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Patton v. Volkswagen Group of America Chattanooga Operations, LLC

United States District Court, E.D. Tennessee

April 7, 2017

ANGEL PATTON, Plaintiff,
v.
VOLKSWAGEN GROUP OF AMERICA CHATTANOOGA OPERATIONS, LLC, Defendant.

          MEMORANDUM OPINION

          Thomas A. Varlan, CHIEF UNITED STATES DISTRICT JUDGE

         This civil matter is before the Court on Defendant's Motion To Compel Arbitration and Dismiss Complaint [Doc. 5]. Plaintiff responded in opposition to this motion [Doc. 10], defendant replied [Doc. 11], plaintiff filed a sur-reply [Doc. 16], and defendant submitted a sur-sur-reply [Doc. 17].

         For the reasons set forth herein, the Court will grant defendant's motion, compel arbitration of plaintiff's claims, and dismiss the complaint.

         I. Background[1]

         Plaintiff, Angel Patton, was hired by defendant, Volkswagen Groups of America Chattanooga Operations, LLC, as a laboratory engineering specialist in 2011 [Doc. 1 ¶¶ 1, 6; Doc. 5-2 p. 7]. Prior to working for defendant, plaintiff attended community college for two years and held the positions of “project specialist, ” “lead production supervisor, ” and “operations manager” at various times [Doc. 11-2 p. 2]. Plaintiff signed an offer of employment with defendant on October 19, 2011, and she promptly returned a signed copy of the offer letter to defendant [Doc. 11-3]. This offer letter noted that plaintiff's employment offer was conditioned on acceptance of an arbitration agreement [Id. at 2]. Defendant sent plaintiff a new-hire packet via overnight delivery upon receipt of her signed offer letter, which included a welcome letter and the arbitration agreement alluded to in the offer letter [Doc. 11-1 ¶ 6].

         On her first day of employment, October 24, 2011, [2] plaintiff signed the agreement to arbitrate [Doc. 5-1 pp. 4-6].[3] This agreement states, “Any and all disputes which involve or relate in any way to [plaintiff's] employment (or termination of employment) with [defendant] . . . shall be submitted to and resolved by final and binding arbitration” [Id. at 4]. Specifically, the agreement states that covered claims include those related to employment discrimination or harassment on the basis of age or sex [Id.]. It also includes an explicit waiver of the signee's right to a jury trial [Id.]. The agreement further asserts that “[t]he arbitrator shall have exclusive authority to resolve any Claims, including, but not limited to, a dispute relating to the interpretation, applicability, enforceability or formation of this Agreement” [Id. at 5].

         The arbitration agreement is clearly titled “Agreement to arbitrate, ” in bold font [Id. at 6]. It states directly above the signature line, “I have read and understand the foregoing and agree that if I am unable to resolve my differences with [defendant] through mutual agreement, I will submit all disputes, claims or controversies arising out of or relating to this Agreement to neutral arbitration in accordance with this Agreement” [Id.].

         According to plaintiff, on her first day of employment, defendant instructed her to sign “a very thick stack of forms said to be [defendant's] hiring paperwork, ” which contained the arbitration agreement [Doc. 10-1; Doc. 10-3 ¶ 5]. Plaintiff claims that defendant's characterization of the arbitration agreement as “hiring paperwork” was a “false statement” [Doc. 10-1 p. 4]. She further states that she and the other new employees were not given much time to review the forms, were not specifically directed to the arbitration agreement, and did not receive further information as to what they were signing [Id. at 3; Doc. 10-3 ¶¶ 6-7, 10, 11]. Plaintiff says that this process was “pressured and rushed” and that defendant pushed the new employees to sign the forms quickly [Doc. 10-1 p. 3; Doc. 10-3 ¶ 8]. Thus, according to plaintiff, she did not realize that she signed an arbitration agreement, and, moreover, she “did not know what the word arbitration mean[t]” at that time [Doc. 10-1 p. 3; Doc. 10-3 ¶¶ 12-13].

         Defendant presents evidence, however, that-at the time of plaintiff's hire-its benefits specialist routinely met with new hires on their first day of work and showed them a PowerPoint presentation, which included three slides covering the arbitration agreement [Doc. 17-1 pp. 3, 12-14]. The acting benefits specialist in October 2011, contends that it was defendant's practice at that time to “encourage the attendees to ask any questions that they may have” and that defendant did not discourage new hires from asking questions [Id. at 3]. He also states that it was defendant's practice to encourage new hires to read the packet of materials, including the agreement to arbitrate [Id.]. It has never been, according to defendant's benefits specialist, defendant's routine practice to tell new hires that the arbitration agreement was not a contract, as contended by plaintiff [Id.].

         Defendant also submits an affidavit of Marcio Baleki, who accepted an offer of employment during the same month as plaintiff [Doc. 17-2 ¶ 2]. Baleki states, under oath, that he received a new-hire packet in the mail after accepting employment with defendant and that he brought the packet with him to his first day of employment [Id. ¶ 3]. Baleki further asserts that he remembers plaintiff being in the same new-hire orientation class that he attended on October 24, 2011 [Id. ¶ 4]. Baleki states that, during this orientation class, defendant's benefits specialist explained the documents using a PowerPoint presentation [Id. ¶ 5]. He affirms that the new hires, plaintiff included, had the opportunity to ask questions about the documents during and after the presentation and that none of defendant's employees encouraged the new hires to sign the forms without reading them [Id. ¶ 7].

         As to the facts giving rise to plaintiff's claims currently before the Court, plaintiff contends that, while she was employed by defendant, defendant treated her differently than other employees due to her age and sex [Doc. 1 ¶ 7]. She also claims that she was assaulted by a male co-worker on or about September 2, 2015 [Id. ¶¶ 8-10]. Plaintiff asserts that she reported this assault to her supervisor the same day and that he ignored this report [Id. ¶¶ 11-13]. Plaintiff claims that defendant then planned a “surprise audit, ” which it knew plaintiff was unprepared for, in order “to have a pretext to fire her” [Id. ¶¶ 14-17, 21]. Rather, according to plaintiff, defendant decided to fire plaintiff because she reported the assault, because of her age, and because of her “nonconforming gender behavior” [Id. ¶ 18]. Defendant suspended plaintiff's employment without pay on September 4, 2015, and discharged her employment on October 1, 2015 [Id. ¶¶ 19-20; Doc. 5-1 ¶ 7].

         Upon termination, plaintiff filed an administrative charge with the United States Equal Employment Opportunity Commission (“EEOC”) and received a right-to-sue letter from the EEOC [Doc. 1 ¶¶ 5, 23-25; Doc. 1-3]. She now brings suit under the Age Discrimination in Employment Act (“ADEA”), Title VII of the Civil Rights Act of 1964 (“Title VII”), and Tenn. Code Ann. § 4-21-401 [Doc. 1 p. 1]. Plaintiff specifically claims that defendant chastised and fired her for behavior that defendant deemed acceptable for male employees and younger employees, that defendant fired her in retaliation for her report of workplace harassment, and that defendant systematically ignored her claims of workplace harassment [Id. ¶¶ 26-43].

         After plaintiff filed the current lawsuit, defendant's counsel contacted plaintiff's counsel and brought to her attention the arbitration agreement signed by plaintiff [Doc. 5-2]. Thus, defendant's counsel requested that plaintiff agree to voluntarily dismiss her lawsuit and submit her claims to arbitration [Id.]. Plaintiff refused, and defendant now, therefore, moves the Court to dismiss plaintiff's claims and compel arbitration, pursuant to Rule 12(b) [Doc. 5].

         II. Standard of Review[4]

         Federal courts are courts of limited jurisdiction, possessing “only that power authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted). Therefore, subject matter jurisdiction is a threshold issue, which the Court must consider prior to reaching the merits of a case. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998); see Fed. R. Civ. P. 12(h)(3) (stating that “[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action”). Unlike a motion to dismiss on the merits under Rule 12(b)(6), “where subject matter jurisdiction is challenged under Rule 12(b)(1) . . . the plaintiff has the burden of proving jurisdiction in order to survive the motion.” RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir. 1996) (quoting Rogers v. Stratton Indus., Inc., 798 F.2d 913, 915 (6th Cir. 1986)) (internal quotation marks omitted).

         “Motions to dismiss for lack of subject matter jurisdiction fall into two general categories: facial attacks and factual attacks.” United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). “A facial attack is a challenge to the sufficiency of the pleading itself.” Id. In considering whether jurisdiction has been established on the face of the pleading, “the court must take the material allegations of the petition as true and construed in the light most favorable to the nonmoving party.” Id. (citing Scheuer v. Rhodes, 416 U.S. 232, 235-37 (1974)).

         “A factual attack, on the other hand, is not a challenge to the sufficiency of the pleading's allegations, but a challenge to the factual existence of subject matter jurisdiction.” Id. In considering whether jurisdiction has been proved as a matter of fact, “a trial court has wide discretion to allow affidavits, documents, and even a limited evidentiary hearing to resolve disputed jurisdictional facts.” Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990) (citations omitted). “[N]o presumptive truthfulness applies to the factual allegations, and the court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Ritchie, 15 F.3d at 598 (internal citation omitted).

         Here, defendant supports its motion to dismiss by submitting affidavits and exhibits outside the scope of the complaint [Docs. 5-1, 5-2]. Thus, the Court finds that defendant's jurisdictional challenge is a factual attack. See Ritchie, 15 F.3d at 598. The Court will, therefore, evaluate all submitted documentation and will weigh the evidence, giving no presumptive truthfulness to plaintiff's allegations.

         III. Analysis

         In its motion to dismiss, defendant argues that plaintiff is contractually prohibited from pursuing her claims in this Court because her claims are subject to a binding arbitration agreement, which plaintiff executed while employed with defendant [Doc. 6 pp. 1-2]. It contends that the arbitration agreement constitutes a valid agreement to arbitrate and that all of plaintiff's claims against defendant fall within the scope of the agreement [Id. at 7]. Furthermore, in its response to plaintiff's supplemental brief, defendant contends that this Court must compel the “gateway” arbitrability issues to arbitration due to the arbitration agreement's “delegation provision” [Doc. 17 p. 5].

         Plaintiff opposes defendant's motion to dismiss, arguing that this Court has jurisdiction to resolve contract formation issues and, pursuant to Tennessee law, should determine that the arbitration agreement between the parties is not valid because defendant fraudulently misrepresented the paperwork and because defendant did not give plaintiff adequate time to review the documents [Doc. 10-1].

         The parties appear to disagree as to whether federal or Tennessee arbitration law controls the instant motion. Therefore, the Court will first consider the question of whether this case is governed by the Federal Arbitration Act ...


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