Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-5_16-cv-00704/USCOURTS-alnd-5_16-cv-00704-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1331 Fed. Question: Employment Discrimination

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

NORTHEASTERN DIVISION

NATISHIA HUMPHREY,

Plaintiff,

vs.

CHEDDAR’S CASUAL CAFÉ,

INC.,

Defendant.

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Civil Action No. 5:16-CV-00704-CLS

MEMORANDUM OPINION AND ORDER

Plaintiff Natishia Humphrey filed this action against her former employer,

Cheddar’s Casual Café, Inc. (“Cheddars”), asserting claims of sexual harassment and

retaliation under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.

(“Title VII”).

1 The action currently is before the court on defendant’s motion to dismiss

the action and compel arbitration.

2

The Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA” or “the Act”), establishes

a national policy favoring arbitration of disputes. See, e.g., Shearson/American Express,

Inc. v. McMahon, 482 U.S. 220 (1987). “[A]ny doubts concerning the scope of

arbitrable issues should be resolved in favor of arbitration.” Moses H. Cone Memorial

Hospital v. Mercury Construction Corp., 460 U.S. 1, 24-25 (1983) (alteration

1 Doc. no. 1 (Complaint), ¶¶ 9-22, 23-33.

2 Doc. no. 6.

FILED

 2016 Jun-27 AM 11:03

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 5:16-cv-00704-CLS Document 17 Filed 06/27/16 Page 1 of 9
supplied). “[A]s with any other contract, the parties’ intentions control, but those

intentions are generously construed as to issues of arbitrability.” Mitsubishi Motors

Corporation v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985) (alteration

supplied).

The existence of a valid contract to arbitrate is determined by state law. See First

Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). There are two

prerequisites for a valid arbitration contract under Alabama law: “(1) there must be a

written agreement calling for arbitration[;] and (2) the contract in which the arbitration

agreement appears must relate to a transaction involving interstate commerce.”

Prudential Securities v. Micro-Fab, Inc., 689 So. 2d 829, 832 (Ala. 1997) (citing

Maxus, Inc. v. Sciacca, 598 So. 2d 1376 (Ala. 1992)) (alteration supplied).

There undisputedly exists a written agreement calling for arbitration. That

agreement, dated December 9, 2014, states:

The Company and the Employee consent to the resolution by

arbitration of all claims or controversies involving Employee’s application

with, employment with, or termination from, the Company.

The Claims covered by this Agreement include, but are not limited

to . . . claims for discrimination, retaliation, or harassment of any kind,

including without limitation harassment or discrimination based on gender,

race, nationality, ethnicity, disability, religion, or age. . . .

Doc. no. 7-2, at ECF 5 (Arbitration Agreement) (ellipsis and emphasis supplied).

Plaintiff’s “Opposition to Defendant’s Motion to Compel Arbitration” states, in

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Case 5:16-cv-00704-CLS Document 17 Filed 06/27/16 Page 2 of 9
pertinent part:

Defendant has failed to carry its burden. Defendant contends Plaintiff

electronically signed the arbitration agreement dated December 9, 2014.

(Doc. 6-2). An electronic signature has the same effect as a handwritten

signature, however, the signature still must be attributed to that person

before it can be established as the act of that person. Ala. Code § 8-1A-9

(2015). Whether an electronic signature is attributable as an act of that

person “may be shown in any manner, including a showing of the efficacy

of any security procedure . . . [and] from the context and surrounding

circumstances at the time of its creation, execution, or adoption.” Id.

Defendant’s affidavit shows no policy or process to explain how

Plaintiff’s electronic signature was placed on the arbitration agreement

per some sort of unique identification or log in procedure or any other

method to ensure that the alleged signature is attributable to the

Plaintiff. In short, Defendant presents no evidence as to how this

electronic signature to its arbitration agreement came to be.

Defendant’s affiant only states, without support, that Plaintiff’s electronic

signature is affixed to the agreement.

Defendant’s Motion to Dismiss and to Compel Arbitration fails to

meets [sic] its burden and is due to be DENIED.

Doc. no. 13 (Plaintiff’s Opposition to Defendant’s Motion to Compel Arbitration), ¶¶

2 & 3, at 1-2 (alteration and second ellipsis in original, first ellipsis and emphasis

supplied).

Defendant subsequently filed a reply, stating: “Plaintiff does not dispute that a

valid arbitration agreement exists between the parties, nor does she dispute that

Plaintiff’s claims fall squarely within the scope of the arbitration agreement.”

3

3 Doc. no. 14 (Defendant’s Reply inResponse to Plaintiff’s Opposition to Defendant’s Motion

to Compel Arbitration), at 1.

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Moreover, in response to plaintiff’s contention that defendant failed to demonstrate that

the electronic signature affixed to the arbitration agreement indeed was hers, defendant

states:

4. At the time [plaintiff] signed the 2014 Arbitration Agreement, she

also completed a Personal Information Form, which required she

provide the following: (1) her social security number; (2) her first

name, middle initial, and last name; (3) her street address; (4) her

telephone number; (5) her email address; (6) her date of birth; and

(7) her gender. See Ex. A at ¶¶ 8, 9 and Exhibit 2, attached thereto.

5. Like the arbitration agreement, the Personal Information Form is

part of a new hire packet all Cheddar’s employees are required to

sign upon their hire. Employees must have a personal password

to access, fill out, and sign the packet’s forms. See Ex. A at ¶ 9.

6. In addition to providing Cheddar’s with a record of Plaintiff’s

personal information, the Personal Information Form also explains

how Plaintiff’s electronic signature came to be affixed on the 2014

Arbitration Agreement. See Ex. A at ¶ 11, and Ex. 2, attached

thereto.

7. The Personal Information Form explains the electronic signature

process as follows:

You will be asked to provide your signature electronically on

the required forms and documents by placing your initials in

a box or checking an ‘I Agree’ box where indicated. Your

initials will consist of the first letter of your first name, the

first letter of your middle name, and the first letter of your

last name. . . . By providing your signature below, you:

C Agree that your electronic signature will have the same

legal and binding effect as if it were a manual (handwritten) signature.

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Case 5:16-cv-00704-CLS Document 17 Filed 06/27/16 Page 4 of 9
C Agree that your initials and/or an agreement

checkbox, in conjunction with your personal

password that you used to gain access to the

system, will identify that record or transaction as

yours.

C Agree that because an e le ctronic record or

transaction undertaken with your password will

be attributed to you, it is essential that you keep it

secure. You also agree that you will not disclose your

password to another person.

C Agree that you will immediately request that your

electronic signature be revoked if you discover or

suspect that it has been or is in danger of being lost,

disclosed, compromised, or subject to unauthorized

use in any way.

C Understand that a record or signature may not be

denied legal effect or enforceability solely because

it is in electronic form.

See Ex. A at ¶ 12 and Ex. 2, attached thereto. (emphasis added).

8. Pursuant to Ala. Code § 8-1A-9(a), “[a]n electronic record or

electronic signature is attributable to a person if it was the act of the

person. The act of the person may be shown in any manner,

including a showing of the efficacy of any security procedure

applied to determine the person to which the electronic record

or electronic signature was attributable.” (emphasis added).

9. Ala. Code § 8-1A-9(b) further provides: “The effect of an electronic

record or electronic signature attributed to a person under

subsection (a) is determined from the context and surrounding

circumstances at the time of its creation, execution, or adoption,

including the parties’ agreement, if any, and otherwise as provided

by law.”

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10. As the Personal Information Form explains, Plaintiff gained access

to Cheddar’s system through the use of her personal password,

at which point she provided Cheddar’s with her personal

information and electronically signed the 2014 Arbitration

Agreement.

11. When Plaintiff’s electronic signature is considered alongside

Plaintiff’s personal information and the security procedure Plaintiff

followed to electronically sign the arbitration agreement, as

required under Ala. Code § 8-1A-9(b), it is clear that Plaintiff’s

electronic signature may properly be attributed to her.

12. Accordingly, Cheddar’s has demonstrated how Plaintiff’s signature

on the 2014 Arbitration Agreement came to be, and this Court

should enter an order dismissing Plaintiff’s Complaint and

compelling Plaintiffto arbitrate her claims.

Doc. no. 14 (Defendant’s Reply in Response to Plaintiff’s Opposition to Defendant’s

Motion to Compel Arbitration), at 2-5 (boldface emphasis, ellipsis, and alteration in

original, italicized emphasis supplied).

In light of all of the foregoing, the court is satisfied that there was a written

arbitration agreement regarding plaintiff’s employment, and that plaintiff electronically

affixed her signature to the agreement. Plaintiff does not dispute that the agreement

pertains to matters involving interstate commerce. Accordingly, there is a valid,

enforceable arbitration agreement under Alabama law. See Prudential Securities, 689

So. 2d at 832.

In addition to requesting that this court compel arbitration, defendant requests that

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the court dismiss the action.

4 That aspect of defendant’s motion is due to be denied.

Although there is legal authority from other circuits supporting the proposition that

courts have discretionary authority under 9 U.S.C. § 3 to dismiss cases when compelling

arbitration,

5

the Eleventh Circuit adheres to a more literal interpretation of the statute.

See Bender v . A.G. Edwards & Sons, Inc., 971 F.2d 698, 699 (11th Cir. 1992). See also

Musnick v . King Motor Company of Ft. Lauderdale, 325 F.3d 1255, 1261 (11th Cir.

2003); Pitchford v. Amsouth Bank, 285 F. Supp. 2d 1286, 1297 (M.D. Ala. 2003);

Wright v. Circuit City Stores, Inc., 82 F. Supp. 2d 1279, 1288 (N.D. Ala. 2000);

Bradford v. KFC National Management Co., 5 F. Supp. 2d 1311, 1315 (M.D. Ala.

1998); Nazon v. Shearson Lehman Brothers, Inc., 832 F. Supp. 1540, 1543 (S.D. Fla.

1993). Accord Lloyd v. Hovensa, L.L.C., 369 F.3d 263, 268-71 (3d Cir. 2003).

In Bender, for example, the Eleventh Circuit concluded that district courts do not

have the power to choose dismissal over a stay:

4 Doc. no. 14 (Defendant’s Reply inResponse to Plaintiff’s Opposition to Defendant’s Motion

to Compel Arbitration), at 5.

5 Section 3 of the Federal Arbitration Act states that:

If any suit or proceeding be brought in any of the courts of the United States

upon any issue referable to arbitration under an agreement in writing for such

arbitration, the court in which such suit is pending, upon being satisfied that the issue

involved in such suit or proceeding is referable to arbitration under such an agreement,

shall on application of one of the parties stay the trial of the action until such

arbitration has been held in accordance with the terms of the agreement,providing

the applicant for the stay is not in default in proceeding with such arbitration.

9 U.S.C. § 3 (emphasis supplied).

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The district court properly found that the state law claims were

subject to arbitration, but erred in dismissing the claims rather than

staying them. Upon finding that a claim is subject to an arbitration

agreement, the court should order that the action be stayed pending

arbitration. 9 U.S.C. § 3. If the parties do not proceed to arbitration, the

court may compel arbitration. 9 U.S.C. § 4. Therefore, we vacate the

dismissal of the state law claims and remand with instructions that

judgment be entered staying all claims pending arbitration.

Bender, 971 F.2d at 699 (emphasis supplied). In Lloyd, the Third Circuit expressed a

similar stance on the issue, primarily basing its reasoning upon the clear statutory

language, but also providing some practical justifications for entering a stay rather than

an order of dismissal. Lloyd, 369 F.3d at 268-71. The court noted that a stay “relieves

the party entitled to arbitrate of the burden of continuing to litigate the issue while the

arbitration process is on-going, and it entitles that party to proceed immediately to

arbitration without the delay that would be occasioned by an appeal of the District

Court’s order to arbitrate.”

6

Id. at 269.

For those reasons, it is ORDERED that this action is STAYED pending resolution

through arbitration.

Even so, the Clerk is directed to close this file for administrative and statistical

purposes. See, e.g., Taylor v. Citibank U.S.A., N.A., 292 F. Supp. 2d 1333, 1346 (M.D.

6 The Eleventh Circuit also recognizes the fact that stays, unlike dismissals, are unappealable,

interlocutory decisions. The court in Bender observed, “[i]f the district court had stayed the state law

claims and compelled arbitration under 9 U.S.C. §§ 3-4, this order would not have been appealable

under 9 U.S.C. §§ 16(b)(1) and (2).” Bender, 971 F.2d at 699 (alteration supplied). See also

Campbell v. Dominick & Dominick, Inc., 872 F.2d 358, 360 (11th Cir. 1989).

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Ala. 2003) (closing file administratively after entering stay but advising parties of their

right to request reinstatement); Pitchford, 285 F. Supp. 2d at 1297 (same); Nazon, 832

F. Supp. at 1543 (same); Brown v . Terminix International Company, L.P., No. CV-05-

607-PB, 2006 WL 181678, at *5 (S.D. Ala. Jan. 24, 2006) (same). That action shall have

no effect on the court’s retention of jurisdiction, and the file may be re-opened, on either

party’s motion, for an appropriate purpose, such as dismissal following settlement, entry

of judgment, vacatur, or modification of an arbitrator’s award. See 9 U.S.C. § 9; Cortez

Byrd Chips, Inc. v. Bill Harbert Construction Co., 529 U.S. 193, 201-02 (2000).

The parties are DIRECTED to file a notice with the court upon settlement of the

case or the conclusion of arbitration, whichever event shallfirst occur.

DONE and ORDERED this 27th day ofJune, 2016.

______________________________

United States District Judge

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