaning that a valid agreement to arbitrate exists
between the parties and that the specific dispute falls within the substantive scope of that
agreement.” Javitch v. First Union Sec., Inc., 315 F.3d 619, 624 (6th Cir. 2003). There is no dispute
1/
Remington’s employee handbook, which Remington provided to Banks on his first day of orientation, see
[Doc. 13-1], also explained Remington’s alternative dispute resolution procedures, see [Doc. 6-4.]
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that Banks’s claims “fall[] within the substantive scope of” paragraphs seven and eight. That is, each
claim “aris[es] out of or [is] in connection with an[] aspect of [Banks’s] employment or [the]
termination thereof.” See [Doc. 6-3.] Accordingly, if those paragraphs are enforceable, Banks must
submit his claims to arbitration.
Whether those paragraphs are enforceable, however, is a separate question. “Because
arbitration agreements are fundamentally contracts, we review the enforceability of an arbitration
agreement according to the applicable state law of contract formation,” Seawright v. Am. Gen. Fin.
Servs., Inc., 507 F.3d 967, 972 (6th Cir. 2007)—in this case, Ohio law.2/
Under Ohio law, “[t]he elements of a contract include the following: an offer, an acceptance,
. . . consideration . . . , [and] a manifestation of mutual assent.” Lake Land Emp’t Grp. of Akron,
LLC v. Columber, 804 N.E.2d 27, 31 (Ohio 2004). Banks’s signed employment application provided
“that if [Banks was] employed by the Company, [he] agree[d], in partial consideration of [his]
employment,” to arbitrate any disputes arising from that employment. [Doc. 6-3.] That application
was Banks’s offer to Remington, which Remington accepted when it hired him. Furthermore, that
application—designed by Remington and signed by Banks—was an objective manifestation of
Remington’s and Banks’s mutual assent to the conditions of employment listed in the application,
including the arbitration provision. Finally, notwithstanding Banks’s argument to the contrary,
Remington’s employment of Banks was sufficient consideration for Banks’s promise to arbitrate any
employment disputes. See Dantz v. Am. Apple Grp., LLC, 123 Fed. App’x. 702, 709 (6th Cir. 2005)
2/
This is true so long as the relevant state law does not “prohibit[] outright the arbitration of a particular type
of claim” or “disfavor[] arbitration.” AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1747 (2011). Because the
Ohio legal rules at issue here are nothing more than the generally applicable doctrines of contract formation and
unconscionability and do not disfavor arbitration, the Court will apply them.
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(citing Lake Land Emp’t Grp. of Akron, LLC, 804 N.E.2d at 31-32).3/ Accordingly, Banks and
Remington formed a valid contract.
To this Banks offers two responses, neither persuasive. First, he says, the contract is
unenforceable because it is unconscionable. “Unconscionability has generally been recognized to
include an absence of meaningful choice on the part of one of the parties together with contract terms
which are unreasonably favorable to the other party.” Lake Ridge Acad. v. Carney, 613 N.E.2d 183,
189 (Ohio 1993) (quoting Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449 (D.C. Cir.
1965)). Put another way, unconscionability “embodies two separate concepts: (1) unfair and
unreasonable contract terms, i.e., substantive unconscionability; and (2) individualized circumstances
surrounding each of the parties to a contract such that no voluntary meeting of the minds was
possible, i.e., procedural unconscionability.” Wallace v. Ganley Auto Grp., No. 95081, 2011 WL
2434093, at *4 (Ohio Ct. App. June 16, 2011). “The party asserting unconscionability of a contract
must prove both substantive and procedural unconscionability.” Id.
Banks’s claim of unconscionability fails at its first step. There is nothing “outrageous,” as
Banks puts it, about this arbitration agreement. It provides for
3/
Although Banks acknowledges the existence of his employment application, he makes little effort to explain
why the arbitration agreement memorialized in that document is invalid. Rather, he devotes most of his opposition to
explaining why another form he signed— the employee acknowledgment form— does not require him to arbitrate. Banks
signed this acknowledgment form on his first day of orientation, after Remington had provided him with a copy of the
employee handbook. The handbook contained information on Remington’s alternative dispute resolution procedures
and Banks’s signature on the acknowledgment form indicates that he read, understood, and agreed to be bound by those
procedures.
Banks complains that the acknowledgment form provides Remington with a “one-sided Remington-only escape
hatch,” because “the information, policies, and benefits described in the Handbook are subject to change,” and that
“[o]nly the President of the Company has the ability to adopt any revisions to the policies in the Handbook.” [Doc. 6-5.]
Accordingly, Banks says, his promise on the acknowledgment form to arbitrate employment disputes was not supported
by consideration. See Floss v. Ryan’s Family Steak Houses, Inc., 211 F.3d 306, 315-16 (6th Cir. 2000). W hatever might
be said of this argument, it ignores Banks’s earlier offer to arbitrate (in his employment application) in which Banks
promised to arbitrate in partial exchange for his employment. That agreement did not have a similar “escape hatch” and
was supported by consideration.
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Gwin, J.
binding arbitration under the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association[,] . . . all substantive rights and
remedies including any applicable damages provides under pertinent statute(s) related
to such claims, the right to representation by counsel, a neutral arbitrator, a
reasonable opportunity for discovery, a fair arbitral hearing, a written arbitral award
containing findings of fact and conclusions of law, and any other provisions required
by law . . . .
[Doc. 6-3 (emphasis omitted).] Indeed, although Banks suggests that the arbitration provision is “so
one-sided as to oppress or unfairly surprise” him, [Doc. 13], he fails to point to any specific
deficiency in the arbitral process to which he agreed. Rather, he devotes his brief to arguing that the
employee handbook, which describes Remington’s alternative dispute resolution procedures, is
“outrageous” because Remington has the sole ability to revise “the information, policies, and
benefits described in” it. See [Doc. 13, at 9-10.] That misses the point. Whether or not the
handbook constitutes a binding agreement to arbitrate, there is no doubt that the employment
application, which has no language contemplating future revisions, constitutes such an agreement.
And Banks has failed to demonstrate that the terms of that employment agreement are “unfair and
unreasonable.” Wallace, 2011 WL 2434093, at *4.
Banks’s remaining argument—that he did not knowingly and voluntarily waive his right to
a jury trial—also fails. “In evaluating whether a waiver has been knowingly and voluntarily
executed, we look to (1) plaintiff’s experience, background, and education; (2) the amount of time
the plaintiff had to consider whether to sign the waiver, including whether the employee had an
opportunity to consult with a lawyer; (3) the clarity of the waiver; (4) consideration for the waiver;
as well as (5) the totality of the circumstances.” Morrison v. Circuit City Stores, Inc., 317 F.3d 646,
668 (6th Cir. 2003) (en banc) (quoting Adams v. Philip Morris, Inc., 67 F.3d 580, 583 (6th Cir.
1995)).
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Gwin, J.
Banks has no legal training, but he does hold a certificate in Pharmacy Technology from the
U.S.A.F. School of Health Care Science and is pursuing an Associate’s Degree in Science from
Cuyahoga Community College. He presents no evidence of any difficulty reading or understanding
the English language. Rather, he claims that he either “did not read in detail” or “did not read” the
second page of the employment application because he “had no idea what the label at the top meant,
and [] believed it was a standard employer form.” [Doc. 13-1.]4/ There is no evidence that
Remington hurried Banks to complete the employment application, nor is there any evidence that
Remington denied Banks the opportunity to consult with a lawyer prior to signing the application.
See [Doc. 13-1 (“I went to . . . Remington . . . and filled out an application for employment . . . .”).]
Banks does allege that he “was not given a copy of the application to take with” him and that
“[n]o one at Remington explained to [him] what [the second page] meant” or “what arbitration
meant,” but does not say that he ever asked for a copy of the application or asked Remington to
explain to him the terms with which he was unfamiliar. See id. Rather, he signed the application.
See [Doc. 6-3]; accord Aracri v. Dillard’s, Inc., No. 1:10cv253, 2011 WL 1388613 (S.D. Ohio Mar.
29, 2011) (“Aracri had an opportunity to consider the document before signing it.”); Moore v.
Ferrellgas, 533 F. Supp. 2d 740, 749 (W.D. Mich. 2008) (“Plaintiff did not request extra time to
consider the Employee Agreement or to contact a lawyer. Moreover, Plaintiff did not indicate to
Defendant he did not understand the arbitration agreement or any portion of the Employee
Agreement.”). And in exchange, Remington gave Banks “due consideration”—a job. Ferrellgas,
533 F. Supp. 2d at 749.
4/
Banks does not explain what terms and conditions a “standard employer form” might contain. Suffice it to
say, agreements to arbitrate may indeed be “standard.” See George Watts & Son, Inc. v. Tiffany & Co., 248 F.3d 577,
583 (7th Cir. 2001) (“As a final note, mandatory arbitration clauses are prevalent in a broad collection of contracts,
forcing parties to accept the arbitral rather than judicial forum to adjudicate their rights.”).
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As for the waiver itself, it was the only condition on the second page of the employment
application printed entirely in capital letters, see [Doc. 6-3], and in its concluding sentence
explained: “I understand that my agreement herein constitutes a waiver of my right to adjudicate
claims against the company in court, and that I am opting instead to arbitrate any such claims,” id.
That sentence is so close to the signature line—where Banks’s signed his name—that you can
simultaneously cover parts of both with a quarter-dollar coin.
Considering the circumstances, the Court’s finds that Banks’s waiver was knowing and
voluntary.
Accordingly, the Court GRANTS Remington’s motion to compel arbitration and
DISMISSES this case. See Stachurski v. DirecTV, Inc., 642 F. Supp. 2d 758, 764 (N.D. Ohio 2009)
(“If all the claims in the case are within the scope of the arbitration agreement, and there is nothing
left for the district court to do but execute judgment, dismissal of the case is appropriate.”).
IT IS SO ORDERED.
s/
James S. Gwin
JAMES S. GWIN
UNITED STATES DISTRICT JUDGE
Dated: October 6, 2011
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