United States District Court, S.D. Indiana, Indianapolis Division
ORDER GRANTING DEFENDANT'S MOTION TO ENFORCE ARBITRATION AGREEMENT
SARAH EVANS BARKER, District Judge.
This cause is before the Court on Defendant's Motion to Dismiss Complaint and Enforce Arbitration Agreement [Docket No. 14], filed on January 27, 2014. Plaintiff, Cynthia Johnson, proceeding pro se, brings this action against her former employer, Defendant Western & Southern Life Company ("Western & Southern"), alleging that she was discriminated against because of her age, gender, and race, in violation of Title VII of the Civil Rights Act, as amended, 42 U.S.C. § 1981, and other statutes. Ms. Johnson also alleges various state law claims, including intentional infliction of emotional distress, intentional interference with a contractual relationship, and negligence claims. Defendant contends that, as a condition of her employment, Ms. Johnson signed a valid arbitration agreement that requires her to arbitrate employment-related disputes, including discrimination, breach of contract, and tort claims to arbitration, and thus requests that the Court dismiss Ms. Johnson's complaint and enforce the arbitration agreement. Defendant also seeks to recover all costs and attorney's fees resulting from Ms. Johnson pursuing her claims in court rather than in arbitration.
Plaintiff Cynthia Johnson began working for Defendant Western & Southern as a sales representative in 2007 and was transferred to Indianapolis and promoted to a sales manager position in August 2010. At that time, she signed a "Sales Manager's Agreement" that described the terms and conditions of her employment. Two years later, in August 2012, Ms. Johnson stepped down from her sales manager position and returned to work as a sales representative. As a result of that change, Ms. Johnson signed a "Sale's Representative Agreement" that described the terms and conditions of her employment in that position. On March 27, 2013, Ms. Johnson resigned.
Section III of Ms. Johnson's sales representative employment agreement with Western & Southern is entitled "Dispute Resolution Program" and provides that, by signing the agreement, employees agree: "[n]ot to commence any action or suit relating to your employment by Western & Southern, but, instead, follow the Dispute Resolution Program (DRP') of the Company as set forth in the form(s), which you signed, and the DRP Booklet, described therein, as your exclusive remedy for any claims you may have that are covered by the DRP." Exh. 2, Section III.B. Section III of the agreement further states that employees agree: "[n]ot to commence any arbitration or action under the DRP or otherwise relating to your employment with Western & Southern more than six months after the date of termination of such employment, and to waive any statute of limitation to the contrary." Exh. 2, Section III.C. The sales manager agreement Ms. Johnson signed in August 2010 included virtually identical provisions. Exh. 1, Section III.B-C.
Ms. Johnson also signed an Agreement and Receipt for Dispute Resolution Program ("DRP Agreement") when she was promoted to sales manager in August 2010 and on three separate occasions in August 2012 when she returned to the sales representative position. The DRP Agreement provides: "all legal claims... covered by this Agreement must be submitted to binding arbitration" and that arbitration is the "sole and exclusive final remedy for resolving any such claim." Exh. 3 at 1. The DRP Agreement further provides that:
All legal claims, including... claims for any breach of contract;... tort claims;... discrimination (including, but not limited to, claims based on race, sex, ... [or] age... whether under federal, state, or local law); claims for violation of any other non-criminal federal, state, or other governmental law, statute, regulation or ordinance; and claims for retaliation under any law, statute, regulation, or ordinance.... The DRP Booklet contains a further description of claims that are included or excluded from the DRP.
Id. The DRP Booklet, explicitly made part of the DRP Agreement ( id. at 2), provides details for resolving workplace issues under the DRP. It also lists the only claims that are not subject to arbitration, none of which is relevant here. Exh. 4 at 4. The DRP Booklet also states (in bold font) that "[t]his DRP will prevent you from filing a lawsuit in court for individual relief for a legal claim subject to arbitration." Id. at 6.
Under the DRP process, an arbitrator may award to the prevailing party any relief that might be sought in a court of law. Id. at 2. However, "[i]f either party pursues a legal claim covered by the DRP in court, the responding party shall be entitled to a stay or dismissal of such action... and the recovery of all costs and attorneys' fees and expenses related to such action." Id. at 5.
On October 17, 2013, Ms. Johnson filed the pending action against Western & Southern, alleging age, gender, and race discrimination based on various federal statutes, breach of contract/promissory estoppel, negligence, intentional infliction of emotional distress, intentional interference with a contractual relationship, abuse of process, and defamation. Western & Southern filed the instant motion to dismiss and enforce arbitration agreement on January 27, 2014.
I. Enforceability of Arbitration Agreement
The Federal Arbitration Act ("FAA") and Indiana law govern this dispute. Section 2 of the FAA provides that "[a written] contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction... 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. If the court is "satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement." 9 U.S.C. § 4. If arbitration is ordered, the court must also stay the proceedings until such arbitration occurs, "providing the applicant for the stay is not in default in proceeding with such arbitration." 9 U.S.C. § 3.
To successfully compel arbitration "a party need only show: 1) an agreement to arbitrate, 2) a dispute within the scope of the arbitration agreement, and 3) a refusal by the opposing party to proceed to arbitration." Zurich Am. Ins. Co. v. Watts Indus., Inc., 466 F.3d 577, 580 (7th ...