BARBER v. CHARLOTTE MOTOR SPEEDWAY, LLC
1:13-cv-00099
M.D.N.C.Nov 26, 2014Background
- Plaintiff Jay D. Barber was hired by Charlotte Motor Speedway, LLC (CMS) in July 2006 as an HVAC/mechanical engineer and alleges age and disability discrimination culminating in termination in July 2011.
- Plaintiff signed a July 17, 2006 "Binding Arbitration Agreement" that identified the "Company" as Speedway Motorsports, Inc. (SMI) and required binding arbitration of employment-related disputes, including ADEA and ADA claims.
- CMS is a wholly owned subsidiary of SMI; Plaintiff does not dispute that affiliation.
- The Arbitration Agreement expressly extends to SMI’s "owners, parent companies, affiliates" and covers employment-dispute claims between the employee and the Company (or its affiliates).
- Plaintiff argues the Agreement is unenforceable against CMS because it was signed with SMI, not CMS; CMS argues it may enforce the Agreement as an affiliate/third-party beneficiary under state contract principles.
- The magistrate judge recommended granting CMS’s motion to compel arbitration and dismissing the action without prejudice so Plaintiff must arbitrate his claims against CMS.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid arbitration agreement covers Plaintiff’s employment claims against CMS | Barber signed an arbitration agreement with SMI, not CMS, so CMS cannot enforce it | The agreement expressly includes SMI’s affiliates (including CMS) and was signed in connection with Plaintiff’s employment | The agreement is valid and covers Plaintiff’s claims; CMS may enforce it |
| Whether a non-signatory (CMS) may invoke the arbitration clause | Non-signatory CMS is not bound by an agreement Barber signed with SMI | State-law contract doctrines allow enforcement by/against non-signatories (e.g., third-party beneficiary, affiliates) | Under North Carolina law, CMS may enforce the arbitration clause as an intended third-party beneficiary/affiliate |
| Whether Plaintiff’s claims fall within the arbitration clause’s scope | Implied argument that his statutory discrimination claims are not subject to the SMI agreement with CMS | Agreement explicitly lists discrimination claims (ADA, ADEA) as arbitrable | Plaintiff’s ADEA/ADAAA and state-law claims fall within the arbitration provision |
| Appropriate case disposition pending arbitration | Plaintiff did not directly argue disposition | CMS sought dismissal or stay pending arbitration | Court recommended dismissal without prejudice in favor of arbitration |
Key Cases Cited
- Hightower v. GMRI, Inc., 272 F.3d 239 (4th Cir. 2001) (framework for determining existence and scope of arbitration agreement)
- Long v. Silver, 248 F.3d 309 (4th Cir. 2001) (non-signatory may invoke arbitration under state-law agency/contract principles)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (U.S. 2009) (state-law contract principles can make arbitration provisions enforceable by/against nonparties)
- Brantley v. Republic Mortg. Ins. Co., 424 F.3d 392 (4th Cir. 2005) (limits on equitable estoppel/third-party enforcement where contract does not clearly benefit non-signatory)
- Sykes v. Keiltex Indus., Inc., 473 S.E.2d 341 (N.C. Ct. App. 1996) (third-party beneficiary principles under North Carolina law)