Shadahan v. Macy's Corporate Services, LLC

Filing 17

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANTS MOTION 10 TO COMPEL ARBITRATION AND DISMISSING PROCEEDINGS. Signed by Chief Judge Gina M. Groh on 9/21/2021. (tlg)

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
MARTINSBURG

QASIM SHADAHAN,
Plaintiff,
v.

CIVIL ACTION NO. 3:21-CV-38
(GROH)

MACY’S CORPORATE SERVICES, LLC,
a foreign corporation, formerly known as
MACY’S CORPORATE SERVICES, INC.,
a foreign corporation,
Defendant.
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S MOTION TO
COMPEL ARBITRATION AND DISMISSING PROCEEDINGS
Currently pending before the Court is Defendant Macy’s Corporate Services, LLC’s
Motion to Compel Arbitration and Dismiss or Stay Proceedings, filed on June 11, 2021.
ECF No. 10. Plaintiff Qasim Shadahan filed a Response in opposition to the motion on
June 25, 2021. ECF No. 12. The Defendant filed a Reply on July 2, 2021. ECF No. 13.
Having reviewed the record and considered the arguments of the parties, the Court
GRANTS the motion to compel and DISMISSES this action.
I. BACKGROUND
This case arises out of the Plaintiff’s former employment with the Defendants. The
Plaintiff is a native of Iraq, who moved to the United States in 2009 with his family. ECF
No. 1-1 ¶ 6. From October 9, 2013 to February 8, 2019, the Plaintiff worked for Defendant

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Macy’s Corporate Services, Inc. (“MCS”) at its Logistics and Operations warehouse in
Martinsburg, West Virginia. Id. ¶¶ 7–12. The Plaintiff alleges that he was terminated after
he applied for intermittent leave under the Family Medical Leave Act (“FMLA”) to help his
wife care for their infant child. Id. ¶¶ 22 & 27.
On the first day of his employment, the Plaintiff was given a “Solutions InSTORE
Brochure and Plan Document” that detailed MCS’s four-step employee dispute resolution
system, called Solutions InSTORE. The first three steps of the program are internal
to MCS, allowing employees to raise complaints with, a local supervisor, the regional
Office of Senior Human Resources Management, and the Office of Solutions InSTORE,
respectively.

The fourth and final step consists of binding arbitration through the

American Arbitration Association. MCS employees are deemed to have agreed to the
fourth step unless they opt out of binding arbitration at the outset of their employment by
mailing an “Election Form” to the Office of Solutions InSTORE within thirty days of their
hire. The Solutions InSTORE Brochure contains a copy of the Election Form, with
instructions on how to complete and mail the form. ECF No. 10-1 at 29–30.
Additionally, the Plaintiff viewed and electronically signed the Solutions InSTORE
New Hire Acknowledgement Form on his first day, attesting to the following:
I have received a copy of the Solutions InSTORE brochure and Plan
Document and acknowledge that I have been instructed to read the material
carefully. I understand that I have thirty (30) days from my date of hire to
review this information and postmark my election form to the Office of
Solutions InSTORE if I wish to opt out of Step 4, the final step of the
Company’s early dispute resolution program, Solutions InSTORE, which is
final and binding arbitration. I understand that I will be automatically
enrolled in the program and subject to final and binding arbitration
from my date of hire unless, within thirty (30) days of my date of hire,
I take the steps required to opt out of Step 4 – Arbitration . . . .
...
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I understand that if I do not opt out of this program, any disputes or claims
relating to my employment, other than those expressly excluded from
arbitration in the Plan document, will be resolved using the Solutions
InSTORE process described in the brochure and Plan Document. The
process continues to apply to such employment-related disputes even after
my employment ends. I understand that disputes filed under Step 4 are
resolved by a professional not affiliated with Macy's, Inc. in an arbitration
proceeding, instead of by a judge or jury in a court proceeding. I can read
all about Solutions InSTORE, including the benefits and tradeoffs of Step 4,
in the brochure and Plan Document.
ECF No. 10-2 at 20–22 (emphasis added).

According to the Plaintiff, “he did not

understand what was on the computer” when he electronically signed the
Acknowledgement Form because of his limited ability to read and write English. ECF
No..12 at 4. He avers that he did not know what arbitration meant, or that by “checking a
box on the computer . . . he was agreeing to Macy’s arbitration program.” Id. He alleges
although MCS knew that he had a limited ability to understand English, they did not
provide him an explanation in his native language. Id. He also alleges that he does not
recall being provided an election form with the Brochure. Id.
On February 5, 2021, the Plaintiff filed this lawsuit in the Berkeley County Circuit
Court against the Defendants. See ECF No. 1-1. In his complaint, the Plaintiff alleges
discrimination and retaliation in violation of the FMLA, and interference with his FMLA
rights. Id. On March 12, 2021, the Defendant removed the case to this Court based on
federal question jurisdiction. See ECF No. 1. On June 11, 2021, the Defendant filed the
instant motion pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq. See ECF
No..10. The Defendant contends that the Plaintiff agreed to arbitrate all employmentrelated disputes by signing the Acknowledgement Form and failing to file an election form.
Accordingly, the Defendant moves the Court to compel the Plaintiff to arbitrate his claims
and dismiss the case, or in the alternative, stay the proceedings.
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II. APPLICABLE LAW
The Federal Arbitration Act (the “FAA”) provides that a written agreement to
arbitrate “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. The FAA reflects “a
liberal federal policy favoring arbitration agreements.” Moses H. Cone Mem’l Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 24 (1983). Accordingly, under the FAA, “a court is
required to stay any suit or proceeding pending the arbitration of any issue referable to
arbitration under an agreement in writing for such arbitration.’” Adkins v. Labor Ready,
Inc., 303 F.3d 496, 500 (4th Cir. 2002) (quoting 9 U.S.C. § 3) (quotation marks omitted).
Additionally, the Fourth Circuit has held that, despite the language of the FAA regarding
a stay of arbitration, when all of the claims in a lawsuit are required to be arbitrated,
dismissal, rather than a stay, is a proper remedy. Choice Hotels, Int'l, Inc. v. BSR
Tropicana Resort, Inc., 252 F.3d 707, 709–10 (4th Cir. 2001).
The Court must grant a motion to compel arbitration “where a valid arbitration
agreement exists and the issues in a case fall within its purview.” Adkins, 303 F.3d at
500 (citing United States v. Bankers Ins. Co., 245 F.3d 315, 319 (4th Cir. 2001)). In
considering a motion to compel arbitration, the Court applies the same standard as a
motion for summary judgment. See Rowland v. Sandy Morris Fin. & Est. Planning Servs.,
LLC, 993 F.2d 253, 258 (4th Cir. 2021). Thus, under the FAA, the party seeking a jury
trial “must show genuine issues of material fact regarding the existence of an agreement
to arbitrate.” Galloway v. Santander Consumer USA, Inc., 819 F.3d 79, 85 (4th Cir. 2016).
The Court may rely only on facts supported in the record, not simply assertions in the
pleadings. Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003).

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Further, the Court views the facts in the light most favorable to the nonmoving party, with
all justifiable inferences drawn in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
255 (1986).
III. DISCUSSION
In the Fourth Circuit, 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 failure, neglect or refusal of the defendant to arbitrate the
dispute.” Whiteside v. Teltech Corp., 940 F.2d 99, 102 (4th Cir. 1991). Here, the Plaintiff
contests the second element. The Plaintiff’s sole argument is that there is no valid
arbitration agreement because he did not read and understand the Acknowledgment
Form when he signed it. Thus, the instant issue is one of law, not of fact, and summary
judgment is appropriate.
“[B]efore referring a dispute to an arbitrator, the court determines whether a valid
arbitration agreement exists.” Schein v. Archer & White Sales, Inc., 139 S. Ct. 524, 530
(U.S. 2019).

If there is no valid arbitration agreement, the Court cannot compel

arbitration. See AT&T Techs., Inc. v. Commc’n Workers of Am., 475 U.S. 643, 648 (1986)
(“[A] party cannot be required to submit to arbitration any dispute which he has not agreed
so to submit.”). The Court applies West Virginia contract law principles to determine
whether there is an enforceable contract. See First Options of Chi., Inc. v. Kaplan, 514
U.S. 938, 944 (1995) (stating, “courts generally . . . should apply ordinary state-law
principles that govern the formation of [arbitration agreements]”).

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Under West Virginia law, “[t]he fundamentals of a legal ‘contract’ are competent
parties, legal subject-matter, valuable consideration, and mutual assent. There can be
no contract, if there is one of these essential elements upon which the minds of the parties
are not in agreement.” Syl. pt. 9, Ways v. Imation Enter. Corp., 214 W. Va. 305, 308, 589
S.E.2d 36, 39 (2003). “The contractual concept of ‘mutual assent’ or ‘meeting of the
minds’ relates to the parties having the same understanding of the terms of the agreement
reached.” Messer v. Huntington Anesthesia Grp., Inc., 222 W. Va. 410, 418, 664 S.E.2d
751, 759 (2008). In order for there to be mutual assent, there must be an offer by one
party and an acceptance on another. Ways, 214 W. Va. at 313, 589 S.E.2d at 44. “Both
the offer and acceptance may be by word, act or conduct that evince the intention of the
parties to contract. That their minds have met may be shown by direct evidence of an
actual agreement . . . .” Id. (quoting Bailey v. Sewell Coal Co., 190 W. Va. 138, 140–41,
437 S.E.2d 448, 450–51 (1993)) (citations omitted).
Because the Plaintiff signed the Acknowledgement Form, and there is no evidence
that his signature was obtained by duress or misrepresentation, there is a presumption
that he agreed to arbitration. When a party signs a contract, “[a] court can assume that
a party to a contract has read and assented to its terms, and absent fraud,
misrepresentation, duress, or the like, the court can assume that the parties intended to
enforce the contract as drafted.” See New v. GameStop, Inc., 232 W. Va. 564, 578, 753
S.E.2d 62, 76 (2013). However, the Plaintiff contends that his electronic signature is “not
an effective manifestation of his assent to Macy’s arbitration program” because he did not
understand to what he was agreeing due to his rudimentary English skills. ECF No. 12

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at 6, 7. He further avers that he did not know that he was signing an agreement “by his
checking a box on a computer screen.” Id. at 2, 4.
The Plaintiff’s alleged inability to read or understand English does not make the
agreement unenforceable. West Virginia courts have consistently held that “a party to a
contract has a duty to read the instrument.” Nationstar Mortg., LLC v. West, 237 W. Va.
84, 91, 785 S.E.2d 634, 641 (2016) (citing Syl. pt. 5, Soliva v. Shand, Morahan & Co.,
Inc., 176 W. Va. 430, 435 S.E.2d 33 (1986)). Thus, the fact that the Plaintiff may have
signed the Acknowledgement Form without reading it first does not excuse him from the
binding effect of the agreements contained therein. See Nationstar, 237 W. Va. at 91,
785 S.E.2d at 641 (stating the same).
If the Plaintiff could not read the Acknowledgement Form, it was his duty to seek
assistance. The West Virginia Supreme Court of Appeals places a duty on the individual
claiming illiteracy to acquaint himself with the content of a contract before signing it:
One is never required to, and never should, execute any written instrument
without first becoming fully acquainted with its contents. He should read it,
if able; or if illiterate, have it read to him. And when he has signed a written
contract, the law prima facie presumes that he discharged his duty;
therefore, whether in fact he did it, or chose to waive the privilege, his
signature binds him.
Whittaker v. Sw. Va. Imp. Co., 34 W. Va. 217, 12 S.E. 507 (1890) (quoting Joel Prentiss
Bishop, Commentaries on the Law of Contracts Upon a New and Condensed Method,
§.346 (1887)).
Here, the Plaintiff alleges that he did not understand what he was signing because
it was never explained to him. However, the Plaintiff also states that MCS employees
assisted him in completing his job application and in filling out his tax and payroll forms
due to his inability to read English. Thus, assistance was available to the Plaintiff at the
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time he signed the Acknowledgement Form and received the Solutions InSTORE
Brochure and Plan Document. Moreover, this was not a case where the Plaintiff was
rushed into signing the agreement, without time to seek assistance. Here, the Plaintiff
had thirty days to seek assistance in understanding the Solutions InSTORE program and
opt out of the program’s binding arbitration. Therefore, by failing to seek assistance
interpreting the Acknowledgement Form or the Solutions InSTORE documents, the
Plaintiff neglected his duty to seek assistance. See Reyes v. Gracefully, Inc., No. 17-CV9328, 2018 WL 2209486, at *3 (S.D.N.Y. May 11, 2018) (stating the employee had a duty
of “making a reasonable effort to have the document explained to him”). Thus, the Court
finds that the Plaintiff’s alleged inability to read or understand English does not make the
Acknowledgement Form unenforceable. See id. (stating the same); Molina v. Coca-Cola
Enters., Inc., No. 8-CV-6370, 2009 WL 1606433, at *8 (W.D.N.Y. June 8, 2009) (“The
mere fact that plaintiff does not understand English is insufficient to set aside the
arbitration agreement since he is presumed to know its contents and to has assented to
its terms . . . Cases have consistently held that a person who does not understand English
must make a reasonable effort to have an agreement made clear to him.”).
Under the summary judgment standard that governs this Motion, there is no
genuine dispute of material fact. The Plaintiff does not argue that he did not receive or
sign the Acknowledgment Form. See Farmer v. Macy’s, Inc., No. 17-0567, 2019 WL
5079763, at *4 (D. Md. Oct. 10, 2019) (holding there was no genuine dispute of material
fact where the plaintiff’s argument that she did not receive the agreement was “blatantly
contradicted by the record”). His sole argument attacking the agreement’s validity is that
he did not understand the Acknowledgement Form due to his inability to read English.

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However, in the absence of special circumstances such as fraud, duress, coercion, or
misrepresentation, a plaintiff is held to an agreement that he has signed. Here, the
Plaintiff has not alleged any special circumstances that would relieve him of such an
obligation. Accordingly, the Court finds that as a matter of law, the parties formed a valid
and enforceable arbitration agreement.

Therefore, this action must be referred to

arbitration under the FAA.
V. CONCLUSION
The Court finds that the Plaintiff signed a legally binding arbitration agreement
when he began his employment with MCS. Moreover, the Plaintiff's FMLA claims alleging
discrimination, retaliation, and interference are all clearly covered under the
agreement. Thus, the Plaintiff is clearly required to arbitrate the claims brought in this
lawsuit.

Accordingly, the Court GRANTS the Defendant’s Motion to Compel

Arbitration. ECF No. 10. The Court DISMISSES this action and orders the Plaintiff to
submit all of his claims to final and binding arbitration in accordance with the terms
of the Solutions InSTORE program.
The Clerk is DIRECTED to transmit copies of this Order to all counsel of record
herein.
DATED: September 21, 2021

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