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Roberts-Banks v. Family Dollar Stores of Tennessee, Inc.

United States District Court, E.D. Tennessee, Knoxville

October 9, 2019


          POPLIN JUDGE



         Plaintiff Charlene Roberts-Banks brings this action against her former employer, Family Dollar of Tennessee, Inc., alleging she was denied reasonable accommodation under the Americans with Disabilities Act (ADA) and wrongfully terminated for discriminatory and retaliatory reasons prohibited by the ADA. Roberts-Banks further alleges she was terminated in retaliation for seeking leave under the Family and Medical Leave Act (FMLA). Family Dollar moves to dismiss Banks' Complaint, or alternatively, to compel arbitration. Because there exists a genuine issue of material fact as to the validity of the agreement to arbitrate, the court will not compel arbitration of Roberts-Banks' claims.

         I. Factual Background

         Family Dollar states that Roberts-Banks electronically signed a Mutual Agreement to Arbitrate Claims on March 30, 2014 through the company's online “Family Dollar University” (FDU). FDU contains Family Dollar's company policies and training courses. The Arbitration Module explained what arbitration is, and explained that Roberts-Banks and Family Dollar would be subject to an arbitration agreement. The module provided employees with a complete electronic version of the Arbitration Agreement to view and print. Family Dollar avers that Roberts-Banks reviewed the Arbitration Agreement and clicked a checkbox to indicate that she had read all pages of the Arbitration Agreement and agreed to its terms. The Arbitration Agreement covers claims arising under “all employment related laws” including claims under the ADA and FMLA.

         II. Standard of Review

         Family Dollar brings this motion pursuant to Fed.R.Civ.P. 12(b)(1) based on lack of subject matter jurisdiction, or in the alternative, Fed.R.Civ.P. 12(b)(6) for failure to state a claim.

         Pursuant to Rule 12(b)(1), a complaint may be dismissed for “lack of subject matter jurisdiction.” The party asserting jurisdiction bears the burden of establishing that subject matter jurisdiction exists. Moir v. Greater Cleveland Reg'l Transit Auth., 895 F.2d 266, 269 (6th Cir. 1990). Rule 12(b)(1) motions to dismiss based upon subject matter jurisdiction consists of two types. Facial attacks to subject matter jurisdiction merely question the sufficiency of the pleadings, and courts should apply the Rule 12(b)(6) standard in considering them. Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320 325 (6th Cir. 1990). In such a case, courts should accept the allegations in the complaint as true and construe them in a light most favorable to the nonmoving party. United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). Factual attacks, the second type of challenge to the court's subject matter jurisdiction, do not question the sufficiency of the pleading's allegations, but rather contest the factual predicate for subject matter jurisdiction. Id. In such a case, no 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. Id. In reviewing factual motions, a trial court has wide discretion to allow affidavits, documents, and even a limited evidentiary hearing to resolve disputed jurisdictional facts. Ohio Natl' Life, 922 F.2d 325. Here, no hearing is necessary and the court will rule upon the record submitted by the parties.

         Where the court lacks jurisdiction over plaintiff's claims pursuant to Rule 12(b)(1), the complaint also fails to state a cause of action upon which relief can be granted pursuant to Rule 12(b)(6). When all claims made in the litigation are subject to arbitration, the court may choose to dismiss the action in its entirety for failure to state a claim under Rule 12(b)(6). Rutter v. Darden Restaurants, Inc., 2008 WL 4949043 at *9 (C.D.Cal. Nov. 18, 2008).

         III. Discussion

         The Federal Arbitration Act (FAA), 9 U.S.C. § 2, et seq., “is a Congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary.” Asplundh Tree Expert Co. v. Bates, 71 F.3d 592, 595 (6th Cir. 1995). It mandates that arbitration clauses in commercial contracts “shall be 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. The provisions of the FAA are mandatory. See 9 U.S.C. §§ 3-4. “By its terms, the Act leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985).

         When a party asks a federal court to compel arbitration of a dispute, the court must determine whether the parties agreed to arbitrate the dispute at issue. Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000). Because arbitration is a matter of contract, a party cannot be required to submit to arbitration a dispute she did not agree to arbitrate. AT&T Techs. Inc. v. Comm. Workers of Am., 475 U.S. 643, 648-49 (1986). When a contract contains an arbitration clause, however, doubts regarding the scope of the clause should be resolved in favor of submitting a particular dispute to arbitration. Id. at 650.

         In determining whether parties agreed to arbitrate a particular dispute, the court must conduct a two-part inquiry. Pippenger v. Merrill Lynch, 2009 WL 2244613 at *2 (E.D.Tenn. July 29, 2009). The court must first evaluate whether a valid agreement to arbitrate exists between the parties and, second, whether the specific dispute at issue falls within the substantive scope of that agreement. Watson Wyatt & Co., v. SBC Holdings, Inc., 513 F.3d 646, 649 (6th Cir. 2008). The party opposing arbitration has the burden to prove that there is a “genuine issue of material fact as to the validity of the agreement to arbitrate.” Brubaker v. Barrett, 801 F.Supp.2d 743, 750 (E.D.Tenn. 2011). Roberts-Banks does not argue that her claims fall outside of the scope of Family Dollar's arbitration policy, but she does argue that she never knowingly assented to waive her right to submit claims relating to her employment to a court and that, therefore, there exists no valid arbitration agreement between her and Family Dollar.

         Arbitration agreements are “fundamentally contracts, ” and courts review their enforceability according to the applicable state law of contract formation.” Seawright v. Amer. Gen. Fin. Servs. Inc., 507 F.3d 967, 972 (6th Cir. 2007). Under Tennessee law, a valid, enforceable contract requires consideration and mutual assent, manifested in the form of an offer and an acceptance. ...

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