Opinion
Civil Action No. 3:03-CV-00444-L.
June 30, 2003.
ORDER
Before the court is Defendants' Motion to Dismiss or, in the Alternative, Stay Proceedings Pending Arbitration, filed April 10, 2003. Plaintiff did not file a response to the motion. After careful consideration of the motion and the applicable law, the court grants Defendants' Motion to Dismiss, compels arbitration, and denies as moot Defendants' alternative motion to stay proceedings pending arbitration.
As an initial matter, the court notes that on June 24, 2003, Ms. Cheryl Mann, one of Defendants' counsel, informed the court's law clerk, Ms. Tatia Randolph, that the parties had agreed that all claims in this lawsuit should be resolved through binding arbitration. Ms. Mann further indicated that she would confer with counsel for Plaintiff about submitting an agreed motion to stay these proceedings pending arbitration. On June 27, 2003, Ms. Randolph called Ms. Mann to inquire when the court might expect the parties' agreed motion; however, Ms. Mann was unable to provide an answer at that time, because she would not be able to confer with Plaintiff's counsel until Monday, June 30, 2003, after he returned from vacation. She further stated that she had vacation scheduled to begin on Wednesday, July 2, 2003, and that it was doubtful that the parties would be able to submit their motion within the next week. When Ms. Mann informed Ms. Randolph of the parties' agreement, the court had already drafted its order on Defendants' motion. Since there is no documentation evincing the parties' agreement to arbitrate, and there is no agreed motion before the court regarding such an agreement, the court, under these circumstances, sees no reason to delay issuing this order.
I. Background
This is an employment discrimination case. Plaintiff Yolanda Williams ("Williams" or "Plaintiff") is an African-American female and former employee of Defendants Cintas Corporation and Xpect First Aid Corporation (collectively "Cintas" or "Defendants"). According to Plaintiff's Complaint, Williams began her employment with Cintas in July 2000 as an Accounts Receivables Representative. During her tenure, Williams alleges that she was subjected to racial discrimination and harassment by her supervisor, Jana Butcher. She further alleges that despite her complaints, Cintas never took corrective action and retaliated against her because of her complaints. Williams resigned from her employment with Cintas on July 31, 2002.
While working at Cintas, Williams executed an employment agreement with her employer. Paragraph 5 of that agreement provides, in relevant part, as follows:
5. EXCLUSIVE METHOD OF RESOLVING DISPUTES OR DIFFERENCES. Should any dispute or difference arise between Employee and Employer concerning whether Employer or any agent of Employer ever at any time violated any duty to Employee, right of Employee, law, regulation or public policy or breached this Agreement, Employee and Employer shall confer and attempt in good faith to resolve promptly such dispute or difference. To have a fair, timely, inexpensive and binding method of resolving any such dispute or difference remaining unresolved after Employee and Employer confer in good faith, should Employee desire to pursue Employee's claim, Employee shall, within one year of the date when the dispute or difference first arose or within one year of when Employee's employment ends, whichever occurs first, submit to Employer a written request to have such claim, dispute or difference resolved through impartial arbitration conducted in accordance with the American Arbitration Association's National Rules for the Resolution of Employment Disputes and held in the county and state where Employee currently works for Employer or most recently worked for Employer.
Defs.' Ex. A-1, at 3. Despite this arbitration clause, Williams brought this lawsuit against Cintas on March 3, 2003, alleging claims of race discrimination and retaliation under Title VII of the Civil Rights Act of 1964 ("Title VII"), as amended, 42 U.S.C. § 2000e et seq., and 42 U.S.C. § 1981. Defendant now moves to dismiss Plaintiff's Complaint and to compel arbitration or, in the alternative, to stay these proceedings pending arbitration.
II. Defendants' Motion to Dismiss/Stay Proceedings Pending Arbitration
Defendants contend that Williams' employment discrimination claims fall squarely within the arbitration provision of her Employment Agreement. They further contend that because Williams failed to submit her claims to arbitration before filing this lawsuit, this action must be dismissed and her claims referred to arbitration. As stated before, Plaintiff did not file a response to Defendants' motion.
Ordinarily, when deciding whether to compel arbitration of a dispute, the court must first determine whether the parties agreed to arbitrate that dispute. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985); Ford v. NYLCare Health Plans of Gulf Coast, Inc., 141 F.3d 243, 247 (5th Cir. 1998). This determination is commonly made by applying the "federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the FAA." Mitsubishi Motors Corp., 473 U.S. at 626 (citations omitted). The arbitration provision at issue here, however, states that controversies would be subject to arbitration in accordance with the Federal Arbitration Act ("FAA") and applicable state law, in this case, the Texas General Arbitration Act ("TGAA"). The FAA does not preempt state arbitration rules if the state rules do not undermine the goals and policies of the FAA, Volt Info. Sci., Inc., 489 U.S. at 477, which are "to ensure the enforceability, according to their terms, of private agreements to arbitrate." Id. at 476. Similar to the federal policy of ensuring the enforceability of arbitration agreements, there is a strong presumption in Texas public policy favoring arbitration and upholding the parties' intentions to arbitrate. See ASW Allstate Painting Constr. Co. v. Lexington Ins. Co., 188 F.3d 307, 310 (5th Cir. 1999). The TGAA can govern the scope of an arbitration agreement without undermining the federal policy underlying the FAA. See id. at 311 (citing Ford, 141 F.3d at 247-48.). In light of the choice-of-law provision contained in the Employment agreement, and considering that the Texas arbitration rules do not undermine the federal policy of the FAA, the court will apply Texas law in determining the scope and applicability of the arbitration agreement in this case.
Paragraph 4 of the Employment Agreement differs from a traditional choice of law provision in that it states that the agreement is to be "interpreted, governed, and enforced" by both the FAA and the applicable state law (here, the TGAA) instead of by either federal or state law. Of course, parties may structure their arbitration agreements as they see fit, including, specifying the law governing interpretation of the scope of the arbitration clause. See Volt Info. Sci., Inc. v. Bd. of Tr. of Leland Stanford Junior Univ., 489 U.S. 468, 479 (1989) ("just as [the parties] may limit by contract the issues they will arbitrate, . . . so too may they specify by contract the rules under which that arbitration will be conducted.").
Under Texas law, a party seeking to compel arbitration must establish: (1) the existence of a valid agreement to arbitrate; and (2) that the claims asserted by the party attempting to compel arbitration fall within the scope of that arbitration agreement. ASW Allstate Painting Constr. Co., 188 F.3d at 31 1; Phillips v. ACS Mun. Brokers, Inc., 888 S.W.2d 872, 875 (Tex.App.-Dallas 1994, no writ). Once a party seeking to compel arbitration establishes the two elements, the court must compel arbitration. ASW Allstate Painting Constr. Co., 188 F.3d at 311; Cantella Co. v. Goodwin, 924 S.W.2d 943, 944 (Tex. 1996); Phillips, 888 S.W.2d at 875.
Both elements are easily met. It is undisputed that on November 27,2000, Williams signed an Employment Agreement containing an arbitration covenant for the "exclusive method of resolving disputes or differences." There is also no dispute that Plaintiff's claims fall within the scope of the parties' arbitration agreement. Williams, by not filing a response, has done nothing to show that the arbitration agreement is invalid or that her claims are beyond the scope of its provisions. Further, since she neither refutes the existence of the arbitration agreement nor objects to submitting her claims to arbitration, the court has no trouble concluding that a valid and enforceable agreement to arbitrate exists between the parties, and that Plaintiff's discrimination claims are within the scope of the arbitration agreement. Because a valid agreement to arbitrate exists between the parties and the claims asserted in Plaintiff's Complaint are arbitrable, the court must compel arbitration.
III. Conclusion
For the reasons stated herein, the court grants Defendant's Motion to Dismiss and compels arbitration of this dispute. Having determined that all claims raised by Plaintiff must be submitted to binding arbitration, and finding no other reason to retain jurisdiction over this action, the court dismisses it with prejudice. See Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992). As the court has dismissed this action and compelled arbitration, Defendants' alternate Motion to Stay Proceedings Pending Arbitration is moot, and accordingly denied.