Styczynski v. Marketsource, Inc.

340 F.Supp.3d 534

Rachel STYCZYNSKI, Plaintiff,

v.MARKETSOURCE, INC., and Allegis Group, Inc., Defendants.

CIVIL ACTION No. 18-2662

United States District Court, E.D. Pennsylvania.

Filed November 30, 2018

Caren N. Gurmankin, Console Mattiacci Law LLC, Philadelphia, PA, for Plaintiff.

William E. Corum, Husch Blackwell LLP, Kansas City, MO, Dwayne F. Stanley, Husch Blackwell LLP, St. Louis, MO, for Defendants.

MEMORANDUM

Gerald Austin McHugh, United States District Judge

This is an action where plaintiff alleges that she experienced sexual harassment severe enough to create a hostile work environment, forcing her to resign. The defendant employers have moved to compel arbitration under the terms of an employment contract. Some five years ago, Judge Schiller of this Court faced a similar case and wrote an eloquent opinion enforcing the contract, while expressing his misgivings about the result he was compelled to reach. Porreca v. Rose Group , 2013 WL 6498392 (E.D. Pa. Dec. 11, 2013). Like Judge Schiller, I am also bound to order that this case proceed to arbitration. But since his decision was issued, there has been increasing scholarly research into the adequacy and fairness of arbitration as the primary mechanism for enforcing federal laws governing the workplace. Although consideration of that growing body of literature is ultimately the province of higher courts and Congress, I conclude this opinion with a review that underscores why there is legitimate cause for concern when a parallel system of dispute resolution supplants the courts as the primary means of enforcing the law.

I. Factual and Procedural Background

Plaintiff Rachel Styczynski was formerly employed by Defendants MarketSource, Inc. and Allegis Group. Pl.'s Am. Compl. 1, ECF No. 7. Allegis "is the largest privately-held talent management firm in the world" and MarketSource is its wholly owned subsidiary. Id. 3; Defs.' Mot. Dismiss 3, ECF No. 8-1. Plaintiff was promoted by Defendants several times over the course of her four-year employment with them: first to Sales Manager, then to Electronics and Entertainment Lead, and finally to District Manager. Pl.'s Am. Compl. 7-8, 15. But Plaintiff's career path stalled after a male supervisor repeatedly harassed her, touching Plaintiff inappropriately and prying into her sexual orientation and marital status. Id. 8-9. Plaintiff alleges that Defendants' response was inadequate, discriminatory, and retaliatory. Id. 1-2, 8-9, 15. Defendants purportedly failed to address the harassment, commanded that Plaintiff continue reporting to and working alongside her harasser, and created a hostile work environment that ultimately forced Plaintiff to resign. Id. 1-2, 15.

Upon resigning, Plaintiff filed multiple discrimination charges with the U.S. Equal Employment Opportunity Commission, which issued Plaintiff a Notice of Right to Sue. Pl.'s Am. Compl. 6-7, Ex. 4. Plaintiff subsequently filed suit in this court asserting federal question and supplemental claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq. , the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101, et seq. , the Family Medical Leave Act of 1993, 29 U.S.C. § 2601, et seq. , and the Pennsylvania Human Relations Act, 43 P.S. § 951, et seq. Id. 2. She seeks declaratory, injunctive, and compensatory relief, including punitive damages and attorney's fees. Id. 19-20.

Defendants move to dismiss on the basis of a three-page document Plaintiff signed when she was promoted to District Manager. Defs.' Mot. Dismiss 1, 2. This document contains contractual language and reads as follows:

MUTUAL ARBITRATION AGREEMENT ("AGREEMENT")

As consideration for my application for and/or my employment with MarketSource, Inc. and for the mutual promises herein, I and the Company (as defined below) (each a "party" and collectively "the parties") agree that:

Except (i) as expressly set forth in the section, "Claims Not Covered by this Agreement," all disputes, claims, complaints, or controversies ("Claims") that I may have against MarketSource and/or any of its subsidiaries, affiliates, officers, directors, employees, agents, and/or any of its clients or customers (collectively and individually the "Company"), or that the Company may have against me, including contract claims; tort claims; discrimination and/or harassment claims; retaliation claims; claims for wages, compensation, penalties, or restitution; and any other claim under any federal, state, or local statute, constitution, regulation, rule, ordinance, or common law, arising out of and/or directly or indirectly related to my application for employment with the Company, and/or my employment with the Company, and/or the terms and conditions of my employment with the Company, and/or termination of my employment with the Company (collectively "Covered Claims"), are subject to a confidential arbitration pursuant to the terms of this Agreement and will be resolved by Arbitration and NOT by a court or jury. The parties hereby forever waive and give up the right to have a judge or a jury decide any Covered Claims.

....

While I have the right to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board ("NLRB"), the Department of Labor, the Occupational Safety and Health Commission, or any other federal, state, or local administrative agency, if any federal, state or local administrative agency proceeding does not finally resolve the Covered Claim, the parties must submit the claim to arbitration under this Agreement.

....

Arbitration Procedures

• The parties will use Judicial Arbitration and Mediation Services ("JAMS") subject to its then-current employment arbitration rules and procedures (and the then-existing emergency relief procedures contained in the JAMS comprehensive arbitration rules and procedures if either party seeks emergency relief prior to the appointment of an Arbitrator), available at www.jamsadr.com, unless those rules and/or procedures conflict with any express term of this Agreement, in which case this Agreement is controlling;

....

• The Arbitrator shall issue a final and binding written award, subject to review on the grounds set forth in the FAA....

Arbitration Fees and Costs

• I will pay any JAMS filing or administrative fee up to the amount of the initial filing fee to commence an action in a Court that otherwise would have jurisdiction ("filing fee"), and the Company will pay any amount in excess of the filing fee.

• The Company will pay any other JAMS administrative fees, the Arbitrator's fees, and any additional fees unique to arbitration.

• I will pay my own attorneys' fees and all other costs and fees that I incur in connection with the Arbitration.

• The Company will pay its own attorneys' fees and all other costs and fees that it incurs in connection with the Arbitration.

• The Arbitrator will not have the authority to award attorneys' fees unless a statute or contract at issue in the dispute authorizes the award of attorneys' fees to the applicable prevailing party, in which case the Arbitrator shall have the authority to make an award of attorneys' fees to the full extent permitted by applicable law. If there is a dispute as to whether the Company or I am the prevailing party, the Arbitrator will decide this issue.

....

Damages and Other Relief

Any Covered Claims arbitrated hereunder are subject to the same affirmative rights to individual damages and other relief and the same limitations regarding damages and ability to obtain other relief as would have applied in a judicial forum.

....

Governing Law

This Agreement is governed by the FAA....

All the text quoted above appears on the first two pages of the document; the text below appears on its own, on the last, third, page of the document:

I ACKNOWLEDGE THAT:

• I have carefully read this Agreement, understand the terms of this Agreement, and am entering into this Agreement voluntarily;

• I am not relying on any promises or representations by the Company except those contained in this Agreement;• I am giving up the right to have Covered Claims decided by a court or jury;

• I have been given the opportunity to discuss this Agreement with my own attorney if I wish to do so; and

• My affirmative signature and/or acknowledgement of this Agreement is not required for the Agreement to be enforced. If I begin working for MarketSource without signing this Agreement, this Agreement will be effective, and I will be deemed to have consented to, ratified and accepted this Agreement through my acceptance of and continued employment with MarketSource.

Defs.' Mot. Dismiss Ex. B.

Plaintiff's signature appears on page 3 of the document, directly below the fifth bullet point of the above quoted acknowledgements section. Id. Next to it appears the name and title of Defendant MarketSource's Executive Director of Human Resources. Id. Defendants argue that this document constitutes a valid arbitration agreement between Plaintiff and Defendants that covers this dispute, bars Plaintiff from maintaining a civil action in this or any court, and requires Plaintiff to arbitrate all of her claims through JAMS.

II. Standard of Review

"A party to a valid and enforceable arbitration agreement is entitled to a stay of federal court proceedings pending arbitration as well as an order compelling such arbitration." Alexander v. Anthony Int'l, L.P. , 341 F.3d 256, 263 (3d Cir. 2003). Where, as here, a plaintiff has not "responded to a motion to compel arbitration with additional facts sufficient to place the agreement to arbitrate in issue," that motion "should be considered under a Rule 12(b)(6) standard without discovery's delay." Guidotti v. Legal Helpers Debt Resolution, L.L.C. , 716 F.3d 764, 776 (3d Cir. 2013) (cleaned up).¹ I therefore consider Defendants' motion under the well-established standard set forth in Federal Rule of Civil Procedure 12(b)(6), as elaborated in Fowler v. UPMC Shadyside , 578 F.3d 203, 210-11 (...