Taylor v. Berham
3:16-cv-00002
N.D. Ind.Nov 3, 2016Background
- Plaintiff Curtis D. Taylor (pro se) sued Dollar Tree and his supervisor for Title VII race discrimination and retaliation.
- Dollar Tree implemented a 2014 Arbitration Program; employees hired before Oct. 6, 2014 had a one-time right to opt out by May 31, 2015.
- Taylor electronically accessed the Arbitration Agreement and associated materials on April 23, 2015 but did not timely opt out.
- The Arbitration Agreement expressly covered employment-related claims including discrimination and retaliation and designated the FAA as governing law.
- Defendants notified Taylor of his executed arbitration agreement and asked that his claims be arbitrated; Taylor nevertheless filed an Amended Complaint in federal court.
- The court treated the motion to dismiss/compel as presenting facts outside the pleadings, gave Taylor notice and time to respond, and found no material factual dispute because Taylor did not respond.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of arbitration agreement | (implied) agreement invalid or not binding | Taylor accessed agreement but failed to opt out; assent by inaction | Agreement valid: assent via failure to opt out; consideration mutual promise to arbitrate |
| Scope — Do Title VII discrimination/retaliation claims fall within agreement? | (implied) Title VII claims should proceed in court | Agreement expressly covers discrimination and retaliation claims | Covered; Title VII claims must be arbitrated |
| Can supervisor (named defendant) compel arbitration as third‑party beneficiary? | Supervisor not party; cannot force arbitration | Agreement includes claims against Dollar Tree’s employees/officers; third‑party beneficiary enforcement allowed under Indiana law | Supervisor may compel arbitration as intended third‑party beneficiary |
| Relief / procedural disposition | Plaintiff proceeded in court | Defendants sought dismissal or stay and compelled arbitration | Court granted motion and dismissed the Amended Complaint without prejudice so claims proceed in arbitration |
Key Cases Cited
- Tinder v. Pinkerton Sec., 305 F.3d 728 (7th Cir. 2002) (standard for resisting arbitration likened to summary judgment)
- AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643 (1986) (court decides arbitrability; interpret agreement intent)
- Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (2010) (arbitrability is for courts to decide in the first instance)
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (FAA applies to employment agreements)
- Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (2000) (party resisting arbitration bears burden to show unsuitability)
- Zurich Am. Ins. Co. v. Watts Indus., 417 F.3d 682 (7th Cir. 2005) (elements to compel arbitration)
- First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (1995) (federal courts look to state contract law to determine validity)
- Michalski v. Circuit City Stores, Inc., 177 F.3d 634 (7th Cir. 1999) (mutual promise to arbitrate constitutes consideration)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) (third parties may enforce arbitration agreements when state law allows)
- Straub v. B.M.T. by Todd, 645 N.E.2d 597 (Ind. 1995) (Indiana contract formation principles)