Dunn v. JPMorgan Chase Bank, N.A.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

ANGELA DUNN, CIVIL ACTION

Plaintiff

VERSUS NO. 20-483

JPMORGAN CHASE BANK, N.A. SECTION: “E”

Defendant

ORDER AND REASONS

Before the Court is Defendants’ motion to dismiss under Federal Rule of Civil

Procedure 12(b)(1) or Rule 12(b)(3) and to compel arbitration.1 For the following reasons,

Defendants’ motion is GRANTED.

BACKGROUND

Plaintiff Angela Dunn, individually and on behalf all others similarly situated,

brings an employment discrimination claim under 42 U.S.C. § 1981 against her former

employer, Defendant JPMorgan Chase Bank.2 Chase moves to dismiss Dunn’s claim and

compel arbitration pursuant to Dunn’s agreement to submit employment-related

disputes to binding arbitration.

LEGAL STANDARD

“Arbitration is a substitute for litigation whose purpose is to settle the parties’

differences in a fast, inexpensive manner and in a tribunal chosen by them.”3 “When a

party to a lawsuit claims that the matter is subject to arbitration, it must be determined

whether there is a valid agreement to arbitrate between the parties and whether the

1 R. Doc. 6. Plaintiff opposed the motion. R. Doc. 21. Defendant filed a reply. R. Doc. 23.

2 R. Doc. 1.

3 Hanlon v. Monsanto Ag Prod., LLC, 48,010 (La. App. 2 Cir. 10/9/13), 124 So. 3d 535, 539 (citing Tubbs

Rice Dryers, Inc. v. Martin, 44,800 (La.App.2d Cir.2/24/10), 33 So.3d 926, recons. denied, 2010–1105

(La.4/29/11), 62 So.3d 105).

dispute falls within the scope of the arbitration agreement.”4

“Louisiana and federal law explicitly favor the enforcement of arbitration clauses

in written contracts.”5 The Louisiana Binding Arbitration Law provides:

A provision in any written contract to settle by arbitration a controversy

thereafter arising out of the contract, or out of the refusal to perform the

whole or any part thereof, 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.6

Ordinary state-law principles that govern the formation of contracts are applied when

deciding whether the parties agreed to arbitration.7 “Louisiana law does not require that

[a] written arbitration agreement be signed by the parties.”8 “Any doubt as to whether a

controversy is arbitrable should be resolved in favor of arbitration.”9

FACTS

To determine whether personal jurisdiction is lacking under Rule 12(b)(1) or that

venue is improper under Rule 12(b)(3), the Court may consider, “(1) the complaint alone;

(2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the

complaint supplemented by undisputed facts plus the court’s resolution of disputed

facts.”10 The Court finds the following facts are undisputed based on Dunn’s complaint,11

a copy of Chase’s Binding Arbitration Agreement,12 and a photocopy of the offer letter

4 Id.

5 Duhon v. Activelaf, LLC, 2016-0818 (La. 10/19/16).

6 La. R.S. 9:4201.

7 Duhon v. Activelaf, LLC, 2016-0818 (La. 10/19/16).

8 Id. (citing Marino v. Dillard's, Inc., 413 F.3d 530, 532 (5th Cir. 2005)).

9 Woodson Const. Co. v. R.L. Abshire Const. Co., 459 So. 2d 566, 569 (La. Ct. App. 1984) (citing United

Steelwks. of Am. v. Warrior and Gulf N. Co., 363 U.S. 574 (1960); American Dairy Queen Corp. v.

Tantillo, 536 F.Supp. 718 (M.D. La.1982)).

10 Ballew v. Continental Airlines, Inc., 668 F.3d 777, 781 (5th Cir. 2012).

11 R. Doc. 1.

12 R. Doc. 6-2.

Angela Dunn signed before beginning her employment with Chase.13

On June 10, 2011, Chase provided Dunn an offer letter for employment as a

personal banker at its Gentilly Woods location in New Orleans, Louisiana.14 This offer

letter stated the offer of employment was contingent on Dunn accepting a Binding

Arbitration Agreement (BAA) and contained the following “arbitration clause”:

I understand my employment is subject to my and JPMorgan Chase’s

agreement to submit employment-related disputes that cannot be resolved

internally to binding arbitration, as set forth in the Binding Arbitration

Agreement. <http://www.jpmorganchase.com/pdfdoc/JPMCArb

Agreement>. By signing below, I acknowledge and agree that I have read

and understand the Binding Arbitration Agreement, have accepted its terms

and understand that it is a condition of my employment with JPMorgan

Chase.15

This language was set off from the rest of the offer letter by a bold, underlined heading

and required Dunn’s separate signature of affirmation.16 On June 15, 2011, Dunn signed

the offer letter and signed the separate affirmation within the offer letter stating that she

read and understood the BAA.17

The BAA requires Dunn to submit “[a]ny and all ‘Covered Claims’” to arbitration

under the terms of the BAA.18 The BAA defines the term Covered Claims to include all

claims that relate to Dunn’s employment with Chase including but not limited to all claims

for “violations of . . . Section 1981 of the Civil Rights Act” and all “claims of employment

discrimination.”19 With respect to class action suits, the BAA states, “All Covered Claims

under this Agreement must be submitted on an individual basis. No claims may be

13 R. Doc. 6-4.

14 Id.

15 Id.

16 Id.

17 R. Doc. 6-4.

18 R. Doc. 6-2.

19 Id. at 1.

arbitrated on a class or collective basis unless required by applicable law. Covered Parties

expressly waive any right with respect to any Covered Claims to submit, initiate, or

participate in a representative capacity or as a plaintiff, claimant or member in a class

action, collective action, or other representative or joint action, regardless of whether the

action is filed in arbitration or in court.”20

Dunn asserts that, although she signed the offer letter during a meeting with

Chase’s hiring manager, she was not made aware of the contents of the BAA. Dunn claims

she was not provided a hard copy of the BAA.21 It is undisputed that the BAA was only

accessible through the web address contained in the offer letter.22 Dunn claims, however,

that she did not have the opportunity to look up this web address before signing the offer

letter and she was not given a copy of the letter to take home with her or review.23 She

argues it was only after receiving Chase’s motion to compel arbitration that she learned

the web address was to a separate, more detailed arbitration agreement.24

LAW AND DISCUSSION

Two considerations determine whether a particular dispute must be subject to

arbitration: “(1) whether there is a valid agreement to arbitrate between the parties; and

(2) whether the dispute in question falls within the scope of that arbitration agreement.”25

In her offer letter, and in the BAA incorporated by reference, Dunn agreed to arbitrate

disputes arising from her employment with Chase, including claims under 42 U.S.C. §

1981. In the BAA, Dunn also agreed “[n]o claims may be arbitrated on a class or collective

20 Id. at 2.

21 R. Doc. 21-1 ¶ 6.

22 R. Doc. 6-4.

23 R. Doc. 21-1 ¶¶ 8, 10.

24 Id. ¶ 6.

25 Wieland v. Shreveport Aquarium, LLC, 53,302 (La. App. 2 Cir. 11/6/19).

basis unless required by applicable law” and that she cannot “participate in a

representative capacity or as a plaintiff, claimant or member in a class action, collective

action, or other representative or joint action, regardless of whether the action is filed in

arbitration or in court.”26 Accordingly, the Court will compel arbitration of Dunn’s instant

employment-related dispute with Chase to the extent she brings it individually. Dunn may

not serve as a class representative or bring her claim against Chase on a class or collective

basis.

I. Dunn’s Offer Letter and the BAA Contain Valid Agreements to

Arbitrate.

Under Louisiana law, “[a] contract is an agreement by two or more parties whereby

obligations are created, modified, or extinguished.”27 “Four elements are required for a

valid contract: (1) capacity to contract; (2) mutual consent; (3) a lawful cause; (4) and an

object that is lawful, possible, and determined or determinable.”28 The party claiming the

existence of a contract bears the burden of proof.29

There are two contract clauses at issue in this case. One is the arbitration clause in

Dunn’s offer letter, which the parties agree Dunn signed before beginning her

employment with Chase.30 The second is the BAA, which the parties agree was referenced

in Dunn’s offer letter. With respect to both of these contracts, the only contested

contractual element is mutual consent.31

26 R. Doc. 6-2, at 2.

27 LA. CIV. CODE art. 1906.

28 Henry v. New Orleans Louisiana Saints L.L.C., No. CV 15-5971, 2016 WL 2901775, at *5 (E.D. La. May

18, 2016) (citing Granger v. Christus Health Cent. La., 144 So. 3d 736, 760-61 (La. 2013); LA. CIV. CODE

arts. 1918, 1927, 1966, 1971).

29 LA. CIV. CODE art. 1831

30 R. Doc. 6-4; R. Doc. 21-1 ¶ 4.

31 The parties do not dispute that they had capacity to contract. Louisiana law presumes that all persons

have capacity to contract, except unemancipated minors, interdicts, and persons deprived of reason at the

time of contracting. LA. CIV. CODE art. 1918. The parties also do not dispute that Dunn’s employment

contract concerned a lawful cause. “Employment [is a] valid cause of [a] contract.” Cellular One, Inc. v.

A. Dunn consented to the arbitration clause in her offer letter.

“[M]utual consent is established through offer and acceptance.”32 In Henry v.

New Orleans Louisiana Saints L.L.C., another section of this court found the parties

mutually consented to an arbitration agreement as a condition of the plaintiff’s

employment with the defendant because the parties signed the agreement and the

plaintiff continued employment after receiving the arbitration agreement.33 “[I]t 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 he did not read it, that he did not

understand it, or that the other party failed to explain it to him.”34

Dunn’s consent to the terms of the offer letter—including the arbitration clause—

is most clearly evidenced by Dunn’s two signatures on the offer letter. Moreover, as in

Henry, Dunns’ consent also is evidenced by her employment with Chase after receiving

and signing the offer letter. Dunn “cannot avoid [the] obligations [of her offer letter] by

contending that [s]he did not read it, that [s]he did not understand it, or that the other

party failed to explain it to [her].”35 As a result, the Court finds the parties mutually

consented to the terms of Dunn’s offer letter, and the arbitration clause in Dunn’s offer

letter is enforceable.

B. Dunn consented to the terms of the BAA.

Dunn did not directly sign the BAA. Nevertheless, Dunn’s consent to the terms of

Boyd, 653 So. 2d 30, 34 (La. App. 1 Cir. 1995). Finally the parties do not dispute the dispute the legality of

the contractual object to arbitrate. “The objects of a contract are the specific actions the parties must

undertake to comply with the contract.” Henry, 2016 WL 2901775, at *5 (citing La. Civ. Code art. 1971).

Because Louisiana law favors arbitration, “the act of submitting disputes to arbitration is a valid contractual

object.” Id.

32 Id. (citing LA. CIV. CODE art. 1927.)

33 Henry, 2016 WL 2901775, at *5.

34 Aguillard v. Auction Mgmt. Corp., 908 So.2d 1, 17 (La. 2005).

35 Id.

the BAA is demonstrated by her signature of the offer letter because the offer letter

incorporated the BAA by reference. Further, the BAA is not a contract of adhesion to

which Dunn did not meaningfully consent.

1. The BAA was properly incorporated by reference in Dunn’s

offer letter.

Louisiana case law “allow[s] an arbitration agreement to apply if ‘an arbitration

clause is incorporated by reference to another written contract.’”36 The incorporation of

an arbitration clause by reference to another written contract is a suitable method of

evidencing the parties’ intent to arbitrate as long as the arbitration clause in the contract

referred to has a “reasonably clear and ascertainable meaning.”37 If a contract

unambiguously incorporates by reference an arbitration agreement, it is not necessary to

discuss issues of intent.38

Louisiana courts often have enforced arbitration clauses incorporated by reference

in a contract. For example, in Star Transportation, Inc. v. Pilot Corp., the Louisiana

Fourth Circuit determined a signed note incorporated by specific reference a Direct Bill

Agreement and held the parties’ signature of the note evidenced their awareness of an

arbitration provision in the Direct Bill Agreement.39 Similarly, in Lamarque v. Barbara

Enterprises, Inc., the Louisiana Fourth Circuit determined that, because a party is

deemed to know the contents of a signed written instrument and cannot avoid his or her

obligations by claiming he or she did not read it or was not aware of its contents, the

36 Dufrene, 03–2201, p. 5–6, 872 So.2d at 1211 (quoting Woodson Const. Co. v. R.L. Abshire Const. Co., 459

So.2d 566, 569 (La.App. 3rd Cir.1984)).

37 Woodson Const. Co. v. R.L. Abshire Const., 459 So.2d 566 (La. Ct. App. 1984) at 569, citing J.S. & H

Construction Co. v. Richmond County Hospital Auth., 473 F.2d 212 (5th Cir. 1973).

38 Russellville Steel Co. v. A & R Excavating, Inc., 624 So. 2d 11, 13 (La. Ct. App. 1993).

39 2014-1228 (La. App. 4 Cir. 6/24/15), 171 So. 3d 1195, 1204, writ denied, 2015-1446 (La. 11/16/15), 184 So.

3d 26.

parties were bound by an arbitration agreement incorporated only by reference in a

contract.40

By the second signature on her offer letter, Dunn clearly affirmed she read,

understood, and agreed to the BAA. Accordingly, the Court finds Dunn consented to the

terms of the BAA as it was incorporated by reference in the offer letter, and the BAA is an

enforceable contract. Again, “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 he

did not read it, that he did not understand it, or that the other party failed to explain it to

him.”41

2. The BAA is not a contract of adhesion.

Dunn’s primary objection to the enforceability of the BAA is that it is an

unenforceable contract of adhesion to which she did not meaningfully consent. Aguillard

v. Auction Management Corp., is the seminal Louisiana case addressing the validity of an

arbitration agreement under a “contract of adhesion” analysis.42 In that case, the

Louisiana Supreme Court held a contract of adhesion is usually a standard form contract,

in small print, prepared by a party with superior bargaining power and presented to a

weaker party for acceptance or rejection.43 The court recognized, however, that not all

standard form contracts are adhesionary; a standard form is instead merely a “possible

indicator of adhesion.”44 In applying the Aguillard standard, courts focus on (1) the

physical characteristics of the arbitration clause, (2) the distinguishing features of the

arbitration clause, (3) the mutuality of the arbitration clause, in terms of the relative

40 Lamarque v. Barbara Enterprises, Inc., 2006-1422 (La. App. 4 Cir. 4/25/07), 958 So. 2d 708.

41 Aguillard v. Auction Mgmt. Corp., 908 So.2d 1, 17 (La. 2005).

42 Id. at 10.

43 Id.

44 Id.

burdens and advantages conferred by the clause upon each party, and (4) the relative

bargaining strength of the parties.45

Dunn argues the BAA is an unenforceable contract of adhesion because it was

“concealed.” Specifically, she claims she was not provided a hard copy of the BAA46 and

was not given the opportunity to look up the web address to the BAA either before or after

signing her offer letter.47 Dunn asserts it was only after receiving Chase’s motion to

compel arbitration that she learned the web address was to a separate arbitration

agreement.48

Even assuming Dunn’s allegations are true, the Court does not find the BAA is an

unenforceable contract of adhesion. First, the BAA was not concealed through means such

as small type or failing to set sections of text off from one another. In Sutton Steel &

Supply, Inc. v. BellSouth Mobility, Inc., the Louisiana Third Circuit held an arbitration

clause was not enforceable because it had been concealed in the contract through

vanishingly small type and was not sufficiently distinguished from other clauses.49

This case bears no resemblance to Sutton Steel. Neither the statement in the offer

letter referring to the BAA nor the BAA itself is set in unreasonably small type or otherwise

hidden. In fact, the arbitration provision in the offer letter is set off from the rest of the

text with a bold, underlined heading and, as stated many times, required Dunn’s separate

signature of affirmation. As Dunn points out, the BAA is single spaced, but it is not

45 Sutton Steel & Supply, Inc. v. BellSouth Mobility, Inc., 2007-146 (La. App. 3 Cir. 12/12/07), 971 So. 2d

1257, 1266, writ denied, 2008-0094 (La. 3/14/08), 977 So. 2d 931; see also Hanlon v. Monsanto Ag Prod.,

LLC, 48,010 (La. App. 2 Cir. 10/9/13), 124 So. 3d 535, 540.

46 Id. ¶ 6.

47 R. Doc. 21-1 ¶¶ 8, 10.

48 R. Doc. ¶ 6.

49 Id.

otherwise conciliatory, and the single spacing does not render it illegible.50

Second, Chase’s alleged failure to provide a hard copy of the BAA to Dunn did not

“conceal” the BAA from her. In Cowan v. Morgan Keegan & Co., Inc., the plaintiff signed

a disclosure statement stating an account of his was “covered by a predispute arbitration

agreement which is located in paragraphs 19 and 20 of the Client Agreement located on

the reverse side of this page.”51 The disclosure statement, however, had been sent by

facsimile and did not have a Client Agreement on the reverse side.52 In fact, the plaintiff

testified he “never saw or received” the Client Agreement when he executed the disclosure

statement.53 Nevertheless, because the plaintiff “signed a document that made specific

reference to an arbitration agreement,” the District Court for the Western District of

Louisiana deemed him “to know the contents of the document to which he affixed his

signature.”54 The court stated the “document gave him information by which he could

have easily requested and obtained a copy of the Client Agreement and arbitration

provision, giving the arbitration clause a reasonably clear and ascertainable meaning.”

Similarly, in Alfortish v. GreenSky, LLC, the plaintiffs signed a “GreenSky

Authorization Form” that incorporated by reference a “GreenSky Installment Loan

Agreement” that contained an arbitration provision.55 The plaintiffs argued they should

not be bound by the arbitration provision because they never received a copy of the

“GreenSky Installment Loan Agreement.” Another section of this court disagreed with the

plaintiffs and observed, “[w]hether Plaintiffs received the ‘GreenSky Installment Loan

50 See R. Doc. 64-4.

51 No. 09-CV-1644, 2010 WL 5103064, at *5 (W.D. La. Nov. 18, 2010), report and recommendation

adopted, No. 09-CV-1644, 2010 WL 5141340 (W.D. La. Dec. 1, 2010).

52 Id.

53 Id. at *1.

54 Id. at *5.

55 No. CV 16-15084, 2017 WL 699830, at *6 (E.D. La. Feb. 22, 2017).

Agreement’ before they signed the authorization form, after they signed the authorization

form, or never, it cannot be denied that they signed a statement acknowledging receipt of

the loan agreement and thereby agreed to be bound by the loan agreement’s terms and

conditions.”56 The court further stated, “if they signed that form, they agreed to be bound

by the terms and conditions in the loan agreement. If they did not have a copy of the loan

agreement, they could have easily requested a copy. Thus, we find that there was a valid

agreement to arbitrate.”57

For the reasons stated by the courts in Cowan and Alfortish, Dunn bound herself

to the terms of the BAA by signing and affirming she read, understood, and agreed to its

terms, regardless of whether she actually reviewed it. Before affirming she read,

understood, and agreed to the BAA, it was Dunn’s duty to either request a hard copy or

review the agreement on the website. The Court will not penalize Chase for Dunn’s failure

to request a copy of the agreement because she signed a false affirmation that she had

read, understood, and agreed to the BAA.

II. The Offer Letter and BAA Require Arbitration of Dunn’s Dispute.

The offer letter alone, even if there were no BAA referenced, contains a sufficient

“provision in a[] written contract to settle by arbitration a controversy thereafter arising

out of the contract.”58 In Henry, another section of this court found an employee agreed

to arbitrate employment disputes by signing an agreement stating “I agree that all matters

in dispute between myself and the Club shall be referred to the Commissioner for binding

arbitration.”59 The arbitration clause in Dunn’s offer letter is just as clearly a “provision

56 Id. at *6.

57 Id. at *7.

58 La. R.S. 9:4201.

59 No. CV 15-5971, 2016 WL 2901775, at *5 (E.D. La. May 18, 2016).

in a[] written contract to settle by arbitration a controversy thereafter arising out of the

contract.”60 The letter states, “I understand my employment is subject to my and JP

Morgan Chase’s agreement to submit employment-related disputes that cannot be

resolved internally to binding arbitration.”61 Again, Dunn specifically affirmed that clause

by a second signature. Accordingly, the Court finds the arbitration clause in Dunn’s offer

letter requires Dunn to arbitrate her instant employment-related dispute.

The BAA provides additional detail with respect to the scope of the agreement.

Under the BAA, Dunn must submit to arbitration “[a]ny and all ‘Covered Claims,’”

including but not limited to all claims for “violations of . . . Section 1981 of the Civil Rights

Act” and all “claims of employment discrimination.”62 Dunn’s claim under § 1981 is

squarely within the scope of the BAA.63

Finally, it is well established that claims for racial discrimination, including § 1981

claims, are arbitrable.64 The case Dunn cites in support of her argument to the contrary,

60 La. R.S. 9:4201; see also Bartley, Inc. v. Jefferson Par. Sch. Bd., 302 So. 2d 280, 282 (La. 1974) (“The

Bartley-School Board contract contains a general clause in Article 7, Section 10.12 providing for arbitration

of ‘(a)ll claims, disputes and other matters in question arising out of, or relating to, this Contract or the

breach thereof.’ A reading of the subcontract between Bartley and American unquestionably shows that

these parties incorporated by reference the Bartley-School Board contract and thus intended to be governed

by its arbitration provisions.”).

61 R. Doc. 6-4, at 4–5.

62 R. Doc. 6-2.

63 Several courts have required parties to arbitrate their claims based on nearly identical arbitration

agreements. See, e.g., JPMorgan Chase & Co. v. Custer, No. 15-cv-6288, 2016 WL 927339, at *1 (D.N.J.

Mar. 10, 2016) (granting motion to compel when “[r]espondent signed the ‘Binding Arbitration Affirmation’

in his offer letter”); Ryan v. JPMorgan Chase & Co., 924 F. Supp. 2d 559, 566 (S.D.N.Y. 2013) (requiring

parties to arbitrate when offer letter had binding arbitration affirmation with link); Newhall v. Chase Home

Fin. LLC, No. 10-2624-T-26EAJ, 2010 WL 8759340, at *2 (M.D. Fla. Dec. 22, 2010) (holding that “the FAA

and binding and authoritative 4 legal precedent mandate that Plaintiff’s [FLSA] claim be compelled to

arbitration” when offer letter contained binding arbitration affirmation).

64 EEOC v. Waffle House, Inc., 534 U.S. 279, 299 ((2002) (“Neither does the Court contest that claims

arising under federal employment discrimination laws . . . may be subject to compulsory arbitration”)

(Thomas, J., dissenting); Alford v. Dean Witter Reynolds, Inc., 939 F.2d 229, 230 (5th Cir. 1991) (“[W]e

have little trouble concluding that Title VII claims can be subjected to compulsory arbitration. Any broad

public policy arguments against such a conclusion were necessarily rejected by Gilmer.”); Willis v. Cleco

Corp., 749 F.3d 314, 317 (5th Cir. 2014) (“The legal framework governing [Title VII and § 1981] claims is

coextensive.”); Henry v. New Orleans Louisiana Saints L.L.C., CV 15-5971, 2016 WL 2901775, at *11 (E.D.

La. May 18, 2016) (holding “no federal statute or policy renders Plaintiff’s [§ 1981] claims nonarbitrable”).

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., is inapposite.® In that case,

the Supreme Court held that a particular antitrust dispute was subject to arbitration

under the Arbitration Act. It has nothing to do with the arbitrability of § 1981 claims.

The Court finds Dunn’s § 1981 claims against Chase arising from her employment

with Chase are subject to arbitration pursuant to the arbitration clause in her offer letter

and the terms of the BAA. Further, the Court finds that, pursuant to the BAA, Dunn

cannot act as a class representative and bring her claims against Chase on a class or

collective basis.

CONCLUSION

For the foregoing reasons, IT IS ORDERED that Defendants’ motion to compel

arbitration is GRANTED,” that Plaintiff Angela Dunn is directed to submit to

arbitration any individual claims she wishes to pursue, that this case is stayed, and that

the Clerk of Court administratively close this case, subject to the right of any party to file

a motion to reopen based on good cause.

New Orleans, Louisiana, this 27th day of April, 2020.

UNITED STATES DISTRICT

65 473 U.S. 614 (1985).

66 Td,

67 R. Doc. 6.

13