Cooper v. MRM Investment Co.

199 F. Supp. 2d 771, 2002 U.S. Dist. LEXIS 8098, 2002 WL 753832
CourtDistrict Court, M.D. Tennessee
DecidedApril 29, 2002
Docket3:01-1596
StatusPublished
Cited by32 cases

This text of 199 F. Supp. 2d 771 (Cooper v. MRM Investment Co.) is published on Counsel Stack Legal Research, covering District Court, M.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cooper v. MRM Investment Co., 199 F. Supp. 2d 771, 2002 U.S. Dist. LEXIS 8098, 2002 WL 753832 (M.D. Tenn. 2002).

Opinion

MEMORANDUM ORDER

JOHN T. NIXON, Senior District Judge.

Pending before the Court is Defendants’ Motion to Dismiss or, in the Alternative, to Compel Arbitration and Stay Proceedings (Doc. No. 12). Plaintiff has now responded to this Motion (Doc. No. 16). The Court heard oral arguments in this matter on April 8, 2002. For the reasons discussed below, Defendants’ Motion will be denied.

I. BACKGROUND

This case arises from the employment of Plaintiff by Defendant MRM Investment Co. (“MRM”), a Kentucky Fried Chicken (“KFC”) franchisee. Ms. Cooper was hired by MRM to work at its Waverly Tennessee KFC on or about January 8, 2000. Plaintiff alleges that, while working for MRM, she was sexually harassed by Defendant Terry Rogers, one of the owners of MRM, and was constructively discharged by Defendants on or about August, 2000.

As part of her employment contract, and prior to commencing work at KFC, Plaintiff signed a document entitled “Arbitration of Employee Rights.” The document provides:

... KFC and I agree to use confidential binding arbitration for any claims that arise between me and KFC, its related companies and/or their current or former employees. Such claims would include any concerning compensation, employment including, but not limited to any claims concerning (sexual harassment), or termination of employment ... In any arbitration, the prevailing rules of the American Arbitration Association and, to the extent" not inconsistent, the prevailing rules of the Federal Arbitration Act will apply.

(Doc. No. 16, Exh. A)(herein, “KFC Arbitration Agreement”).

Defendants now argue that Plaintiff and Defendants have bargained for mandatory arbitration, and thus her claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. (“Title VII”), and the Tennessee Human Rights Act, Tenn. Code Ann. §§ 4-21-101 et seq. 1 Plaintiff responds that there is no agreement to arbitrate between herself and these particular Defendants, and, even if there is an agreement, that agreement is unenforceable because it require the Plaintiff to pay a portion of the costs associated with arbitration.

II. LEGAL STANDARDS

The Supreme Court has recently held that agreements to arbitrate employment disputes as a condition of employment are almost universally enforceable under the Federal Arbitration Act, 9 U.S.C. §§ 1, et. seq. (“FAA”), Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001). Nevertheless, arbitration agreements may be *775 attacked under “such grounds as exist at law or in equity for the revocation of a contract.” 9 U.S.C. § 2.

The Sixth Circuit has consistently held that pre-dispute mandatory arbitration agreements are valid. Haskins v. Prudential Ins. Co. of Am., 230 F.3d 231, 239 (6th Cir.2000); Willis v. Dean Witter Reynolds, Inc. 948 F.2d 305, 310 (6th Cir.1991). Specifically, the Sixth Circuit has held that the employees may be required, as a condition of employment, to waive their right to bring future Title YII claims in court. Willis, supra. Almost every other Circuit to consider this issue has agreed with the Sixth Circuit. 2

However, although the Supreme Court and lower courts endorse the use of arbitration, courts continue to emphasize that an employee cannot be required to forfeit any “substantive rights” as a condition of employment. See Gilmer v. Interstate/ Johnson Lane Corp., 500 U.S. 20, 28, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). Thus, “... even if arbitration is generally a suitable forum for resolving a particular statutory claim, the specific arbitral forum provided under an arbitration agreement must nevertheless allow for the effective vindication of that claim.” Floss v. Ryan’s Family Steak Houses, Inc., 211 F.3d 306 (6th Cir.2000).

Some courts have held that requiring a plaintiff to pay for the right to vindicate their federal substantive rights would amount to an insurmountable obstacle. See e.g. Paladino v. Avnet Computer Tech , Inc., 134 F.3d 1054 (11th Cir.1998); Shankle v. B-G Maint. Mgmt. of Colo., Inc., 163 F.3d 1230 (10th Cir.1999)(finding that requiring the Plaintiff to pay costs renders the arbitral forum invalid); Cole v. Burns Int'l Sec. Serv., 105 F.3d 1465 (D.C.Cir.1997)(same). Cf. Bradford v. Rockwell Semiconductor Sys., Inc., 238 F.3d 549, 556 (4th Cir.2001)(declining to follow the per se rule, but holding that courts should assess whether the fees associated with arbitration are prohibitive to the actual employee in the present case); Manuel v. Honda R & D Americas, Inc., 175 F.Supp.2d 987 (S.D.Ohio 2001)(same).

Additionally, although mandatory arbitration is presumed valid, the waiver of any rights (substantive or procedural), must be both knowing and clear. See K.M.C. Co., Inc. v. Irving Trust Co., 757 F.2d 752 (6th Cir.1985); Trumbull v. Century Marketing Corp., 12 F.Supp.2d 683, 687 (N.D.Ohio.1998)(“[t]o conclude that there was a waiver of [the right to a jury trial], there must be evidence that the plaintiff intended such waiver.”).

Finally, and most fundamentally, an agreement to arbitrate Title VII rights must comport with the principles of contract law. In deciding whether the arbitration agreements are enforceable, state-law contract principles control. Floss, 211 F.3d at 314.

First, although courts may not invalidate arbitration agreements under state laws that only apply to arbitration provisions, general contract defenses may *776 still operate to invalidate an arbitration agreement. Doctor’s Assoc. Inc. v. Casarotto, 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996).

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Bluebook (online)
199 F. Supp. 2d 771, 2002 U.S. Dist. LEXIS 8098, 2002 WL 753832, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cooper-v-mrm-investment-co-tnmd-2002.