Summary
finding FCRA claims subject to arbitration
Summary of this case from Acosta v. Ross Dress for Less, Inc.Opinion
Case No.: 03-61951-CIV-ALTONAGA/Bandstra
March 8, 2004
Marc A. Silverman, Esq., for Plaintiff
Eric K. Gabrielle, Esq. Janeen R. Richard, Esq., for Defendant
ORDER GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION
THIS CAUSE came before the Court upon Defendant, Clear Channel Broadcasting, Inc.'s ("Clear Channel") Motion to Compel Arbitration ("Motion") (D.E. 8). Plaintiff, Joseph Kotch ("Kotch"), seeks relief for alleged "handicap" and race discrimination pursuant to the Florida Civil Rights Act, Chapter 760, Florida Statutes (hereinafter referred to as the "FCRA"). In its Motion to Compel Arbitration, Clear Channel asserts that, by virtue of an Arbitration Agreement between the parties, the present dispute is subject to compulsory arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. § 1, et seq. (hereinafter referred to as the "FAA"). The Court has carefully considered the written submissions of the parties and the entire file, and is otherwise fully advised in the premises.
On September 30, 1996, Kotch signed an "Arbitration Agreement" with Clear Channel, which provides, in pertinent part:
As a condition of my employment with the Company, I hereby WAIVE MY RIGHT TO SUE the Company, and the Company hereby waives its right to sue me, for any claim or cause of action arising out of or relating to my employment relationship with the Company or the termination thereof. In lieu of suing, any such legal dispute may instead be submitted for final and binding resolution by a private, impartial arbitrator. I agree that such an arbitration shall be governed by the Employment Dispute Resolution Rules of the American Arbitration Association. I understand that a copy of these rules is available for my review.
(Arbitration Agreement, p. 1). Kotch agreed to arbitrate, inter alia, the following "Covered Claims:" (1) "[a]ny claim that could be asserted in court . . . for violation of any federal, state or local law, statute, ordinance or regulation;" and (2) "[a]ny claim for discrimination, including but not limited to discrimination because of sex, pregnancy, race , national or ethnic origin, age, religion, creed, marital status, sexual harassment, sexual orientation, mental or physical disability or medical condition or other characteristics protected by statute." (Id., p. 2) (emphasis added). The Arbitration Agreement also indicates that it is a mutual promise to arbitrate and that Kotch did not give up any substantive rights.
Page 1 of the Arbitration Agreement states:
By this Arbitration Agreement, however, I am giving up my right to sue the Company, and the Company is giving up its right to sue me in court, as well as the right to trial by jury. Instead, the Company and I hereby agree that any legal claim or dispute that either of us may hereafter have against or with the other will be submitted solely to a private, impartial arbitrator (a "private judge," so to speak) for a final and binding decision.
I understand that by entering into this Arbitration Agreement, I am not giving up any of my substantive rights to recover damages or other relief for any legal wrongs that may hereafter be done to me by the Company in violation of any state or federal law; I am merely agreeing to present any such claim to an arbitrator rather than to a court or administrative agency.
(underlining in original).
Clear Channel relies on the foregoing provisions of the parties' Agreement, as well as the FAA, to urge that Kotch be compelled to submit his claims to arbitration. The FAA provides in pertinent part that:
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement. . . .9 U.S.C. § 3. Notwithstanding the parties' Agreement and the applicable statutory text, Kotch urges a denial of the Motion based on various arguments relating to invalidity of the Agreement.
Kotch's first argument is that the Agreement is invalid, because its fee-splitting provision will result in prohibitive costs which will effectively preclude him from vindicating his claims pursuant to the FCRA. The "fee-splitting provision" that Kotch refers to states that:
I agree to share the arbitrator's fees and expenses equally with the Company. All other costs and expenses associated with the arbitration, including but not limited to any attorney's fees, shall be bourne by the party incurring the expense.
(Arbitration Agreement, p. 4). Kotch also maintains that the Arbitration Agreement was drafted solely by Clear Channel, the party with greater bargaining power, and was not the result of individual negotiations between Kotch and Clear Channel. In fact, execution of the Agreement was a prerequisite to his employment with Clear Channel.
Kotch has failed to put forward evidence that he is unable to pay any arbitration fees that may be imposed as part of the arbitration process, or that he is even likely to bear such fees. Such a showing by Kotch is required before the Arbitration Agreement may be found invalid or unenforceable by virtue of the fee-splitting provision. See Anders v. Hometown Mortgage Services, Inc., 346 F.3d 1024, 1029 (11th Cir. 2003 (citing Green Tree Fin. Corp. v. Randolph. 531 U.S. 79, 90 (2000)); Musnick v. King Motor Co. of Fort Lauderdale, 325 F.3d 1255, 1262 (11th Cir. 2003) (citing Green Tree, 531 U.S. at 91). There is no record evidence as to Kotch's personal financial resources, assets or income, and his conclusory assertion that arbitration costs would be "cost prohibitive" is insufficient. See Musnick, 325 F.3d at 1260 (finding that contention in litigant's affidavit that he feared the imposition of prohibitive fees was "wholly inadequate to establish that the arbitration would result in prohibitive costs that force him to relinquish his claim").
Moreover, should Kotch not be able to afford arbitration fees, Rule 38 of the applicable Rules of the American Arbitration Association ("AAA") permit the Association to "defer or reduce the administrative fees" in the "event of extreme hardship on any party." (Plaintiff's Response to Defendant's Motion and Memorandum of Law to Compel Arbitration ("Response"), Ex. C, p. 12). Additionally, Rule 27 of those Rules permit the arbitrator to "take whatever interim measures he or she deems necessary with respect to the dispute." (Id., Ex. C, p. 10). Kotch has failed to explore the options presented by these Rules, and thus his argument that he would incur "prohibitive costs" is premature.
The parties agree that they will be bound in arbitration by the AAA's National Rules for the Resolution of Employment Disputes. (See Response, p. 5 Ex. C; Defendant's Reply Memorandum in Support of its Motion and Memorandum of Law to Compel Arbitration, p. 9).
Kotch's next argument is that the Arbitration Agreement is invalid because it allows the arbitrator to award statutory fees and costs at his or her discretion. (Response, p. 7). The specific language of the Arbitration Agreement is as follows:
[I]f a party is entitled to attorney's fees under any federal, state or local statute or law, the arbitrator will award those fees pursuant to the governing law, at his/her discretion .
(Arbitration Agreement, p. 4) (emphasis added). Kotch urges that the arbitrator's "discretion" to award attorney's fees is in conflict with the "mandatory" provision of Chapter 760 of the Florida Statutes that entitles prevailing parties to an award of attorney's fees. (Response, p. 7-8). This argument, too, is unavailing because the attorney's fee provision of the FCRA is discretionary, not mandatory:
In any action or proceeding under this subsection, the court, in its discretion , may allow the prevailing party a reasonable attorney's fee as part of the costs.
Fla. Stat. 760.11(5) (emphasis added). Accordingly, the discretionary attorney's fees provision of the Arbitration Agreement does not eliminate or reduce any remedies available to Kotch under the FCRA.
The Arbitration Agreement further provides that "[t]he arbitrator shall have the authority to interpret and apply to the dispute any statute, ordinance, regulation, or principle of common law as may be applicable, and may award such relief as would be available if the claim(s) were brought in a court of law, to the extent the arbitrator deems appropriate." (Arbitration Agreement, p. 4). Similarly, Rule 34(d) of the AAA's Rules provides that " [t]he arbitrator may grant any remedy or relief that the arbitrator deems just and equitable, including any remedy or relief that would have been available to the parties had the matter been heard in court." (Response, Ex. C, p. 12).
The Court also comments on two other issues addressed in the memoranda. Whether or not the Arbitration Agreement was "non-negotiable" and "not the result of individual negotiations between Plaintiff and Defendant," is not dispositive on the issue of enforceability of its terms. Indeed, Kotch has not suggested that the Arbitration Agreement was in any way unconscionable under Florida law.
Kotch agreed on page 1 of the Arbitration Agreement that he " enter[ed] into this Agreement voluntarily and in exchange for [his] employment with the Company and the Company's agreement to resolve any disputes with [him] in the same manner, and in the interest of a prompt resolution of any dispute that [he] might have with the Company." (Arbitration Agreement, p. 1).
Equally unpersuasive is Kotch's theory that the Agreement is unenforceable because it limits the parties to three depositions. Under the AAA's Rules, Rule 7, the arbitrator has "the authority to order such discovery, by way of deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature of arbitration." (Response, Ex. C, p. 6). Under Rule 1, "[i]f a party establishes that an adverse material inconsistency exists between the arbitration agreement and these rules, the arbitrator shall apply these rules." (Id., Ex. C., p. 5). See also Wilks v. Pep Boys, 241 F. Supp.2d 860, 864-65 (M.D. Term. 2003) (permitting arbitration, in light of Rules 1 and 7, where employee was limited to one deposition of a fact witness). Moreover, courts have rejected similar arguments that such discovery limitations render an arbitration agreement unenforceable. See, e.g., Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 673-74 (6th Cir. 2003) (approving arbitration agreement limiting employee to three depositions unless a showing of "substantial need" was made); Fernandez v. Clear Channel Broadcasting, Inc., 268 F. Supp.2d 1365, 1368 (S.D. Fla. 2003) (enforcing arbitration agreement between an employer and employee that limited the parties to three depositions and otherwise limited the discovery allowed in federal courts, finding that limitations would not prevent employee from having a fair opportunity to present his claims); DeGroff v. MascoTech Forming Technologies, 179 F. Supp.2d 896, 909 (N.D. Ind. 2001) (rejecting challenge to arbitration agreement limiting employee's claim to one deposition in reliance on Rule 7, and where no showing had been made that limitation on discovery would thwart the employee's ability to present a Title VII claim).
In a section titled "Pre-Arbitration Procedures," the Arbitration Agreement provides that "[e]ither party may conduct discovery of the other by deposition, interrogatories, requests for production of documents and things, and requests for admission. Neither party, however, may require more than three oral depositions." (Arbitration Agreement, p. 3).
Based on the foregoing, the Court concludes that arbitration in accordance with the Arbitration Agreement should be compelled, and further concludes pursuant to the FAA, 9 U.S.C. § 3, 4, that the case shall be stayed pending the outcome of such arbitration proceedings. Accordingly, after due consideration, it is
ORDERED AND ADJUDGED that the Motion (D.E. 8) is GRANTED as follows:
1. Kotch is directed that, should he wish to pursue his claims through arbitration, he must follow the procedures described in the Arbitration Agreement regarding the filing of a demand for arbitration with the AAA. The statutes of limitations governing Kotch's claims shall be tolled for thirty (30) days from the date of this Order.
2. This action is STAYED pending completion of the arbitration proceedings.
3. On or before April 8, 2004, the parties shall file a Joint Status Report indicating the status of the arbitration proceedings and the expected date those proceedings will be concluded, except that if this matter is resolved prior to that date, the parties shall notify the Court within ten (10) days after such resolution.
4. Failure to comply with the provisions of this Order will result in a dismissal without further notice from the Court.
5. The Clerk of Court is instructed to mark this case CLOSED for statistical purposes only.
Clear Channel has stipulated that the statutes of limitations governing Kotch's claims may be tolled for thirty (30) days after the Court's Order is entered, to permit Kotch to file an arbitration claim.