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Farmer v. Macy's, Inc.

United States District Court, D. Maryland

October 10, 2019

MONICA FARMER, Plaintiff,
v.
MACY'S, INC. and MACY'S RETAIL HOLDINGS, INC., Defendants.

          MEMORANDUM OPINION

          THEODORE D. CHUANG UNITED STATES DISTRICT JUDGE

         Monica Farmer, a former employee of Macy's, Inc., has filed this civil action against Macy's, Inc. and Macy's Retail Holdings (collectively, "Macy's") in which she alleges discrimination on the basis of age, in violation of the Age Discrimination in Employment Act of 1967 ("ADEA",, 29 U.S.C. SS 621-634 (2018), and on the basis of race, in violation of 42 U.S.C. § 1981 (2012). Pending before the Court is Defendants' Motion to Compel Arbitration and Dismiss, or Alternatively Stay, the Proceeding.. Having reviewed the submitted materials, the Court finds that no hearing is necessary. See D. Md. Local R. 105.6. For the reasons set forth below, the Motion is GRANTED.

         BACKGROUND

         Monica Farmer began working at the Macy's department store in Alexandria, Virginia on February 17, 2011. According to Farmer, during her employment at Macy's, she was subjected to discrimination, harassment,, and a hostile work environment on the basis of age and race. This alleged mistreatment culminated in the termination of her employment on November 5, 2015.

         Throughout Farmerss employment at the Alexandria, Virginia location, Macy's used a four-step employee dispute resolution system called Solutions InSTORE ("SIS"). The first three steps of the program are internal to Macy's, allowing employees to raise complaints with, respectively, a local supervisor, the regional Office of Senior Human Resources Management, and the Office of Solutions InSTORE. The fourth step consists of binding arbitration through the American Arbitration Association. Macy's employees are deemed to have agreed to the fourth step, and thereby to have forfeited the right to bring employment disputes in state or federal court, unless they opt out of binding arbitration at the outset of their employment. Specifically, new employees receive from Macy's a New Hire Brochure that includes an opt-out form that, to be effective, must be completed and mailed back to the Office of Solutions InSTORE within 30 days of starting employment at Macy's. The opt-out form, and several other documents in the new hire packet, provide that to opt out of arbitration, an employee must mail the form to a specific address in Ohio. In particular, new hires must electronically sign a form ("the Acknowledgment Form") acknowledging that they have received the SIS documents and affirming that "I understand that if I do not wish to be covered by Step 4, Arbitration, the only way to notify the Company about my choice is by postmarking my election form within 30 days of hire and mailing it to the Office of Solutions InSTORE." Acknowledgment Form, Reply Mot. Compel Arbitration Ex. I at 91, ECF No. 72-1.

         Farmer initiated a Step 1 complaint on January 6, 2015 and then pursued this complaint through Steps 2 and 3. While it is unclear what results Steps 1 and 2 produced, at Step 3 her complaints were denied by Cindy Ripak, the Senior Manager of SIS, who informed Farmer that after investigation, she was not able to substantiate Farmerss claims of "harassment, discrimination and defamation of character." Ripak Letter (Dec. 22, 2055), Opp'n Mot. Compel Arbitration Ex. 5, ECF No. 60-ll.

         After the completion of the third SIS step in December 2015, Macy's informed Farmer that if she was not satisfied with this resolution, she could proceed to arbitration. Instead, however, on July 21, 206,, Farmer filed an adversary proceeding against Macy's relating to this issue as part of the proceedings on her personal bankruptcy in the United States Bankruptcy Court for the District of Maryland. In February 2017, Farmer filed a motion to withdraw the reference from the bankruptcy court. After the motion was granted, Farmer filed the currently operative Amended Complaint in this Court. Macy's then filed a Motion to Dismiss, which was granted in February 2019 as to Farmerss Americans with Disabilities Act claims. Macy's has now filed the pending Motion to Compel Arbitration and Dismiss, or Alternatively Stay, the Proceeding..

         DISCUSSION

         Macy's claims that Farmer "previously agreed to have all employment-related legal disputes with Defendants resolved exclusively by final and binding arbitration under the Solutions InSTORE Program" and so asks this Court to "compel Plaintiffs claims to arbitration" and "dismiss this action." Mot. Compel Arbitration 1-2, ECF No. 55-1. Farmer disputes the claim that she agreed to arbitration and that the arbitration agreement encompasses her discrimination claims.

         I. Legal Standard

         Judges in this District have recognized that "motions to compel arbitration exist in the netherworld between a motion to dismiss and a motion for summary judgment." Caire v. Conifer Value Based Care, LLC, 982 F.Supp.2d 582, 589 (D. Md. 2013) (quoting Shaffer v. ACS Gov't Servs., Inc., 321 F.Supp.2d 682, 683 (D. Md. 2004)); PC Canst. Co. v. City of Salisbury, 871 F.Supp.2d 475, 477 (D. Md. 2012). Treating a motion to compel arbitration as a motion for summary judgment is proper where "the formation or validity of the arbitration agreement is in dispute," Caire, 982 F.Supp.2d at 589, or where documents outside the pleadings must be considered "to effectively assess the merits of [the] motion," Shaffer v. ACS Gov 't Servs., Inc., 321 F.Supp.2d 682, 683-84 (D. Md. 2004); accord PC Const. Co., 871 F.Supp.2d at 477 ("Whether the motion [to compel arbitration] should be treated as a motion to dismiss or a motion for summary judgment turns on whether the court must consider documents outside the pleadings."). See also Galloway v. Santander Consumer USA, Inc., 819 F.3d 79, 85 & n.3 (4th Cir. 2016) (stating that under the Federal Arbitration Act, a party seeking a jury trial "must show genuine issues of material fact regarding the existence of an agreement to arbitrate," a standard that is "akin to the burden on summary judgment"" (quoting Chorley Enters. v. Dickey's Barbecue Rests., 807 F.3d 553, 564 (4th Cir. 2015))). Here, the Court will apply the summary judgment standard both because the parties dispute whether an arbitration agreement was formed and because resolving this dispute requires consideration of materials beyond the pleadings.

         Under Federal Rule of Civil Procedure 56(a), the Court grants summary judgment if the moving party demonstrates that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In assessing the Motion, the Court views the facts in the light most favorable to the nonmoving party, with all justifiable inferences drawn in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The Court may rely only on facts supported in the record, not simply assertions in the pleadings. Bouchat v. Bah. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003). A fact is "material" if it "might affect the outcome of the suit under the governing law." Anderson, 477 U.S. at 248. A dispute of material fact is only "genuine" if sufficient evidence favoring the nonmoving party exists for the trier of fact to return a verdict for that party. Mat 248-49.

         II. Arbitration Agreement

         Macy's asserts that Farmer agreed to be bound by arbitration because at the time she was hired, she accepted the Macy's SIS and failed to opt out of arbitration by mailing back the opt-out form within the allotted 30 days, as required by the terms of the SIS Acknowledgment Form and the opt-out form itself. Farmer, however, disputes that there was a mail-in requirement to opt out of arbitration and asserts that she completed a paper ...


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