Opinion
A-23-CV-686-DII
01-18-2024
KEITH JENSEN, PLAINTIFF, v. BURGERS OF BEAUMONT I, LTD. D/B/A WHATABURGER, DEFENDANT.
REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
MARK LANE, UNITED STATES MAGISTRATE JUDGE
TO THE HONORABLE UNITED STATES DISTRICT JUDGE:
Before the court is Defendant's Motion to Compel Arbitration and Brief in Support (Dkt. 6) and all related briefing Having reviewed the pleadings, the relevant case law, as well as the entire case file, and determined that oral arguments are not necessary, the undersigned submits the following Report and Recommendation to the District Court.
The motion to compel arbitration was referred by United States District Judge Robert Pitman to the undersigned for a Report and Recommendation as to the merits pursuant to 28 U.S.C. § 636(b), Rule 72 of the Federal Rules of Civil Procedure, and Rule 1 of Appendix C of the Local Rules of the United States District Court for the Western District of Texas. Text Order dated Oct. 6, 2023.
I. Background
Plaintiff Keith Jensen was hired by Defendant as a District Manager in 2012 and subsequently rose to the position of Director of Operations. Dkt. 1 (Compl.) ¶ 5. Defendant terminated his employment in 2022. Id. ¶ 12. Jensen asserts claims for sex discrimination and retaliation under Title VII. Id. ¶¶ 18-34. Defendant moves to compel Jensen to pursue his claims in arbitration, pursuant to an employment Arbitration Agreement. See Dkt. 6-1 (Arbitration Agmt). Jensen argues the Arbitration Agreement is not enforceable because it requires arbitration through an entity that no longer exists and several of its provisions are unconscionable. Dkt. 8.
II. Applicable Law
When a party seeks to compel arbitration based on a contract, the first question for the court is whether there is an arbitration agreement between the parties at all. Arnold v. Homeaway, Inc., 890 F.3d 546, 550 (5th Cir. 2018) (citing Kubala v. Supreme Prod. Servs., Inc., 830 F.3d 199, 201-02 (5th Cir. 2016)). The second question is whether the claim presented is covered by the arbitration agreement. Brittania-U Nigeria, Ltd. v. Chevron USA, Inc., 866 F.3d 709, 713-14 (5th Cir. 2017).
III. Analysis
Jensen contends the Arbitration Agreement should not be enforced. First, Jensen argues the Arbitration Agreement requires arbitration before the American Mediation Association (“AMA”), which no longer exists. Therefore, he argues the court cannot compel performance of the Arbitration Agreement. Jensen relies on Ranzy v. Tijerina, 393 Fed. App'x 174 (5th Cir. 2010), in which the Fifth Circuit affirmed the district court's decision not to enforce an arbitration agreement that designated the National Arbitration Forum as the sole arbitration forum. At the time of the suit, the National Arbitration Forum no longer handled the types of claims the plaintiff asserted. In Ranzy, the court had to determine whether the designation of the NAF as the sole arbitration forum was an integral part of the agreement. Id. at 176. Using the rules of contract construction to determine the parties' intent, the court found that “where the parties' agreement specifies that the laws and procedures of a particular forum shall govern any arbitration between them, that forum-selection clause is an ‘important' part of the arbitration agreement,” and the district court was not required to compel arbitration in a substitute forum. Id.
However, unlike Ranzy, the present Arbitration Agreement mandates that the Federal Arbitration Act shall apply, and alternatively the Texas General Arbitration Act shall apply if the FAA is inapplicable. Arb. Agmt. ¶ 1.11. The Agreement also states the AMA's rules shall apply, and the AMA's filing fee shall be paid by the party seeking resolution. Id. ¶ 1.12. However, the Agreement also states the parties shall attempt to resolve the dispute by informal internal discussion, and either party “may” contact the AMA. Id. The Agreement further provides that the “Company and Employee shall attempt to select a mutually acceptable arbitrator,” and if one cannot be agreed upon the AMA will provide a list of five qualified persons. Id. ¶ 1.14. Taking these provisions together, the parties did not intend that the AMA's role in the arbitration was such an integral part of the Agreement that without the AMA the parties would not intend to arbitrate. See Ranzy, 393 Fed.Appx. at 176 (“Any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.”). Accordingly, the AMA's status does not provide an adequate reason to not enforce the agreement.
Jenson also argues that several other provisions within the Arbitration Agreement are unconscionable and therefore the Agreement should not be enforced. However, Defendant has agreed not to enforce those provisions, rendering Jenson's arguments moot.
Accordingly, the undersigned finds the parties made an agreement to arbitrate the claims Jensen asserts and will recommend Defendant's motion be granted.
IV. Recommendation
The undersigned RECOMMENDS the District Court GRANT Defendant's Motion to Compel Arbitration and Brief in Support (Dkt. 6) and STAY the case.
V. Objections
The parties may file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are being made. The District Court need not consider frivolous, conclusive, or general objections. See Battles v. United States Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report and, except upon grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Services Auto. Ass'n, 79 F.3d 1415 (5th Cir. 1996)(en banc).