Thomas v. Hyundai of Bedford

141 N.E.3d 1088

2020 Ohio 185

Shannon THOMAS, Plaintiff-Appellant,

v.HYUNDAI OF BEDFORD, et al., Defendants-Appellees.

No. 108212

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

RELEASED AND JOURNALIZED: January 23, 2020

Friedman & Associates, and Avery Friedman ; Klebanow Law, L.L.C., and Jared S. Klebanow, for appellant.

Zashin & Rich Co., L.P.A., Stephen S. Zashin, and David P. Frantz, for appellees.

JOURNAL ENTRY AND OPINION

KATHLEEN ANN KEOUGH, J.:

{¶ 1} Plaintiff-appellant, Shannon Thomas ("Thomas"), appeals from the trial court's judgment that granted the motion of defendants-appellees, Migdal 1, L.L.C., d.b.a. Hyundai of Bedford, Joe Delguidice, and Kyle Pisani ("appellees"), to stay proceedings pending arbitration. We reverse and remand.

I. Background

{¶ 2} On December 15, 2017, Thomas signed an arbitration agreement with his then-employer, Migdal 1, L.L.C. The arbitration agreement provided that

[a]s the exclusive means of initiating adversarial proceedings to resolve any Covered Dispute, and pursuant to the Federal Arbitration Act ( 9 U.S.C. § 1, either Migdal or Employee may demand that the dispute be resolved by final and binding arbitration using the procedures described in this Agreement, and each party hereby consents to all Covered Disputes being so resolved.

{¶ 3} The agreement defined "Covered Disputes" as

any actual or alleged claim or liability, regardless of its nature , that Migdal or its owners, managers, members, officers, employees, agents, or insurers may wish to bring against Employee, or that Employee may wish to bring against Migdal or any of Migdal's owners, managers, members, officers, employees, agents, or insurers.

(Emphasis added.) The agreement excluded from consideration as a "Covered Dispute" any claim by an employee for unemployment compensation or workers' compensation benefits, any claim relating to a violation of the National Labor Relations Act, or any other claim that under law cannot be the subject of a pre-dispute arbitration agreement.

{¶ 4} The agreement provided that in any arbitration conducted pursuant to the agreement, either Migdal or the employee "may seek and recover any amount or type of damages or other legal or equitable relief that could have been recovered had the action been brought in a court." The agreement further provided that the arbitrator's award would be "final and binding forever" on both the employee and Migdal, and neither Migdal nor the employee could appeal the arbitrator's decision.

{¶ 5} In September 2018, Thomas filed a two-count complaint against Migdal, Pisani, and Delguidice. Thomas's complaint asserted claims for race discrimination (Count 1) and retaliation (Count 2) under Ohio Revised Code Chapter 4112. Count 1 alleged that Thomas was discriminated against on the basis of his race while he was employed by Migdal,¹ and Count 2 alleged that Migdal, Pisani, and Delguidice retaliated against Thomas by demoting him and not paying him in the same manner as white employees when he complained about the discrimination.

{¶ 6} Appellees answered the complaint and then filed a motion to stay proceedings pending arbitration and for costs and sanctions. Thomas filed a brief opposing the motion. The trial court subsequently granted the motion to stay proceedings pending arbitration and denied the motion for costs and sanctions. This appeal followed.

II. Law and Analysis

{¶ 7} In his sole assignment of error, Thomas contends that the trial court erred in granting appellees' motion to stay proceedings pending arbitration. He asserts that he cannot be compelled to arbitrate his discrimination and retaliation claims because Ohio's public policy commitment to challenging racial bias in the workplace, as codified in R.C. Chapter 4112, "is so strong * * * that it permits direct access to the courts without any administrative prerequisite." (Appellant's Brief, p. 10). He further contends that the arbitration agreement cannot be enforced because it is unconscionable.

{¶ 8} This court reviews a trial court's decision to grant a motion to stay litigation pending arbitration for an abuse of discretion. Avery v. Acad. Invest., L.L.C. , 8th Dist. Cuyahoga No. 107550, 2019-Ohio-3509, 2019 WL 4131125, ¶ 9.

{¶ 9} Ohio courts recognize a presumption favoring arbitration that arises when the claim in dispute falls within the scope of the arbitration provision.

Wallace v. Ganley Auto Group , 8th Dist. Cuyahoga No. 95081, 2011-Ohio-2909, 2011 WL 2434093, ¶ 13. Indeed, Ohio law requires a stay of proceedings when an arbitrable dispute has been improperly brought before a court. See , e.g. , McGuffey v. LensCrafters, Inc. , 141 Ohio App.3d 44, 50, 749 N.E.2d 825 (12th Dist.2001) (noting that a trial court "shall" stay proceedings pending arbitration once it is satisfied that an issue is arbitrable); Sasaki v. McKinnon , 124 Ohio App.3d 613, 618, 707 N.E.2d 9 (8th Dist.1997) ("The Ohio Arbitration Act, which strongly favors arbitration, compels the court to review the arbitration clause at issue and, if the court is satisfied that the dispute or claim is covered by the arbitration clause, give effect to the clause and stay the proceedings pursuant to R.C. 2711.02."). In light of this strong presumption favoring arbitration, any doubts regarding arbitration should be resolved in its favor. Ignazio v. Clear Channel Broadcasting, Inc. , 113 Ohio St.3d 276, 2007-Ohio-1947, 865 N.E.2d 18, ¶ 18.

{¶ 10} Nevertheless, Thomas asserts that he should not be compelled to arbitrate his race discrimination and retaliation claims. As support for his argument, Thomas first directs us to Justice Ruth Bader Ginsburg's dissent in Epic Sys. Corp. v. Lewis , 584 U.S. ––––, 138 S.Ct. 1612, 200 L.Ed.2d 889 (2018), wherein Justice Ginsburg stated:

It would be grossly exorbitant to read the FAA [Federal Arbitration Act] to devastate Title VII of the Civil Rights Act of 1964 * * * and other laws enacted to eliminate, root and branch, class-based employment discrimination * * *. With fidelity to the Legislature's will, the Court could hardly hold otherwise.

Id. at 1648. Thomas suggests that this statement by Justice Ginsburg stands for the proposition that after Epic Sys. , individual, non-class action claims brought pursuant to R.C. Chapter 4112 are not arbitrable.

{¶ 11} We fail to see any connection between Epic Systems and this case. The issue decided in Epic Systems was whether the Federal Arbitration Act permits employers to include class-action waivers in arbitration agreements with their employees, even though the National Labor Relations Act allows employees to engage in "concerted activities" for their "mutual aid and protection." Id. at 1633. The majority held that class-action waivers in arbitration agreements are enforceable; Justice Ginsburg would have answered the question with a "resounding no." Id. As aptly stated in Thomas's brief, " Epic Systems had nothing to do with individual, non-class action cases like Shannon Thomas's case." (Appellant's Brief, p. 9).

{¶ 12} The excerpt Thomas quotes from Justice Ginsburg's dissent does not support his argument that after Epic Systems , non-class action discrimination claims are immune from arbitration. To the contrary, reading the paragraph as a whole, it explains Justice Ginsburg's belief that the majority's holding in Epic Systems does not threaten an individual litigant's ability to pursue disparate impact or pattern-or-practice claims, even though such claims may require proof on a group-wide basis.

{¶ 13} We also find no merit to Thomas's assertion that this is a case of "first impression" after Epic Systems involving non-class action claims for workplace discrimination subject to an arbitration agreement. In Jones v. Carrols, L.L.C. , 9th Dist. Summit, 2019-Ohio-211, 119 N.E.3d 453, Jones argued that the arbitration agreement he had signed requiring him to arbitrate claims against his employer was against public policy because it contained a class-action waiver. The Ninth District disagreed, noting that in Epic Systems , the Supreme Court held that arbitration agreements requiring individualized arbitration instead of class or collective proceedings did not violate the National Labor Relations Act, and that the Federal Arbitration Act required enforcement of the agreements. Id. at ¶ 27, citing Epic Systems , ––– U.S. ––––, 138 S.Ct. at 1616, 200 L.Ed.2d 889. Notably, as relevant to Thomas's argument, the Ninth District also rejected Jones's other arguments regarding the enforceability of the arbitration agreement, and held, even after Epic Systems , that Jones's individual, non-class action claims for, among other things, racial and age discrimination, were subject to arbitration under the arbitration agreement. Id. at ¶ 47.

{¶ 14} Thomas next contends the trial court erred in staying proceedings pending arbitration because there is "Ohio precedent which affords Ohio workers the choice to go to arbitration or to the court of common pleas under O.R.C. Section 4112." (Appellant's Brief, p. 9.) But Thomas's citations to Thomas v. GE Co. , 131 Ohio App.3d 825, 723 N.E.2d 1139 (1st Dist.1999), and Luginbihl v. Milcor L.P. , 3d Dist. Allen No. 1-01-162, 2002-Ohio-2188, as support for this argument are not on point. Both Thomas and Luginbihl stand for the proposition that a union cannot, in a collective bargaining agreement, prospectively waive a member's right to select a judicial forum for the resolution of the member's statutory claims, even if the collective bargaining agreement contains a grievance procedure that culminates in binding arbitration. Thomas at 831, 723 N.E.2d 1139 ; Luginbihl at ¶ 28. That is so because statutory discrimination rights are distinct from contractual collective bargaining rights and are independent of the arbitration process. Haynes v. Ohio Turnpike Comm. , 177 Ohio App.3d 1, 2008-Ohio-133, 893 N.E.2d 850, ¶¶ 17-18 (8th Dist.) ; Luginbihl at ¶ 29. Thus, the employee is not required to proceed to arbitration...