Hay v. Summit Funding, Inc.Hay v. Summit Funding, Inc.
Case Information
*1
[Cite as
Hay v. Summit Funding, Inc.
,
IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT ROSS COUNTY
DIANNA HAY, : Case No. 16CA3577
:
Plaintiff-Appellee, :
: DECISION AND JUDGMENT vs. : ENTRY :
SUMMIT FUNDING, INC., et al. :
: Defendants-Appellants. : Released: 10/18/17 APPEARANCES:
Steven M. Loewengart and Curtis G. Moore, Fisher & Phillips, LLP, Columbus, Ohio, for Appellants.
Nicholas Kolitsos, Jones Law Group, LLC, Columbus, Ohio, for Appellee.
McFarland, J. Summit Funding, Inc., Eddie Hughes, and John Beasley (collectively,
“Appellants”) appeal the final judgment of the Ross County Court of Common Pleas entered November 9, 2016. Dianna Hay (“Appellee”), a former employee of Summit Funding, Inc., filed a complaint alleging Appellants engaged in conduct constituting sexual harassment. Appellants filed a Motion to Compel Arbitration, arguing Appellee’s claims were subject to arbitration by virtue of an agreement Appellee executed at the time she was hired. In the appealed-from entry, the trial court overruled Appellants’ motion. Appellants’ sole assignment of error is that the trial court erred in holding that Appellee’s claim of sexual harassment did not fall within the scope of the arbitration agreement. Based upon our de novo review in this matter, we find Appellants’ argument has merit. As such, we reverse the judgment of the trial court.
FACTS
{¶2} On July 13, 2016, Appellee filed a complaint in the Ross County Court of Common Pleas against Appellants Summit Funding, Inc., Eddie Hughes, and John Beasley, alleging sexual harassment, hostile work environment, termination in violation of public policy, retaliation, intentional and negligent infliction of emotion distress, respondeat superior, defamation, and negligent hiring, training, retention and supervision. The following is a summary of the allegations of her complaint:
1) Upon Appellee’s employment in July 2015 as a loan officer for Summit Funding, Inc., a California corporation conducting business in Chillicothe, Ohio, Appellee was required to work alone in a branch office with Appellant Hughes. Appellee and Hughes were employed under the supervision of Appellant Beasley. Additionally, Hughes supervised Appellee’s time sheets and directed some job duties. 2) Within the first week of employment, Hughes exhibited unwanted and offensive sexual conduct towards Appellee which included sexually charged comments both verbally and via text and picture messaging; sexual advances; invasion of personal space; and Hughes taking a picture of Appellee’s “backside,” which he later published to Beasley.
3) Appellee rejected the sexual advances and requested that Hughes desist, but the harassment continued and heightened in severity and frequency. On one occasion, Hughes became physically violent. Appellee alleged she became concerned for her physical safety as well.
4) In August 2015, Beasley advised Appellee not to contact human resources regarding her complaints about Hughes’ behavior. In August 2015, Hughes confronted Appellee about her time sheets and other work matters, threatening not to pay her for overtime. 5) On or about August 31, 2015, per Summit Funding’s established protocol, Appellee reported the harassment to Summit Funding’s human resource director. On or about September 1, 2015, Appellee was directed not to report to work until an investigation into her complaints was completed.
6) On September 16, 2015, Appellee received two letters. In the first letter, Summit Funding advised that its investigation confirmed that Hughes did act inappropriately. In the second letter, Summit Funding advised Appellee that her employment was terminated.
7) Since Appellee’s termination, Hughes made and has continued to make defamatory remarks falsely stating Appellee was terminated by Summit Funding due to inability to perform her job. Appellee’s complaint demanded judgment against Appellants, jointly
and severally, and requested compensatory, special, and punitive damages. Appellee further requested a declaratory finding that Hughes’ statements were untrue and defamatory, as well as a retraction from Hughes. On September 16, 2016, Appellants filed a motion to compel
arbitration. On September 30, 2016, Appellee filed a memorandum contra the motion to compel arbitration. On November 9, 2016, the trial court filed its decision and judgment entry denying the motion to compel arbitration. This timely appeal followed.
ASSIGNMENT OF ERROR
“I. THE TRIAL COURT ERRED IN HOLDING THAT THE PLAINTIFF-APPELLEE’S CLAIMS DO NOT FALL WITHIN THE SCOPE OF THE PARTIES’ ARBITRATION AGREEMENT.”
A. STANDARD OF REVIEW The question of whether a party has agreed to submit an issue to
arbitration is reviewed under a de novo standard.
Arnold v. Burger King,
48 N.E.3d
69,
court's decision.
Hedeen
at ¶ 9, citing
Brownlee v. Cleveland Clinic Found.,
8th
Dist. Cuyahoga No. 97707,
B. LEGAL ANALYSIS When parties to a contract have agreed in writing to arbitration of
disputes, the trial court must, upon application of a party and being satisfied that
the issue is referable to arbitration, stay its proceedings pending the arbitration.
R.C. 2711.02(B). However, arbitration is a matter of contract and a party cannot be
required to submit to arbitration any dispute which he has not agreed to so submit
* * *.
Ritchie’s Food Distributor, Inc., v. Refrigerator Const. Services, Inc.,
4th
Dist. Pike No. 03CA713,
that Appellee’s claims predicated on sexual harassment were not within the scope
of the arbitration agreement Appellee executed with Appellant Summit. Until the
existence of an agreement to arbitrate is established, “[o]ur inquiry is ‘ “strictly
6 confined” * * * to whether the parties agreed to submit disputes * * * to
arbitration.’ ” (First alteration original.)
Ritchie’s, supra,
at ¶ 10, quoting
Council
of Smaller Enterprises
at 668,
there is a strong presumption in favor of arbitration, and any ambiguities or
doubts regarding the scope of the arbitration clause are resolved in favor of
arbitration.
Sasaki v. McKinnon
,
state law presumption favoring arbitration. Here, the trial court’s decision also recognizes the strong presumption in favor of arbitration. However, the trial court points out the presumption is not unlimited. “Though guided by a strong presumption, Ohio also recognizes that principles of equity and fairness require that greater scrutiny be given to arbitration provisions that do not involve parties of equal sophistication and bargaining power.” Arnold, supra, at 25.
A. Appellants argue Appellee’s sexual harassment claims are within the agreement’s scope because sexual harassment is a form of sex discrimination.
When deciding whether parties agreed to arbitrate a certain matter,
courts generally apply ordinary state-law principles that govern the formation of
contracts.
Cales, supra
, citing,
First Options of Chicago, Inc. v. Kaplan
, 514 U.S.
938, 944,
contract in a manner inconsistent with those terms.
Ritchie’s supra,
at ¶ 12;
Alexander v. Buckeye Pipe Line Co
.,
“A. Claims Covered by the Agreement
The only claims that are arbitrable are those that are justiciable under applicable federal state or local law. Arbitrable claims include, but are not limited to: * * * claims for discrimination (on the basis of, but not limited to, race, sex, * * * claims for violation of any federal, state, or other governmental law, statute regulation or ordinance (except as provided below).”
{¶13} As is evident, the language of the parties’ arbitration agreement explicitly provides for claims for discrimination on the basis of sex. However, in its judgment, the trial court noted that the arbitration language at issue did not specify “sexual harassment” but only “sexual discrimination.” In essence, this is a question of whether, due to the omission of the term “sexual harassment,” Appellee intended to agree to arbitrate a sexual harassment claim. Appellants assert it is well-settled that sexual harassment is a form of
sexual discrimination under Title VII of the Civil Rights Act of 1964 and Ohio Revised Code 4112. Therefore, the trial court erred in holding there was a distinction between sexual harassment and sexual discrimination. By contrast, Appellee argues that while it is true that a person can be both sexually harassed and discriminated against in the same instance, one can also be sexually harassed without being discriminated against. As such, the harassment claim stands on its own. We are compelled to agree with Appellants. The Equal Employment
Opportunity Commission (EEOC) has provided the following guidance on the relevant terms herein:
“Harassment is a form of employment discrimination that violates Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, (ADEA), and the Americans with Disabilities Act of 1990, (ADA).* * *
Harassment is unwelcome conduct that is based on race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. Harassment becomes unlawful where 1) enduring the offensive conduct becomes a condition of continued employment, or 2) the conduct is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive. * * * To be unlawful, the conduct must create a work environment that would be intimidating, hostile, or offensive to reasonable people. * * * Offensive conduct may include, but is not limited to, offensive jokes, slurs, epithets or name calling, physical assaults or threats, intimidation, ridicule or mockery, insults or put-downs, offensive objects or pictures, and interference with work performance. Harassment can occur in a variety of circumstances, including, but not limited to, the following:
The harasser can be the victim's supervisor, a supervisor in another area, an agent of the employer, a co-worker, or a non-employee. The victim does not have to be the person harassed, but can be anyone affected by the offensive conduct. Unlawful harassment may occur without economic injury to, or discharge of, the victim.” Furthermore, the EEOC’s definition of sexual harassment is as follows:
“It is unlawful to harass a person (an applicant or employee) because of that person’s sex. Harassment can include “sexual harassment” or unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature. * * * Harassment does not have to be of a sexual nature, however, and can include offensive remarks about a person’s sex. For example, it is illegal to harass a woman by making offensive comments about women in general.” The parties have also directed us to several pertinent cases. In
Meritor Savings v. Vinson, FSB,
Ohio recited
Meritor’s
language that held: “[A] plaintiff may establish a violation
of R.C. 4112.02(A)'s prohibition of discrimination “because of * * * sex” by
proving either of two types of sexual harassment: (1) “quid pro quo” harassment,
i.e., harassment that is directly linked to the grant or denial of a tangible economic
benefit, or (2) “hostile environment” harassment, i.e., harassment that, while not
affecting economic benefits, has the purpose or effect of creating a hostile or
abusive working environment. Various Ohio appellate courts have cited the
language of the
Meritor
and
Hampel
decisions.
In
Kilgore v. Ethicon Endo-Surgery, Inc.,
Ohio-2902,
N.E.2d 181 (6th Dist.2004), at ¶ 12, the appellate court recited the R.C. 4112.02(A) language defining discriminatory practices, previously set forth above. The Persichillo court further cited the language of Hampel, supra, at ¶ 13:
“The Ohio Supreme Court has held that “[a] plaintiff may establish a violation of R.C. 4112.02(A)'s prohibition of discrimination ‘because of * * * sex’ by proving either of two types of sexual harassment: (1) ‘quid pro quo’ harassment, i.e., harassment that is directly linked to the grant or denial of a tangible economic benefit, or (2) ‘hostile environment’ harassment, i.e., harassment that, while not affecting economic benefits, has the purpose or effect of creating a hostile or abusive working environment.” Hampel v. Food Ingredients Specialties, Inc. (2000),89 Ohio St.3d 169 ,729 N.E.2d 726 , paragraph one of the syllabus.” [2] Similarly, in McPherson v. Goodyear Tire & Rubber, Inc., 9th Dist.
Summit No. 21499,
ambiguous on its face with regard to whether the parties intended to agree to a subsection within Article 9 of the agreement, entitled “ARCHITECT'S ADMINISTRATION OF THE CONTRACT.” This court’s decision in Ritchie’s set forth the generally applicable principles of contract interpretation and ultimately agreed that the contract was ambiguous as a matter of law. Specifically, because the contract listed “N/A” under the architect designation, but the parties did not strike the numerous contract provisions regarding the architect, we found the contract to be “reasonably susceptible to more than one interpretation.” Id. at ¶ 14. In Buckholtz v. West Chester Dental Group, 12th Dist. Butler No.
CA2007-11-292,
4647,
ambiguous. While we have not found use of the terms “sexual discrimination” and “sexual harassment” used interchangeably within the Revised Code, we are mindful of the case law’s repeated instruction that “Ohio courts apply federal case law interpreting Title VII of the Civil Rights Act of 1964 to claims arising under R.C. Chapter 4112 * * *.” And, we note the parties’ arbitration agreement recitation that “The only claims that are arbitrable are those that are justiciable under applicable federal state or local law.” Sexual harassment is indeed one of the claims justiciable under applicable federal and state law. Therefore, it is not unreasonable to conclude that Appellant’s sexual harassment claim is properly encompassed within sexual discrimination language of the arbitration agreement. While the term “sexual harassment” was not employed in the arbitration agreement Appellee executed, based on the EEOC’s definitions provided, along with Ohio’s practice of applying federal law case law interpreting Title VII of the Civil Rights Act to R.C. 4112, it would not be reasonable to interpret the parties’ agreement to arbitrate claims for sex discrimination as excluding claims for sexual harassment. We find provision for Appellee’s sexual harassment claim well-within the “umbrella” of the sexual discrimination language of the arbitration agreement. In the trial court and on appeal, Appellee also argued that the
arbitration agreement she executed was unconscionable.
“ ‘Unconscionability has generally been recognized to include an absence of
meaningful choice * * * on the part of one of the parties together with contract
terms which are unreasonably favorable to the other party
. Deutsche Bank Natl.
Trust Co. v. Pevarski,
trial court’s finding that Appellee’s claim for sexual harassment does not come within the purview of the arbitration agreement. For the foregoing reasons, we find merit to Appellants’ sole assignment of error and it is hereby sustained. We find the trial court erred as a matter of law in holding that Appellee’s claim for sexual harassment does not fall within the scope of the parties’ arbitration agreement because sexual harassment is a form of sexual discrimination. Accordingly, the judgment of the trial court is reversed.
JUDGMENT REVERSED. JUDGMENT ENTRY It is ordered that the JUDGMENT BE REVERSED and that Appellants recover of Appellee any costs herein.
The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Ross County Common Pleas Court to carry this judgment into execution.
Any stay previously granted by this Court is hereby terminated as of the date of this entry.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
Harsha, J. & Hoover, J.: Concur in Judgment Only.
For the Court, BY: _______________________________ Matthew W. McFarland, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment entry and the time period for further appeal commences from the date of filing with the clerk.
Notes
[1] A trial court, “shall on application of one of the parties stay the trial of the action until the arbitration of the issue has been had in accordance with the agreement.” R.C. 2711.02.
[2] For this principle,
see also Ellis v. Jungle Jim’s Market, Inc.,