Champness v. J.D. Byrider Systems, LLC

Filing 19

ORDER granting in part and denying in part 5 Motion to Dismiss or stay proceedings and compel arbitration. Accordingly this action is STAYED pending arbitration. Signed by Judge Susan J. Dlott. (wam1)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
David Champness,
Plaintiff,
v.
J.D. Byrider Systems, LLC,
Defendant.

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Case No. 1:14-cv-730
Judge Susan J. Dlott
Order Granting In Part and Denying In
Part Defendant’s Motion to Dismiss or
Stay Proceedings and Compel Arbitration

This matter comes before the Court on Defendant’s Motion to Dismiss or to Stay
Proceedings and Compel Arbitration (Doc. 5). Plaintiff contests the Motion. For the reasons
that follow, the Motion will be GRANTED IN PART, and this action will STAYED pending
arbitration.
I.

BACKGROUND
The instant action arises from Plaintiff’s employment with and subsequent termination

from Defendant, J.D. Byrider Systems, LLC (“Byrider”).1 Plaintiff David Champness was hired
as an account representative in February 2012, and worked out of Byrider’s Anderson, Ohio
branch throughout his tenure until his termination from employment on October 10, 2013.
(Compl., Doc. 1 at PageID 2–3, ¶¶ 15, 27.)
Plaintiff filed the instant lawsuit on September 13, 2014. Plaintiff claims that during his
employment with Byrider, he was subjected to disparaging comments regarding his age made by
his supervisor. (Id. at PageID 3, ¶ 17.) In May 2013, Plaintiff was hospitalized for stroke-like
systems, and upon his returning to work was told he was “too old” to perform his job. (Id. at
PageID 3, ¶ 23–24.) Plaintiff worked without restrictions following his return to work, but his
1

Defendant asserts that the proper Defendant in this case is J.D. Byrider Sales of Indiana S, Inc., now
called J.D. Byrider Sales of Indiana S, LLC.

supervisor questioned whether Plaintiff could put in the time and effort required by Byrider. (Id.
at PageID 3, ¶ 25.) Although he exceeded his sales goals for the first eight months of 2013, on
October 10, 2013, Plaintiff was terminated. (Id. at PageID 3, ¶¶ 26–27.) Plaintiff now asserts
claims of age discrimination under state and federal law, FMLA retaliation, disparate treatment,
and breach of contract. He seeks reinstatement and to recover lost pay and benefits, front and
back pay, compensatory damages, punitive damages, reasonable attorney’s fees and costs,
prejudgment interest, and all other legal and equitable relief to which he may be entitled.
Shortly after Plaintiff filed his complaint, Defendant filed a Motion to Dismiss or to Stay
the Proceedings and Compel Arbitration (Doc. 5) on the basis that Plaintiff is bound to multiple
agreements to arbitrate his claims. In support of its position, Defendant attached the following
documents it contends contain an agreement by Plaintiff to arbitrate the claims at issue in this
litigation: (1) the J.D. Byrider CNAC Application for Employment (“Employment
Application”), (2) the J.D. Byrider Receipt & Acknowledgment of Having Read the J.D. Byrider
Employee Manual (“Acknowledgment Form”), and (3) the Employee Dispute Resolution Plan
(“Dispute Resolution Plan”).
Plaintiff completed his Employment Application prior to hire on January 17, 2012, which
contains the following language regarding arbitration:
I agree that I will settle any and all claims, disputes, or controversies arising out
of or relating to my application or candidacy for employment, term of
employment, and cessation of employment with the Company, exclusively by
final and binding arbitration before a neutral arbitrator. By way of example only,
such claims include claims under federal, state, and local statutory or common
law, such as sexual harassment, the Age Discrimination and Employment Act,
Title VII of the Civil Rights Act of 1964, as amended, including the amendments
of the Civil Rights Act of 1991, The Americans with Disabilities Act, the law of
contract and the law of tort. Complete details of my agreement to submit these
claims to arbitration are contained in the Company’s Employee Dispute
Resolution Plan, which is available for my review upon my request.
2

(Doc. 5-3 at PageID 41.)
On February 20, 2012, Plaintiff also signed the Acknowledgment Form verifying he read
the Byrider Employee Manual. The Acknowledgment Form includes a statement that Plaintiff
“understand[s] and agree[s] that disputes [he] has with the Company will be settled by binding
arbitration according to the Employee Dispute Resolution Plan.” (Doc. 5-4 at PageID 43.) The
same day, Plaintiff also signed the Dispute Resolution Plan, which states it “is intended to create
an exclusive mechanism for the final resolution of all disputes falling within its terms.” (Doc. 55 at PageID 45.) The Dispute Resolution Plan also states:
This Plan applies to and binds the Company, each Employee who is in the
employment of the Company on or after the effective date of this Plan, and
applicant for employment who applied on or after the effective date of this Plan,
and the heirs, beneficiaries, successors, and assigns of any such persons. All
such persons shall be deemed parties to this Plan.
Except as provided for herein, this Plan applies to any past, present, or future
legal or equitable claim, demand, or controversy, whether or not arising out of
the employment relationship, between persons bound by the Plan. The claims
covered by this Plan include, but are not limited to, claims relating to the
employment of Employee; claims relating to this Plan; claims for wages or other
compensation due; claims for breach of any contract or covenant (express or
implied); tort claims, claims for discrimination (including but not limited to,
race, sex, sexual orientation, religion, national origin, age, marital status, sexual
or other harassment, disability or handicap, or relation); claims for benefits or
other incidents of employment with the Company, provided, however, that this
Plan does apply to claims relating to ERISA-covered plans; and claims for
violation of any federal, state, or other governmental law, statute, regulation, or
ordinance, except claims excluded elsewhere by this Plan.
(Id. at PageID 46.)
Defendant asserts that all three of the afore-mentioned documents constitute
valid agreements to arbitrate. In response, Plaintiff argues the language of the Dispute

3

Resolution Plan is not enforceable, a position he supports with his own Affidavit. (Pl.
Aff., Doc. 9-3 at PageID 96-101.)2
II.

LEGAL STANDARD
Plaintiff’s Motion to Dismiss or to Stay the Proceedings and Compel Arbitration, made

pursuant to Rule 12(b)(1) and the Federal Arbitration Act, 9 U.S.C. § 1, et seq. (the “FAA”), is
properly analyzed as a motion to compel under the FAA. Stepp v. NCR Corp., 494 F. Supp. 2d
826, 828–29 (S.D. Ohio 2007) (motion to compel arbitration is brought under 9 U.S.C. § 1, et
seq., not Fed. R. Civ. P. 12(b)(1)). The FAA provides that “a party to an arbitration agreement
that is aggrieved by another party’s refusal to submit an arbitral dispute to arbitration may
petition any federal court which would otherwise have jurisdiction over the underlying matter to
compel arbitration.” Raasch v. NCR Corp., 254 F.Supp.2d 847, 851 (S.D. Ohio 2003); 9 U.S.C.
§ 4. Thus, the Court will first consider whether the parties’ agreement to arbitrate is enforceable
pursuant to the FAA.
Section 2 of the FAA states that an agreement to arbitrate “shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law in in equity for the revocation of any
contract.” 9 U.S.C. § 2. In examining a contract, the Court:
first, must determine whether the parties agreed to arbitrate; second, it must
determine the scope of that agreement; third, if federal statutory claims are
asserted, it must consider whether Congress intended those claims to be
nonarbitrable; and fourth, if the court concludes that some, but not all, of the
claims in the action are subject to arbitration, it must determine whether to stay
the remainder of the proceedings pending arbitration.

2

Plaintiff has requested oral argument on the instant Motion. The Court granted Plaintiff’s request to file a
surreply, and the issues have been fully briefed by both sides. Because oral argument would not assist the resolution
of the Defendant’s Motion, Plaintiff’s request for an oral argument is denied.
4

Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000). “The FAA then contemplates a stay of
the proceedings in federal court, as compared to dismissal of the action, ‘until such arbitration
has been had in accordance with the terms of the agreement.’” Raasch, 254 F. Supp. 2d at 851
(citing 9 U.S.C. § 3). Once it has been established that arbitration must be compelled, federal
courts have held that dismissal of the action is appropriate where the language of the agreement
dictates the arbitrator’s decision is final and binding. Id.
“In evaluating motions or petitions to compel arbitration, courts treat the facts as they
would in ruling on a summary judgment motion, construing all facts and reasonable inferences
that can be drawn therefrom in a light most favorable to the non-moving party.” Id. At the
same time, the FAA manifests “a liberal federal policy favoring arbitration agreements,
notwithstanding any state substantive or procedural policies to the contrary” and “doubts
concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Moses H.
Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983)).
The validity of an arbitration agreement is determined in accordance with state law.
Floss v. Ryan’s Family Steak Houses, Inc., 211 F.3d 306, 314–15 (6th Cir. 2000). Ohio has the
most significant relationship to the contract and the parties when an arbitration agreement that is
the subject of a dispute between an employee and his employer is allegedly formed in Ohio and
the employee’s employment and termination occur in Ohio. See Morrison v. Circuit City Stores,
Inc., 70 F. Supp. 2d 815, 821 (S.D. Ohio 1999). As both are the case here, the Court will
interpret the contracts at issue in accordance with Ohio law.

5

III.

ANALYSIS

A.

Agreement to Arbitrate Plaintiff’s Claims
The Court finds that the parties entered into two valid agreements to arbitrate Plaintiff’s

claims: the Employment Application and the Dispute Resolution Plan.3 There is no dispute
Plaintiff signed the Dispute Resolution Plan on February 20, 2012 and the Employment
Application on January 17, 2012. (Dispute Resolution Plan, Doc. 5-5 at PageID 46; Pl. Aff.,
Doc. 9-3 at PageID 98; Employment Application, Doc. 5-3 at PageID 42.)
There is also no dispute the claims at issue in this litigation are covered by the broadlyworded arbitration clauses in each agreement. The Dispute Resolution Plan applies to “any past,
present, or future legal or equitable claim, demand or controversy, whether or not arising out of
the employment relationship,” including “claims relating to the employment of Employee,”
“claims for breach of contract,” and “claim[s] for discrimination.” (Doc. 5-5 at PageID 46.) The
Employment Application includes an agreement to “settle any and all claims, disputes, or
controversies arising out of or relating to my application or candidacy for employment, term of
employment, and cessation of employment with the Company” by arbitration, including claims
arising under “federal, state, and local statutory law,” the Age Discrimination and Employment
Act, and “the law of contract.” (Employment Application, Doc. 5-3 at PageID 41.) All of

3

The Court rejects the argument that the Acknowledgment Form is a contract. The Acknowledgment Form
expressly states the “Manual is not a contract of employment or contract of any kind.” See Stanich v. Hissong
Group, Inc., No. 2:09-cv-0143, 2010 WL 3732129, at *4–6 (S.D. Ohio Sept. 20, 2010) (handbook did not create an
agreement to arbitrate where the purported arbitration agreement expressly stated it was not a contract). Moreover,
the Acknowledgment Form lacks mutuality of obligation, as only Plaintiff signed the document and as the alleged
agreement to arbitrate only applies to him, and not to Defendant. See id., 2010 WL 3732129 at *5 (mutuality of
obligation requires both parties to be bound by the terms of a contract).
6

Plaintiff’s claims asserted in this litigation relate to his employment and are covered by the
express language of the two arbitration agreements.4
Plaintiff brings claims of age discrimination under state and federal law, FMLA
retaliation, disparate treatment, and breach of contract and does not argue that his claims do not
fall within the language of the parties’ agreement. Agreements to arbitrate employment disputes
are generally enforceable under the FAA, including employment discrimination and breach of
contract claims. Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 109 (2001); Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 35 (1991) (ADEA claim was subject to compulsory
arbitration pursuant to arbitration agreement); Morgan v. United Healthcare Services, Inc., No.
1:12-cv-676-HJW, 2013 WL 1828940, at *4 (S.D. Ohio April 30, 2013) (FMLA claim was
subject to arbitration); Raasch, 254 F. Supp. 2d at 868 (ADEA and age discrimination claim
under Ohio law were governed by binding arbitration agreement); Leach v. Kenetic Concepts,
Inc., No. 1:06-cv-00525, 2006 WL 3337471, at *2 (S.D. Ohio Nov. 16, 2006) (claims for breach
of contract were subject to arbitration pursuant to the parties’ agreement). Thus, the Court finds
the agreements to arbitrate in this case unambiguously encompass the dispute between the
parties.
B.

Enforceability of the Dispute Resolution Plan
Although Plaintiff does not dispute agreeing to arbitrate, he argues that the terms of the

Dispute Resolution Plan relating to fees and expenses, discovery rules and venue selection are
unenforceable. Defendants argue that Plaintiff cannot establish these provisions are

4

The Employment Application has been found to be a valid and enforceable agreement to arbitrate. See
McLean v. Byrider Sales of Indiana S, LLC, No. 2:13-cv-00524-GLF-MRA, 2013 WL 4777199 (S.D. Ohio Sept. 5,
2013).
7

unenforceable but regardless, any unenforceable provisions are severable from the Dispute
Resolution Plan.
1.

Prohibitive Cost-Shifting, Pay-to-Play, and Loser-Pays Provisions
The Court will first consider Plaintiff’s central argument that the fees and costs

provisions of the Dispute Resolution Plan render the entire agreement unenforceable and act as a
deterrent to him and other similarly situated litigants. Three provisions are at issue: a costshifting provision tying Plaintiff’s upward exposure for arbitration fees and costs to the greater of
$10,000 or ten percent the amount in controversy, a pay-to-play provision requiring Plaintiff to
tender an unknown security deposit prior to arbitration, and a loser-pays provision. Specifically,
Section 14, Fees and Expenses, states:
A. The parties shall equally share the cost of any filing fee and the fees and costs
of the Arbitrator; provided, however, that the Employee’s maximum
contribution shall be the greater of: (i) $10,000.00 or (ii) 10% of the amount in
controversy. The Arbitrator has the authority upon motion to further reduce
the Employee’s share of the costs and fees upon a showing of substantial
need,
B. Each party shall deposit funds or post other appropriate security for its share
of the Arbitrator’s fee, in an amount to be determined by the Arbitrator, ten
days before the first day of the hearing,
C. Each party shall bear its own costs and attorney’s fees; provided, however,
that the Arbitrator may award attorney’s fees and costs to the prevailing party
in accordance with the terms of this Plan.
(Doc. 5-5 at PageID 50, ¶14.) In addition, Section 13 of the Dispute Resolution Plan provides
that the Arbitrator may award attorney’s fees and costs to the prevailing party:
[u]pon a finding that a party has sustained its burden of proof on any dispute or
counterclaim, the Arbitrator may award such monetary or injunctive relief as may
be just and reasonable under applicable law. In awarding relief, however, the
Arbitrator shall abide by this Plan and shall further adhere to the following
guidelines:
...
B. The Arbitrator may award any party its reasonable attorney’s fees and costs,
including reasonable expenses associated with production of witnesses or
8

proof incurred in defending against a dispute or counterclaim that is frivolous
or brought for the purpose of harassment.
(Id. at PageID 50, ¶13.)
The Court will first consider the issue of the cost-shifting and pay-to-play provisions of
the Dispute Resolution Plan. Although Defendant argues that the issue of arbitration fees and
costs is properly raised after arbitration, the issue is not premature. The Sixth Circuit has held
that “potential litigants must be given an opportunity, prior to arbitration on the merits, to
demonstrate that the potential costs of arbitration are great enough to deter them and similarly
situated individuals from seeking to vindicate their federal statutory rights in the arbitral forum.”
Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 663 (6th Cir. 2003) (en banc). Thus, if the
splitting of costs of the arbitral forum under the terms of an arbitration agreement prevents the
vindication of a plaintiff’s statutory rights, those rights cannot be subject to mandatory
arbitration under that agreement. Id. at 658.
In determining whether the cost-shifting provision of an arbitration agreement is
enforceable, the Court must inquire into whether “the potential costs of arbitration are great
enough to deter [potential litigants] and similarly situated individuals from seeking to vindicate
their federal statutory rights in the arbitral forum.” Id. at 663. “Reviewing courts must ‘define
the class of … similarly situated potential litigants by job description and socioeconomic
background,’ and ‘look to average or typical arbitration costs’ weighted against ‘the potential
costs of litigation.’” Mazera v. Varsity Ford Management Services, LLC, 565 F.3d 997, 1003
(6th Cir. 2009) (citing Morrison, 317 F.3d at 663–64.) “In short, where ‘the overall cost of
arbitration, from the perspective of the potential litigant, is greater than the cost of litigation in
court,’ and the ‘additional expense … would deter potential litigants from bringing their statutory
9

claims in the arbitral forum,’ the cost-shifting provision is unenforceable.” Id. at 1003 (citing
Morrison, 317 F.3d at 664.)
Plaintiff asserts in his Affidavit that he earned $29,000 in 2012 and $49,811.43 while
working for Byrider in 2012 and 2013 respectively. (Doc. 9-3 at PageID 97.) Following his
termination from employment, Plaintiff received unemployment benefits for approximately
seven months, which, after taxes and child support, amounted to less than $350 in benefits every
two weeks. (Id.) On May 12, 2014, Plaintiff began a new job, for which his current salary is
$36,000 annually and his sole means of support. (Id.) Thus, Plaintiff represents a class of
account representatives who earn between $25,000 and $50,000 per year, who shoulder family
expenses, such as child support, and who may face a significant amount of unemployment
following termination from employment. As the Morrison Court noted: “[r]ecently terminated, a
potential litigant must continue to pay for housing, utilities, transportation, food and the other
necessities of life in contemporary society despite losing [his] primary, and most likely only,
source of income.” Morrison, 317 F.3d at 669.
The Court must also consider the costs of arbitration in this case weighed against the
potential costs of litigation. In this case, there is no question that the costs of arbitration will
exceed the costs of litigation. Plaintiff estimates that the costs and fees of arbitration include
pre-arbitration conferences, resolution of discovery disputes, motion practice, renting a venue,
travel, arbitration, and costs associated with the arbitrator drafting a decision. (Doc. 9-3 at
PageID 100.) Based upon Plaintiff’s research, arbitrators on the AAA panel often charge $300
to $500 per hour on pre-trial issues, and $1,250 to $1,5000 daily for arbitration. (Id.) Applying
those rates, Plaintiff estimates that an arbitrator’s fees in this matter could fall between $5,500 to

10

$7,000 for ten hours of work on pre-trial matters, and two days of arbitration and decision
writing. (Id.)
Pursuant to the terms of the Dispute Resolution Plan, Plaintiff faces paying the greater of
$10,000 or ten percent the amount of controversy for his share of arbitration fees and costs.
Unlike litigation, he must also pay-to-play and post an undetermined amount in security ten days
prior to arbitration. In short, there is no way for Plaintiff to determine his maximum upwards
exposure to realistically assess his arbitration cost. But for the sake of completeness,
based upon his current demand of $250,000, Plaintiff’s current maximum exposure is $25,000.
Plaintiff’s upwards exposure hinges upon his demand and estimated damages, so this upwards
exposure is subject to change. In contrast, based upon Plaintiff’s current and modest estimation
of arbitration expenses, Plaintiff’s share for the cost of arbitration could be at least $2,750, which
is approximately thirteen percent of his Plaintiff’s current income. This amount is particularly
burdensome considering Plaintiff’s unemployment following his termination from employment.
Moreover, Plaintiff has no way to estimate the expense of a security deposit required to be
posted in advance of arbitration. In contrast, Plaintiff’s litigation costs, aside from the work of
his counsel, include a $400 filing fee and exclude the cost of a security deposit or decisionmaker’s time. It is clear that the costs of arbitration are a significant and intentional deterrent to
filing a claim.
Plaintiff filed this litigation because he argues the costs of arbitration exceed his limited
financial resources and act as a deterrent for pursing his claims. The Court agrees. Both the
cost-shifting and pay-to-play provisions are clear efforts to deter Plaintiff and other similarly
situated litigants from seeking redress and enforcing their statutory rights. Most egregious is the
fact that Plaintiff’s share of arbitration costs is tied directly to his own demand. This is
11

particularly nefarious considering the greater a potential litigant may have been harmed, the
greater his arbitration cost exposure will be. Thus, the Court is satisfied Plaintiff has met his
burden in demonstrating that the heavy-handed cost-shifting and pay-to-play arrangement in the
arbitration agreement would deter a substantial number of similarly situated persons from
attempting to vindicate their statutory rights in an arbitral forum, thus rendering the provisions
unenforceable.
The Defendant argues that Plaintiff cannot show that the arbitration would be
prohibitively expensive because he bears the burden of showing the likelihood of incurring the
costs of arbitration. Under Section 14(A) of the Dispute Resolution Plan, “[t]he Arbitrator has
the authority upon motion to further reduce the Employee’s share of the costs and fees upon a
showing of substantial need.” (Doc. 5-5 at PageID 50.) In Mazera, the plaintiff, who had signed
an agreement to arbitrate, was able to request his employer waive the $500 arbitration filing fee
by submitting a request to his general manager, and there was evidence that the defendant
employer would likely grant the plaintiff’s request. 565 F.3d at 1000, 1004–05. Thus, the Court
found that the plaintiff had not met his burden of demonstrating he was likely to incur
substantial, prohibitive fees in pursuing arbitration. Id.
By contrast, the language of the fees and expenses provision of the Dispute Resolution
Plan is significantly more burdensome. The potential fees at issue are far greater than the $500
filing fee at issue in Mazera, as Plaintiff must bear the greater of up to $10,000 or ten percent of
the amount in controversy and pay a security deposit to be determined by the arbitrator ten days
prior to the hearing. While the arbitrator may reduce Plaintiff’s share of fees, there is no
evidence to suggest that Plaintiff would meet the “substantial need” standard or that the arbitrator
is authorized to waive all fees in their entirety. There is also no method by which the Plaintiff
12

may request a waiver of the pay-to-play security deposit. Moreover, Defendant’s statement that
it “may not object” to a request for a reduction in fees is not evidence that a request would be
granted. Thus, this case is not analogous to Mazera, and Plaintiff has met his burden that he is
likely to incur significant, prohibitive costs if he filed for arbitration pursuant to the parties’
agreement.
The Court now turns to the loser-pays provisions of Sections 13(B) and 14 of the Dispute
Resolution Plan. These provisions are unenforceable as they provide recovery to a successful
defendant-employer that was not intended under the FMLA. Deher v. Eskco, Inc., Nos. 3:08-cv325, 3:09-cv-209, 2009 WL 2176060, at *8 (S.D. Ohio July 21, 2009) (adopting magistrate’s
report and recommendation that loser-pays provision in the arbitration clause was unenforceable
because it provided recovery to the defendant-employer not extended to FMLA defendants under
the statute).
As such, the cost-shifting, pay-to-play, and loser-pays provisions of Section 13(B) and 14
are unenforceable.
2.

Restrictive Discovery Limitation
Plaintiff also contends that the limit on the number of interrogatories is unenforceable.

Section 10(B)(2) of the Dispute Resolution Plan states as follows: “The Arbitrator shall have
discretion to determine the form, amount, and frequency of discovery, subject to the following
guidelines: . . . Each party may propound one set of no more than ten interrogatories, including
subparts. Additional interrogatories may be propounded only upon a show of good cause.”
(Doc. 5-5 at PageID 48.) Plaintiff does not cite any authority in support of his argument, while
Defendant argues that Plaintiff has not made any showing he would need to propound greater
than ten interrogatories or that the arbitrator would refuse a request to do so. Defendant also
13

argues that the Dispute Resolution Plan calls for discovery to be conducted “in accordance with
the Federal Rules of Civil Procedure, subject to any restrictions imposed by the Arbitrator of the
Plan.” (Id. at PageID 48.)
The Sixth Circuit has held that limitations on discovery in the arbitral forum do not
prejudice an employee’s ability to prove his statutory claims. Howell v. Rivergate Toyota, Inc.,
144 Fed. App’x 475, 480–81 (6th Cir. 2005) (holding that a limitation on discovery was not
likely to prejudice the employee’s ability to prove his statutory claims). In Howell, the Court
rejected the plaintiff’s argument that the parties’ limited discovery procedure, which permitted
additional discovery upon a showing of good cause, prevented the plaintiff’s ability to prove his
statutory claims. Id. at 481. Similarly, the Court is not persuaded that Plaintiff will be unable to
vindicate his statutory rights with the applicable reduced discovery imposed by the Dispute
Resolution Plan. See also Prasad v. General Elec. Co., No. 2:13-cv-272, 2014 WL 934577, at
*4 (S.D. Ohio Mar. 10, 2014) (limit on pre-trial discovery not restrictive where arbitrator had the
authority to order additional discovery necessary for a full and fair exploration of the issues in
dispute). As such, the Court finds that the discovery procedures of the Plan are enforceable.
3.

Inconvenient Forum
Plaintiff argues that the forum selection of Indianapolis, Indiana established by Section 9

of the Dispute Resolution Plan is unenforceable. He argues that the forum is inconvenient and
will cause greater expense to him, as he is located and worked in Cincinnati, Ohio, which is more
than three hours away from Indianapolis. In responding to Plaintiff’s argument, Defendant
stated that it is willing to hold the arbitration in Cincinnati, Ohio. (Doc. 13 at PageID 125)
(“Byrider would be willing to hold the arbitration hearing in Cincinnati if Plaintiff would so

14

prefer.”) As the Defendant’s offer addresses the Plaintiff’s concerns about cost and convenience,
the Court orders that the parties’ arbitration be held in Cincinnati, Ohio.
4.

Limitation on Remedies
This Court also finds that the Dispute Resolution Plan’s limitation on remedies violates

established precedent of this Circuit. Section 6(B) of the Dispute Resolution Plan prohibits
recovery of punitive damages, as it states, “[y]ou may not seek punitive damages to any statutory
claim relating to your employment or termination of employment.” (Doc. 5-5 at PageID 47.) In
Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 670 (6th Cir. 2003), cited by both parties
throughout their briefing, the Court held that an arbitration agreement curtailing a Title VII
plaintiff’s remedies “undermine[d] both the remedial and deterrent principles of Title VII,” and
was unenforceable. Specifically, the limitation on remedies “eviscerate[d] Congress’s intent to
utilize punitive damages as a tool for combating discrimination.” Id. at 672.
Section 6(B) of the Dispute Resolution Plan undermines the remedial purposes of OHIO
REV. CODE Chapter 4112, which authorizes an award of punitive damages in civil employment
discrimination contexts. As Morrison noted, “[i]t is well-established that ‘a party does not forgo
the substantive rights afforded by [a] statute [when she agrees to arbitrate a statutory claim but]
only submits to their resolution in an arbitral, rather than a judicial, forum.’” Id. at 670 (citing
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991)). The critical issue is not
whether a claimant may attain some of the remedies under the statute but whether the limitation
on remedies at issue “undermines the rights protected by the statute.” Id.
OHIO REV. CODE § 4112.99 authorizes an award of punitive damages in civil employment
discrimination contexts, including in age discrimination cases. Rice v. CertainTeed Corp., 704
N.E.2d 1217, 1218 (Ohio 1999); see Johnson v. Con-Way Freight, Inc., No. 4:10cv2167, 2010
15

WL 4735754, at *1 (N.D. Ohio 2010) (noting OHIO REV. CODE Chapter 4112 permits recovery
of front pay, back pay, and other compensatory damages, as well as punitive damages and
attorney’s fees). In addressing the issue of whether OHIO REV. CODE § 4112.99 authorizes an
award of punitive damages in civil employment discrimination contexts, the Ohio Supreme
Court issued a resounding “yes,” noting the statute is remedial in nature but also possesses a
“deterrent component concerned with preventing socially noisome business practices.” Rice,
704 N.E.2d at 1218, 1220–21. Plaintiff’s age discrimination claim under state law is brought
under OHIO REV. CODE §§ 4112.14 and 4112.99, and he seeks to recover punitive damages.
Thus, consistent with Morrison, the Dispute Resolution Plan’s limitation of punitive damages
undermines the rights protected by the Ohio Revised Code. As such, this Court finds that
Section 6(B) of the Dispute Resolution Plan is not enforceable.
C.

Severability
The parties diverge on the issue of whether the unenforceable provisions of the parties’

Dispute Resolution Plan should be severed or render the entire Plan unenforceable. Under Ohio
law, whether unenforceable provisions render the entire agreement unenforceable or are properly
severed is determined by the intent of the parties. Morrison, 317 F.3d at 674–75 (citing Toledo
Police Patrolmen's Ass'n v. City of Toledo, 641 N.E.2d 799, 803 (Ohio App. 1994), appeal
denied, 639 N.E.2d 795 (Ohio 1994)). Section 16 of the Dispute Resolution Plan states:
Each provision and individual covenant of this Agreement is severable. If any
court or other governmental body of competent jurisdiction shall conclude that
any provision or individual covenant of this Agreement is invalid or
unenforceable, such provision or individual covenant shall be deemed ineffective
to the extent of such unenforceability without invalidating the remaining
provisions and covenants hereunder. The court shall sever the unenforceable
provision and enforce the remainder of this Agreement and the Arbitration Rules.

16

(Doc. 5-5 at PageID 50.) Thus, the language of the Dispute Resolution Plan clearly states that
even if some provisions are found to be unenforceable, as in this case, they are properly severed,
and the remainder of the agreement is to be enforced.
Severability in this context is consistent with the precedent in this Circuit. In Morrison,
the Court found both a cost-shifting and limitation on remedies provisions to be unenforceable,
and held that severance of the unenforceable provisions was permissible. 317 F.3d at 674.
Later, in Scovill v. WSYX/ABC, 425 F.3d 1012, 1016 (6th Cir. 2005), the Court examined a
district court’s decision to sever unenforceable provisions of an arbitration agreement, and noted
that the language of the two severability clauses at issue left “little to doubt” as to whether the
parties intended the enforceable provisions to be severed. The Court also rejected the plaintiff’s
argument that severance was not permissible because there were multiple unenforceable
provisions, finding Morrison instructive. Id. at 1016–17. The Court held, “[w]e do not think the
Plaintiff has presented enough evidence to show that the agreement in this case is one where the
unenforceable provisions are so overwhelming as to ‘taint’ the rest of the agreement.” Id. at
1017.
The facts of this case are not distinguishable enough to allow this Court to conclude that
the unenforceable provisions so taint the entire Dispute Resolution Plan so as to render it entirely
unenforceable. The Court concludes it must follow Sixth Circuit precedent and sever the
unenforceable provisions of the Dispute Resolution Plan and enforce the remainder of the
agreement.

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D.

Unconscionability
Plaintiff alternately argues that the entire Dispute Resolution Plan is unconscionable

under Ohio law. Under Ohio law, the unconscionability doctrine consists of both substantive
unconscionability, or “unfair and unreasonable contract terms,” and procedural
unconscionability, or “individualized circumstances surrounding each of the parties to a contract
such that no voluntary meeting of the minds was possible.” Scovill, 425 F.3d at 1017 (citing
Jeffry Mining Prods., L.P. v. Left Fork Mining Co., 758 N.E.2d 1173, 1181 (Ohio App. 2001)).
Both procedural and substantive unconscionability must be established to find a contract
unconscionable. Id.
Plaintiff cannot meet the threshold for establishing procedural unconscionability, nor
does he cite any case law to demonstrate the facts of his case rise to the level of procedural
unconscionability under Ohio law. In determining whether procedural unconscionability exists,
“Ohio courts look to ‘factors bearing on the relative bargaining position of the contracting
parties, including their age, education, intelligence, business acumen and experience, relative
bargaining power, who drafted the contract, whether the terms were explained to the weaker
party, and whether alterations in the printed terms were possible.’” Id. (citing Cross v. Carnes,
724 N.E.2d 828, 837 (Ohio App. 1998)).
Plaintiff states that he did not have an opportunity to review the costs or fees he was
expected to pay in the event he sought arbitration under the agreement, and he has no
recollection of signing the Dispute Resolution Plan. (Doc. 9-3 at PageID 98.) These facts are
not sufficient evidence of procedural unconscionability. See Vanyo v. Clear Channel
Worldwide, 808 N.E.2d 482, 486 (Ohio App. 2004) (there was no record evidence to allow the
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court to conclude that the plaintiff was unaware of the impact of the agreement or otherwise
limited in understanding its impact, particularly as the agreement itself contained an
acknowledgment that she was given the opportunity to discuss the agreement with an attorney).
Here, as in Vanyo, the language of the Dispute Resolution Plan includes a statement that
the signing party has an opportunity to consult an attorney. (Doc. 5-5 at PageID 45.) The
Dispute Resolution Plan also includes Section 19, Special Provision For Persons Over 40, which
provides for twenty-one days to consider the agreement and seven days to revoke signature. (Id.
at PageID 51.) Moreover, the Dispute Resolution Plan is drafted in regular font, conspicuously
labeled on the first page as “EMPLOYEE DISPUTE RESOLUTION PLAN” and lacks any
hidden or fine print. See Taylor Bldg. Corp. of Am. v. Benfield, 884 N.E.2d 12, 23 (Ohio 2008)
(finding arbitration agreement was not procedurally unconscionable where font size was standard
and not hidden, plaintiffs initialed and signed the agreement, and there was no evidence of
plaintiffs being rushed through review of the contract or being prevented from consulting an
attorney). Thus, the Court concludes that based on the record, there is insufficient evidence to
establish procedural unconscionability existed in this case.
Because unconscionability requires both procedural and substantive unconscionability,
the Court need not consider Plaintiff’s argument that the Dispute Resolution Plan is substantively
unconscionable. See Scovill, 425 F.3d at 1018. Thus, there is insufficient evidence to establish
the Dispute Resolution Plan was unconscionable under Ohio law.
IV.

CONCLUSION
For the foregoing reasons, the Court finds Plaintiff has agreed to arbitrate his claims and

therefore must be compelled to do so. As such, Defendant’s Motion to Dismiss or to Stay
Proceedings and Compel Arbitration (Doc. 5) is GRANTED IN PART AND DENIED IN
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PART. The Court finds that Sections 6(B), 13(B), and 14 of the Dispute Resolution Plan are
unenforceable and are therefore severed from the Dispute Resolution Plan. The Court
COMPELS ARBITRATION of the instant dispute pursuant to the terms of the Dispute
Resolution Plan sans the unenforceable provisions. The Court further orders that the arbitration
occur in Cincinnati, Ohio. Pursuant to Section 11 of the Dispute Resolution Plan, the AAA
Employment Dispute Resolution Rules shall apply to the fees and costs of this dispute.
The Court has discretion to stay or dismiss the instant matter. See 9 U.S.C. § 3
(mandating courts to stay proceedings pending completion of arbitration); Hensel v. Cargill, Inc.,
No. 99-3199, 1999 WL 993775, at *4 (6th Cir. Oct. 19, 1999) (permitting courts to dismiss
actions in which all claims are referred to arbitration). Under the facts of this case, the Court
finds that staying Plaintiff’s claim will promote judicial economy. Accordingly, this action is
STAYED pending arbitration.
IT IS SO ORDERED.
S/Susan J. Dlott________________
Judge Susan J. Dlott
United States District Court

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