Opinion
No. 02-2286
April 15, 2003
MEMORANDUM OPINION AND ORDER
Plaintiff brings this action against her former employer under the Americans with Disabilities Act of 1990 ("ADA"), 42 U.S.C. § 12101 et seq.; the Family and Medical Leave Act ("FMLA"), 29 U.S.C. § 2601 et seq.; and the Arkansas Civil Rights Act, Ark. Code Ann. § 16-123-101, et seq. Plaintiff alleges that during her employment with Defendant, she was "diagnosed with Meniere's disease or syndrome, which is an inner ear disorder characterized by vertigo, nausea and vomiting which are commonly associated with an acute attack." (Doc. 1 ¶ 11.) Plaintiff contends that Defendant failed to advise her of her rights under the FMLA and terminated her for absenteeism related to her medical condition, in violation of the ADA. Currently before the Court is Defendant's Motion to Compel Arbitration and to Dismiss or, in the Alternative, to Stay Action Pending Arbitration. (Doc. 4.) For the reasons reflected herein, the motion is GRANTED and this action will be stayed pending arbitration.
BACKGROUND
The following facts are not disputed.
1. Defendant is a national securities brokerage firm and a member of the National Association of Securities Dealers, Inc. ("NASD") and the New York Stock Exchange, Inc. ("NYSE"). Defendant's principal place of business is in St. Louis, Missouri, but it has approximately 700 branch offices throughout the United States, including one in Fort Smith, Arkansas.
2. Defendant hired Plaintiff as a secretary in its Fort Smith office in 1993. In 1994, Plaintiff became a sales assistant. In January 1997, Plaintiff went to work for a competitor for a brief period of time, but returned to work for Defendant in August 1997.
3. When she applied for employment with Defendant in 1993 and when she reapplied in 1997, Plaintiff was required to complete an employment application. The section of the application preceding the signature line stated in bold print, "Read Carefully Before Signing." Under this section was a paragraph providing:
In consideration of [Defendant] . . . considering my application for employment, I agree that any controversy or dispute arising between me and [Defendant] in respect to . . . my employment by [Defendant] or the termination of that employment by [Defendant] shall be submitted for arbitration before the [NYSE] or the [NASD]. (Doc. 4 Ex. A at p. 3, Ex. B at p. 4.)
4. Upon rehiring Plaintiff as a sales assistant in 1997, Defendant provided Plaintiff with training and study materials and sponsored her in obtaining her registration with the major securities exchanges, including the NYSE and the NASD. On August 12, 1998, Plaintiff executed three documents.
5. The first document was a Sales Assistant Agreement, setting out the terms of Plaintiff's employment and prohibiting her from disclosing any information furnished to her during the training program. Paragraph 29 of this agreement was entitled "Arbitration" and provided:
You agree that any claim or controversy arising between you and [Defendant] shall be submitted for arbitration before the [NYSE] or the [NASD] including, but not limited to, any claim or controversy concerning wrongful termination, . . . discrimination, . . . or claims under any federal, state or local statute or ordinance and/or other theory." (Doc. 4 Ex. C at p. 6.)
6. The second document Plaintiff executed on August 12, 1998, was a Supplementary Training Agreement for a Sales Assistant. This agreement provided that in exchange for Defendant disclosing its business methods and procedures to Plaintiff and incurring significant expense in training and educating Plaintiff to obtain her major securities registration, Plaintiff agreed to various conditions, including that she would either work for Defendant for a 24-month period from the date she obtained her registration or, if she terminated her employment, that she would not accept employment with a competitor unless and until she reimbursed Defendant a certain sum for her training. The last paragraph on the first page of this agreement stated:
You agree that any controversy or dispute arising between you and [Defendant] in respect to this agreement or your employment by [Defendant] shall be submitted for arbitration before the [NYSE] or the [NASD] unless [Defendant] exercises its right to seek an injunction in the event you breach or threaten to breach any of these provisions or any other provision of any agreement between you and [Defendant]. (Doc. 4 Ex. D at p. 2.)
7. The third document Plaintiff executed was a "Form U-4 Uniform Application for Securities Industry Registration or Transfer." The last page of the application contained a section stating, "THE APPLICANT MUST READ THE FOLLOWING VERY CAREFULLY." Paragraph 5 of this section provided, "I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm . . . that is required to be arbitrated under the rules . . . of [the NYSE and the NASD] as may be amended from time to time . . ." (Doc. 4 Ex. E at p. 4.)
8. Plaintiff's registration as a general securities representative was approved in February 1999. Plaintiff worked for Defendant as a registered sales agent from that time until her termination in 2002.
DISCUSSION
Defendant moves to compel arbitration, arguing that "all of the [P]laintiff's claims are required by several agreements with the [D]efendant to be resolved through arbitration." (Doc. 4 ¶ 5.) A dispute must be submitted to arbitration if there is a valid agreement to arbitrate and the dispute falls within the scope of that agreement. See Lyster v. Ryan's Family Steak Houses, Inc., 239 F.3d 943, 945 (8th Cir. 2001). The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., declares a "liberal federal policy favoring arbitration agreements." Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24 (1983) (citing 9 U.S.C. § 2) The FAA establishes that "as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Id.
Plaintiff argues that her claims are not subject to arbitration for several reasons. First, Plaintiff argues that the NYSE and NASD rules, which governed her position as a sales agent with Defendant, have been amended and that the arbitration clauses at issue are not enforceable under these rules. On December 29, 1998, the Securities and Exchange Commission (SEC) amended NYSE Rules 347 and 600 to exclude employment discrimination claims from arbitration unless the parties have agreed to arbitrate the claim "after it has arisen." 64 Fed. Reg. 1051. Plaintiff is correct that her claims are not subject to arbitration before the NYSE, as she signed the arbitration agreements prior to her claims arising. Plaintiff's claims, however, are still subject to arbitration before the NASD. On June 22, 1998, the SEC approved an amendment to Rule 10201 of the NASD Code providing that "claims alleging employment discrimination . . . in violation of a statute are not required to be arbitrated by the NASD rules." 63 Fed. Reg. 35299, 35301. While the NASD rules no longer require arbitration, they still recognize the enforceability of a "pre-dispute obligation to arbitrate." 63 Fed. Reg. at 35301. Accordingly, Plaintiff's "pre-dispute" arbitration agreements are enforceable under the NASD rules.
Plaintiff next argues that the arbitration clauses are unconscionable and unenforceable, as they were not conspicuous and she did not know she was consenting to arbitration. Plaintiff signed five documents containing arbitration clauses, some of which cautioned her to "Read Carefully Before Signing." A person who signs a written contract is presumed to know the contents of the terms of the contract and is bound by such terms. See Pinken v. Frank, 704 F.2d 1019, 1025 (8th Cir. 1983). Further, the FAA contains no requirement that arbitration clauses be conspicuous. See Securities Ind. Ass'n v. Connolly, 883 F.2d 1114 (1st Cir. 1989). The Court sees no merit to Plaintiff's argument in this regard.
Plaintiff also argues that the arbitration clauses are unconscionable because there was a "significant imbalance in bargaining power." According to Plaintiff, the clauses were presented to her on "standard forms" and she "was not invited to negotiate the terms." (Doc. 9 at p. 8.) The Court is not persuaded by this argument, as "[t]he use of a standard form contract between two parties of admittedly unequal bargaining power does not invalidate an otherwise valid contractual provision. Nesslage v. York Securities, Inc., 823 F.2d 231, 234 (8th Cir. 1987)
Plaintiff next argues that "burdensome fees associated with arbitration render the arbitration provisions substantively unconscionable." (Doc. 9 at p. 8.) Plaintiff's argument fails, as the provisions at issue make no mention of who should bear the cost of arbitration. See Green Tree Financial Corp. Alabama v. Randolph, 531 U.S. 79, 90-92 (2000) (a party seeking to invalidate an arbitration agreement because of prohibitive arbitration fees bears the burden of proof and the possibility of such party incurring prohibitive costs is too speculative to invalidate an arbitration agreement where the record reveals only that the agreement is silent on the subject of arbitration costs); cited in Lyster, 239 F.3d at 947.
Plaintiff also argues that the arbitration clauses are unconscionable because there is no "mutuality of obligation." Plaintiff bases this argument on provisions found in two of the agreements. First, under the terms of the Sales Assistant Agreement, she must submit her claims to arbitration, but Defendant has the right to seek injunctive relief and to pursue "any available remedy at law." (Doc. 4 Ex. C at p. 2.) Second, under the terms of the Supplementary Training Agreement for a Sales Assistant, Defendant has a right to seek injunctive relief, while Plaintiff does not. ( Id. Ex. D at p. 1.) Defendant's reservation of these rights does not render the arbitration clauses non-mutual. The two agreements at issue are aimed primarily at prohibiting Plaintiff from disclosing Defendant's business methods and procedures and Defendant has the right to seek injunctive relief or a "remedy at law" only in the event Plaintiff breached the agreements. Defendant does not have this right with regard to any other type of dispute, such as the employment-discrimination dispute at issue here. Further, mutuality of obligation is not required for arbitration clauses so long as the contract as a whole is supported by consideration and this issue is not contested in the instant case. See Barker v. Golf U.S.A., Inc., 154 F.3d 788, 792 (8th Cir. 1998) (applying Oklahoma law and noting the trend established by decisions holding that consideration for a contract as a whole covers the arbitration clause)
Finally, Plaintiff argues that the arbitration clauses are not enforceable because they limit her statutory remedies. Any argument Plaintiff may have in this regard may be presented in the arbitral forum and renewed when and if she challenge's the arbitrator's award. See Larry's United Super, Inc. v. Werries, 253 F.3d 1083, 1085-86 (8th Cir. 2001)
CONCLUSION
Based on the foregoing, Defendant's motion (Doc. 4) is GRANTED and the proceedings in this matter will be stayed pending arbitration. This action is hereby administratively terminated, subject to being reopened upon the conclusion of the arbitration proceedings.
IT IS SO ORDERED