2013 WL 5973151
D. Md.2013Background
- Caire was hired by InforMed (now Conifer) in 2010, received an employee handbook on day one containing an arbitration policy, and signed acknowledgments; the offer letter did not mention arbitration.
- Caire suffers from Major Depressive Disorder and social anxiety; he telecommuted with employer approval and incurred home-office costs partially reimbursed by a stipend.
- After two family deaths and worsening depression, Caire requested FMLA leave in January 2012; Camp (HR director) approved the leave, which began January 30, 2012.
- Two days after FMLA leave began, InforMed terminated Caire for alleged telecommuting violations (no dedicated business line, use of personal voicemail, misuse of stipend); unemployment hearing found no misconduct.
- Caire sought arbitration with AAA; defendants rejected AAA administration and refused to arbitrate under AAA rules. Caire then sued in federal court asserting FMLA, ADA (and Maryland analog), and wage-payment claims.
- Defendants moved to compel arbitration or dismiss; the court denied the motions, holding the arbitration agreement unenforceable and denying 12(b)(6) dismissal of the individual FMLA claim and the ADA/Maryland discrimination claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of arbitration agreement (consideration/mutuality) | Agreement is unenforceable: continued employment cannot supply consideration; employer not mutually bound | Arbitration clause creates mutual obligation by conditioning continued employment on arbitration | Denied: agreement unenforceable — continued employment is not adequate consideration and employer did not clearly promise to arbitrate |
| Employer's reservation of unilateral change (illusory promise) | Handbook language allowing unilateral changes makes employer's promise illusory | Employer says change clause is separate and should not be read into arbitration clause | Denied: arbitration policy was in handbook and subject to unilateral change, rendering employer's promise illusory |
| Unconscionability (procedural & substantive) | Agreement was adhesive, employee lacked meaningful choice and no neutral forum/process was guaranteed | Employer disputes procedural unconscionability and challenges evidence of prohibitive arbitration costs | Denied: court found procedural unconscionability and substantive unconscionability (no neutral arbitrator mechanism and employer sought to dictate arbitration terms) |
| Dismissal of statutory claims (12(b)(6)) — FMLA against Camp individually; ADA/Maryland discrimination against InforMed | Caire: factual allegations suffice to show Camp exercised control over FMLA rights; disability and temporal proximity support ADA causation | Camp: not an "employer" under FMLA; InforMed: Caire not a "qualified individual" and no causal nexus | Denied: sufficient facts to plausibly allege Camp had authority to impact FMLA rights; Caire plausibly a qualified individual and alleged adequate causal connection to support ADA/Maryland claims |
Key Cases Cited
- Aziz v. Alcolac, Inc., 658 F.3d 388 (4th Cir. 2011) (standard for accepting well-pleaded factual allegations)
- Noohi v. Toll Bros., Inc., 708 F.3d 599 (4th Cir. 2013) (one-sided arbitration language may fail to bind employer; mutuality required)
- Cheek v. United Healthcare of the Mid-Atlantic, Inc., 378 Md. 139 (Md. 2003) (continued employment cannot constitute consideration for arbitration; mutual promises required)
- Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (2010) (arbitration clause severability and limits on compelling arbitration when formation is disputed)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA enforces arbitration agreements but allows generally applicable contract defenses)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (policy favoring arbitration on scope questions)
- Tyndall v. Natl. Educ. Ctrs., Inc., 31 F.3d 209 (4th Cir. 1994) (regular, reliable attendance is necessary for most jobs in ADA context)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standards — plausibility requirement)