Soto v. STATE INDUSTRIAL PRODUCTS, INC.

642 F.3d 67, 24 Am. Disabilities Cas. (BNA) 774, 2011 U.S. App. LEXIS 7747, 2011 WL 1447757
CourtCourt of Appeals for the First Circuit
DecidedApril 15, 2011
Docket10-1626
StatusPublished
Cited by52 cases

This text of 642 F.3d 67 (Soto v. STATE INDUSTRIAL PRODUCTS, INC.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Soto v. STATE INDUSTRIAL PRODUCTS, INC., 642 F.3d 67, 24 Am. Disabilities Cas. (BNA) 774, 2011 U.S. App. LEXIS 7747, 2011 WL 1447757 (1st Cir. 2011).

Opinion

LYNCH, Chief Judge.

In March 2009, Vidalina Soto filed this employment discrimination suit in federal court, alleging violations of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., and Puerto Rico law. Soto named as defendants State Industrial Products Corp. and State Chemical Sales Company International, Inc. (together “State Chemical”), which have employed Soto since 1992, their insurance companies, and associated individuals. State Chemical moved to dismiss and compel arbitration pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., on the grounds that the dispute was covered by an arbitration agreement.

Soto argued that the arbitration agreement was unenforceable due to a lack of consideration and consent. The district court rejected these arguments and dismissed Soto’s complaint without prejudice on March 24, 2010. Soto v. State Chem. Sales Co. Int’l, 719 F.Supp.2d 189 (D.P.R. 2010). Soto filed a timely appeal.

We affirm the judgment of the district court. We reject Soto’s claims that she did not receive valid consideration for sign *70 ing the arbitration agreement, that her consent was rendered void by the conditions under which she signed the agreement, and that the arbitral costs imposed by the agreement are unconscionable.

I.

We begin by describing the four documents that State Chemical submitted to the district court with its motion to dismiss and compel arbitration. 1

The first document, titled “Acknowledgment,” states:

I have received and read the alternative dispute resolution program of State Industrial Products (“ADR Program”).
I understand that it is a three-step program consisting of:
1. Internal negotiation;
2. Mediation conducted by an independent, neutral third party; and
3. Arbitration before an independent, neutral third party.
I understand that if, I am employed by State Industrial Products prior to January 1, 1996, I will retain all my rights to go to court if I so desire at the conclusion of the ADR program.

Soto signed and dated this document on June 15,1996.

The second document, titled “Acknowledgment of Attendance and Receipt,” states:

I acknowledge that on June 15, 1996, I attended a meeting in which State Industrial Product’s Dispute Resolution Program was described. I also acknowledge that on this date I received a copy of the State Industrial Products Dispute Resolution Program.

The third document, titled “Sales Associate’s Employment Agreement,” is a written employment contract. It states in two places that Soto’s employment is on an “at-will” basis. The contract recites that it is supported by consideration in the form of “the terms and conditions and the mutual covenants herein set forth and such other good and valuable consideration, the receipt of which is hereby acknowledged.”

The contract contains an arbitration clause, which is not listed in either the “Company Obligations and Covenants” section or the “Associate Obligations and Covenants” section, but rather is listed in an independent section, titled “Alternative Dispute Resolution,” that states a mutual obligation:

I understand that the Company has a three-step Alternative Dispute Resolution Program for its employees consisting of 1. negotiation, 2. mediation, and 3. final and binding arbitration. In consideration for my employment or continued employment by the Company, I agree that this will be my exclusive means of making any employment-related claim against the Company, as set forth in more detail in the State Industrial Products Dispute Resolution Program, a copy of which I have been provided.

Soto signed this contract on March 1, 2001. It bears Soto’s initials on every page, and *71 includes a separately initialed clause in bold stating: “I HAVE READ AND I FULLY UNDERSTAND EACH AND EVERY PROVISION OF THE FOREGOING AND DO HEREBY ACCEPT AND AGREE TO THE SAME.” The contract is also initialed and signed by a representative from human resources.

The fourth document is a copy of the ADR Program that is referenced in the documents that Soto signed. This document states that the program has an effective date of January 1, 1996, and that “[continued employment by the Company after this date is consideration for and constitutes acceptance of this alternative dispute resolution program.”

The Program sets out a three-step process. The first step is negotiation. If the parties do not reach a settlement within 30 working days, they proceed to mediation before the American Arbitration Association. If the claim remains unresolved after mediation, the parties go to arbitration under the arbitration clause:

If the Employment Claim remains unresolved following MEDIATION, the Complainant agrees to promptly submit the Employment Claim to ARBITRATION administered by the American Arbitration Association in Cleveland, Ohio under its Employment Dispute Resolution Rules.... The Company agrees to pay one-half of the filing fee and the Complainant agrees to pay one-half of the filing fee to the American Arbitration Association (current filing fee is $500.00). The Company agrees to pay the arbitrator’s fee over and above the filing fee (approximately $750.00/ day).

Other relevant provisions of this clause are as follows:

1. Procedure
The ARBITRATION shall take place in a location to be determined by the Company, and the Company shall pay reasonable out-of-pocket travel expenses if any are incurred by the Complainant as a result of the Company’s choice of location ....
2. Remedies
The arbitrator shall have the authority to award whatever remedies would have been available to the employee through a federal court or the courts of the state in which the hearing is held and which he/she determines to be supported by credible, relevant evidence.

Employees who were employed before the effective date of January 1, 1996 do “not waive their right to go into court if they are dissatisfied at the conclusion of the three step program,” while those employed after that date waive “the right to take such disputes to court.” This aspect of the agreement is explained in a section titled “Effect of Findings,” which states:

If an individual was employed prior to January 1,1996, the arbitrator’s decision shall be final and binding only if both parties so stipulate. If the parties do stipulate that the decision is final and binding, it may be entered in any court having jurisdiction thereof.

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642 F.3d 67, 24 Am. Disabilities Cas. (BNA) 774, 2011 U.S. App. LEXIS 7747, 2011 WL 1447757, Counsel Stack Legal Research, https://law.counselstack.com/opinion/soto-v-state-industrial-products-inc-ca1-2011.