Court Opinion

ID: 9492560
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:44:00.633757+00
Date Added: 2024-06-11T17:55:21.962875
License: Public Domain

KING, Circuit Judge,
dissenting:
Because I agree with the district court that there was no agreement to arbitrate in this case, I must respectfully dissent. I would, therefore, without reaching the issue of the authority of the EEOC to seek injunctive and “make-whole” relief for Mr. *814Baker on his ADA claim, simply affirm the decision of the district court.
I.
On June 23, 1994, Mr. Baker completed an employment application at a Waffle House restaurant in Columbia, South Carolina (“Columbia Waffle House” or “CWH”).1 The district court found that the manager of the CWH offered Mr. Baker a job on that occasion, which Mr. Baker did not accept.
Approximately three weeks later, Mr. Baker travelled to a different Waffle House restaurant, one located in West Columbia, South Carolina (“West Columbia Waffle House” or ‘WCWH”), where, the district court found, Mr. Baker “orally applied for a job and was orally given a job which he accepted.” J.A. 137. Mr. Baker did not execute a written employment application at the WCWH. Indeed, there is no evidence that the terms of the employment application that Mr. Baker completed at the CWH were discussed or adopted by Mr. Baker andMike Bradley, the WCWH manager who hired Mr. Baker. Since there was no evidence on the point, the district court found that it did not appear that the “management [of WCWH] knew of or had the benefit of the application form which Baker had previously signed.” J.A. 137-38.
The district court made no findings connecting the WCWH offer to the CWH offer that Baker had rejected.2 Further, the district court’s affirmative rejection of the magistrate judge’s findings, see supra note 2, is, in itself, a factual finding that requires our deference. The district court’s “[findings of fact, whether based on oral or documentary evidence, shall not be set aside [on appeal] unless clearly erroneous.” Fed.R.Civ.P. 52(a). Findings *815of fact may be overturned only if we are “left with the definite and firm conviction that a mistake has been committed.” Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573-74, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985).3 The majority wrongly implies that an appellate court may consider and adopt facts found by a magistrate judge — facts already expressly rejected by the district court — without finding such facts to be clearly erroneous.4
Based on its factual findings, the district court concluded that Mr. Baker and Waffle House had not made an agreement to arbitrate with respect to the job that he ultimately accepted — the position of grill operator at the West Columbia Waffle House. Consequently, the district court denied Waffle House’s motion to compel arbitration and its motion to dismiss.
The district court’s findings of fact are not clearly erroneous, and its conclusion that there was no agreement to arbitrate follows perforce from its findings. Accordingly, I would affirm the district court’s order denying Waffle House’s motions to dismiss and compel arbitration, thereby enabling the EEOC to pursue injunctive and “make-whole” relief on behalf of Mr. Baker.
II.
A.
The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1, et seq., which governs here, represents “a liberal federal policy favoring arbitration agreements.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). Where there is a valid agreement to arbitrate that covers the matter in dispute, the FAA requires federal courts to stay any ongoing judicial proceedings and compel arbitration. See Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 937 (4th Cir.1999) (citing the FAA, 9 U.S.C. §§ 3, 4).
But the mandate and policy concerns of the FAA come into play only if the claims at issue are arbitrable in the first instance, and if there is a valid agreement to arbitrate. See Phillips, 173 F.3d at 937-38. This court has held that a claim such as Baker’s is arbitrable; the ADA does not prohibit arbitration of a claim arising under that statute. See Austin v. Owens-Brockway Glass Container, Inc., 78 F.3d 875, 881 (4th Cir.1996) (“The language of the [ADA] could not be any more clear in showing Congressional favor towards arbitration.”); see also Phillips, 173 F.3d at 937. However, the question remains whether Mr. Baker and Waffle House entered into an agreement to arbitrate that would require Mr. Baker to arbitrate any ADA claim arising from his employment at the WCWH.
Whether a contract to arbitrate exists is “an issue for judicial determination to be decided as a matter of contract.” Johnson v. Circuit City Stores, 148 F.3d 373, 377 *816(4th Cir.1998) (citing AT & T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643, 648-49, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986)). In deciding this issue, we should apply “ordinary state-law principles that govern the formation of contracts.” Johnson, 148 F.3d at 377 (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995)).
South Carolina law supports the district court’s conclusion here. In recognition of the fact that Mr. Baker did not accept the offer of employment at the CWH, the district court held that “no employment agreement came into being following Baker’s signing of the application form on June 23, 1994.” The formation of contracts under South Carolina law “is governed by well-settled principles.” Carolina Amusement Co. v. Connecticut Nat’l Life Ins. Co., 313 S.C. 215, 437 S.E.2d 122, 125 (1993).
Quite simply, [a] contract exists where there is an agreement between two or more persons upon sufficient consideration either to do or not to do a particular act. Stated another way, there must be an offer and an acceptance accompanied by valuable consideration.
Id. (internal citations and quotation marks omitted).
When the manager at the Columbia Waffle House offered Mr. Baker a job, the terms of that offer included the provisions of the employment application, which Mr. Baker had completed in the restaurant on June 23,1994, while the restaurant manager was sitting next to him. Those terms were part of the “bargained-for exchange” offered by the manager of the CWH.5 “An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.” Restatement (Second) of Contracts § 24 (1981); see also Prescott v. Farmers Tel. Coop., 335 S.C. 330, 516 S.E.2d 923, 926 (1999). “The offer identifies the bargained for exchange and creates a power of acceptance in the offeree.” Carolina Amusement, 437 S.E.2d at 125 (citations omitted).- Without an acceptance of an offer, there can be no contract. Id.; see also Restatement (Second) of Contracts § 35 cmt. c.
Because Mr. Baker declined to accept the job offered on June 23, 1994, by the manager of the CWH, no employment agreement was formed. Id. Under settled legal principles, the terms of the rejected offer, including the provisions of the employment application, did not survive the rejection of the offer. Mr. Baker’s power of acceptance of that offer was terminated by his rejection of it. See Restatement (Second) of Contracts §§ 36, 38 (when of-feree rejects offer, his power of acceptance is terminated).
When Mr. Baker, three weeks later, travelled to the West Columbia Waffle House and orally applied for a job there, its manager, Mr. Bradley, made Mr. Baker an offer for a job as a grill operator at $5.50 an hour. Mr. Baker accepted Mr. Bradley’s offer on the spot. There is no evidence that the provisions of the June 23, 1994 employment application were adopted, or even discussed, as part of the employment agreement that came into being three weeks later at the West Columbia Waffle House. See Player v. Chandler, 299 S.C. 101, 382 S.E.2d 891, 893 (1989) (a valid and enforceable contract requires “a meeting of the minds between *817the parties with regard to the essential and material terms of the agreement”). Thus, there is no basis for the majority’s conclusion that Mr. Baker agreed to arbitrate claims arising from his employment at the West Columbia Waffle House.6
B.
In its opinion, the majority simply relies on its own assumptions about corporate practices, as if those are somehow disposi-tive of the question whether an agreement to arbitrate has been formed, while ignoring the district court’s factual findings.7 The majority’s holding — that the “generic, corporation-wide employment application completed and signed by Baker, and the arbitration provision it contained, followed Baker to whichever facility of Waffle House hired him,” ante at 809 — creates an unprecedented rule that has disturbing implications beyond the injustice done to Mr. Baker.
Under the rule the majority creates today, the terms contained in an employment application submitted to one facility in a restaurant chain, or any other business chain, become binding on the job applicant if she is subsequently hired by another facility in the same chain. In effect, the terms contained in the employment application, including the mandatory arbitration provision, become free-floating, ready to bind the unsuspecting job applicant whenever and wherever she might obtain employment with the same chain. It is not surprising that the majority fails to cite any authority to support its conclusion. As explained above, the majority’s holding is untenable under fundamental principles of contract law.8
*818The majority’s rule has no temporal or geographical limits. For example, suppose a student submits an employment application to a McDonald’s in North Carolina, and is offered but declines a position there. Then, months or years later, she seeks and obtains employment at a McDonald’s in Maryland without submitting another written employment application. Under the majority’s rule, she would be bound by the terms of the employment application submitted earlier in North Carolina.
Moreover, if a job applicant wishes to escape the stranglehold of the “generic, corporation-wide employment application,” he must specify his “intent to limit the application to a particular location.” Ante at 815. The Waffle House application, however, does not request the applicant to specify which Waffle House locations he is applying for. And the application form itself clearly assumes that the job seeker is applying for a position at the restaurant where he obtained and completed the application. Yet the majority would nonetheless require the job applicant — rather than the corporation that drafted the terms of the employment application — to specify his intent, which is not asked for, to limit the application to a particular location. To place such a duty on job applicants is patently unfair and unwarranted.
Common sense tells us that a person who physically goes to the Wal-Mart in Lewisburg, West Virginia, is applying for a job at that Wal-Mart, not one in Richmond, Virginia, or Charlotte, North Carolina, absent express negotiations to the contrary. He would not reasonably expect that the employment application submitted to the Lewisburg Wal-Mart would be considered an application to work in Richmond or Charlotte. The majority sets a trap for the unwary job applicant by the counterintuitive rule that it has created today.
III.
Because I agree with the district court that there was no agreement to arbitrate between Waffle House and Mr. Baker, I would affirm its ruling and permit the EEOC to pursue both injunctive and “make-whole” relief on behalf of Mr. Baker.
I respectfully dissent.

. The employment application completed by Mr. Baker contains a mandatory arbitration provision, which is comprised of four lines of single-spaced text located at the bottom of the first page of a two-page application. It states in full:
The parties agree that any dispute or claim concerning Applicant’s employment with Waffle House, Inc., or any subsidiary or Franchisee of Waffle House, Inc., or the terms, conditions or benefits of such employment, including whether such dispute or claim is arbitrable, will be settled by binding arbitration. The arbitration proceedings shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association in effect at the time a demand for arbitration is made. A decision and award of the arbitrator made under the said rules shall be exclusive, final and binding on both parties, their heirs, executors, administrators, successors and assigns. The costs and expenses of the arbitration shall be borne evenly by the parties.
This provision, printed in seven-point font, occupies merely JÍ6 of an inch of a page that is eleven inches long. No other clause in the employment application is printed in as small a font size.

. In its written opinion of March 20, 1998, from which this appeal is taken, the district court found and concluded as follows:
[T]his Court sua sponte inquired concerning the existence of evidence that Baker and Waffle House made an agreement to arbitrate with respect to the job he accepted. The facts stated by the Magistrate Judge which are extrapolated from the pleadings do not suggest that an employment agreement came into being following Baker’s signing of the application form on June 23, 1994. Baker left the Columbia Waffle House without accepting employment. It does not appear from the statement of facts relied upon by the Magistrate Judge that when Baker went to the West Columbia, South Carolina Waffle House, the management there knew of or had the benefit of the application form which Baker had previously signed. Instead, it appears that Baker orally applied for and was orally given a job which he accepted. That being the case, it does not appear that Baker's acceptance of employment at the West Columbia Waffle House was made pursuant to the written application which included the agreement to arbitrate. For that reason, I am unable to agree with that portion of the Magistrate Judge’s conclusions.
J.A. 137-38. Significantly, the district court expressly rejected the magistrate judge’s conclusion that Baker "appear[ed] to have assented to be bound by the prior agreement, that if employed he would submit his claim to arbitration,” by Baker’s subsequent acceptance of employment at the WCWH.

. See also Fed.R.Civ.P. 52 advisory committee's note (1985) (public interest recognizes the trial court, not the appellate tribunal, as the fact-finder, to promote stability and judicial economy). When a court of appeals actively engages in the fact-finding function, it undermines the legitimacy of the district courts. Id.

. While the majority asserts that the EEOC interrogatory answers support its factual scenario, see ante p. 807 note 1, these answers are legally irrelevant for at least three reasons: (1) they are invalid because they were not made under oath (as required by Rule 33(b) of the Federal Rules of Civil Procedure); (2) they are signed by counsel only (not by Baker, who had the requisite personal knowledge); and (3) their evidentiary value was repudiated by the EEOC at oral argument. Bracey v. Grenoble, 494 F.2d 566, 570 n. 7 (3rd Cir.1974). Accordingly, these answers could not and cannot be properly relied on in this case. See id. Most importantly, subsequently filed affidavits (properly sworn) do not contain the information relied -upon by the majority, see J.A. 12, 28, and that information is contrary to the findings of the district court. See supra note 2. As I have noted, the majority has not determined the factual findings of the district court to be clearly erroneous.

. Indeed, at the top of the application in large, bold, capital letters, Waffle House states the following requirement:
MUST BE COMPLETED IN THE RESTAURANT
J.A. 26. The choice of the definite article "the” is telling. Which restaurant must the application form be completed in? The answer is obvious — the Waffle House restaurant to which the job applicant is applying.
In Mr. Baker's case, he did just what the form required — he completed the employment application in the Columbia Waffle House— the restaurant to which he was applying when he filled out the application.

. . It is undisputed that when Mr. Baker spoke with Mr. Bradley about a job at the WCWH, Mr. Bradley mentioned neither arbitration nor anything else about the way disputes were settled between Waffle House and its employees.

. Indeed, the majority substitutes its assumptions for the district court’s findings, and fails to review or analyze the district court's findings for clear error. See Section I.

. In addition, I believe that even under the majority's theory — that the employment application "followed” Mr. Baker to the West Columbia Waffle House — the arbitration provision would be unenforceable.
First, the arbitration provision mandates that the employee pay one-half of the costs and expenses of arbitration, see supra note 1 ("The costs and expenses of the arbitration shall be borne evenly by the parties”). At least three of our sister circuits have held that a mandatory arbitration agreement that requires an employee to pay a portion of the arbitrator’s fees is unenforceable under the Federal Arbitration Act. See Shankle v. B-G Maintenance Mgmt. of Colorado, Inc., 163 F.3d 1230 (10th Cir.1999); Paladino v. Avnet Computer Techs., Inc., 134 F.3d 1054 (11th Cir.1998); Cole v. Burns Int’l Sec. Servs., 105 F.3d 1465 (D.C.Cir.1997). These courts reasoned that if an employer requires an employee to agree to mandatory arbitration as a condition to obtaining or continuing employment, thereby prohibiting the employee from using the judicial forum to vindicate his rights, then the employer must provide an accessible alternative forum. See, e.g., Shankle, 163 F.3d at 1235. If an arbitration agreement requires the employee to pay a portion of the arbitrators’ fees — which often may amount to thousands of dollars — an accessible forum is, in effect, unavailable, because of the disincentive to arbitrate created by such fees. Id. Under these circumstances, an employee like Mr. Baker is unlikely to pursue his statutory claims. See Cole, 105 F.3d at 1484 (noting that arbitration fees "are unlike anything that [employee] would have to pay to pursue his statutory claims in court”). As the Tenth Circuit reasoned, “[s]uch a result clearly undermines the remedial and deterrent functions of the federal anti-discrimination laws.” Shankle, 163 F.3d at 1235 (citations omitted).
Second, the mandatory arbitration provision would be unenforceable because it is so inconspicuous that it failed, as a matter of law, to provide Mr. Baker with sufficient notice that he was waiving his right to a judicial forum for his statutory claims. See Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 170 F.3d 1, 20-21 (1st Cir.1999). In Rosenberg, the First Circuit interpreted the Supreme Court's decision in Wright v. Universal Maritime Serv. Corp., 525 U.S. 70, 119 S.Ct. 391, 142 L.Ed.2d 361 (1998), and a provision of the 1991 Civil Rights Act (which is also included in the ADA), as requiring that ("there be some minimum level of notice to the employee [who is a party to a private arbitration agreement] that statutory claims are subject to arbitration”). Rosenberg, 170 *818F.3d at 20-21. With its buried arbitration provision, Waffle House failed, as a matter of law, to provide such "minimum level of notice” to Mr. Baker that he was required to arbitrate his ADA claim. See Rosenberg, 170 F.3d at 20.