Opinion
CIVIL ACTION NO. 3:10CV297TSL-FKB.
July 19, 2010
MEMORANDUM OPINION AND ORDER
This cause is before the court on the motion of defendant O'Charley's to dismiss, or in the alternative, to compel arbitration pursuant to § 4 of the Federal Arbitration Act (FAA). Plaintiff Angel Mangum has responded in opposition to the motion and the court, having considered the memoranda of authorities, together with attachments, submitted by the parties, concludes that the motion is well taken and should be granted.
Plaintiff Angel Mangum has filed this action asserting claims under Title VII, 42 U.S.C. § 2000e et seq., and under state law for intentional and/or negligent infliction of emotional distress, and violations of Mississippi public policy based on allegations that she was subjected to severe and pervasive sexual harassment and sexual discrimination during her employment with defendant O'Charley's. O'Charley's has moved to dismiss or, in the Alternative, to compel arbitration, contending that, in an Arbitration Agreement, plaintiff consented to be bound upon becoming employed by defendant.
The determination whether a plaintiff will be complled to arbitrate under § 4 requires that the court first determine whether the parties agreed to arbitrate the dispute in question. This involves two considerations: (1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement. Webb v. Investacorp, Inc., 89 F.3d 252, 257-58 (5th Cir. 1996). "The second step is to determine `whether legal constraints external to the parties' agreement foreclose[s] the arbitration of those claims.'" Webb, 89 F.3d at 258 (quotingMitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S. Ct. 3346, 3355, 87 L. Ed. 2d 444 (1985)).
According to the proof submitted by O'Charley's in this case, and specifically the affidavit of Christine Schaeffer, O'Charley's Human Resources Information Systems Manager, every employee who becomes employed by O'Charley's is required to participate in the company's standard new-hire orientation process. This process includes an electronic review and acknowledgment of various employment-related documents, including an Arbitration Agreement. Employees express their assent to the terms of the Arbitration Agreement by clicking the "I Agree" box on the screen, and they are not permitted to continue with the orientation program until they have expressed their consent to the terms of the Arbitration Agreement. Once the box is clicked, O'Charley's captures the employee's electronic signature, which it maintains on file.
It is undisputed that Mangum went through the new-hire orientation process, and that she clicked the "I Agree" box on the Arbitration Agreement, indicating her assent to be bound by the Arbitration Agreement. It is also undisputed that her claims in this action fall within the scope of claims covered by the terms of the Arbitration Agreement, which provides for binding arbitration of "all claims and disputes" between the parties, including all claims or controversies "that would constitute a cause of action in a court, including but not limited to . . . claims for discrimination or other employment-related claims . . . and claims for violation of any federal, state, local, or other governmental law, statute, regulation, or ordinance. . . ."
The Arbitration Agreement provides in pertinent part as follows:
Employee and O'Charley's mutually agree that any and all claims or disputes described in paragraph 2 that Employee may have now or in the future with or against O'Charley's, any parent or subsidiary of, or any company affiliated with, O'Charley's Inc., or any of its subsidiaries, and their officers, directors, managers, employees, or agents acting in their capacity as such or otherwise, or that O'Charley's may have now or in the future with or against Employee, may be heard by a neutral mediator selected from the roster of Employment Dispute Mediators of the American Arbitration Association ("AAA") in accordance with O'Charley's Rules for the Resolution of Employment Disputes; and that if voluntary mediation of a dispute by Employee or O'Charley's is unsuccessful, or if the Employee or O'Charley's do not wish to use the voluntary mediation procedure, the claim or dispute shall be submitted to arbitration and heard and decided by a neutral arbitrator from the AAA's roster of Employment Dispute Arbitrators in accordance with O'Charley's Rules for the Resolution of Employment Disputes, which are incorporated herein by reference.
. . .
The disputes and claims covered by this Agreement include claims or controversies, whether or not arising out of employment or termination of employment, that would constitute a cause of action in a court, including but not limited to claims for claims for wages or other compensation due; claims for breach of contract or promise (express or implied); tort claims; claims for discrimination or other employment-related claims; claims for benefits . . .; and claims for violation of any federal, state, local, or other governmental law, statute, regulation, or ordinance. . . .
. . .
The Arbitrator's decision shall be final and binding on Employee and O'Charley's. Employee and O'Charley's acknowledge that arbitration is a substitute for traditional litigation and hereby waive their respective rights to file a private lawsuit and have that suit heard in court by a judge or a jury.
Employee's waiver of his/her right to trial by jury and his/her agreement ot submit all disputes, including without limitation those arising out of employment or termination of employment, to final and binding arbitration is done voluntarily and knowingly. Employee fully understands that this Agreement precludes employee from seeking redress in court for a dispute with or against O'Charley's.
. . .
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN O'CHARLEY'S AND ME RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED IN IT, AND THAT I HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY PROMISES OR REPRESENTATIONS BY O'CHARLEY'S OTHER THAN THOSE CONTAINED IN THIS AGREEMENT ITSELF.
In her response to the motion, Mangum does not deny that she clicked the "I Agree" box on the Arbitration Agreement and thereby electronically "signed" the Arbitration Agreement. However, she contends that she did so only because representatives of O'Charley's told her she must do so if she wanted to become employed by O'Charley's, and she needed the job. She states that O'Charley's never told her to read the Arbitration Agreement and did not explain to her what was in the Arbitration Agreement, and she contends that under the circumstances, she ought not be bound by the agreement.
Mangum does not contend that she somehow failed to understand that by clicking the "I Agree" box, she was, in effect, signing the agreement electronically and by so "signing," indicating that she was, in fact, agreeing to be bound by the terms of the Arbitration Agreement. Yet she contends that she should not be bound to the terms of the Agreement because she did not read it before "signing it" and because O'Charley's did not explain to her what was in it before she "signed" it. Clearly, however, the Arbitration Agreement is not unenforceable simply because Mangum failed to read it before "signing" it.
The determination whether there is a valid agreement to arbitrate between the parties — the first step in the court's inquiry on a motion to compel arbitration — "is generally made on the basis of `ordinary state-law' principles that govern the formation of contracts.'" Morrison v. Amway, 517 F.3d 248, 254 (5th Cir. 2008) (quoting Fleetwood Entersprises, Inc. v. Gaskamp, 280 F.3d 1069, 1073 (5th Cir. 2002)). The Mississippi Supreme Court has held that an arbitration agreement may be held unenforceable on grounds of procedural unconscionability where there is proof of "a lack of knowledge, lack of voluntariness, inconspicuous print, the use of complex legalistic language, disparity in sophistication or bargaining power of the parties and/or a lack of opportunity to study the contract and inquire about the contract terms." McKenzie Check Advance of Mississippi, LLC v. Hardy, 866 So. 2d 446, 454-455 (Miss. 2004) (citing First Family Financial Servs., Inc. v. Fairley, 173 F. Supp. 2d 565, 572 (S.D. Miss. 2001)). However, a party does not prove "lack of knowledge" as to the contents of an agreement based merely on the fact that she failed to read the agreement. On the contrary, "[i]t is well settled under Mississippi law that a contracting party is under a legal obligation to read a contract before signing it." Id. at 455. See also MS Credit Center, Inc. v. Horton, 926 So. 2d 167, 177-178 (Miss. 2006) ("Under Mississippi law, . . . parties to a contract have an inherent duty to read the terms of a contract prior to signing; that is, a party may neither neglect to become familiar with the terms and conditions and then later complain of lack of knowledge, nor avoid a written contract merely because he or she failed to read it or have someone else read and explain it. Horton may not escape the agreement by simply stating she did not read the agreement or understand its terms."); New South Federal Sav. Bank v. Anding, 414 F. Supp. 2d 636, 651 (S.D. Miss. 2005) (recognizing that Mississippi law imposes legal obligation on contracting party to read contract before signing, and holding that defendants who signed deed of trust rider were "presumed to have read and understood that their common law claims relating to their loans would be subject to arbitration").
In this case, Mangum does not allege that she was not permitted to review the Arbitration Agreement, or that she was not given sufficient time to read the Agreement, or that O'Charley's undertook any other action that resulted in her being coerced or pressured into signing the Agreement without reading it. She merely claims that did not read the Agreement prior to "signing" it during her new-hire orientation training because she was not expressly told to read it. Cf. McKenzie, 866 So. 2d 455 (finding no procedural unconscionability where customers did not allege that they were illiterate, or that lender failed to give them an opportunity to read the arbitration agreement or prevented them from doing so in any way, and where, "had they read the arbitration agreement, as the law presumes that they did, they would have easily understood the language of the agreement, and their attention would have been particularly drawn to the rights that they were agreeing to waive by signing the agreement").
Neither can Mangum avoid enforcement of the contract on the basis that O'Charley's failed to explain the Agreement to her. The plaintiff in Horton, supra, alleged that she was unaware of an arbitration agreement, and similarly argued that because the arbitration agreement was not explained to her, she did not understand arbitration and did not have proper knowledge of the legal effect of the agreement. The court addressed this argument, stating,
[T]his Court has never held that one party to an arm's-length contract has an inherent duty to explain its terms to the other. Duties to disclose or to act affirmatively, such as explaining the terms of a contract, do not arise in arm's length transactions or under an ordinary standard of care. Rather they arise only in fiduciary or confidential relationships. Consequently, Defendants in this case had no affirmative duty to disclose, explain, or affirmatively act on behalf of Horton, and she cannot attribute her lack of knowledge to Defendant's failure to explain.926 So. 2d at 178 (citations omitted).
Mangum finally appears to suggest that she cannot be bound to arbitrate because she was not given and did not sign a copy of O'Charley's Rules for the Resolution of Employment Disputes, which are referenced and incorporated in the Arbitration Agreement. However, the fact that she did not receive a copy of these Rules is irrelevant to her agreement to arbitrate all claims against O'Charley's that fall within the scope of the Arbitration Agreement.
As plaintiff has offered no other basis for denial of O'Charley's motion to compel arbitration, the court concludes the motion should be granted. The court further concludes since the agreement to arbitrate extends to all of plaintiff's claims herein, the court, rather than stay the claims pending arbitration, will dismiss plaintiff's claims without prejudice.See Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992) ("weight of authority clearly supports dismissal of the case when all of the issues raised in the district court must be submitted to arbitration").
SO ORDERED.