Talley v. Brinker Oklahoma Inc et al
Filing
17
ORDER denying 5 Motion to Dismiss and Compel arbitration as set forth herein. Signed by Honorable Lee R. West on 8/22/16. (ml)
IN THE UNITED STATES DISTRICT COURT FOR
THE WESTERN DISTRICT OF OKLAHOMA
SHAMYRA TALLEY,
Plaintiff,
No. CIV-16-451-W
vs.
BRINKER OKLAHOMA, INC., also
known as CHILI'S OKLAHOMA, INC.,
BRINKER INTERNATIONAL PAYROLL
COMPANY, L.P., doing business as
CHILI'S GRILL & BAR and CHILI'S
HAMBURGER GRILL AND BAR, INC..
and BRINKER INTERNATIONAL, INC.,
Defendants.
ORDER
Plaintiff Shamyra Talley brought this action on May 2, 2016, seeking relief under
Title VII of the Civil Rights Act of 1964 ("Title Vll"), as amended, 42 U.S.C. § 2000e et seq.
Talley named as defendants Brinker Oklahoma, Inc.. also known as Chili's Oklahoma, Inc.,
Brinker International Payroll Company, L.P.. doing business as Chili'sGrill &Bar and Chili's
Hamburger Grill and Bar, Inc. ("Brinker Payroll"), and Brinker International. Inc., which
operate several restaurants in the State of Oklahoma. Talley alleged in her complaint that
during her employment as a server at one particular restaurant, she was subjected to a
hostile work environment because of her gender and retaliation because she protested the
harassment, offensive comments and sexual assaults and advances.
Talley was first hired by the defendants in January 2006, and she remains employed
by the defendants at a restaurant other than the one at which the alleged discriminatory
and retaliatory conduct occurred.^
Each time Talley applied for employment, she
completed certain papenwork. Applications dated January 10, 2006,^ December 9. 2006,
and June 19, 2008, ^
Doc. 5-1 at 7, 9, 11, required Talley to read and sign the
accompanying Agreement to Arbitrate, and each advised that execution of the Agreement
to Arbitrate was a condition of employment. See id. at 8. 10, 14.
On June 4, 2014, Talley again applied for employment with the defendants. See
Doc. 1 at 4, H 10. An Agreement to Arbitrate dated that same day reflects Talley's
electronic signature, s^ Doc. 5-1 at 17, and provides in pertinent part that if an employee
is
unable to resolve any... complaints or disputes [relating to her employment]
to . . . [the employee's] satisfaction internally, [the defendants] . . . ha[ve]
provided for the resolution of all disputes that arise between [the employee]
. . . and [the defendants]. .. through formal, mandatory arbitration before a
neutral arbitrator.
Id. at 16. The employee's electronic signature on that document "affirm[s] that. . . [the
employee] ha[s] read the . . . Agreement to Arbitrate and agree[s] to resolve all
[employment-related] disputes . . . through formal, mandatory arbitration . . .
id. at 17.
The defendants distribute or make available to their employees a document, which
since 2010 has been known as the "Hourly Team Member Policies and Procedures Manual
('Manual')." See id. at 26. An employee indicates receipt of the Manual through his or her
signature, which is an acknowledgement that the employee not only has "read,
^See Declaration of Chris Gravens (July 13, 2016) at 3, U4. Talley has advised that she
is now on maternity leave. See Affidavit and Declaration of Shamyra T. Talley (August 2, 2016)
at 4,1125.
^Although Talley does "not recall reviewing and signing the Arbitration Agreement dated
January 10, 2006.... [she concedes that] the signature [on the document]... appears to be [her]
. . . handwriting." Jd. at 2, ^ 6.
understancl[s] and [is] ... in compliance vyith each policy[ ] [set forth] in the Manual[,
including that section pertaining to the Agreement to Arbitrate,]. . .[but also understands
that such compliance] is a condition of. . . employment with [the defendants]...jd. A
papertitled "Receipt of Brinker's Hourly Team Member Policies &Procedures Manual" and
dated June 4, 2014, bears Talley's electronic signature. See id.
The matter now comes before the Court on the defendants' Motion to Dismiss and
Compel Arbitration filed pursuant to the Federal Arbitration Act ("Act"), 9 U.S.C. § 1 et seq.
Talley has responded, and the defendants have filed a reply.
Section 2 of the Act, which has been described by the United States Supreme Court
as "the 'primary substantive provision of the Act,"' AT&T Mobilitv LLC v. Concepcion. 563
U.S. 333, 339 (2011 )(quoting Moses H. Cone Memorial Hospital v. Mercury Construction
Corporation, 460 U.S. 1, 24 (1983)), and "as reflecting both a 'liberal federal policyfavoring
arbitration,"' jd- (quoting Moses H. Cone, 460 U.S. at 24), "and the 'fundamental principle
that arbitration is a matter of contract,"' jd. (quoting Rent-A-Center, West. Inc. v. Jackson.
561 U.S. 63, 67 (2010)), provides in relevant part that
[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 ... or an agreement in writing to submit to arbitration
an existing controversy arising out of such a contract[ ] [or] transaction . . .
shall be valid, irrevocable, and enforceable, save upon such grounds as exist
at law or in equity for the revocation of any contract.
9 U.S.C. §2.
Sections 3 and 4 of the Act "establish[ ] [the] procedures by which federal courts
implement [section] 2's substantive rule." Rent-A-Center. 561 U.S. at 68. Under section
3,
[i]f any suit... be brought in any of the courts of the United States upon an
issue referable to arbitration under an agreement in writing for such
arbitration, the court in which such suit is pending, upon being satisfied that
the issue involved in such suit . . . is referable to arbitration under such
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....
9 U.S.C. § 3.
Section 4 further provides that
[a] party aggrieved by the alleged failure ... or refusal of another to arbitrate
under a written agreement for arbitration may petition any United States
district court which, save for such agreement, would have jurisdiction ... in
any civil action ... of the subject matter of a suit arising out of the
controversy between the parties, for an order directing that such arbitration
proceed in the manner provided for in such agreement. . . .
Id. §4.
Before "the [C]ourt shall make an order directing the parties to proceed to
arbitration," id-, the Court must find that a valid written agreement to arbitrate exists
between the parties and that the parties are therefore "bound by a contractual duty to
arbitrate . . . ." ARW Exploration Corporation v. Aauirre. 45 F.3d 1455, 1460 (10^^ Cir.
1995): e.g.. Avedon Engineering. Inc. v. Seatex. 126 F.3d 1279, 1283 (10'^ Cir. 1997).
The crucial document in the instant case is the Agreement to Arbitrate dated June
4,2014. See Doc. 5-1 at16-17. There can be no dispute that this document, ifexecuted
by Talley, clearly constitutes "an agreement in writing to submit to arbitration an[y] existing
controversy arising out[,]" 9 U.S.C. § 2, Talley's employment with the defendants, and
Talley has not argued otherwise.
The issue rather is whetherTalley executed the arbitration agreement.^ Talley has
not denied that she did so; rather, she has stated only that she "do[es] not recall reviewing
and/or signing the . . . [A]greement [to Arbitrate] dated June 4, 2014[.]" Affidavit and
Declaration of Shamyra T. Talley (August 2, 2016) at 2, H12 (hereafter "Talley Affidavit").
Under Rule 406. F.R.E., "[e]vidence of... an organization's routine practice may
be admitted to prove that on a particular occasion the... organization acted in accordance
with th[at] . . . practice. . . . [T]his evidence [is admissible] regardless of whether it is
corroborated . . .
As the Tenth Circuit has held, the Court may accept such evidence at this stage of
the litigation and may draw the inference therefrom that this routine practice was
implemented in this instance. E.g.. Hancock v. American Telephone &Telegraph Co.. 701
F.3d 1248, 1261-63 (10'^ Cir. 2012); Morris v. Travelers Indemnity Co. of America. 518
F.Sd 755, 761 (10^^ Cir. 2008)(affidavit from agent that itwas his usual practice to explain
various coverage options constitutes relevant evidence that his conduct on the relevant
occasion was in conformity with that routine practice): Federal Kemper Life Assurance Co.
V. Ellis. 28 F.Sd 1033, 1040 (10'^ Cir. 1994)(testimony regarding organization's "standard
operating procedure" admissible to show adherence to procedure on particular occasion).
^'"When parties dispute the making of an agreement to arbitrate, a jury trial on the existence
of the agreement is warranted unless there are no genuine issues of material fact regarding the
parties' agreement.'" Hardin v. First Cash Financial Services. Inc., 465 F.Sd 470, 475 (10'^ Cir.
2006)(quoting Avedon Engineering. Inc. v. Seatex. 126 F.Sd 1279, 1283 (10'^ Cir. 1997)). '"When
... no material disputes of fact exist it [is] . . . permissible and efficient for [the] . . . [Cjourt to
decide the arbitration question as a matter of law through motions practice and viewing the facts
in the light most favorable to the party opposing arbitration." Howard v. Ferrellaas Partners. L.P..
748 F.3d 975, 978 (10'^ Cir. 2014)(citing Hancock v. American Telephone &Telegraph Co.. 701
F.Sd 1248, 1261 (10'^ Cir. 2012)).
See Rule 406, supra. Advisory Committee Notes (generallyagreed "that habit evidence is
highly persuasive as proof of conduct on a particular occasion.").
In response to Talley's assertions, the defendants have submitted the sworn
statement of Brandon Loeffler, Brinker Payroll's Talent Systems Analyst. See Declaration
of Brandon Loeffler (August 9, 2016). Loeffler has explained the defendants' hiring
process, which includes completion by new hires of"onboarding" papen/vork and execution
and submission by these individuals of"electronic signature agreements"'^ and agreements
to arbitrate. Because Talley has not disputed the defendants' standard-practice evidence,
the Court finds even giving Talley "the benefit of all reasonable doubts and inferences that
may arise[,]'" Hancock. 701 F.3d at 1261 (quotation and further citation omitted), from the
evidence, as the Court is required to do, that the defendants have shown that an
agreement to arbitrate exists between the parties.
Accordingly, the Court must next inquire, e^, Cumminasv. FedEx Ground Package
System. Inc.. 404 F.3d 1258, 1261 (10'^ Cir. 2005), whether Talley's dispute with the
defendants falls within the scope of that arbitration agreement. E.g.. Granite Rock Co. v.
International Brotherhood of Teamsters. 561 U.S. 287, 2856 (2010)(court may order
arbitration of particular dispute only where court is satisfied that "parties agreed to arbitrate
that dispute")(emphasis deleted).
Talley has advanced no strong objection to the
applicability or enforceability of arbitration clauses in lawsuits involving Title VII claims,
such as the case-at-bar. Indeed, it is well-established "that federal statutory claims can be
'^E.q.. 15 U.S.C. § 7001(a)("signature . . . may not be denied legal effect, validity, or
enforceability solely because it is in electronic form"); 12A O.S. § 15-107(a)("signature may not be
denied legal effect or enforceability solely because it is in electronic form").
appropriately resolved through arbitration," Green Tree Financial Corp.-Alabama v.
Randolph, 531 U.S. 79, 89 (2000), and that TitleVII claims in particular may be subject to
mandatory arbitration. E.g., Metz v. Merrill Lynch. Pierce. Fenner &Smith. Inc.. 39 F.3d
1482, 1487 (10'^ Cir. 1994).
Finally, the Court has considered Talley's remaining challenge:
she "cannot
effectively vindicate her statutory rights under Title VII .. . ," Doc. 14 at 2, because she
cannot afford the costs of arbitration ^ the costs of legal representation. See Talley
Affidavit at 4, TIH 24-28. As stated, Section 2 permits agreements to arbitrate "to be
declared unenforceable upon such grounds as exist at law or in equity for the revocation
of any contract.'" AT&T Mobility. 563 U.S. at 339.
Agreements may therefore "be
invalidated by 'generally applicable contract defenses, such as fraud, duress, or
unconscionability,"' jd-. or, as Talley has invoked in this case, the judge-made exception
to the Act which permits the Court "to invalidate, on 'public policy' grounds, arbitration
agreements that 'operat[e]... as a prospective waiver of a party's right to pursue statutory
remedies.'" American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304, 2310
(2013)(quoting Mitsubishi Motors Corp. v. SolerChrvsler-Plvmouth, Inc.. 473 U.S. 614,637
n.19 (1985))(emphasis deleted): e^, Nesbitt v. FCNH. Inc., 811 F.3d 371 (10'^ Cir. 2016).
The Tenth Circuit has held that while an arbitral forum is presumptively adequate
to resolve federal statutory claims, this presumption falters "if the terms of [the] . . .
arbitration agreement actually prevent [the employee]. . . from effectively vindicating . . .
her statutory rights." Shankle v. B-G Maintenance Management of Colorado, Inc.. 163
F.3d 1230,1234 (10'^ Cir. 1999)(citations omitted). Because "an arbitration agreement that
prohibits use of the judicial forum as a means of resolving statutory claims must also
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provide for an effective and accessible alternative forum[,]" jd- (footnote omitted), this
"effective vindication" exception has been applied to deny enforcement of an arbitration
agreement that required a plaintiff seeking relief against an employer under federal anti
discrimination lavjs to pay certain arbitration costs. E.g.. id.
In Shankle. each party had to pay one-half of the arbitrator's fees-an amount
estimated to be "between $1,875 to $5,000[.]" Id. Because the employee could not afford
this expense, the circuit found that the employer through imposition of this "prohibitive
cost[,]" jd- at 1235, had "failed to provide an accessible forum in which [its employee]...
could resolve his statutory rights[,]" id.-"a result [that] clearly undermine[d] the remedial
and deterrent functions of the federal anti-discrimination laws." Id- (citations omitted).
The Agreement to Arbitrate dated June 4, 2014, is silent regarding payment of
arbitrator fees and administrative expenses. The defendants have not challenged Talley's
assertion that she cannot afford to pay these fees and expenses, if she is required to do
so; they have in fact "agree[d] to pay in full the arbitrator's fees, as well as the arbitrator's
administrative expenses and travel costs, ifany."^ Declaration of Chris Gravens (July 13,
2016) at 5.
13. Thus, assuming the defendants' offer pertains to the upfront payment of
all arbitration costs and fees, and not reimbursement after Talley's payment of the same,
^In Green Tree Financial Corp.-Alabama v. Randolph. 531 U.S. 79 (2000), the employee
argued that the arbitration agreement was unenforceable because it was silent as to which party
would bear the cost of the arbitrator and "thus fail[ed] to provide her protection from potentially
substantial costs of pursuing herfederal statutory claims in the arbitral form." Id. at 89, The United
States Supreme Court found that silence "alone [was] . . . plainly insufficient to render. . . [the
arbitration agreement] unenforceable. The 'risk' that [the employee would] ... be saddled with
prohibitive costs [was in that case] . . . too speculative to justify the invalidation of [the] . . .
agreement." Id. at 91. The Supreme Court imposed on the "party seek[ing] to invalidate an
arbitration agreement on the ground that arbitration would be prohibitively expensive... the burden
of showing the likelihood of incurring such costs." jd. at 92.
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the Court finds the concern expressed in Shankle that arbitration agreements that require
employees to pay arbitration costs effectively preclude pursuit of statutory claims is
arguably not present in this case.®
Talley has also argued that the Agreement to Arbitrate should not be enforced due
to its fee-shifting language. While Talley "is entitled to representation by an attorney
throughout the arbitration proceedings," Doc. 5-1 at 16, the instant arbitration agreement
mandates that such representation is "at [her]. .. own expense[.]" jd-. and that she must
"bear. . . [her] own [legal] fees and expenses[.]" Id. In response, the defendants have
focused on the qualifying phrase to that requirement: "unless otherwise awarded by the
arbitrator." Id.
Title VII authorizes the Court to "allow the prevailing party ... a reasonable
attorney's fee . . .
42 U.S.C. § 2000e-5(k). "[W]hen a plaintiff [has] secure[d] an
'enforceable judgment[ ] on the merits . . .
CRST Van Expedited. Inc. v. Equal
Employment Opportunitv Commission. 136 S. Ct. 1642, 1646 (2016)(quotation omitted),
"that plaintiff is the prevailing party[,]" jd-, for purposes of Title VII. "When a defendant is
the prevailing party on a civil rights claim,... [a] district court[ ] may [exercise its discretion
and] award attorney's fees if the plaintiffs 'claim was frivolous, unreasonable, or
groundless,'or if'the plaintiff continued to litigateafterit clearly became so.'" jd- (quotation
and further citation omitted).
®ln Nesbitt v. FGNH. Inc.. 811 F.3d 371 (lO'*" Cir. 2016), the Tenth Circuit rejected the
defendants' argument that the absence of any language in the arbitration agreement regarding the
allocation of arbitration fees and arbitrator costs "'eliminated the potential for burdensome fees[,]"'
jd at 379 (citation omitted), since the agreement Invoked the American Arbitration Association's
Commercial Rules, which expressly addressed the issue of fees and costs.
Under the instant Agreement to Arbitrate, Talley runs the risk that even if she
prevails before the arbitratorshe will "bear... [her] own [legal] fees and expenses[.]" Doc.
5-1 at 16. This is so despite the fact the agreement does not require Talley to "surrender
... any substantive statutory... benefits[ ] [or] protection[,]"id-. a provision which appears
to conflict with the document's language governing legal fees and costs.
Because Talley has sufficiently shown that she could likely face prohibitive legal
fees and expenses if arbitration is compelled and that she is financially incapable of paying
the same, the Court finds that the Agreement to Arbitrate prevents Talley from effectively
vindicating her rights under Title VII. Accordingly, the Court DENIES the defendants'
Motion to Dismiss and Compel Arbitration [Doc. 5] filed on July 13, 2016.
ENTERED this 2Z!^day of August, 2016.
R. WEST
rNITED STATES DISTRICT JUDGE
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