United States District Court, D. Maryland
Janvier S. Gordon
Sterling Jewelers, Inc.
before the Court is Defendant Sterling Jewelers, Inc.'s
(“Sterling”) Motion to Dismiss with Prejudice, or
Alternatively, Stay Proceedings Pending Submission to
Mandatory Arbitration (ECF No. 3), which the Court will
construe as a Motion to Dismiss or Stay and Compel
Arbitration. The Motion is ripe for disposition, and no
hearing is necessary. See Local Rule 105.6 (D.Md.
2016). For the reasons outlined below, the Court will grant
Janvier S. Gordon is an African-American male who was a store
manager and full-time sales representative for Sterling at
locations in Delaware, Maryland, and Texas. (Compl.
¶¶ 1, 12, 15, 41, ECF No. 1). Prior to starting
at Sterling in August 2013, Gordon signed an agreement to
submit employment-related claims to Sterling's RESOLVE
program, which culminates in mandatory arbitration (the
“Arbitration Agreement” or
“Agreement”). (Id. ¶ 11; Def.'s
Mem. Supp. Mot. to Dismiss Ex. A [“Arbitration
Agmt.”], ECF No. 3-3). While a manager at
Sterling's Frederick, Maryland store, Gordon's staff
racially and sexually harassed him on an ongoing basis.
(Compl. ¶¶ 19-23). When Gordon reported these
incidents of harassment to his managers, they counseled him,
demoted him, and denied him relocation expenses when he was
transferred to a Texas store. (Id. ¶ 82).
Because of these actions, he resigned in January 2015.
(See id. ¶¶ 56-58). In June 2015, Gordon
filed a claim with the RESOLVE program. (Gordon Decl. ¶
20, ECF No. 4-1). Gordon also filed a claim with the Equal
Employment Opportunity Commission (“EEOC”) at an
unspecified time and received his right to sue letter on
November 30, 2016. (Compl. ¶ 5).
February 26, 2017, Gordon sued Sterling, alleging one count
of race discrimination, one count of sex discrimination, and
one count of retaliation all in violation of the Civil Rights
Act of 1964, 42 U.S.C. § 2000e et seq. (2012).
(ECF No. 1). Gordon seeks monetary damages and declaratory
relief. (Compl. ¶ 83). Sterling filed its Motion to
Dismiss with Prejudice, or Alternatively, Stay Proceedings
Pending Submission to Mandatory Arbitration on April 21,
2017. (ECF No. 3). On May 5, 2017, Gordon filed his
Opposition. (ECF No. 4). On May 31, 2017, Sterling filed its
Reply. (ECF No. 9). Gordon filed his Surreply on June 27,
2017. (ECF No. 12). Sterling filed its Final Reply on June
30, 2017. (ECF No. 15).
Federal Arbitration Act (the “FAA”) codifies a
strong federal policy favoring arbitration. Moses H. Cone
Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1,
24-25 (1983). As a result, the FAA provides that written
agreements to arbitrate “shall be valid, irrevocable,
and enforceable, ” unless there is a basis to revoke
the contract. 9 U.S.C. § 2 (2012). Under the FAA, a
court may compel arbitration if the parties agreed in writing
to arbitrate the dispute. Bey v. Midland Credit Mgmt.,
Inc., No. GJH-15-1329, 2016 WL 1226648, at *3 (D.Md.
Mar. 23, 2016) (quoting Adkins v. Labor Ready, Inc.,
303 F.3d 496, 500-01 (4th Cir. 2002)). A court decides as a
matter of contract whether the parties agreed to arbitrate a
particular dispute. Id. (quoting Johnson v.
Circuit City Stores, 148 F.3d 373, 377 (4th Cir. 1998)).
to compel arbitration “exist in the netherworld between
a motion to dismiss and a motion for summary judgment.”
Shaffer v. ACS Gov't Servs., Inc., 321 F.Supp.2d
682, 683 (D.Md. 2004). If the parties dispute the validity of
an arbitration agreement, motions to compel arbitration
“are treated as motions for summary judgment.”
Bey, 2016 WL 1226648, at *4 (quoting Rose v. New
Day Fin., LLC, 816 F.Supp.2d 245, 251 (D.Md. 2011)). In
this case, Gordon contests the Arbitration Agreement's
enforceability. Accordingly, the Court will review
Sterling's Motion using the summary judgment standard.
See Shaffer, 321 F.Supp.2d at 684.
this standard, a court will grant a motion to compel
arbitration “if the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Bey,
2016 WL 1226648, at *4 (quoting Fed.R.Civ.P. 56(a)). In
considering the motion, a court must “view the evidence
in the light most favorable to . . . the nonmovant, and draw
all reasonable inferences in h[is] favor.” Id.
(alteration in original) (quoting Dennis v. Columbia
Colleton Med. Ctr., Inc., 290 F.3d 639, 645 (4th Cir.
2002)). But, as in all cases, the court must also
“abide by the ‘affirmative obligation of the
trial judge to prevent factually unsupported claims and
defenses from proceeding to trial.'” Id.
(quoting Bouchat v. Balt. Ravens Football Club,
Inc., 346 F.3d 514, 526 (4th Cir. 2003)).
contends that all of Gordon's claims are subject to the
Arbitration Agreement, and Gordon does not dispute this
contention. Instead, Gordon argues that he should not
be required to arbitrate his claims because Sterling
materially breached the Agreement and breached the covenant
of good faith and fair dealing. Gordon also argues that the
Arbitration Agreement is unconscionable.
asserts that Sterling materially breached the Arbitration
Agreement by choosing to arbitrate in Texas. Courts have
defined a material breach as one that “violates a term
essential to the purpose of the contract.” Price v.
KNL Custom Homes, Inc., 28 N.E.3d 640, 651 (Ohio Ct.
App. 2015); see also Sachs v. Regal Sav. Bank, 705
A.2d 1, 4 (Md.Ct.App. 1998), aff'd sub nom. Regal
Sav. Bank, FSB v. Sachs, 722 A.2d 377 (Md.
1999). Here, the Arbitration Agreement provides
that “[a]bsent any undue hardship as determined by
arbitrator, the arbitration shall occur near where Employee
worked for Sterling.” (Arbitration Agmt.). Gordon
worked for Sterling in Delaware, Maryland, and, most
recently, Texas, making Texas a viable arbitration location
under the terms of the Agreement. Thus, the Court concludes
that there is no genuine dispute of material fact that
Sterling did not materially breach the Agreement.
of Good Faith and Fair Dealing
claims that Sterling breached the covenant of good faith and
fair dealing when it unilaterally selected Midland, Texas as
the arbitration location in an attempt to make arbitration
prohibitively expensive, thereby forcing Gordon to withdraw
his claim. The covenant of good faith and fair dealing
requires a party to “do everything that the contract
presupposes they will do to accomplish its purpose.”
Questar Builders, Inc. v. CB Flooring, LLC, 978 A.2d
651, 675 (Md. 2009) (quoting Photovest Corp. v. Fotomat
Corp., 606 F.2d 704, 728 (7th Cir. 1979)). But the duty
of good faith and fair dealing does not “interpose new
obligations about which the contract is silent, even if
inclusion of the obligation is thought to be logical and
wise.” E. Shore Mkts., Inc. v. J.D. Assocs. Ltd.
P'ship, 213 F.3d 175, 184 (4th Cir. 2000). Rather,
the only obligations required are ones “inherent in
expressed promises.” Id.
discussed above, the Agreement provides that “the
arbitration shall occur near where Employee worked for
Sterling” absent the arbitrator finding undue hardship.
(Arbitration Agmt.). Therefore, Sterling's only
obligation under the Agreement was to arbitrate near where
Gordon worked for Sterling-Texas-unless the arbitrator
determined otherwise. Indeed, Sterling's RESOLVE
coordinator identified Midland, Texas as the location for
arbitration because it was Gordon's most recent work
location. (Gordon Decl. Ex. 1 at 4). Gordon withdrew from
arbitration before the parties selected an arbitrator, and
therefore he never argued to the arbitrator that arbitration
in Texas caused him undue hardship. (See id. at 5).
Although it may seem “logical or wise” that
Gordon should be permitted to arbitrate in a more
cost-effective location without the arbitrator's hardship
determination, those were not the terms that Gordon and
Sterling agreed to. See E. Shore Mkts., 213 F.3d at
184. Thus, the Court concludes that there is no genuine
dispute of material fact that Sterling did not breach the
covenant of good faith and fair dealing.