Dudley v. Am. Family Care, Inc.

MELLIE DUDLEY, Plaintiff, v. AMERICAN FAMILY CARE, INC., Defendant.

CIVIL ACTION NO. 2:20cv105-MHT (WO)

DISTRICT COURT OF THE UNITED STATES FOR THE MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION

November 4, 2020

OPINION AND ORDER

This suit under the Age Discrimination in Employment Act, 29 U.S.C. § 621, also known as the ADEA, is before the court on the motion of defendant American Family Care, Inc. to dismiss plaintiff Mellie Dudley's complaint and compel her to arbitrate her claim. The court has federal-question jurisdiction pursuant to 28 U.S.C. § 1331.

Dudley worked for many years at Montgomery locations of American Family Care, a network of healthcare facilities with clinics across the United States. She alleges that, near the end of her time at the company, her co-workers began harassing and threatening her because of her age: She is either 77 or 79 years old. See Complaint (doc. no. 1) at ¶ 4 (seventy-seven); Decl. of Mellie Dudley (doc. no. 15-1) at ¶ 3 (seventy-nine). Dudley says she ultimately left the company in September 2018 because of this harassment.

In May 2018, after she started complaining of age discrimination to her supervisors, Dudley was asked to sign an agreement to arbitrate "any controversy, dispute or claim arising out of or relating to" her employment with American Family Care as a condition of remaining in her job. Arbitration Agreement (doc. no. 15-2) at 2; see also Mem. in Supp. Defs.' Motion to Dismiss (doc. no. 6) at 5. She signed the agreement, and the company now seeks to enforce it. For the reasons that follow, the court will grant the company's motion insofar as it seeks to compel arbitration. The arbitration agreement is enforceable, and Dudley must arbitrate her claim.

The Federal Arbitration Act requires a court to stay an action when it finds the suit to be subject to a validarbitration agreement. 9 U.S.C. § 3. American Family Care nonetheless moves to dismiss Dudley's complaint because the only claim presented in her complaint is subject to arbitration. See Mem. in Supp. Defs.' Motion to Dismiss (doc. no. 6) at 10-11. The cases the company cites to support this request show nothing more than that the district court has the power to dismiss rather than stay an action under these circumstances. The court declines to exercise that power. It will deny the motion insofar as the company seeks dismissal of this suit, and it will instead stay this action pending the arbitration of Dudley's claim.

I. LEGAL STANDARD

The Federal Arbitration Act instructs that arbitration agreements such as the one in this case are "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. As the Supreme Court has explained, the Act evinces "a liberal federal policyfavoring arbitration agreements." Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1621 (2018) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). The agreements may be "invalidated by 'generally applicable contract defenses'" under state contract law, but not by "defenses that apply only to arbitration." AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (quoting Dr.'s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)).

However, the United States Supreme Court and the Eleventh Circuit Court of Appeals have recognized one arbitration-specific defense that is relevant here. An arbitration agreement may be unenforceable when "the existence of large arbitration costs" would preclude a plaintiff from "effectively vindicating her federal statutory rights in the arbitral forum." Green Tree Fin. Corp. v. Randolph, 531 U.S. 79. 90 (2000). A party seeking to invalidate an agreement based on this "effective-vindication" defense bears the burden of presenting evidence that shows "(1) 'the amount of thefees he is likely to incur;' and (2) 'his inability to pay those fees.'" Escobar v. Celebration Cruise Operator, Inc., 805 F.3d 1279, 1291 (11th Cir. 2015) (quoting Musnick v. King Motor Co., 325 F.3d 1255, 1259 (11th Cir. 2003)). Merely showing a "[s]peculative fear of high fees" does not meet this requirement. Id.

As the Supreme Court of Alabama has explained, "[t]he party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that that contract evidences a transaction affecting interstate commerce." SCI Ala. Funeral Servs., LLC v. Hinton, 260 So. 3d 34, 36-37 (Ala. 2018) (quoting Cartwright v. Maitland, 30 So. 3d 405, 408 (Ala. 2009)). Once this showing is made, the burden shifts to the opposing party "to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Id.

II. DISCUSSION

Dudley neither contests that the arbitration agreement affects interstate commerce nor that it bars her suit if it is enforceable. She instead argues four reasons why the arbitration agreement should not be enforced: It constitutes an unconsented waiver of her Seventh Amendment jury trial right; it is unconscionable; it was signed under duress; and it "will be so gravely difficult and inconvenient" that she "will be deprived of her day in court." Response to Motion to Dismiss (doc. no. 15) at 3, 5, 11, 12. Although the latter defense is not styled as such, the court understands Dudley to be raising an effective-vindication argument based on the cost of arbitration.

Dudley's first three defenses all run headlong into contrary precedent. The Eleventh Circuit has rejected her argument that the Seventh Amendment presents a bar to the enforcement of arbitration agreements, following the reasoning of the Fifth Circuit Court of Appeals (among others) that the Constitution confers "only theright to have a jury hear the case once it is determined that the litigation should proceed before a court." Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1371-72 (11th Cir. 2005) (emphasis in original); see also Stinson v. Am.'s Home Place, Inc., 108 F. Supp. 2d 1278, 1286 (M.D. Ala. 2000) (Thompson, J.) (also rejecting this argument).

Dudley offers largely identical allegations to support her unconscionability and duress arguments. To invalidate a contract on the ground of unconscionability, a party must show that the agreement was both procedurally and substantively unconscionable. See SCI Ala. Funeral Servs., 260 So. 3d at 38-39. Dudley argues that the agreement was procedurally unconscionable because of the inequality of bargaining power and business sophistication between herself and American Family Care, a lack of time to review the agreement, and because she had no other means to secure employment. See Response to Motion to Dismiss (doc. no. 15) at 6-9. Similarly, she argues that she signed the agreement underduress because she was not represented by counsel in signing the agreement; she had a brief period of time to review the agreement; and keeping her job depended on signing it. See Complaint (doc. no. 1) at ¶ 19; Response to Motion to Dismiss (doc. no. 15) at 12.

It is unclear how long Dudley actually had to consider the agreement and whether she had the option to have a lawyer review it. In her response to American Family Care's motion, she says that she was "given mere minutes to sign the agreement," Response to Motion to Dismiss (doc. no. 15) at 12, but she provides no further support for this time frame and does not mention it in her attached declaration, see Decl. of Mellie Dudley (doc. no. 15-1) ¶¶ 6, 11-12. Elsewhere, she claims simply that she was "asked to sign" the contract "[w]ithin minutes of being given the documents," and that "[s]he was not informed that she should review the document in detail." Response to Motion to Dismiss (doc. no. 15) at 8. She claims at one point that she was not "allowed to have an attorney review the document," id.,but she says in her declaration that she was just "not informed that I could contact an attorney to discuss the arbitration agreement," see Decl. of Mellie Dudley (doc. no. 15-1) at ¶ 11.

In any event, the facts she has alleged do not amount to procedural unconscionability, substantive unconscionability, or duress under Alabama law. The Supreme Court of Alabama has found a lack of procedural unconscionability in another sign-or-be-fired case when the employee alleged she was told, in her words, that she "could not leave the room with the form and that I either had to sign it then and there or lose my job." Potts v. Baptist Health Sys., Inc., 853 So. 2d 194, 204-06 (Ala. 2002). This restriction of the employee's opportunity to review the arbitration agreement in Potts went well beyond what Dudley alleges here. The employee in Potts could not leave the room where she was handed the agreement without signing it; Dudley alleges just that she was "told that to keep my job, I needed to sign the paperwork" and was "not informed that I could contact anattorney to discuss the arbitration agreement." Decl. of Mellie Dudley (doc. no. 15-1) at ¶¶ 6, 11. The Supreme Court of Alabama has elsewhere held that making an employee choose between signing a new contract or being terminated is not economic duress either. See Clark v. Liberty Nat'l Life Ins. Co., 592 So. 2d 564, 567 (Ala. 1992).¹

Dudley also argues that the arbitration agreement is substantively unconscionable because the agreement requires the employee to "bear the expense of his/her own legal counsel, if necessary." Arbitration Agreement (doc. no. 15-2) at 2; see Response to Motion to Dismiss (doc. no. 15) at 10-11. She maintains that this makes the agreement unconscionable because of the possibility that the parties would ultimately each have to bear their own attorneys' fees, notwithstanding the agreement'sprovision granting the arbitrator power to award attorneys' fees. See Response to Motion to Dismiss (doc. no. 15) at 11.

A showing of substantive unconscionability requires that the terms of the contract be "grossly favorable" to one par...