Arbitration of Employment Discrimination Claim Compelled; Court Rejects Employee’s Claim That He Never Signed Arbitration Agreement

In McNeill v. Raymour & Flanigan Furniture, No. 15-1473, 2016 WL 7048712 (N.D.N.Y. Dec. 5, 2016), the court granted the defendant’s motion to compel arbitration of plaintiff’s claims of employment discrimination (race discrimination and retaliation) under Title VII of the Civil Rights Act of 1964. This decision illustrates the uphill – albeit not insurmountable – battle faced by a discrimination plaintiff who seeks to be relieved from an arbitration agreement they are alleged to have signed.

Plaintiff argued, in response to defendant’s motion, that the signature on the “Associate’s Agreement & Consent” (which contained an agreement to arbitrate) was not his, and that defendant’s Employment Arbitration Program is “unconscionable” because it “immunizes [defendant] from liability.”

The court summarized the law:

Defendant’s motion to compel arbitration is made under the FAA, which requires federal courts to enforce arbitration agreements and stay any litigation that contravenes such agreements. 9 U.S.C. §§ 2 and 3; McMahan Sec. Co. v. Forum Capital Markets L.P., 35 F.3d 82, 85-86 (2d Cir. 1994). The FAA does not require parties to arbitrate, however, “when they have not agreed to do so.” McMahan Sec. Co., 35 F.3d at 86 (quoting Volt Info. Sci. Inc. v. Bd. of Tr., 489 U.S. 468, 478 [1989]).The FAA is an expression of “a strong federal policy favoring arbitration as an alternative means of dispute resolution.” Hartford Accident & Indem. Co. v. Swiss Reinsurance Am. Corp., 246 F.3d 219, 226 (2d Cir. 2001). In fact, the Second Circuit has said that “it is difficult to overstate the strong federal policy in favor of arbitration, and it is a policy we have often and emphatically applied.” Arciniaga v. Gen. Motors Corp., 460 F.3d 231, 234 (2d Cir. 2006) (citation and internal quotation marks omitted).However, “emphatic application does not amount to automatic application.” Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115, 121 (2d Cir. 2010). This is because the FAA provides that an arbitration agreement “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. Accordingly, “generally applicable contract defenses, such as fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements [.]” Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996). “As a result, prior to compelling arbitration, the district court must first determine two threshold issues that are governed by state rather than federal law: (1) [d]id the parties enter into a contractually valid arbitration agreement[;] and (2) [i]f so, does the parties’ dispute fall within the scope of the arbitration agreement?” Cap Gemini Ernst & Young, U.S., L.L.C. v. Nackel, 346 F.3d 360, 365 (2d Cir. 2003).In the context of motions to compel arbitration pursuant to the FAA, “the court applies a standard similar to that applicable for a motion for summary judgment.” Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003). “If there is an issue of fact as to the making of the agreement for arbitration, then a trial is necessary.” Bensadoun, 316 F.3d at 175 (citing 9 U.S.C. § 4). However, “[i]f the party seeking arbitration has substantiated the entitlement by a showing of evidentiary facts, the party opposing may not rest on a denial but must submit evidentiary facts showing that there is a dispute of fact to be tried.”

As to plaintiff’s argument that he did not sign the arbitration agreement, the court explained: “In opposition [to defendant’s motion] Plaintiff failed to submit sufficient, admissible evidentiary facts in support of his argument that he did not sign the Associate’s Agreement & Consent in March 2014” and thereafter “failed to file a sur-reply in response to Defendant’s assertions concerning his agreements to arbitrate in both December 2013 and March 2014.” Based on this, the court concluded that he “failed to demonstrate that there is a dispute of fact as to his agreement to arbitrate.”

It also noted that plaintiff did not dispute that the claims were arbitrable, and found that defendant’s arbitration programs were not unconscionable and did not improperly shield defendant from liability (observing that the programs “state that the arbitrator adjudicating a claim may award all of the relief that a court of law could award.”).

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