Charles STADTLANDER and Christine Robinson, Plaintiff-Appellee,
v.
RYAN'S FAMILY STEAKHOUSES, INC., Defendant-Appellant.
Court of Appeal of Louisiana, Second Circuit.
*884 Hailey, McNamara, Hall, Larmann & Papale by Frederic Theodore Le Clercq, Metarie, Darren A. Patin, Baton Rouge, Alayne R. Corcoran, Metarie, counsel for Defendant-Appellant.
Bodenheimer, Jopnes & Szwak, by David A. Szwak, Shreveport, Mary E. Winchell, Counsel for Plaintiff-Appellee.
Before NORRIS, STEWART, GASKINS, PEATROSS and KOSTELKA, JJ.
NORRIS, Chief Judge.
Ryan's Family Steakhouses, Inc. appeals the denial of their exception of no cause of action based on a binding arbitration agreement. We reverse.
Factual Background
Charles Stadtlander and Christine Robinson filed suit against their employer, Ryan's, alleging that they were forced to work without compensation when their supervisors clocked them out hours before they actually ended working.[1] Ryan's filed an exception of no cause of action based on a binding arbitration agreement Stadtlander and Robinson signed when they applied for work with Ryan's and an exception of improper cumulation of parties because there was no commonality of interests. On December 16, 1999, the trial court granted Ryan's exception of improper cumulation of parties, but apparently relying on equity in regards to Stadtlander,[2] denied its exception of no cause of action. The trial court also found that the arbitration agreement was between the employees and Employment Dispute Services, Inc. (EDSI), and as such Ryan's did not have standing to rely on the agreement.
With regard to Robinson's claim, Ryan's filed an application for supervisory writ challenging the denial of the exception of no cause of action. Ryan's initial writ was denied by this court on January 27, 2000 for an UCRA 4-3 violation. After various delays in the trial court, this court ultimately concluded on July 20, 2000 that the ruling denying the exception could lead to irreparable harm, and therefore was an appealable interlocutory judgment. This appeal followed.
Law and Analysis: Timeliness of the Appeal
As a threshold issue in response to Ryan's appeal, Robinson argues that this interlocutory appeal is untimely and should be dismissed. Specifically, she claims that Ryan's is seeking a writ application from a December 16, 1999 ruling,[3] and, based on *885 UCRA 4-3, the return date cannot exceed January 16, 2000, unless an extension of time is filed within the original or extended return date period. Ryan's writ (and this subsequent appeal), Robinson urges, is untimely because it was filed on June 15, 2000, six months after the original filing period for writ applications.
Appeals are favored in the law and should be maintained unless a legal ground for dismissal is clearly shown. Tucker v. Northeast Louisiana Tree Service, 27,768 (La.App.2d Cir.12/6/95),
By a ruling dated July 20, 2000, we found this case to be an appealable interlocutory judgment and remanded to the district court with directions to perfect an appeal within 30 days. The district court lodged the appeal with this court on August 2, 2000. Although the code of civil procedure delineates specific time lines for appeal from final judgments, La. C.C.P. art.2087, 2123, we find nothing in the code, and the plaintiffs fail to cite to anything which establishes a time frame to appeal an interlocutory judgment. We also note that interlocutory judgments may be amended at any time, see, e.g., Carner v. Carner, 97-128 (La.App. 3d Cir. 6/18/97),
Propriety of Ryan's Exception of No Cause of Action
As a purely procedural matter, we note that although Ryan's filed an Exception of No Cause of Action, the district court took evidence and rendered its judgment on the merits purporting to interpret the arbitration agreement, although it was not directly mentioned in Robinson's petition. When ruling on an Exception of No Cause of Action, a court may only consider the four corners of the petition itself, and not extrinsic evidence; as such, the district court's judgment is inherently erroneous. La.C.C.P. art. 931. However, when evidence on an exception of no cause of action is presented and considered by the court without objection, as in this case, then both sides have consented to the consideration thereof and the pleadings are deemed expanded. Crosby v. Stinson, 33,6268 (La. App.2d Cir.8/23/00),
*886 In the instant case, although Ryan's introduced the arbitration agreement into evidence for the first time as part of its exception, Robinson, in response, specifically disputed the agreement's applicability[4] and enforceability; at no time did Robinson object to the consideration of the agreement itself.[5] In addition, Robinson's petition implicitly includes the agreement, for it facially states that she was employed by Ryan's, and that her causes of action arise from that employment; of which the arbitration agreement is an incident. As such, we find that Robinson's petition was expanded to include the arbitration agreement and testimony offered at the hearing on the exception.[6]
Arbitration Clause: Standing
When Robinson applied for her job with Ryan's, she signed a "Job Application Agreement to Arbitration of Employment Related Disputes." The trial court specifically found that the arbitration agreement was in fact between EDSI, an arbitrator, and Robinson, and as such, Ryan's did not have standing to raise the issue. It apparently based this ruling on the boldface clause which stated that:
This agreement is with EDSI, not with the Company, and is not, nor is it intended to be, an employment contract or any part of an employment contract. This agreement does not affect or alter My "at will" employment relationship with the Company.
Ryan's argues that although the agreement is between EDSI and Robinson, it is an enumerated third party beneficiary to the agreement and is therefore entitled to rely on it.
A contracting party may stipulate a benefit for a third person, who is called a third-party beneficiary. La. C.C. art.1978. Under Louisiana law, such a contract for the benefit of a third party is referred to as a stipulation pour autrui. Paul v. Louisiana State Employees' Group Benefit Program, 99-0897 (La.App. 1st Cir. 5/12/00),
The Arbitration agreement in the instant case specifically states that:
The Company ... [is a] "third party beneficiary" of My agreement with EDSI, and I am a "third party beneficiary" of others' agreements with EDSI. A "third party beneficiary" is someone who benefits legally from a contract between other parties.
In the preamble, the "Company" is defined as Robinson's "potential employer," which in this situation was Ryan's.
In addition to specifically designating Ryan's as a third party beneficiary of the agreement between Robinson and EDSI, the instant agreement clearly binds both Ryan's and Robinson to submit any applicable employment-related disputes to EDSI. See infra, pp. 6-7, at 887-88. As such, we find that the intended benefit to Ryan's is not merely incidental.
The trial court's finding that Ryan's did not have standing was based solely on the clause printed in boldface which was obviously designed to insure that a potential employee would not interpret the agreement as a promise to hire and to emphasize that any subsequent employment was "at-will" and not contractual. The trial court erred by premising its finding as to Ryan's standing merely on this one clause, and not even considering the following clause which specifically designated Ryan's as a third party beneficiary to the Robinson/EDSI agreement.
In sum, we find that the agreement is manifestly clear that Ryan's is a third party beneficiary to the arbitration agreement and the trial court erred in finding that Ryan's did not have standing to enforce it accordingly.
Applicability and Enforceability of the Arbitration Agreement
The gravamen of Ryan's arguments is that the district court erred when it failed to dismiss the case because Robinson agreed to a binding arbitration of all disputes by signing an agreement which stated, inter alia:
The following agreement between you and EDSI is a "selection of forum" agreement by which you agree that employment-related disputes between You and the Company [Ryan's] shall be resolved through arbitration. Any arbitration matter shall be heard and decided under the provisions and the authority of the Federal Arbitration Act, 9 U.S.C. § 1, as applicable.
As such, Ryan's contends that as a condition of the agreement, any employmentrelated dispute must be brought in the arbitration forum, not in state or federal court. The agreement further provided that:
Any employment-related dispute between the Company, Me, and/or other signatories which would otherwise be brought in State or Federal court will be brought ONLY in the EDSI arbitration forum and under EDSI Rules and Procedures, as modified or amended from time to time. (Other signatories to the same Agreement with EDSI may be, for example, supervisors, managers, and agents of the Company.)
Notably, the agreement was clear as to which disputes were subject to arbitration; specifically exempted from the arbitration agreement were "claims or charges handled by a State or Federal agency" such as the Equal Employment Opportunity Commission, state unemployment agency, or state office of worker's compensation. Nevertheless, the agreement was emphatic *888 that all disputes which would otherwise be subject to litigation were subject to arbitration:
Except as to claims or charges actually handled within a State or Federal agency, any and all disputes I may have with the Company, or in that company, its supervisors, managers or other agents may have with Me which would otherwise be decided in court, shall be resolved only through arbitration in the EDSI forum and NOT THROUGH LITIGATION IN STATE OR FEDERAL COURT.
The Federal Arbitration Act, 9 U.S.C. § 1 et seq. (FAA), which was specifically adopted by the agreement, establishes that as a matter of preemptive federal law,[7] any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the issue at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.[8]Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp.,
Louisiana courts have recognized the heavy weight of this presumption, noting that as to issues of arbitrability, "even if some legitimate doubt could be hypothesized the Supreme Court requires resolution of the doubt in favor of arbitration." Grote v. Merrill Lynch, Pierce, Fenner & Smith, Inc., supra at 928; Collins v. Prudential Ins. Co. of America, 99-1423 (La.1/19/00),
A provision in any written contract to settle by arbitration a controversy thereafter arising out of the contract ... or an agreement in writing between two or more persons to submit to arbitration any controversy existing between them at the time of the agreement to submit, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
LSA-R.S. 9:4201.
In light of this strong federal and state presumption in favor of arbitrability, we *889 find that the district court was clearly wrong in denying Ryan's Exception of No Cause of Action. The agreement is a clear, express, and unequivocal agreement to arbitrate all employment-related disputes such as those brought by Robinson in the present suit. Ryan's assignments of error have merit.
Robinson's Arguments Against Enforceability of the Agreement
Recognizing the strong presumption in Louisiana law favoring arbitrability, Robinson nevertheless contends that the agreement is unenforceable, claiming that it is "vague and ambiguous" and it should be construed against its maker under La. C.C. art. 2056. We disagree.
While it is true that an arbitration agreement is a contract subject to the general rules of contract interpretation, Doctor's Associates v. Casarotto,
Similarly, Robinson's argument that the agreement is void ab initio because it is an "adhesion agreement" between a fast-food worker and a corporation is meritless. Robinson has made no showing that she did not understand the agreement or would have refused to work for Ryan's had she been aware of the import of its terms. In fact, it is well settled that a party who signs a written instrument is presumed to know its contents and cannot avoid its obligations by contending that she did not read it, that she did not understand it, or that the other party failed to explain it to her.[9]Tweedel v. Brasseaux,
Robinson's claim that the agreement is invalid by virtue of the unequal bargaining positions of the parties is likewise without merit. Generally, an "adhesion contract" is a standardized contract, usually pre-printed, which is prepared by a party of superior bargaining power for adherence or rejection of the weaker party. Golz v. Children's Bureau of New Orleans, Inc.,
In a factually analogous case, the United States District Court for the Middle District of Louisiana rejected the similar contentions of a fast-food worker who, like *890 Robinson, was presented a pre-printed arbitration agreement. Rogers v. Brown,
Moreover, allegations that an arbitration agreement is invalid due to irregularities in the "making" of the agreement other than fraud in the inducement (which Robinson does not raise in the present case) are more properly lodged with the arbitrator and not a court. Prima Paint Corp. v. Flood & Conklin Mfg. Co.,
Robinson also contends that the arbitration agreement contains vague and ambiguous language because it is internally contradictory. Specifically, Robinson points to Provision 1 of the agreement which states:
You retain all the substantive legal rights and remedies under state and federal law that you would otherwise have as an employee/applicant of the Company, and You will not have any additional substantive legal rights or remedies[.]
whereas, Provision 4 of Part A reads as follows:
An EDSI decision on any dispute shall be FINAL AND BINDING on all parties[.]
Robinson contends that the former section directly contradicts the latter because although Provision 1 states that the employee retains all substantive legal rights and remedies she may have under state or federal law, she loses these rights because Provision 4 forecloses any opportunity to appeal an EDSI decision. This internal contradiction, she argues, renders the entire agreement vague and unenforceable.
An arbitration agreement is a "kind of forum-selection clause," Scherk v. Alberto-Culver Co.,
Robinson's remaining contention is that the arbitration agreement is inapplicable because she is no longer employed by Ryan's and that agreement to arbitrate is only binding during the period of her employment. If not frivolous, this argument is devoid of merit, for the agreement itself states:
I absolutely must use the EDSI forum for any and all employment-related disputes and/or claims and/or related tort claims I may have against the Company and all other signatories to this Agreement which would otherwise be brought in court, even if the Agreement has been terminated since the date of the claim.
(Emphasis added).
At oral argument, for the first time, Robinson's counsel suggested that the FAA and the substantive body of federal and state law applying it are inapplicable because Robinson's employment does not affect interstate commerce. As a general rule, courts of appeal will not consider issues raised for the first time on appeal, and certainly not for the first time at oral argument. Segura v. Frank, 93-1271 (La.1/14/94),
*892 Conclusion
For the reasons expressed herein, the judgment of the district court is REVERSED, the Exception of No Cause of Action is GRANTED, and Robinson's petition is DISMISSED without prejudice. Costs are assessed to the appellee, Christine Robinson.
REVERSED; EXCEPTION GRANTED; PETITION DISMISSED WITHOUT PREJUDICE.
GASKINS, J., dissents for the reasons expressed by J. PEATROSS.
PEATROSS, J., dissents with written reasons.
PEATROSS, J., dissenting.
I respectfully dissent for the following reasons. The majority erred in sustaining Ryan's exception of no cause of action. As a preliminary procedural matter, I believe that the petition, even if expanded by the introduction of Robinson's agreement with EDSI[1], does, in fact, state a cause of action. In other words, despite the existence of the EDSI agreement, Robinson states a viable cause of action within the four corners of her petition. The EDSI agreement does not extinguish her cause of action; rather, that cause of action is subject to an exception of prematurity, motion for summary judgment or motion to compel arbitration. The exception of no cause of action is not the appropriate vehicle to enforce, or to have the court determine the validity of, an agreement to arbitrate. Further, had Ryan's filed an exception of prematurity, motion for summary judgment or motion to compel arbitration, in order to prevail, it would have had to introduce not only the agreement between EDSI and Robinson, but also the alleged agreement between EDSI and Ryan's. The agreement between EDSI and Robinson states:
Your potential Employer ("signatory company" or "Company") has entered into an agreement with Employment Dispute Services, Inc. (EDSI) to arbitrate and resolve any and all employment-related disputes between the Company's employees (and job applicants) and the Company.
The agreement also contains the following provision:
D. The Company.. [is a] "third party beneficiary" of My agreement with EDSI, and I am a "third party beneficiary" of others' agreements with EDSI. A "third party beneficiary" is someone who benefits legally from a contract between other parties.
We have no proof, however, that such an agreement between Ryan's and EDSI exists; and, if it does in fact exist, we certainly have no evidence of what that agreement requires of Ryan's. Alone, the agreement between EDSI and Robinson must fail because it is essentially a unilateral agreement to arbitrate on the part of the employee with EDSI promising only to furnish an arbitral forum for the arbitration. Put another way, the agreement itself states that "this agreement is with EDSI;" it is not an agreement between Ms. Robinson and Ryan's. It is not, therefore, an arbitration agreement because in order to have an arbitration agreement, both parties must agree to arbitrate. And, as previously stated, there is absolutely no evidence before us that an agreement exists between Ryan's and EDSI and, even if such an agreement does exist, we have no evidence of its contents. In addition, the majority opinion points out that an arbitration agreement is a "selection of forum" agreement; however, this particular *893 agreement is selection of arbitrator agreement.
Moreover, EDSI has unfettered discretion as to the venue and proceedings in any arbitration conducted under the agreement. The agreement provides that all arbitrations be conducted according to "EDSI Rules and Procedures" which may be "modified or amended from time to time." This vests entire control of the arbitration process with EDSI. Additionally, EDSI has the unqualified ability and unilateral authority to change the "rules and procedures" of the arbitration process at any time without the knowledge or consent of the employee. In a very recent case out of Kentucky, the Sixth Circuit Federal Court of Appeal found an identical agreement between EDSI and a former Ryan's employee to be unenforceable for that very reason. Floss v. Ryan's Family Steak Houses, Inc.,
EDSI's promise to provide an arbitral forum is fatally indefinite. Though obligated to provide some type of arbitral forum, EDSI has unfettered discretion in choosing the nature of that forum. Specifically, EDSI has reserved the right to alter the applicable rules and procedures without any obligation to notify, much less receive consent from, Floss and Daniels.
The Floss court concluded that EDSI's promise was illusory and, thus, lacked mutuality of obligation or consideration, rendering the agreement unenforceable. Accord Blair v. Scott Specialty Gases,
It is well-settled that arbitration agreements are to be construed under state law principles governing the formation of contracts. Rogers v. Brown,
In the same vein, and even more disturbing is the testimony of Robinson at the hearing on the exception wherein she denied ever having received a copy of EDSI's "Rules and Procedures" despite the provision in the agreement which indicates that a "copy of full EDSI Rules and Procedures" was provided to her.[2] Not only *894 did Robinson not receive a copy of EDSI's Rules and Procedures, Donald Southerland, a manager of Ryan's who was present when Robinson completed her application, testified that it was not the practice of managers to hand out copies of EDSI's Rules and Procedures to applicants. Further, Mr. Southerland admitted that he was not even sure what the "EDSI Rules and Procedures" were. Mr. Southerland also testified that managers of Ryan's were trained to have applicants sign the EDSI agreement first in the application process:
Q: Okay. Could you describe the fashion in which most of these agreements were signed by job applicants?
A: Theythey are attached to the application itself. A lot of times they're signed when we get handed the application. And those that aren't, that's the first thing we're trained to flip to, is that page where you have to sign it. Wewe just tell them we need you to sign this before we continue.
According to Mr. Southerland, managers would "get in trouble" if applicants were allowed to continue the application process without signing the EDSI agreement. Mr. Southerland further testified that the waiver of legal rights language in the agreement was not explained to applicants. Therefore, not only does EDSI have full control over the arbitration process, the applicant has no knowledge of what that process is, nor does the managerial staff of the particular Ryan's restaurant to which the applicant is applying.[3]
An additional basis for finding this agreement to be unenforceable is grounded in the language of La.-R.S. 9:4201. In that statute, the validity of an arbitration agreement is qualified by the language "save upon such grounds as exist at law or in equity for the revocation of any contract." In my opinion, overwhelming grounds exist in this case for revocation of the EDSI agreement. The majority relies on Ryan's Family Steak Houses, Inc. v. Regelin,
First, the record shows that the arbitrator organization, Employment Dispute Services, Inc., ("EDSI"), in collaboration with the employer, Ryan's Family Steak Houses, enlisted as its own clients *895 or customers not only these plaintiff employees but also all of her applicants for employment with Ryan's. The arbitration agreement form drafted, executed, and promoted by EDSI goes so far as to require each other contracting party to agree that "I absolutely must use the EDSI forum ..." This solicitation is unseemly for a judge, as an arbitrator is supposed to be. The collaboration with Ryan's also creates an inescapable bias in favor of Ryan's.
Second, the arbitration agreement form in the context of the record shows that EDSI is collaborating with Ryan's in an elaborate ruse of mutual third-party beneficiary contracts, with EDSI serving as the straw-man in each contract some with Ryan's and its managerial personnel as the other contracting parties and others with the applicants for employment as the other contracting parties, and with the arbitration provisions binding and benefiting (sic) both sets of other contracting parties not only as such but as third-party beneficiaries of all the other contractsall for the obvious purpose of giving Ryan's all of the benefits of an employment contract with arbitration provisions but without any of the burdens of a written employment contract.
This "ruse" is illustrated by the provision of the EDSI agreement stating "this agreement is with EDSI, not the Company, and is not, nor is it intended to be, an employment contract or any part of an employment contract," but which is immediately followed by the provision affording "the Company" third-party beneficiary status. As Justice Johnstone opined, the bias on the part of EDSI in favor of Ryan's created by this "ruse" is inescapable.
Further, the majority opinion in Regelin, supra, was severely criticized in the subsequent case of Penn v. Ryan's Family Steakhouses, Inc.,
Furthermore, while not the basis for striking down the agreement, the court in Floss, supra, expressed the same concern for agreements of this type of "unique" contractual scenario:
We have serious reservations as to whether the arbitral forum provided under the current version of the EDSI Rules and Procedures is suitable.... Specifically, the neutrality of the forum is far from clear in light of the uncertain relationship between Ryan's and EDSI. Floss and Daniels suggest that EDSI is biased in favor of Ryan's and other employers because it has a financial interest in maintaining its arbitration service contracts with employers. Though the record does not clearly reflect whether EDSI, in contrast to the American Arbitration Association, operates on a for-profit basis, the potential for bias exists. In light of EDSI's role in determining the pool of potential arbitrators, any such bias would render the arbitral forum fundamentally unfair.
The above cases speak directly to the issue before the court in the case sub judice, i.e., the pre-arbitration determination of whether the EDSI Agreement is a valid and enforceable arbitration agreement such that a party may be compelled to abide by its terms. The majority attempts to distinguish Floss, supra, and Penn, supra, on the basis that both cases involved claims under 9 U.S.C. § 10, stating that concerns about the fitness or bias of an arbitrator are "properly addressed in an action" under 9 U.S.C. § 10. This distinction is misplaced and the majority noted the reason why when it acknowledged that 9 U.S.C. § 10 provides limited judicial review of arbitral proceedings governed by the Federal Arbitration Act, which arises after arbitration has concluded. (Emphasis mine.) Common sense dictates that the arbitration has to have taken place before one can have a claim under 9 U.S.C. § 10, which reviews the arbitral process after an arbitration has occurred. To the contrary, in both Floss and Penn, the courts were addressing the validity and enforceability of the agreements in question pursuant to motions to compel arbitration before the arbitration process had commenced. If one party refuses to arbitrate and a motion to compel (or as in this case, an exception of no cause of action) is filed, the first question that must be answered by the court is whether there exists a valid and enforceable arbitration agreement between the parties. As previously stated, that determination is made through application of the relevant state law governing arbitration agreements and contract formation. Recall that Louisiana's arbitration law provides that an arbitration agreement may be found invalid on any grounds that exist in law or equity for revocation of such contract. Inherent unfitness and bias of the arbitral forum constitutes such grounds for revocation. This is precisely what Justice Johnstone concluded as did the majority in Penn, supra. Further, this reasoning provided the basis for the concern over these types of agreements expressed by the majority in Floss. The fact that the plaintiffs' claims in those cases involved federal statutory claims is irrelevant to the issue addressed by the Penn court, and that is *897 before this court, regarding the preliminary determination of the validity of the agreements prior to arbitration.
The majority also cites the very recent United States Supreme Court's decision in Circuit City Stores, Inc. v. Adams,
Finally, arbitration is intended to secure a just and fair resolution of disputes between the parties without litigation. Again, the instant agreement is not between the disputing parties. Ryan's is not a party to the agreement and is not named in the agreement. Rather, a third party arbitral organization is contracting with the employee to provide the arbitral forum. It is unseemly that an agreement which purports to provide such a forum, but that reserves total control over the venue[6] and process to the arbitral organization, an organization which has every incentive to please its client, Ryan's, could be considered to be a valid, irrevocable and enforceable agreement.
As previously stated, I respectfully dissent and I would affirm the judgment of the trial court.
*898 EXHIBIT A JOB APPLICATION AGREEMENT TO ARBITRATION OF EMPLOYMENT-RELATED DISPUTES Your potential Employer ("signatory company" or "Company") has entered into an agreement with Employment Dispute Services, Inc. (EDSI) to arbitrate and resolve any and all employment-related disputes between the Company's employees (and job applicants) and the Company. The following Agreement between You and EDSI is a "selection of forum" agreement by which you agree that employment-related disputes between You and the Company shall be resolved through arbitration. Any arbitration matter shall be heard and decided under the provisions and the authority of the Federal Arbitration Act, 9 USC sec. 1, as applicable. The purpose of this agreement is to provide You and the Company a forum in which claims or disputes with the Company and any other signatories may be resolved by arbitration rather than litigation. This Agreement does not restrict you from filing a claim or charge with any state or federal agency, for example, Equal Employment Opportunity Commission, state unemployment agency, state workers' compensation commission, where applicable. Rather, the Agreement applies only to State of Federal court proceedings. A. Acceptance of EDSI Agreement Important aspects of Your acceptance of this Agreement are: 1. You retain all the substantive legal rights and remedies under state and federal law that you would otherwise have as an employee/applicant of the Company, and You will not have any additional substantive legal rights or remedies; 2. You retain the right to file a claim or charge with any State of Federal agency that would otherwise handle Your claim or charge; 3. Except as to claims or charges handled within a State or Federal agency. You and the Company agree to use EDSI to resolve legal claims concerning You that either party would otherwise bring in State or Federal court; 4. An EDSI decision on any dispute shall be FINAL AND BINDING on all parties. B. Agreement 1. Any employment-related dispute between the Company, Me. and/or other signatories which would otherwise be brought in State of Federal court will be brought ONLY in the EDSI arbitration forum and under EDSI Rules and Procedures, as modified or amended from time to time. (Other signatories to the same Agreement with EDSI may be, for example, supervisors, managers, and agents of the Company.) 2. In consideration of the agreement by EDSI to provide an arbitration forum. Rules and Procedures, and a hearing and decision based on any claim or dispute I (employee/job applicant) may file or defend. I understand and agree to the following: A. Except as to claims or charges actually handled within a State or Federal agency. any and all disputes I may have with the Company, or in that company, its supervisors, managers of other agents may have with Me which would otherwise be decided in court, shall be resolved only through arbitration in the EDSI forum and NOT THROUGH LITIGATION IN STATE OR FEDERAL COURT. B. The decision of an EDSI arbitration panel is final and binding on all parties. There is no appeal by any party on the merits of the dispute either to State or Federal court. C. This agreement is with EDSI, not with the Company, and is not, nor is it Intended to be, an employment contract or any part of an employment contract. This agreement does not affect or alter My "at will" employment relationship with the Company. D. The Company and any other successor or assign, its signatory superiors, mangers and other agents, are "third party beneficiary" of My agreement with EDSI, and I am a "third party beneficiary" of others' agreements with EDSI. A "third party beneficiary" is someone who benefits legally from a contract between two other parties. *899 E. I absolutely must use the EDSI forum for any and all employment-related disputes and/or claims and/or related tort claims I may have against the Company and all other signatories to this Agreement which would otherwise be brought in court, even if the Agreement has been terminated since the date of the claim. In South Carolina and Texas this Agreement shall apply to personal injury tort claims where the Company is a "non-subscriber" and is not a covered employer under the state's workers' compensation insurance program. F. If any of the foregoing terms of the Agreement are determined to be in violation of any law, rule or regulation or are otherwise unenforceable, that determination shall not affect any other clauses of the Agreement. All other clauses shall remain in full force and effect. If any EDSI Rules or Procedure is determined by any court of competent jurisdiction to be invalid or unenforceable, EDSI shall be permitted a reasonable period of time to amend its Rules and Procedures in order to accomplish the arbitration purpose of this Agreement. G. My Agreement shall continue for the period of My employment with the Company unless mutually terminated in writing by EDSI and Me. H. My Agreement supersedes any and all prior understandings and agreements between the parties, or with the Company, concerning the resolution of any and all claims or disputes between the Company, its supervisors, managers, and/or other agents, and Me. It contains the entire understanding and agreement of the parties regarding these subjects. My agreement may not be altered or amended, except in writing signed by the President of EDSI and Me. I. The agreement is effective immediately. I understand I have the right to consult with an attorney of my choice. J. I have read the Agreement carefully and have been given a copy of full EDSI Rules and Procedures. I knowingly and voluntarily agree to be bound by the terms and conditions of the Agreement and EDSI Rules and Procedures, as modified and/or amended from time to time. 3-17-98 Chnssy A. Rabnson _______ ______________________ Date Name (Please Print) ______________________ Address ______________________ City, State, Zip ______________________ Social Security Number Witness SIGNATURE "The agreement must be notarized if not witnessed by an Agent of the Company. 8/15/93 --------------------------------------------------------------------------------------------------------------- Please indicate whether you wish to be considered for purposes of serving as an "Adjudicator" and participating in hearings and deciding disputes under the EDSI Rules and Procedures. YES_________ NO____________ Note: Your indication of interest is no assurance that you will be selected for Adjudicator training or to serve as an Adjudicator. Employment Dispute Services, Inc. P.O. Box 30326 Charleston, South Carollna XXXXX-XXXX Inquiries may be directed to EDSI's Toll Free Number: 800-892-5335NOTES
[1] Stadtlander also made additional allegations of harassment and a worker's compensation claim. He is not a party to this appeal, so his claims will not be addressed.
[2] Testimony taken at the hearing on the exceptions indicated that although the application and arbitration agreement were dated two weeks after Stadtlander's 18th birthday, the documents were signed while he was still 17 years old and were subsequently post-dated. The court apparently based its decision, in part, on this apparent inequity. Ms. Robinson, however, was of legal age when she signed her agreement.
[3] The written judgment was not signed until February 2, 2000.
[4] In fact, Robinson's co-plaintiff, Statlander, relied on the agreement itself to defeat Ryan's exception as to him.
[5] To preserve an evidentiary issue for appellate review, it is essential that the complaining party enter a contemporaneous objection to the evidence or testimony and state the reasons for the objection. Stephens v. Town of Jonesboro, 25,715 (La.App.2d Cir.8/19/94),
[6] Even if the pleadings were not deemed expanded, we would likely treat Ryan's exception as one of subject matter jurisdiction. See, e.g., Martin v. Texaco, 94-2412, (La.App. 1st Cir. 5/5/95);
Notes
[7] The United States Supreme Court has noted that section 2 of the FAA constitutes a "congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary. The effect of the section is to create a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act." Moses H. Cone, supra,
[8] A written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. § 2.
[9] The final section of the agreement, which is immediately above Robinson's signature, clearly states:
J. I have read the Agreement carefully and have been given a copy of full EDSI Rules and Procedures. I knowingly and voluntarily agree to be bound by the terms and conditions of the Agreement and EDSI Rules and Procedures, as modified and/or amended from time to time.
[10] Inherent in all arbitral proceedings pursuant to the FAA is limited judicial review under 9 U.S.C. § 10, which arises after arbitration has concluded. Robinson, however, does not allege any grounds for review under that section at the present time. As such, cases like Penn v. Ryan's Family Steakhouses, Inc.,
[1] The agreement is attached to this dissent as "Exhibit A."
[2] Even if Robinson had been furnished with "EDSI Rules and Procedures," it would have served no purpose because of the sole right of EDSI to change the "Rules and Procedures" at any time.
[3] Citing Flynn v. Aerchem, Inc.,
[4] Cases cited in this dissent involved Ryan's use of identical EDSI agreements in Alabama and Kentucky in addition to Louisiana.
[5] The agreement in Penn refers to EDS rather than EDSI, however, both acronyms represent the same entity, Employment Dispute Services, Inc.
[6] In Penn, supra, Mr. Penn took issue with EDSI's control over the location of the arbitration hearing, asserting that the agreement should be found void because it did not state an exact location for arbitration or state that the arbitration would take place in a location convenient to him. The court concluded that Mr. Penn's argument was well-founded. With EDSI having total control over the entire arbitration process, and having the power to change the rules governing that process at any time, including the place where a given arbitration is to be held, there is no safeguard against EDSI setting an arbitration in a location which would make a plaintiff's participation extremely burdensome, if not impossible.