Opinion ID: 3014207
Heading Depth: 1
Heading Rank: 4

Heading: the confidentiality of certain aspects of the

Text: arbitration, are unconscionable and Finally, we address two arguments unenforceable. We exercise plenary relating to the enforceability of the DRA. review over questions regarding the First, Lloyd challenges the District Court’s validity and enforceability of an agreement holding that the DRA was not used in a to arbitrate. Alexander, 341 F.3d at 263. discriminatory manner against public However, “to the extent that the district policy.11 Second, Wyatt’s cross-appeal court predicated its decision on findings of fact, our standard of review is whether those findings were clearly erroneous.” 10 As we have noted, the DRA allows Medtronic AVE, Inc. v. Advanced HOVENSA, as an intended beneficiary, to Cardiovascular Sys., Inc., 247 F.3d 44, 53compel arbitration of claims arising out of 54 (3d Cir. 2001) (citing Kaplan v. First Lloyd’s employment and employment Options of Chicago, Inc., 19 F.3d 1503, application. While Lloyd urges that we 1509 (3d Cir. 1994)). should remand for fact finding on whether the parties intended HOVENSA to be a A. third party beneficiary, he has not made a proffer of evidence which would tend to Lloyd’s primary argument on appeal is show an intent contrary to that reflected on that Wyatt used the DRA in a the face of the DRA. discriminatory manner as part of a 11 “purposeful scheme to contravene Lloyd also argues that, even if unambiguous Virgin Islands public policy, HOVENSA were an intended third-party as reflected by the V.I. Civil Rights Act, beneficiary of the DRA, the provision 10 V.I.C. § 3.” Appellant’s Br. at 12. granting it such status is unconscionable. Lloyd bases this claim on his assertion that He contends that the provision is Wyatt, by requiring Virgin Islands workers unreasonably one-sided because while he to sign the DRA as a condition of is bound to arbitrate claims against employment, uses “place of residence” as HOVENSA, the provision does not require a “proxy” for race, color and national Wyatt to arbitrate claims against HOVENSA; nor does the DRA allow Lloyd to compel arbitration of any claims but not vice versa. See Restatement that HOVENSA may have against him. (Second) of Contracts § 304 (1981). We As an initial matter, we note that this need not address the issue, however, argument appears to be a challenge to the because it was never presented to the fundamental principle of contract law that District Court and was therefore waived. an intended beneficiary to a contract may See In re City of Phila. Litig., 158 F.3d at enforce a promise made by the promisor, 727. 11 origin. Alternatively, Lloyd alleges that Lloyd also cites Title VII and the Virgin the DRA has a disparate impact upon Islands Civil Rights Act, 10 V.I. Code Blacks and Hispanics who predominate in Ann. § 1 et seq., as illustrative of a strong the Virgin Islands workforce. As a result, federal and local public policy against he urges, the DRA is unenforceable under employment discrimination.13 the generally applicable contract defense that use of the agreement contravenes Significantly, Lloyd does not allege that public policy. Lloyd also claims that the any particular promise or term in the DRA District Court erred in not allowing him an was discriminatory. Rather, he claims that opportunity to conduct discovery into this Wyatt used the DRA in a discriminatory issue. manner. Even assuming, however, that § 178 of the Restatement may be applied to Lloyd’s generally applicable contract a facially neutral contract, Lloyd’s defense relies on § 178(1) of the argument must still fail as he has proffered Restatement (Second) of Contracts, which no evidence that Wyatt’s use of the DRA provides: was in any way discriminatory. A promise or other term of an Lloyd’s argument is based solely on two agreement is unenforceable on facts: (1) that Wyatt began using the DRA grounds of public policy if after its upper management was hired; and legislation provides that it is (2) that Wyatt’s parent company, Wyatt unenforceable or the interest in its Field Services, does not use the DRA. enforcement is clearly outweighed Wyatt does not contest these facts. in the circumstances by a public Instead, it admits that it began using the policy against the enforcement of DRA in the Virgin Islands in January such terms.12 2002. Wyatt responds, however, that this 13 Lloyd further cites, for the first time 12 Wyatt argues on appeal that Lloyd on appeal, 24 V.I. Code Ann. § 74a(b), waived his public policy argument by not which provides that “[a]n employer subject relying on § 178 of the Restatement to this chapter may not require an (Second) of Contracts in the District Court. employee to arbitrate a dispute as a While it is true that Lloyd never condition of employment.” Section 74a specifically relied upon the Restatement, was enacted on September 18, 2002, one he nonetheless expressly argued that the month before Lloyd filed his memorandum DRA was applied in a discriminatory in opposition to Wyatt’s motion to compel manner and unenforceable as a matter of arbitration. Lloyd did not, however, bring public policy. He therefore preserved the this statute to the attention of the District argument for appeal and we will address it Court as a source of public policy and we on the merits. therefore need not address it. 12 timing explains why its upper management well established that the scope and conduct employees, who were hired before January of discovery are within the sound 2002, were not required to sign the DRA. discretion of the trial court and that after The record indicates that all persons who final judgment of the district court or final applied for employment at Wyatt after agency order, our review is confined to January 2002 were obligated to sign the determining if that discretion has been DRA. Wyatt proffered that the reason it abused.” (citations omitted))). Lloyd began using the DRA was concern for the argues that the District Court erred in not high cost of employee litigation claims in considering his request to conduct the Virgin Islands. It adds that its parent discovery, but he does not cite any motion does not, and has not, engaged in any that the court denied or allege that he was business in the Virgin Islands. Lloyd has deprived of the opportunity to conduct not addressed Wyatt’s explanations or discovery on his own. The Federal Rules claimed that they are pretextual. of Civil Procedure allow for numerous discovery mechanisms that do not require The burden of proving a generally leave of the court. See Fed. R. Civ. P. applicable contract defense lies with the 30(a)(1) (oral depositions), 31(a)(1) party challenging the contract provision. (written depositions), 33(a ) Cf. Harris v. Green Tree Fin. Corp., 183 (interrogatories), 34(b) (production of F.3d 173, 181 (3d Cir. 1999) (“The party documents). Lloyd does not state whether challenging a contract provision as he ever attempted to use any of these unconscionable generally bears the burden avenues of discovery to support his claim. of proving unconscionability.”); E. Allen We therefore reject his assignment of Farnworth, Farnsworth on Contracts § error. 4.28 & n.14 (3d ed. 1999) (“The party asserting the defense of unconscionability B. must prove it.”). Here, Lloyd has failed to present any evidence in attempting to meet On cross-appeal, Wyatt argues that the this burden. We will therefore affirm the District Court erred in holding that the District Court’s holding that the DRA was confidentiality provisions of AAA Rules not unenforceable as violative of public 17, 18, and 34, as incorporated in the policy. DRA, were unconscionable and severable from the remainder of the DRA. We With respect to Lloyd’s assignment of recently addressed an identical issue in error regarding his request for discovery, Parilla v. IAP Worldwide Services VI, Inc., we review a district court’s denial of a ___ F.3d ___ (3d Cir. 2004) and concluded discovery motion for an abuse of that the district court in that case had erred discretion. See Seus, 146 F.3d at 178 in hold ing the se A AA Ru les (citing Marroquin-Manriquez v. I.N.S., unconsc i o n a b le . The factual 699 F.2d 129, 134 (3d Cir. 1983) (“It is circumstances in this case are substantially 13 the same as those in Parilla and the parties have also presented substantially the same arguments that were presented in that case. For the reasons given in Parilla, we hold that the District Court’s ruling on this issue was in error. Accordingly, AAA Rules 17, 18, and 34 should not have been held unconscionable or severed from the DRA.