enforceable in the employment context.” Gilmer, 500 U.S. at 33. Thus, plaintiff’s assertion that

she was told that the document was an acknowledgment of receipt of the employee handbook,
and not that it included an arbitration agreement provision is not sufficient to excuse plaintiff of
her duty to read this one-page document. Nor does plaintiff allege an overwhelming disparity in
bargaining power. Plaintiff has failed to meet her burden of showing that the arbitration
agreement was unenforceable because she did not knowingly and voluntarily execute it.
Plaintiffs assertion that defendant was not bound by the arbitration agreement is no more
persuasive than her argument that she did not knowingly or voluntarily enter into the agreement.
Illinois law regarding the mutuality of obligation — essentially, the common law principle of
consideration — requires only that both parties be bound by the agreement. S.J. Groves & Sons

Co. y. State, 444 N.E.2d 131, 134 (Ill. 1982), overruled on other grounds by Rossetti Contracting

Co. v. Court of Claims, 485 N.E.2d 332, 335 (Ill. 1985). The parties’ obligations need not be

identical. Hofmeyer v. Willow Shores Condo. Ass’n, 722 N.E.2d 311, 315 (Ill. App. Ct. 1999).

The Seventh Circuit has found sufficient consideration from the parties’ mutual agreement to
arbitrate with each other. See Michalski v. Circuit City Stores, Inc., 177 F.3d 634, 637 (7" Cir.
1999).

In this case, defendant agreed to be bound by arbitration. Plaintiff argues that defendant’s
agreement to arbitrate is illusory because the arbitration agreement establishes a process that is
inherently biased in favor of defendant. As evidence of this bias, plaintiff claims that under the
agreement, the employee is not given the right to name the arbitrator or choose the time and
location of the arbitration hearing, defendant is not bound by the arbitrator’s order and can

choose not to reinstate the employee following arbitration, defendant pays the arbitration fees, the


51 (7" Cir. 2000), cert. denied, $32 U.S. 971 (2001). The party asserting waiver bears a heavy

burden, and the court does not lightly infer waiver. St. Mary’s Med. Ctr. of Evansville, Inc. v.

Disco Aluminum Prods. Co., 969 F.2d 585, 590 (7" Cir. 1992). Participating in E.B.0.C.
proceedings is not inconsistent with the right to arbitrate. See, e.g., DeGroff v. MascoTech
Forming Techs. Fort Wayne, Inc., 179 F. Supp. 2d 896, 913 (N.D. Ind. 2001); DiCrisci v.

Lyndon Guar, Bank of New York, 807 F. Supp. 947, 954 (W.D.N.Y, 1992). Nor is participating

in settlement negotiations. Dickinson v. Heinold Securities, Inc., 661 F.2d 638, 641 (7" Cir.

1981). Here, defendant filed its motion to compel arbitration two months after it was served in
this case. This delay is not significant enough to constitute waiver of defendant’s right to enforce
the arbitration agreement. Therefore, plaintiff's claims in this case are arbitrable.

IH. Request for Dismissal

In addition to its request that the court compel arbitration, defendant requests that the
court dismiss this action. The FAA provides that if the court determines that any issue is
arbitrable pursuant to an arbitration agreement, the court “shall on application of one of the
parties stay the trial of the action until such arbitration has been had in accordance with the terms
of the agreement...” 9 U.S.C. § 3. Although the FAA does not explicitly provide that a case
subject to arbitration can be dismissed, this court agrees with other courts that have concluded
that an action may be dismissed when all the claims within it are subject to arbitration. See, ¢.g.,
Fedmet Corp. v. M/V BUYALYK, 194 F.3d 674, 678 (5" Cir. 1999); Tupper v. Bally Total
Fitness Holding Corp., No. 01-C-1137, 02-C-55, 2002 WL 334500, at *11-12 (E.D. Wis. Feb.

27, 2002); Bloxom v. Landmark Publ’g Corp., 2002 WL 185551, at *6 (E.D. Tex. Feb. 5, 2002);

Milgrim v. Backroads, Inc., 142 F. Supp. 2d 471, 476 (S.D.N.Y. 2001); Emeronye v. CACI Int’].


Plaintiff contends that defendant must do more than merely offer plaintiffs signed
agreement to show that plaintiff knowingly and voluntarily entered into the arbitration
agreement. Claiming that she did not enter into the agreement knowingly and voluntarily,
plaintiff states in an affidavit that she was not given an opportunity to read the document before
she signed it. In addition, she states that the person who gave it to her told her that the
document’s purpose was simply to show that plaintiff had received the employee handbook.
Finally, she states that she would not have signed the document if she had been informed that by
doing so she gave up her right to pursue claims in a judicial forum.

The court finds plaintiffs arguments unpersuasive. It is a basic principle of contract law
that an individual’s failure to read a document before signing it does not render the document

invalid. See, e.g., Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1292 (7" Cir. 1989)

(“it is no defense to say, ‘I did not read what I was signing.’”); Magnus v. Lutheran Gen. Health

Care Sys., 601 N.E.2d 907, 915 (Ill. App. Ct. 1992); Bien v. Fox Meadow Farms Ltd., 574

N.E.2d 1311, 1315 (ll. App. Ct. 1991). Like any contract, an arbitration agreement may be
nevertheless unenforceable if entered into due to fraud! or overwhelming economic power. See

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 627 (1985). However,

reliance on a misrepresentation is unreasonable as a matter of law where the fraud could have
been discovered by simply reading the document. See Cozzi Iron & Metal, Inc. v. United States
Office Equipment, Inc., 250 F.3d 570, 574 (7" Cir. 2001). Moreover, “[m]Jere inequality in

bargaining power...is not a sufficient reason to hold that arbitration agreements are never

' However, courts may consider fraud in the inducement of the arbitration provision itself
only, and not fraud in the inducement of a contract generally. Prima Paint Corp. v. Flood &
Conklin Mfg. Co., 388 U.S. 395, 403-04 (1967).

3


arbitration process limits discovery, and the arbitrator is not bound by the rules of evidence.
Plaintiff's reliance on the Seventh Circuit’s decision in Penn v. Ryan’s Family Steak

Houses, Inc., 269 F.3d 753 (7" Cir. 2001), to support her position that these factors render the

arbitration agreement unenforceable, is misplaced. In Penn, an employer tried to enforce an
arbitration agreement as a third-party beneficiary of a contract between its employee and an
arbitration company. Penn, 269 F.3d at 755. The court held that that contract was unenforceable
because it did not obligate the arbitration company to provide consideration to the employee in
return for the employee’s agreement to bring any disputes to the arbitration company instead of
to acourt. Id. at 759. The court emphasized that Penn was not “the conventional case in which
the question is whether ... an alleged agreement between an employer and its employee to
arbitrate various disputes is unenforceable for some reason,” and noted that the fact that the
employer in Penn was not a party to the arbitration agreement made the contract “quite a
different animal.” Id. at 755. Indeed, the court in Penn expressed concern that the district court
had placed too much weight on the very factors that plaintiff would have this court find decisive
here, such as that the arbitration process is funded by the employer, or that the process places
limitations on discovery. Id, at 758.

In this case, plaintiff has offered no credible evidence of actual bias in the arbitration
process in favor of defendant. Many of the factors she cites as evidence of bias are based on a
misreading of defendant’s arbitration procedure. For example, contrary to plaintiff's argument,
the employee does participate in the selection of the arbitrator: if the parties do not agree on an
arbitrator within a set period of time, each party is allowed to strike one prospective arbitrator

from a list of three provided by the arbitration company, and there is no evidence that defendant


Inc., 141 F. Supp. 2d 82, 88 (D.D.C. 2001). Since this entire action is subject to arbitration,
staying the action would serve no purpose. Therefore, defendant’s motion to dismiss is granted.

ORDERED: Defendant’s motion to compel arbitration and dismiss the case is granted.

ENTER:

George W. Lindberg
Senior United States District Judge

DATED: MAR 1 2 2002



‘Minute Order Form (06/97)

, LB L United States District Court, Northern District of Illinois

Namfé of Assign . iti
noe Magistrate Judge George W. Lindberg “thanAsigned Judge
CASE NUMBER 01 C 2278 DATE 3/12/2002
CASE Xochiti Medina vs. Hispanic Broadcasting Corporation
TITLE

MOTION:

{In’the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

of the motion being presented}

DOCKET ENTRY:

(1) QO Filed motion of [ use listing in “Motion” box above.]
(2) QO Brief in support of motion due
@) Oo Answer brief to motion due___. Reply to answer briefdue_____.
(4) oO Ruling/Hearing on___seset for at
(5) Oo Status hearing[held/continued to} [set for/re-set for]on___—set for__at
(6) a Pretrial conference[held/continued to] [set for/re-set for]on___—ssetfor__———sat_—
(7) im} Trial[set for/re-set for] on___at
(8) oO {Bench/Jury trial] [Hearing] held/continued to___ at
(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
CUFRCP4(m) ClGeneral Rule 21 COFRCP41(a)(1) CIFRCP41(a)(2).
ao ff (Other docket entry] Defendant’s motion to compel arbitration and dismiss (18-1) case is granted.
Enter memorandum opinion and order. Case terminated.
a1) a [For further detail see order (on reverse side offattached to) the original minute order.]
No notices required, advised in open court,
No notices required sunber ® an
J | Notices mailed by judge’s staff.

Notified counsel by telephone. MAR 12 2002

date dockerea)

sangre!

3nz/2002

Docketing to mail notices.

Mail AO 450 form.

LYAGS fe

Copy to judge/magistrate judge.

courtroom 80 0114

wey FD mailed nti
HOES date mailed notice
SLB deputy’s sus
initials

Datehiine réceivedin2 1) J -
central Clerk's Office tailing deputy initials



somehow controls the arbitration company’s pool of prospective arbitrators. As to plaintiff's
claim of bias due to the employee’s lack of input regarding the location of the hearing, the
agreement provides that the hearing may be held at defendant’s corporate offices only with the
employee’s consent, and that alternatively the hearing may be held at the local office of the
arbitration company. Finally, as to plaintiff's criticism of the provision that requires the
arbitrator to order a front pay award as an alternative to any award of reinstatement to the
employee, this provision does not change the fact that the arbitrator’s decision is binding on
defendant, as well as the employee.

The Supreme Court has repeatedly warned that, absent proof to the contrary, courts
should not presume that arbitration systems are unfair or biased. See, ¢.g., Green Tree Fin.

Corp., 531 U.S. at 89-90; Gilmer, 500 U.S. at 30. Given the lack of evidence of actual bias here,

this court declines “to indulge the presumption that the parties and arbitral body conducting a
proceeding will be unable or unwilling to retain competent, conscientious and impartial

arbitrators.” See Gilmer, 500 U.S. at 30. Because the arbitration agreement imposes obligations

on both sides, it does not fail for lack of consideration.

Il. Waiver

Finally, plaintiff contends that defendant waived its right to enforce the arbitration
agreement by not asserting this right during the Equal Employment Opportunity Commission’s
(“EEOC”) investigation or during a settlement conference at the Illinois Human Resource
Commission. To determine whether there has been a waiver, the court must examine whether,
“based on all the circumstances, the [party against whom the waiver is to be enforced] has acted

inconsistently with the right to arbitrate.” Grumhaus v. Comerica Sec., Inc., 223 F.3d 648, 650-



DOCKETE:

MAR 1 2 2002
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
XOCHITI MEDINA, )
)
Plaintiff, )
)
) No. 01 C 2278

v. )

) Judge George W. Lindberg
HISPANIC BROADCASTING CORP., )
)
Defendant. )

MEMORANDUM OPINION AND ORDER

Defendant Hispanic Broadcasting Corporation has moved to compel arbitration and
dismiss plaintiff's complaint pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 3 and
4. For the reasons stated below, defendant’s motion is granted.

Plaintiff began working for defendant in early 1996. According to defendant’s motion
and accompanying exhibits, on August 31, 1999, plaintiff signed a Receipt and Acknowledgment
of Employee Handbook, which stated:

I agree to submit all Disputes (as defined in the Company’s ADR Policy, which I

have received or acknowledge that I am entitled to receive upon a request to my

local personnel representative or the Director of Human Resources), if any,

regarding my termination or other covered Dispute to binding arbitration, within

180 days of termination, in accordance with the Company’s ADR Policy, and to

abide by and comply with any award rendered by the arbitrator. J understand that

a neutral arbitrator rather than a judge or jury decides the Dispute, and a court may

enter a judgment enforcing the arbitration award.

The Employee Handbook also describes the arbitration process. Plaintiff claims that defendant

discriminated against her based on national origin, for failing to promote her in October 1999,

and sexually harassed her. Plaintiff did not submit these claims to arbitration, but rather filed this


case, alleging employment discrimination in violation of Title VII.
The FAA provides for orders compelling arbitration when one party has failed or refused
to comply with an arbitration agreement. See 9 U.S.C. §§ 3 and 4. These provisions “manifest a

‘liberal federal policy favoring arbitration agreements.’” E.E.O.C v. Waffle House, Inc., 122 S.

Ct. 754, 762 (2002) (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25 (1991)).

To determine whether a claim is arbitrable, the court must determine whether (1) there is a valid
and enforceable arbitration agreement, (2) the claims fall within the scope of the agreement, and

(3) there has been no waiver. Bauer vy. Morton’s of Chicago, No. 99 C 5996, 2000 WL 149287,

at *2 (N.D. Ill. Feb. 9, 2000) (citing Gilmer, 500 U.S. at 24-34.). The party opposing arbitration
bears the burden of proving that the claim is not referable to an arbitration forum. Green Tree
Fin. Corp. v. Randolph, 531 U.S. 79, 91-92 (2000).

Plaintiffs laundry list of objections to defendant’s motion boils down to essentially two
arguments: (1) that the arbitration agreement is unenforceable because plaintiff did not enter the
agreement knowingly and voluntarily, and because of a lack of consideration; and (2) that
defendant waived its right to demand arbitration. The court considers each in turn.

1. Validity and Enforceability of the Arbitration Agreement

Agreements requiring arbitration of statutory claims, including discrimination claims
brought pursuant to Title VII, are generally enforceable under the FAA. See Koveleskie v. SBC
Capital Markets, Inc., 167 F.3d 361, 362 (7" Cir. 1999). To determine whether an arbitration
agreement is valid, the court looks to the state law that governs contract formation. Gibson v.

Neighborhood Health Clinics, Inc., 121 F.3d 1126, 1130 (7" Cir. 1997). Since the events of this

dispute took place in Illinois, the court looks to Illinois contract law principles.