Opinion
Civil Action 22-1662
07-18-2023
NICOLE ANDERSON, Plaintiff, v. RUE21, INC., Defendant.
Re: ECF No. 10
J. Nicholas Ranjan, District Judge.
REPORT AND RECOMMENDATION
Maureen P. Kelly, Magistrate Judge.
I. RECOMMENDATION
Plaintiff Nicole Anderson brings claims for religious discrimination and retaliation under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000, et seq., and violation of the Pennsylvania Wage Payment Collection Law, 43 P.S. § 260.1, et seq., against her former employer, rue21, Inc. (“rue21”).
Presently before the Court is rue21's Motion to Dismiss, or Alternatively, to Compel Arbitration and Stay Further Judicial Proceedings (“Motion to Dismiss”). ECF No. 10. For the reasons below, it is respectfully recommended that the Motion to Dismiss be denied without prejudice to the filing of a renewed motion after limited discovery.
IL REPORT
A. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff filed this action on November 21, 2022. ECF No. 1. She later filed the operative Amended Complaint on December 1, 2022. ECF No. 4.
1. Amended Complaint
In her Amended Complaint, Plaintiff alleges that she was hired to work at rue21 in December 2014 as a Social Media and Outreach Branch Manager. Id. ¶ 12. Plaintiff originally worked in an office at the Support Center. Id. Beginning in March 2020, however, she worked remotely because of the CO VID-19 pandemic. Id.
In January 2022, rue21 announced a mandatory COVID-19 vaccination requirement, which required employees who normally would be working at the Support Center to receive a vaccine or be terminated. Id. ¶ 13. Rue21 also indicated that it would like employees to return to work on-site, but it did not specify when this would occur. Id.
Plaintiff notified rue21 by letter that she could not comply with the COVID-19 vaccine requirement for religious reasons, and she requested an exemption from the requirement. Id. ¶ 15. She then submitted a formal accommodation request form and participated in a remote conference with two employees to discuss her request and religious beliefs. Id. ¶¶ 16-17.
On February 11, 2022, Plaintiff received a letter saying that rue21 could not accommodate her request for a vaccine exemption because it created more than a de minimis burden to the company. ECF No. 4-4 at 1. Plaintiff asserts this was a form letter that contained multiple inaccuracies, and she disputes there was any burden for rue21 to accommodate her request. ECF No. 4 ¶¶ 19-21. Seven days later, Plaintiff was terminated from her employment because she was not vaccinated. Id. ¶ 24.
Based on these allegations, Plaintiff brings claims for religious discrimination in violation of Title VII (Count I), retaliation in violation of Title VII (Count II), and violations of the Pennsylvania Wage Payment Collection Law (Count III). Id. ¶¶ 25-46.
2. Motion to Dismiss
On February 21, 2023, rue21 filed this Motion to Dismiss, or Alternatively, to Compel Arbitration and Stay Further Judicial Proceedings and Brief in Support. ECF Nos. 10 and 11.
In support of its motion, rue21 relies on declarations from two rue21 employees, Kim Strauss (“Strauss”) and Tara Elders (“Elders”), who began working at rue21 after Plaintiff was hired. ECF No. 11-1 ¶ 1; ECF No. ll-2¶2.
Plaintiff was hired in December 2014. ECF No. 4 ¶ 12. Elders and Strauss did not begin working at rue21 until October 4. 2021. and March 7. 201 8. resnectivelv. ECF No. 11 -1 ¶ 2: ECF No. 11 -2 ¶ 2.
Strauss is a Human Resources Business Partner at rue21. ECF No. 11-2 ¶ 2. In her declaration, Strauss states that she is familiar with rue21's employee onboarding processes as part of her job duties. Id. ¶3. She asserts that when rue21 extends an offer of employment to a potential new employee, the individual is sent a “welcome” email to their personal email account with a link to rue21's electronic Onboarding Portal, as well as a unique login name and instructions for resetting their password. Id. ¶ 4. After inputting their login name and password, employees are able to access rue21's onboarding materials. Id. ¶¶ 5-6. As part of the onboarding materials, the potential new employee is advised of rue21's Dispute Resolution Program and provided a copy of its Dispute Resolution Agreement (the “Agreement”), which allows the employee to read, review and print the entire Agreement. Id. ¶ 7.
The Agreement is four pages long, and rue21 refers the Court to following provisions contained in the Agreement.
1. Scope of the Agreement.
This Agreement is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law and requires all such disputes to be resolved only by an arbitrator through final and binding arbitration and not by way of court or jury trial .... This Agreement is governed by the Federal Arbitration Act, 9U.S.C. § 1 et seq. and evidences a transaction involving commerce.
2. Claims Covered by This Agreement.
This Agreement applies to any dispute arising out of or related to Associate's employment with rue21, inc. or one of its affiliates, subsidiaries or parent companies (“rue21”) or the termination of such employment, that rue21 may have against Associate or Associate may have against any of the following: (1) rue21; (2) rue21's past, current and future officers, directors, employees, or agents; (3) rue21's benefit plans or the plans' sponsors, fiduciaries, administrators, affiliates, employees and agents; and (4) all successors or assigns of any of them. This Agreement requires all such claims to be resolved by an arbitrator through final and binding arbitration and not by way of court or a jury trial. Such disputes include without limitation disputes arising out of or relating to interpretation or application of this Agreement, including the enforceability, revocability or validity of the Agreement or any portion of the Agreement. The Agreement also applies, without limitation, to disputes regarding the employment relationship, trade secrets, unfair competition, compensation, breaks and rest periods, termination, discrimination, harassment or retaliation, and claims arising under the Uniform Trade Secrets Act, Title VII of the Civil Rights Act of 1964 . ..
6. Opt-Out Provision.
An associate may submit a form stating that the Associate wishes to opt out and not be subject to this Agreement. The Associate must submit a signed and dated statement on a “Dispute Resolution Agreement Opt Out Form” (“Form”) that can be obtained from the Company's Human Resources Department.... In order to be effective, the signed and dated Form must be returned to the Human Resources Department within 30 days of the date of the Associate's receipt of this Agreement. An associate who timely opts out as provided in this paragraph will not be subject to any adverse employment action as a consequence of that decision and may pursue available legal remedies without regard to this Agreement. Should an Associate not opt out of this Agreement within 30 days of the Associate's receipt of this Agreement, continuing the Associate's employment constitutes mutual acceptance of the terms of this Agreement by Associate and the Company. An Associate has the right to consult with counsel of the Associate's choice concerning this Agreement.ECF No. 11-3 at 1-3, 5.
According to Strauss, Plaintiff was sent the above-referenced “welcome” email and received materials through the electronic Onboarding Portal. She did not elect to opt out of the Agreement and signed it on December 8, 2014, at 11:30 AM. ECF No. 11-2 ¶¶ 10-13.
Elders is the Human Resources Information Systems Manager at rue21. ECF No. 11-1 ¶ 2. In her declaration, Elders states that she has reviewed Plaintiffs onboarding documentation, and it includes an electronically signed copy of the Agreement. Id. ¶¶ 5-7.
Rue21 also provides a purported copy of the Agreement that Plaintiff signed, which contains the following signature line.
Rue21 asserts this Agreement was signed by Plaintiff, Nicole Anderson. The parties do not address whether Plaintiff currently or formerly has used the last name “Nejak.”
Plaintiff filed a Brief in Opposition to the Motion to Dismiss, together with a declaration from Plaintiffs counsel, Avrum Levicoff (“Levicoff”). ECF Nos. 14 and 15. In his declaration, Levicoff represents that Plaintiff informed him she had “no recollection whatsoever of either having been presented with an Arbitration Agreement, or having done anything to cause a red checkmark to appear in a box set forth in the agreement.” ECF No. 14 ¶ 3. Levicoff also states that counsel for rue21 did not provide additional evidence or information upon his request to support its claim that Plaintiff signed the Agreement. Id. ¶¶ 4-5.
Plaintiff filed Levicoff s declaration separately, ECF No. 14, and as an exhibit to the Brief in Opposition to the Motion to Dismiss, ECF No. 15-1.
Rue21 filed a Reply in support of the Motion to Dismiss. ECF No. 23. Plaintiff then filed a Sur-Reply, together with a declaration from Plaintiff. ECF Nos. 24 and 27. In her declaration, Plaintiff states as follows.
Plaintiff filed her declaration senaratelv. ECF No. 24 and as an exhibit to the Snr-Renlv F.CF No 27-1.
In December 2022 I was contacted by my attorney, Avrum Levicoff, who inquired of me as to whether I had signed an agreement to arbitrate in connection with my
employment at Rue21. As I told Mr. Levicoff, I have no recollection whatsoever of either having been presented with an Arbitration Agreement, nor having signed one. Mr. Levicoff emailed me a copy of an Arbitration Agreement that Rue21 evidently claims I signed. Having looked at it, I do not recall having done anything to cause a red checkmark to appear in a box set forth in the document.ECF No. 27-1 ¶2.
Plaintiff also filed a Supplemental Memorandum, ECF No. 30, noting the Court's recent decision on a Motion to Dismiss, or Alternatively, to Stay Further Judicial Proceedings and Compel Arbitration in Boehm-Scharff v. Rue2L Inc., Case No. 23-227 (W.D. Pa. 2023), which involves the same defendant and similar allegations. At the Court's request, Plaintiff also filed a transcript of the oral argument the Court held regarding the motion at issue in Boehm-Scharff. ECF Nos. 31,33.
The Motion to Dismiss is now ripe for consideration.
B. LEGAL STANDARD
Under the Federal Arbitration Act (“FAA”), “[a] written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract... 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.
“[P]arties may agree to have an arbitrator decide not only the merits of a particular dispute but also . . . ‘whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.'” Henry Schein, Inc, v. Archer & White Sales, Inc., 139 S.Ct. 524, 52829 (2019). “However, even when questions of arbitrability have been delegated to the arbitrator the court must decide issues concerning contract formation.” Juric v. Dick's Sporting Goods, Inc., No. 2:20-cv-00651, 2020 WL 4450328, at *2 (W.D. Pa, Aug. 3, 2020) (citing, e.g., Granite Rock Co. v. Int'l Bd. of Teamsters, 561 U.S. 287, 296 (2010) (“[W]here the dispute at issue concerns contract formation, the dispute is generally for the courts to decide.”)).
In considering a motion to compel arbitration, the Court first must determine whether the motion to dismiss standard under Federal Rule of Civil Procedure 12(b)(6) applies, or if the summary judgment standard under Federal Rule of Civil Procedure 56 should govern. Guidotti v. Legal Helpers Debt. Resol., 716 F.3d 764, 776 (3d Cir. 2013). The Rule 12(b)(6) standard applies when it is “apparent” from the face of the complaint and documents relied on in the complaint “that certain of a party's claims are subject to an enforceable arbitration clause ....” Id. (internal citations and quotations omitted).
On the other hand, “if the complaint and its supporting documents are unclear regarding the agreement to arbitrate, or if the plaintiff has responded to a motion to compel arbitration with additional facts sufficient to place the agreement to arbitrate in issue, then ‘the parties should be entitled to discovery on the question of arbitrability,' after which the Court considers the motion under the Rule 56 summary judgment standard.” Id. (quoting Somerset Consulting, LLC v. United Capital Lenders, LLC, 832 F.Supp.2d 474, 482 (E.D. Pa. 2011)).
C. DISCUSSION
In support of the Motion to Dismiss, rue21 argues that Plaintiff agreed to arbitrate any disputes arising out of her employment, including questions pertaining to the enforceability and applicability of the Agreement. Based on this, rue21 requests that the Court dismiss Plaintiffs claims and order her to arbitrate them instead.
In response, Plaintiff disputes that a checkmark in a box is a valid signature. She also asserts that, under Guidotti, further development of the factual record is necessary before the Court can consider whether Plaintiffs claims must be arbitrated. As Plaintiff points out, this Court recently considered a substantially similar motion filed by rue21 in Boehm-Scharff. In Boehm-Scharff, as here, plaintiff Julie Boehm-Scharff (“Boehm-Scharff) brought claims against rue21 arising out of her alleged wrongful termination based on her failure to obtain the COVID-19 vaccination. Rue21 moved to dismiss Boehm-Scharff s claims based on the same Agreement provisions at issue in this case, and it relied on substantially similar declarations from rue21 employees Elders and Strauss regarding rue21's onboarding process. Boehm-Scharff v. Rue21, Inc., No. 23-227 (W.D. Pa. 2023), at ECF Nos. 1, 12 and 13.
Based on an exhibit that Plaintiff attaches to her Complaint, Boehm-Scharff was Plaintiff's immediate supervisor atrue21. ECF No. 1-1 at 7.
Upon consideration at oral argument, the Court in Boehm-Scharff noted that rue21's motion presented a threshold issue for the Court to decide as to whether a valid agreement to arbitrate was formed between Boehm-Scharff and rue21. ECF No. 33 at 3. The Court found that it was rue21 's burden to establish the formation of an arbitration agreement and that, while it was a “close call,” rue21's declarations did not “go far enough to establish sufficient evidence of a formation of an arbitration agreement....” Id. at 28-30. Based on this, the Court granted leave to conduct limited discovery on the issue of contract formation, and it denied rue21's motion without prejudice to renew after this discovery was completed. Iff; ECF No. 30-1.
Among other issues, the Court noted that, as here, Elders and Strauss were not employed at rue21 when Boehm-Scharff was onboarded. ECF No. 33 at 28.
The same result should apply here. Rue21 relies on substantially the same evidence the Court considered in Boehm-Scharff, which was insufficient to establish that the parties entered in an agreement to arbitrate at this preliminary stage. Accordingly, the Court should deny the Motion to Dismiss without prejudice to the filing of a renewed motion after limited discovery.
D. CONCLUSION
For these reasons, it is respectfully recommended that the Court deny rue21's Motion to Dismiss, or Alternatively, to Compel Arbitration and Stay Further Judicial Proceedings (“Motion to Dismiss”), ECF No. 10, without prejudice to renew following the completion of limited discovery.
In accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1), and Local Rule 72.D.2, the parties are permitted to file written objections in accordance with the schedule established in the docket entry reflecting the filing of this Report and Recommendation. Objections are to be submitted to the Clerk of Court, United States District Court, 700 Grant Street, Room 3110, Pittsburgh, PA 15219. Failure to timely file objections will waive the right to appeal. Brightwell v. Lehman, 637 F.3d 187, 193 n. 7 (3d Cir. 2011). Any party opposing objections may file their response to the objections within fourteen (14) days thereafter in accordance with Local Civil Rule 72.D.2.
Honorable J. Nicholas Ranjan, United States District Judge