Roland-Davis v. Remington College

Filing 14

ORDER AND OPINION RULING ON REPORT AND RECOMMENDATION adopting 11 Report and Recommendation, granting 5 Motion to Dismiss, Motion to Compel Arbitration filed by Remington College. Signed by Honorable Margaret B Seymour on 8/29/2013. (mdea )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION
Lunette Roland-Davis,

)
) C/A No. 3:12-2227-MBS
Plaintiff,
)
)
vs.
)
)
ORDER AND OPINION
Remington College,
)
)
Defendant.
)
____________________________________)
Plaintiff Lunette Roland-Davis formerly was employed by Defendant Remington College1
as a medical assistant instructor. Plaintiff brought this action on October 9, 2012, alleging that she
was terminated because of her race (white) in violation of Title VII of the Civil Rights Act, as
amended, 42 U.S.C. §§ 2000e, et seq. Plaintiff seeks actual and punitive damages as well as
reasonable attorneys’ fees. In accordance with 28 U.S.C. § 636(b) and Local Rule 73.02, D.S.C., this
matter was referred to United States Magistrate Judge Paige J. Gossett for pretrial handling.

This matter came before the court on motion to dismiss and compel arbitration filed by
Defendant on September 19, 2013. Plaintiff filed a memorandum in opposition to Defendant’s
motion on October 9, 2012, to which Defendant filed a reply on October 19, 2012. On July 10,
2013, the Magistrate Judge issued a Report and Recommendation in which she noted that Plaintiff
executed a Employment Application that provides, in part:
8.
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 BUT NOT
LIMITATION, DISPUTES CONCERNING ALLEGED CIVIL RIGHTS
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Defendant states that Plaintiff was employed by Remington College Mobile Campus, Inc. d/b/a
Remington College–Columbia Campus at all times relevant to the allegations contained in her
complaint. Defendant states that “Remington College” does not exist for purposes of this action.

VIOLATIONS, EMPLOYMENT DISCRIMINATION OF ANY KIND INCLUDING
ON THE BASIS OF ANY PROTECTED CATEGORY UNDER FEDERAL OR
STATE LAW, RETALIATION, WRONGFUL DISCHARGE, ENTITLEMENT TO
OVERTIME PAY, SEXUAL HARRASMENT [sic], OR BREACH OF
EXPRESSED OR IMPLIED CONTRACT OR TORT), SHALL BE EXCLUSIVELY
SUBJECT TO BINDING ARBITRATION UNDER THE NATIONAL RULES FOR
THE RESOLUTION OF EMPLOYMENT DISPUTES OF THE AMERICAN
ARBITRATION ASSOCIATION (“AAA”), PROVIDED ALL SUBSTANTIVE
RIGHTS AND REMEDIES INCLUDING ANY APPLICABLE DAMAGES
PROVIDED UNDER PERTINENT STATUE(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
PROVISION REQUIRED BY LAW, SHALL BE AVAILABLE IN THE AAA
FORUM. ANY DECISION OF THE ARBITRATOR SHALL BE FINAL AND
BINDING AS TO BOTH PARTIES, AND ENFORCEABLE BY ANY COURT OF
COMPETENT JURISDICTION. NOTHING CONTAINED HEREIN SHALL
PROHIBIT ME FROM FILING ANY CLAIM OR CHARGES WITH ANY
APPROPRIATE GOVERNMENT AGENCY. 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.
Employment Application, ECF No. 5-2.
The Magistrate Judge also determined that (1) the arbitration provision was discernable
simply by reading the Employment Application; (2) the Employment Application, even if deemed
to be a contract of adhesion, was not per se unenforceable; and (3) the arbitration provision did not
favor Defendant. Thus, the Magistrate Judge found the arbitration provision to be valid and
enforceable and, contrary to Plaintiff’s contention, not unconscionable.2 The Magistrate Judge further
found that the claims raised by Plaintiff in the complaint fall within the scope of the arbitration
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Plaintiff also argued the unenforceability of certain arbitration policies set forth in an employee
handbook she executed over a year after she was employed. The Magistrate Judge properly found
Plaintiff’s arguments regarding arbitration policies contained in the employee handbook to be
irrelevant because Plaintiff already was bound by the arbitration provision in the Employment
Application.
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provision. Accordingly, the Magistrate Judge recommended that Defendant’s motion to dismiss be
granted. Plaintiff filed objections to the Report and Recommendation on July 29, 2013. Defendant
filed a response to Plaintiff’s objections on August 15, 2013.
The Magistrate Judge makes only a recommendation to this court. The recommendation has
no presumptive weight. The responsibility for making a final determination remains with this court.
Mathews v. Weber, 423 U.S. 261, 270 (1976). This court may accept, reject, or modify, in whole
or in part, the findings or recommendations made by the Magistrate Judge. 28 U.S.C. § 636(b)(1).
This court may also receive further evidence or recommit the matter to the Magistrate Judge with
instructions. Id.

I. DISCUSSION
As the Magistrate Judge properly observed, he Federal Arbitration Act (FAA) provides that
any written provision in a contract involving commerce to settle by arbitration a controversy
thereafter arising out of such contract “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. “As a result
of this federal policy favoring arbitration, ‘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.’” Patten
Grading & Paving, Inc. v. Skanska USA Building, Inc., 380 F.3d 200 (4th Cir. 2004) (quoting Moses
H. Cone Mem’l Hosp., 460 U.S. 1, 24-25 (1983)). A party can compel arbitration under the FAA
if it can demonstrate (1) the existence of a dispute between the parties, (2) a written agreement that
includes an arbitration provision which purports to cover the dispute, (3) the relationship of the
transaction, which is evidenced by the agreement, to interstate or foreign commerce, and (4) the

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failure, neglect or refusal of the other party to arbitrate the dispute. Hyder v. Inova Diagnostics, Inc.,
2013 WL 3036488, *2 (W.D.N.C. June 17, 2013) (quoting Adkins v. Labor Ready, Inc., 303 F.3d
496, 500–01 (4th Cir. 2002)). The validity of an agreement to arbitrate is a question of state law
governing contract formation. Id. at *3 (citing cases).
A.

Validity of the Arbitration Provision
Plaintiff disputes in her response to the motion to dismiss and in her objections to the Report

and Recommendation the creation of a binding arbitration agreement. According to Plaintiff, there
was no “meeting of the minds” as to arbitration because she was not aware of the implications of the
arbitration clause and she was not afforded time to ascertain such an awareness. Plaintiff contends
that she cannot be required to submit to arbitration any dispute which she has not agreed to arbitrate,
and that the Magistrate Judge erred in finding the arbitration provision to be valid and enforceable.
The court disagrees.
In Towles v. United HealthCare Corp., 524 S.E.2d 839, 844-46 (S.C. Ct. App. 1999), the
South Carolina Court of Appeals held that a unilateral requirement of arbitration relating to disputes
arising out of an employment relationship, when acknowledged by the employee, forms a binding
contract to arbitrate employment disputes. In this case, the arbitration provision set out in full
hereinabove was contained in Plaintiff’s Employment Application almost directly above the
signature line.3 By executing the Employment Application and accepting employment with
Defendant, Plaintiff became bound by the arbitration provision. See Towles, 524 S.E.2d at 845-46.
It was Plaintiff’s duty to read and understand the arbitration prior to executing the Employment

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One sentence regarding severability of the provisions of the Employment Application constitutes
Paragraph 9.
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Application. A person signing a document is responsible for reading the document and making sure
of its contents. Wachovia Bank v. Blackburn, 716 S.E.2d 454, 458 (S.C. Ct. App. 2011) (quoting
Regions Bank v. Schmauch, 682 S.E.2d 432, 440 (S.C. Ct. App. 2003)). Plaintiff’s objection is
without merit.
B.

Unconscionability of Arbitration Provision
Plaintiff contends that the Magistrate Judge erred in finding the arbitration agreement to not

be unconscionable and unenforceable. In South Carolina, unconscionability is defined as the absence
of meaningful choice on the part of one party due to one-sided contract provisions, together with
terms that are so oppressive that no reasonable person would make them and no fair and honest
person would accept them. Simpson v. MSA of Myrtle Beach, Inc., 644 S.E.2d 663, 668 (S.C.
2007). Relying on Simpson, Plaintiff asserts that the arbitration provision is unconscionable because
she was required to “take it or leave it” with respect to the Employment Application. Plaintiff further
contends that, like the plaintiff in Simpson, (1) she did not have sufficient business judgment to be
aware of the implication of the agreement; (2) she did not have a lawyer present to provide
assistance; (3) the contract was hastily presented to her for her signature; and (4) the arbitration
clause was inconspicuous in light of its consequences.
In Simpson, the supreme court reviewed, “with ‘considerable skepticism’” a contract between
a consumer and an automobile retailer. Id. The supreme court observed that, “regardless of the
general legal presumptions that a party to a contract has read and understood the contract’s terms,”
id., the arbitration clause at issue
required [the plaintiff] to forego certain remedies that were otherwise provided by
statute. While certain phrases within other provisions of the additional terms and
conditions were printed in all capital letters, the arbitration clause in its entirety was
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written in the standard small print, and embedded in paragraph ten (10) or sixteen
(16) total paragraphs included on the page. Although this Court acknowledges that
parties are always free to contract away their rights, we cannot, under the
circumstances, ignore the inconspicuous nature of a provision, which was drafted by
the superior party, and which functioned to contract away certain significant rights
and remedies otherwise available to [the plaintiff] by law.
Id.
In addition, the supreme court found a provision in the arbitration clause “prohibiting double
and treble damages to be oppressive, one-sided, and not geared toward achieving an unbiased
decision by a neutral decision-maker.” Id. at 671. The Simpson plaintiff was entitled to seek such
damages under the South Carolina Unfair Trade Practices Act (treble damages for violation of the
statute) and the South Carolina Regulation of Manufacturers, Distributors, and Dealers Act (double
damages for violation of the statute). In short, the supreme court found the arbitration clause
prevented the Simpson plaintiff from receiving meaningful relief in violation of statutory law and
in contravention of the public interest. See also Smith v. D.R. Horton, Inc., 742 S.E.2d 37 (S.C. Ct.
App. 2013) (holding that provision attempting to waive legal remedies and disclaiming contractor’s
liability for any money damages was unconscionable).

The court finds Simpson to be

distinguishable.
Regarding the alleged “take it or leave it” nature of the Employment Application, the court
notes that, under South Carolina law, a standard form contract offered on a take-it or leave-it basis
with terms that are not negotiable is known as an adhesion contract. See Munoz v. Green Tree Fin.
Corp., 542 S.E.2d 360, 365 (S.C. 2001). An adhesion contract is not per se unconscionable. Id. As
noted hereinabove, the adhesion contract must contain terms that are one-sided and oppressive as
against the party accepting the adhesion contract. The Magistrate Judge found that the arbitration

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provision in the Employment Agreement did not favor Defendant and ensured that Plaintiff’s rights
were protected. Moreover, the arbitration provision was clearly identified and conspicuous. The
court discerns none of the overbearing conduct apparent in Simpson. Plaintiff’s objection is without
merit.
III. CONCLUSION
The court concurs in the Report and Recommendation and incorporates it herein by reference.
Defendant’s motion to dismiss and compel arbitration (ECF No. 5) is granted.
IT IS SO ORDERED.

/s/ Margaret B. Seymour
Senior United States District Judge
Columbia, South Carolina
August 29, 2013.

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