Opinion
C. A. 2:22-3432-RMG-KDW
03-07-2023
Anthony M. Palmer, Plaintiff, v. Johns Island Post Acute, LLC, Defendant.
REPORT AND RECOMMENDATION
Kaymani D. West, United States Magistrate Judge
Plaintiff Anthony M. Palmer (“Plaintiff” or “Palmer”) filed this employment-related action against his former employer, Defendant Johns Island Post Acute, LLC (“Defendant” or “JIPA”), bringing Title VII claims of sexual harassment and retaliation, as well as a state-lawbased claim of wrongful discharge in violation of public policy. Compl., ECF No. 1. In response to the Complaint Defendant filed a Motion to Dismiss and Compel Arbitration, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(3), ECF No. 6, to which Plaintiff submitted his opposition and a supplemental opposition, ECF Nos. 9, 10; Defendant filed a Reply, ECF No. 11. Having considered the parties' filings and applicable law, the undersigned submits this Report recommending the court grant Defendant's Motion and end this case.
All pretrial proceedings in this case were referred to the undersigned pursuant to the provisions of 28, U.S.C. § 636 (b)(1)(B) and Local Rule 73.02(B)(2)(g), D.S.C.
I. Standard of review/what may be considered
Defendant seeks to compel arbitration, citing Federal Rules of Civil Procedure 12(b)(1) and 12(b)(3), as well as the Federal Arbitration Act (“FAA”). Def. Mot. 1, ECF No. 6. Section 4 of the FAA provides that a “party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in such agreement.” 9 U.S.C. § 4. The FAA reflects “a liberal federal policy favoring arbitration agreements.” Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). “‘Courts will compel arbitration under Section 4 if: (1) the parties entered into a valid agreement to arbitrate claims; and (2) the dispute or claims in question fall within the scope of the arbitration agreement.'” Snow v. Genesis Eldercare Rehab. Servs., LLC, No. CV 3:22-1794-SAL, 2023 WL 371085, at *2 (D.S.C. Jan. 24, 2023) (quoting Oyekan v. Educ. Corp. of Am., No. 4:18-cv-1785, 2019 WL 978865, at *2 (D.S.C. Feb. 28, 2019)).
Section 4 of the FAA requires the district court to “decide whether the parties have formed an agreement to arbitrate.” Berkeley Cnty. Sch. Dist. v. Hub Int'l Ltd., 944 F.3d 225, 234 n.9 (4th 2019). The question of whether an arbitration agreement has been formed is one of contract law, and ordinary state law principles apply. See First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995). When, as here, a party “unequivocally denies ‘that an arbitration agreement exists,'” that party bears the burden of coming forward with “sufficient facts” to support his position. Berkeley Cnty. Sch. Dist., 944 F.3d at 234. The standard to decide whether the party has presented “sufficient facts” is “akin to the burden on summary judgment,” and the court may consider matters outside the pleadings. Chorley Enters., Inc. v. Dickey's Barbecue Rests., Inc., 807 F.3d 553, 564 (4th Cir. 2015). When no genuine issue of material fact exists as to whether there is an arbitration agreement, the court will compel arbitration, subject to consideration of other applicable arguments. Snow, 2023 WL 371085, at *2.
Regarding what may be considered in ruling on the instant motion, the court agrees with Defendant that Plaintiff's challenge to the declaration submitted by Defendant (Catrena Fields Decl., ECF No. 6-6) is unavailing. Section 1746 of Title 28 of the United States Code provides that an “unsworn declaration, certificate, verification, or statement, in writing of such person which is subscribed by him, as true under penalty of perjury, and dated,” may be considered in the same manner as an affidavit so long as the declaration includes language declaring “under penalty of perjury that the foregoing is true and correct.” 28 U.S.C. § 1746(2). Fields' Declaration conforms to the requirements of 28 U.S.C. § 1746 and is competent evidence to be considered herein.
Despite Plaintiff's protestations that Fields' declaration is not sworn before a notary public, Plaintiff himself has submitted an unsworn “Affidavit” of a third party as part of his Supplemental Memorandum. Affidavit of Marsha Gilliland, ECF No. 10-1. This “Affidavit” indicates on its first page that Gilliland, “being duly sworn, depose[s] and say[s]” the information then provided. Id. However, the signature page of Gilliland's “Affidavit” is not attested by a notary. Nor does her statement conform to the requirements of 28 U.S.C. § 1746, which permits unsworn declarations, so long as they include the penalty-of-perjury language noted above. 28 U.S.C. § 1746(2). Furthermore, Gilliland's Affidavit does not indicate she has first-hand knowledge of the matters included. Rather, Gilliland indicates she “do[es] not recall” Plaintiff's signing an Arbitration Agreement and that she is “unaware” of an “electric component to the onboarding process.” Gilliland Aff. ¶¶ 4, 6. Nor does Gilliland purport to include the foundation that the affidavit is made on personal knowledge and information. See, e.g., Causey v. Balog, 162 F.3d 795, 803 n.4 (4th Cir. 1998) (“Because we cannot assess whether Causey had first hand knowledge of these facts or whether he is competent to testify to them, we cannot consider them in our review.”)
Accordingly, the undersigned agrees that Gilliland's “Affidavit” need not be considered. Folks v. Ellison, No. CV 1:21-105-MGL-SVH, 2022 WL 16700276, at *3, n.5 (D.S.C. Aug. 19, 2022) (finding it inappropriate to consider party's unsworn statement of events, despite the presence of the language that they were “sworn to as an affidavit” as the statement did not satisfy the requirements of 28 U.S.C.A. § 1746), report and recommendation adopted, No. CV 1:21-105-MGL-SVH, 2022 WL 12350526 (D.S.C. Oct. 20, 2022).
In any event, as discussed below, Gilliland's “Affidavit,” even if considered herein, does not change the court's recommendation.
Finally, the undersigned notes that Plaintiff has presented no affidavit or declaration as to his version of events surrounding the existence of an arbitration agreement. Rather, in his briefs opposing the Motion, Plaintiff's counsel has provided some information setting out “the events surrounding the start of Plaintiff's employment,” related to whether he digitally signed any documents. Pl. Mem. 6; see also Pl. Supplemental Resp. 1 (indicating what Plaintiff “states” and “alleges” as to his onboarding process when beginning work for Defendant). Technically speaking, however, “factual” information set out by Plaintiff's counsel in these briefs are not evidence to be considered by the court. See Davidson v. Robertson, No. 2:13-CV-1972-DCN, 2015 WL 1056975, at *2 (D.S.C. Mar. 10, 2015) (collecting cases and noting that statements by counsel in brief were not to be considered as evidence in summary-judgment context). Accordingly, Plaintiff's counsel's recollection of Plaintiff's version of events is not competent evidence and need not be considered.
For purposes of providing this Report for the District Judge's consideration, the undersigned is mindful that the improper format of the affidavit/declaration and the improperly presented facts from Plaintiff likely “could” be presented in admissible form. In the summary judgment context (which is similar to the standard utilized herein), though, facts may be considered so long as they “can[] be presented in a form that would be admissible in evidence.” Fed.R.Civ.P. 56(c)(2) (“A party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence.”). Because Plaintiff's statements as to his onboarding process go to the heart of Plaintiff's argument, and because Plaintiff presumably can put his information in to an admissible format, the undersigned will consider Plaintiff's additional factual allegations made through Plaintiff herein. Similarly, the information provided by Gilliland will be considered for what it is worth.
II. Background
Plaintiff initially was hired by Defendant to work as a Registered Nurse beginning on October 28, 2020. Oct. 26, 2020 Offer Letter, hand-signed by Plaintiff on October 26, 2020, ECF No.6-2 at 2. As explained by Defendant's Human Resources (“HR”) Manager Catrena Fields (“Fields”), Plaintiff “was unable to begin employment at that time and separated” from Defendant. Fields Decl. ¶ 3, ECF No. 6-6; see also Pl. March 20, 2021 Employment Application to JIPAC 3, ECF No. 6-5 (noting Plaintiff worked at JIPAC for “less than one week,” and indicating he “did not finish orientation due to family matter”).
According to statements by Plaintiff's counsel in opposing the pending Motion, Plaintiff initially applied for the position with Defendant “informally through Facebook and was then called in for an in-person meeting at which time he was provided with a paper application that he completed at the time of his interview.” Pl. Mem. 2. The record includes Plaintiff's March 10, 2021 Application for Employment, which was completed by hand. March 10, 2021 Employ. Application, ECF No. 6-5.
Importantly for purposes of the instant Motion, in completing and signing the March 10, 2021 Application, Plaintiff initialed several statements just above his signature on the Application, including the following:
I understand that any and all disputes regarding my employment with the Company, including any disputes relating to the termination of my employment, are subject to the Alternative Dispute Resolution process, which includes final and binding arbitration. I also understand and agree as a condition of employment, to subject any such disputes for resolution under that process, and I further agree to abide by and accept the decision of the arbitration panel as the final binding decision and resolution of any such disputes I may have.March 10, 2021 Applic. 3.
Plaintiff was offered employment in a letter dated March 17, 2021, with a start-date of March 24, 2021; Plaintiff would be full-time RN, “Monday-Friday 7a-3p.” March 17, 2021 Offer Ltr., ECF No. 6-4. Plaintiff hand-signed the letter on March 22, 2021, indicating he was accepting the offer. Id.
HR Manager Fields states that at the time of Plaintiff's March 2021 rehire JIPA “utilized a new-hire onboard process that included an electronic component and in-person component.” Fields Decl. ¶ 3. Fields indicates Plaintiff completed the on-boarding process on his first day of work, March 24, 2021. Fields Decl. ¶ 5 and attachment 1 thereto, found at ECF No. 6-6 at 6 (listing of documents received and signed electronically using the electronic onboarding process; this list indicates Plaintiff signed the Arbitration Agreement at 11:04 am on March 24, 2021).
The Arbitration Agreement provides, inter alia,
I. Mutual Decision to Arbitrate Disputes. This agreement (“Arbitration Agreement”) is between JOHNS ISLAND POST ACUTE, LLC (“the Company”), including its parents, subsidiaries, affiliates, predecessors, successors and assigns, their (including the Company's) respective owners, directors, officers, managers, employees, vendors, and agents and the “Employee,” the individual whose signature and name appear on the last page
of this Arbitration Agreement. Both Employee and the Company acknowledge that the Company has a system of alternative dispute resolution that involves binding arbitration to resolve disputes that may arise out of the employment context. The duty to arbitrate under this Arbitration Agreement is mutual, and Employee's decision to accept or to continue employment and to execute this Arbitration Agreement means that Employee and the Company have agreed to and are bound by this Arbitration Agreement. The duty to arbitrate under this Arbitration Agreement survives any decision, by either the Employee or the Company, to terminate (voluntarily or involuntarily) Employee's employment with the Company. ...
II. This Arbitration Agreement specifically includes all claims, disputes, and controversies by Employee or on Employee's behalf, against the Company . . . known as “Covered Claims.” ...
Covered claims include all claims which may be brought in a court or before a governmental agency unless specifically excluded [in this agreement] .... Covered claims include past, current, and future disputes or controversies related to an Employee's job application, hiring, terms and conditions of employment, job assignments, payment of wages, benefits, forms of compensation, or termination from the Company. ...
Covered claims include . . . [a]ny claim, dispute, and/or controversy arising under federal, state, or local laws, regulations, or statutes prohibiting employment discrimination, harassment, and/or retaliation . . .Arbitration Agmt. 1-2.
The signature block of the Agreement proffered by Defendant provides:
ACKNOWLEDGMENT OF ARBITRATION
I UNDERSTAND THAT THIS ARBITRATION AGREEMENT CONTAINS AN AGREEMENT TO ARBITRATE, AFTER SIGNING THIS DOCUMENT, I UNDERSTAND THAT I WILL NOT BE ABLE TO BRING A LAWSUIT CONCERNING ANY DISPUTE THAT MAY ARISE WHICH IS COVERED BY THE ARBITRATION AGREEMENT. MY SIGNATURE BELOW ATTESTS TO THE FACT THAT I HAVE READ, UNDERSTAND, AND AGREE TO BE LEGALLY BOUND TO ALL OF THE ABOVE TERMS. I UNDERSTAND THAT, UNLESS I TIMELY SEND THE OPT-OUT LETTER REFERENCED ABOVE TO THE PROPER ADDRESSEE, I WILL BE REQUIRED TO ARBITRATE ALL DISPUTES WITH THE COMPANY THAT ARE COVERED BY THIS ARBITRATION AGREEMENT. I ALSO UNDERSTAND THAT THIS ARBITRATION AGREEMENT CONTAINS A WAIVER OF JURY TRIAL.
03/24/2111:04:52 23802175696254903
Employee's Signature
Anthony Palmer
Print Name (Employee)
03/24/2021
DateArbitration Agreement 7.
In addition to the Arbitration Agreement, Plaintiff electronically reviewed and signed, among other things, the policy against unlawful harassment, discrimination, and retaliation; personal appearance and behavior policy; the code of conduct; ethics and anti-harassment policies; a confidentiality agreement; handbook acknowledgement; federal tax and employment forms; and documents to set up direct deposit. List of forms electronically reviewed by Plaintiff on March 24, 2021 between 10:59 am and 11:42 am, ECF No. 6-6 at 6.
(Image Omitted)
Electronic list, ECF No. ECF No. 6-6 at 6.
Fields explained that, when Plaintiff was hired, he was sent an email to the email address he had provided. This email included a link that directed Plaintiff to complete his onboarding paperwork. Fields Decl. ¶ 4. Fields indicated this was part of JIPA's business practice of having employees sign certain documents through its Human Resources Information System, Oasis. Fields Decl. ¶¶ 2, 4. Once Plaintiff clicked on the link in the provided email, he was required to verify his social security number and zip code to “access [his] particular new hire documents for review and electronic signature.” Decl. ¶ 4.
Fields notes that the Arbitration Agreement electronically signed by Plaintiff gives employees a period of 30 calendar days within which the employee can opt-out of the Arbitration Agreement by submitting his or her opt-out request in an email or letter to the Facility Administrator. Fields Decl. ¶ 6; see Arbitration Agreement 5. JIPA's HR Department maintains a hard copy file of all opt-out forms submitted by employees. Fields searched that file and confirms there was no opt-out form on file for Plaintiff. Fields Decl. ¶ 7.
Plaintiff indicates in his memorandum that he “never reviewed or completed any forms online or on a computer.” Pl. Mem. 2. Plaintiff has also provided the unsworn “affidavit” of former JIPA employee Marsha Gilliland. Gilliland Aff., ECF No. 10-1. Gilliland does not indicate when she was employed by JIPA other than to note that she “was employed at JIPA at the same time as Anthony Parker.” Gilliland Aff. ¶ 4. Gilliland indicates she worked as a Staff Development Coordinator and in Infection Control. Id. ¶ 1. Gilliland states that part of her job duties as Staff Development Coordinator included assisting Fields with “circulating and securing employees' signature to JIPA's Arbitration Agreement.” Id. ¶ 4. Gilliland recalls having employees sign hard copies of the Agreement and does not recall any employee signing an electronic version. Id. ¶ 3. Gilliland says she does not recall Plaintiff's ever signing JIPA's Arbitration Agreement. Id. ¶ 4. Gilliland indicates that she was unaware of any electronic component to the onboarding process and that “if there was an electronic component, [she] would have known about it as [she] was responsible for educating new staff on JIPA's policies and procedures.” Id. ¶ 6.
Plaintiff was terminated on April 20, 2021. Compl. ¶ 19. Plaintiff filed a Charge of Discrimination with the Equal Employment Opportunity Commission (“EEOC”). On October 4, 2022, Plaintiff filed his Complaint in this court, alleging sexual harassment and retaliation in violation of Title VII and a state-law-based claim of wrongful discharge in violation of public policy. Compl., ECF No. 1.
III. Law/Analysis
A. A signed Arbitration Agreement
Plaintiff first asserts the Arbitration Agreement is not enforceable because it “makes a generic reference to an electronic signature” and that he did not complete any onboarding documentation on a computer. Pl. Mem. 6. As noted above, Plaintiff's counsel's statements as to Plaintiff's alleged recollection are not competent evidence. In any event, if they are considered, they do not carry the day. When, as here, a party “unequivocally denies ‘that an arbitration agreement exists,'” that party bears the burden of coming forward with “sufficient facts” to support his position. Berkeley Cnty. Sch. Dist., 944 F.3d at 234.
Plaintiff's arguments that he does not recall having reviewed and electronically signed the Arbitration Agreement or other onboarding documents and his presentation of unsworn testimony by a former employee as to her failure to recall Plaintiff's electronically signing the Agreement are not sufficient to convince a reasonable factfinder that Plaintiff did not sign the Agreement. The lack of a “wet” signature notwithstanding, Defendant has submitted evidence sufficient to satisfy its burden of presenting a valid electronic signature by Plaintiff. As recently noted in another case in which an employee averred she did not recall signing an arbitration agreement, “a lack of recollection alone is insufficient to reasonably call into question the validity of the document.” Snow v. Genesis Eldercare Rehab. Servs., LLC, No. CV 3:22-1794-SAL-PJG, 2022 WL 17668157, at *3 (D.S.C. Sept. 6, 2022) (citing Gordon v. TBC Retail Grp., Inc., C/A No. 2:14-cv-03365-DCN, 2016 WL 4247738, at *7 (D.S.C. Aug. 11, 2016) (“[A] signatory's inability to remember signing an agreement, or other surrounding facts, is insufficient to create a genuine dispute of fact as to the authenticity of the signature.”); Gadberry v. RentalServ. Corp., C/A No. 0:09-3327-CMC-PJG, 2011 WL 767034 (D.S.C. Feb. 24, 2011) (adopting Report & Recommendation and finding plaintiff's argument that an agreement did not exist because he did not recall signing the contract was not supported by affirmative evidence)), report and recommendation adopted, No. CV 3:22-1794-SAL, 2023 WL 371085 (D.S.C. Jan. 24, 2023). On the other hand, Defendant has proffered specific, detailed evidence regarding the “new” onboarding process that involves both paper and electronic documentation and explains that Plaintiff could only access the documentation by logging in and verifying his social security number and zip code. The court further notes that, in addition to the Arbitration Agreement, his electronically reviewed documents include documents regularly utilized by employers in onboarding-including tax forms, direct deposition forms, and the like. Further, the e-signed Agreement includes identifying information for Plaintiff that would be generated by the Oasis system described by Fields. In addition, in his handwritten employment application, completed two days before Plaintiff began work and completed his onboarding, Plaintiff specifically acknowledged the arbitration requirement and agreed to settle disputes via the arbitration process.
Neither party explains what the identifying numbers and letters are following Plaintiff's electronic signature.
Plaintiff seems to intimate that Defendant has somehow created copies of the electronically signed Arbitration Agreement and evidence of other electronically reviewed-and-completed documents out of whole cloth. However, Plaintiff has not set forth evidence from which a reasonable factfinder could determine that he did not receive and electronically sign the Arbitration Agreement at issue. Snow, 2022 WL 17668157, at *3; see also Brown v. Fam. Dollar Stores of N.C., Inc., No. 1:21CV977, 2022 WL 3576972, at *3 (M.D. N.C. Aug. 19, 2022) (granting motion to compel arbitration, finding plaintiff's assertion that she did not electronically sign the arbitration agreement insufficient).
B. Adequate consideration
Plaintiff also sets out several legal defenses, arguing the Arbitration Agreement, if considered to have been signed by him, is unenforceable. State contract law principles govern whether parties have a valid agreement to arbitrate. Hightower v. GRMI, Inc., 272 F.3d 239, 242 (4th Cir. 2001). Here, both parties appropriately look to South Carolina law. South Carolina law requires the elements of offer, acceptance, and consideration to create a valid contract. Hardaway Concrete Co., Inc. v. Hall Contracting Corp., 647 S.E.2d 488, 492 (S.C. Ct. App. 2007).
As noted by Defendant, the Arbitration Agreement itself is an offer to Plaintiff to participate in arbitration. By choosing not to opt out of the Agreement within 30 days Plaintiff accepted that offer. South Carolina law supports the premise that continued employment constitutes sufficient consideration for an agreement to arbitrate. See Towles v. United HealthCare Corp., 338 S.C. 29, 40 n.4, 524 S.E.2d 839, 845 n.4 (Ct. App. 1999) (noting that an employee's continued employment constituted acceptance and sufficient consideration to make arbitration agreement binding). Further, as recently noted in Pitt v. Wells Fargo Bank, National Association, “a mutual promise to arbitrate constitutes sufficient consideration to underpin an arbitration agreement.” No. 3:21-CV-3428-JFA-TER, 2022 WL 2068851, at *4 (D.S.C. Apr. 1, 2022) (citing O'Neil v. Hilton Head Hosp., 115 F.3d 272, 275 (4th Cir. 1997) (additional internal citation omitted), report and recommendation adopted, No. 3:21-CV-3428-JFA-TER, 2022 WL 1421120 (D.S.C. May 4, 2022)
Plaintiff's arguments that there was inadequate consideration are unavailing. Plaintiff's citation to the Fourth Circuit case of Noohi v. Toll Bros., Inc., 708 F.3d 599 (4th Cir. 2013), is unhelpful because that case was interpreting Maryland law, not South Carolina law. Noohi, 708 F.3d at 607-09 (noting the court is applying Maryland law as to the formation of contracts). In addition, the clause found to be lacking in consideration in that case was one-sided. The court found there was no consideration because the parties had not mutually agreed to submit claims to arbitration. Noohi, 708 F.3d at 610 (finding arbitration provision that bound only plaintiffs to arbitration lacked mutuality of consideration). Here, though, the Agreement includes a “Mutual Decision to Arbitrate Disputes,” stating, inter alia, that “both the Company [Defendant] and Employee [Plaintiff] agree that any claim, dispute, and/or controversy that the Employee or the Company may have against the other shall be submitted to and determined exclusively by binding arbitration under the [FAA].” Arbitration Agreement I, ECF No. 6 at 4.
The Agreement further provides that “[a]ll other legal decisions shall be determined by the federal, state or local law applicable in the state where the Employee primarily works for the Company [here, South Carolina].” Arbitration Agreement 1.
Further, Plaintiff's citation to the South Carolina Arbitration Act, SC Code Ann. § 1548-10, is inapplicable because the Agreement herein is governed by the FAA, not South Carolina's Act. See Agreement I (“[B]oth the Company and the Employee agree that this Arbitration Agreement will be governed by the [FAA] and involves a transaction in interstate commerce.”), ECF No. 6 at 4.
Plaintiff's argument that a recent law removes his harassment claims from the FAA's purview is discussed below.
Plaintiff's argument that the Agreement is invalid for lack of consideration is without merit.
C. The Arbitration Agreement is not a contract of adhesion, nor is it unconscionable
Looking to Maryland contract law, Plaintiff submits the Arbitration Agreement is unenforceable because it was presented by the stronger party and left Plaintiff with no opportunity to bargain about its terms. Pl. Mem. 7-8 (citing Walter v. Sovereign Bank, 386 Md. 412, 226 (Md.Ct.App. 2005)). Of course South Carolina law applies to the validity of the Agreement. Under South Carolina law, adhesion contracts include nonnegotiable, “take it or leave it” provisions. Even so, adhesion contracts “are not per se unconscionable.” Simpson v. MSA of Myrtle Beach, Inc., 644 S.E.2d 663, 669 (S.C. 2007).
Here, the Agreement had an opt-out provision that gave Plaintiff the ability to refuse the arbitration requirement within 30 days. As it was not a “take it or leave it” requirement, the Arbitration Agreement is not an unconsionable contract of adhesion. See Morgan v. Advance Am., C. A. No. 4:07-3235-TLW-TER, 2008 WL 4191754, *15 (D.S.C. Sept. 5, 2008) (finding arbitration agreement with an opt-out provision not to be an adhesion contract). Plaintiff's argument that the Agreement amounts to an adhesion contract is without merit.
Similarly unavailing is Plaintiff's argument that the Agreement was unconscionable because “[a]t no time during Plaintiff's employment did any manager, supervisor, human resources personnel or any other agent of Defendant explain, educate or discuss the purported Arbitration Agreement with the Plaintiff.” Pl. Mem. 9. The court again notes that Plaintiff cites several Maryland cases that are inapplicable here. Under South Carolina law, there is no requirement that an arbitration agreement be “explained” to make it enforceable. In Pitt v. Wells Fargo Bank, National Assoc., the court rejected the plaintiff's argument that the agreement was unconscionable because it was not explained before signing. Pitt v. Wells Fargo Bank, National Assoc., C/A No. 3:21-CV-3428-JFA-TER, 2022 WL 2068851 at *4 (D.S.C. Apr. 1, 2022). The court noted, “[t]o prove the arbitration provision unconscionable, Plaintiffs must show that (1) they lacked a meaningful choice as to whether to arbitrate because the arbitration agreement's provisions were one sided, and (2) the terms were so oppressive no reasonable person would make them and no fair and honest person would accept them.” Id. (citing Simpson, 644 S.E.2d at 668). The court noted that “South Carolina law ‘does not impose a duty to explain a document's contents to an individual when the individual can learn the contents from simply reading the document.'” Id. (citing Towles, 524 S.E.2d at 845).
Here, as in Pitt, Plaintiff has not shown unconscionability under South Carolina law. Defendant had no duty to “explain” the Agreement. Further, Plaintiff had the ability to opt-out of it. This argument is without merit.
D. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 is inapplicable here
Finally, Plaintiff submits Defendant's focus on the FAA is improper, specifically focusing on the somewhat recently enacted Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “EFASASHA”). By its terms, EFASASHA, Pub. L. No. 117-90, 136 Stat. 26 (codified at 9 U.S.C. §§ 401, 402), a plaintiff “alleging conduct constituting a sexual harassment or a sexual assault dispute” may elect to render invalid and unenforceable an arbitration provision applicable to his or her case. 9 U.S.C. § 402(a). The applicability of this provision must be determined “by a court, rather than an arbitrator.” 9 U.S.C. § 402(b). Importantly, however, EFASASHA applies only to a “dispute or claim that arises or accrues on or after the date of enactment of this act.” EFASASHA § 3, 136 Stat. 28 (emphasis added). EFASASHA was signed into law on March 3, 2022. Pub. L. 117-90.
EFASASHA defines a “sexual harassment dispute” as “a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.”
Plaintiff argues the 2021 Act applies to his claims, making the Arbitration Agreement unenforceable. Although acknowledging the “underlying facts occurred prior to the enactment of the law,” Plaintiff seems to argue that he did not file a “claim” before March 3, 2022 because his EEOC Charge itself did not include an actual request for damages. Pl. Mem. 10 (citing Baron's Law Dictionary's definition of a “claim” as “show[ing] the existence of a right, and injury and a prayer for damages”). Plaintiff notes he filed his EEOC Charge before March 3, 2022, but he argues the Charge of Discrimination should not be considered a “claim” for purposes of determining the applicability of the Act. Pl. Mem. 9-10. Rather, because Plaintiff's Complaint in this court was filed after March 3, 2022, he submits the EFASASHA applies and does not require arbitration of his case. Id.
Plaintiff's argument overlooks the plain language of the statute, however. Section 3 of the EFASASHA specifically states “[t]his Act, and the amendments made by this Act, shall apply with respect to any dispute or claim that arises or accrues on or after the date of the enactment of this Act.” Public Law No. 117-90 (March 3, 2022) 136 Stat 26. (emphasis added). The issue then, is not whether the Charge or the Complaint would be considered the “claim.” Rather, the issue is whether the “dispute or claim” “ar[o]se or accrue[d] on or after” March 3, 2022. It did not. South Carolina courts have clearly defined when a claim arises or accrues. See Harvey v. S.C. Dep't of Corrs., 527 S.E.2d 765, 769 (S.C. 2000) (“The fundamental test for determining whether a cause of action accrued is whether the party asserting the claim can maintain an action to enforce it.”). Title VII claims plainly accrue at the time of the adverse employment action-here, Plaintiff's April 2021 termination. See e.g. Green v. Brennan, 578 U.S. 547 (2016) (stating, with regard to a Title VII wrongful discharge claim, that “the claim accrues when the employee is fired. At that point . . . he has a ‘complete and present cause of action.'”). Further, although the undersigned is aware of no controlling Fourth Circuit authority to have considered this precise issue, the Southern District of New York's Walters v. Starbucks Corp. decision is instructive. In that case, the court noted the plaintiff's employment claims had accrued prior to March 3, 2022, and discounted the plaintiff's argument that the EFASASHA applied to “any claims filed after March 3.” Walters v. Starbucks Corp., ___ F.Supp.3d ___, No. 22CV1907 (DLC), 2022 WL 3684901, at *3 (S.D.N.Y. Aug. 25, 2022) (citing several other cases making similar findings: Zinsky v. Russin, 22CV00547, 2022 WL 2906371, at *3 (W.D. Pa. July 22, 2022); Newcombe-Dierl v. Amgen, 22CV02155, 2022 WL 3012211, at *5 (C.D. Cal. May 26, 2022).
Because the EFASASHA is inapplicable here, the FAA applies, and Plaintiff's claims are subject to arbitration.
E. Defendant's request for attorney fees
Based on paragraph IV of the Agreement, Defendant seeks the court's order awarding its attorneys fees in drafting this Motion in response to Plaintiff's Complaint. Def. Mem. 14. Paragraph IV provides:
Dismissal of Any Lawsuit. The Company and Employee agree that if either pursues a covered claim against the other by any method other than the arbitration provision herein, and an exception does not apply, the responding party is entitled to a dismissal, stay and/or injunctive relief regarding such action, and the recovery of all damages in responding, to include related attorneys' fees, costs, and losses.
Agreement 5. In his supplemental response, Plaintiff contends a fee-award is inappropriate because “the underlying agreement is invalid.” Pl. Suppl. Mem. 2. Alternatively, Plaintiff “reserves the right to separately dispute the nature and extent of such submission by the Defendant.” Id.
The undersigned notes that the plain language of the Agreement contemplates the recovery of “all damages in responding [to a matter dismissed so that it can be arbitrated], to include related attorneys' fees, costs, and losses.” Agreement 5. At this time, no final ruling on the motion to dismiss has been made and no information regarding the fees sought has been provided. The undersigned defers to the United States District Judge to whom this matter is assigned. Should he adopt the within recommendation, he may find it appropriate to have Defendant provide a submission for fees sought and permit Plaintiff the opportunity to comment thereon.
IV. Conclusion
Based on the foregoing, the undersigned recommends that Defendant's Motion to Dismiss and Compel Arbitration, ECF No. 6, be granted and this matter be dismissed so the parties can arbitrate. Should this Report and Recommendation be adopted, the United States District Judge may wish to provide further guidance on Defendant's request for attorney fees.
IT IS SO RECOMMENDED.