Jones v. Michaels Stores, Inc.

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

TIFFANY Y. JONES CIVIL ACTION

VERSUS 18-948-SDD-SDJ

MICHAELS STORES, INC.

RULING

This matter is before the court on the Motion to Vacate, Correct, or Modify

Arbitration Award1 filed by Plaintiff Tiffany Y. Jones (“Jones”). Defendant Michaels

Stores, Inc. (“Michaels”) filed an Opposition.2 Michaels filed a Motion to Confirm

Arbitration Award,3 to which Jones filed an Opposition,4 and Michaels filed a Reply5

to which Jones filed a Sur-Reply.6 For the following reasons, the Court finds that

Jones’ Motion to Vacate7 shall be DENIED and Michaels’ Motion to Confirm8 shall be

GRANTED.

I. FACTS AND PROCEDURAL HISTORY

Jones was employed with Michaels, most recently as a Recruiter in Human

Resources, from November 28, 2016 until she was terminated on February 16, 2018.9

The reason provided by Michaels for her termination was poor performance after

1 Rec. Doc. 14.

2 Rec. Doc. 16.

3 Rec. Doc. 17.

4 Rec. Doc. 22.

5 Rec. Doc. 27.

6 Rec. Doc. 28.

7 Rec. Doc. 14.

8 Rec. Doc. 17.

9 Rec. Doc. 1 ¶4, 24.

60270

being placed on a Performance Improvement Plan (“PIP”).10 After Jones’ employment

with Michaels was terminated, Jones initiated arbitration (the “Patterson Arbitration”)

against Michaels on February 23, 2018, alleging that she was wrongfully terminated

in violation of Michaels’ employee handbook.11 During the course of the Patterson

Arbitration, Jones filed a Charge of Discrimination against Michaels with the Equal

Employment Opportunity Commission (“EEOC”), alleging race-based wrongful

termination, discrimination, and retaliation claims under Title VII.12 The EEOC issued

Jones a Notice of Right to Sue on July 30, 2018.13 Michael Patterson (“Patterson”),

the arbitrator for the Patterson Arbitration, granted a motion to dismiss under Rule

12(c) on September 10, 2018 (the “Patterson Order”), finding that Jones had not

alleged a contractual relationship with Michaels and thus was an employee at-will,

who could be dismissed at any time for any reason without imposing liability on the

employer.14

Subsequent to the Patterson Order, Jones instituted the present lawsuit,

bringing Title VII discrimination claims against Michaels.15 The parties agreed to stay

these proceedings while pending a second arbitration for Jones’ Title VII claims (the

“Pilie’ Arbitration”).16 The arbitrator for the Pilie’ Arbitration, Denise Pilie’ (“Pilie’”),

granted Michaels’ Motion for Summary Judgment on May 7, 2019, on the grounds of

10 Rec. Doc. 1 at ¶24, 26.

11 Rec. Doc. 14-1 p. 1; Rec. Doc. 16 p. 2.

12 Rec. Doc. 14-1 p. 1-2.

13 Id. at p. 2. By filing a Charge of Discrimination with the EEOC and receiving a Right to Sue letter, Jones

satisfied Title VII’s exhaustion requirement.

14 Rec. Doc. 14-1 p. 1-2; Rec. Doc. 14-8 p. 1; Rec. Doc. 16 p. 2. The arbitration order was confirmed by

Judge deGravelles on June 26, 2019. See Id.; Rec. Doc. 14-8; Rec. Doc. 16-2.

15 Rec. Doc. 1; Rec. Doc. 14-1 p. 2; Rec. Doc. 15-1 p. 2.

16 See Rec. Doc. 10; Rec. Doc. 12.

60270

res judicata due to the prior Patterson Arbitration (the “Pilie’ Order”).17 Jones now

moves to vacate this order, and Michaels moves to confirm it.

II. LAW AND ANALYSIS

A. Motion to Vacate Arbitration Award

Jones moves to vacate the Pilie’ Order, arguing that Pilie’ manifestly

disregarded the law when she dismissed Jones’ Title VII claims based on res judicata.

Michaels argues that “manifest disregard of the law” is no longer an independent

ground for vacatur, and even if it was, Pilie’ did not manifestly disregard the law.

Under the Federal Arbitration Act (“FAA”), district courts are vested with

jurisdiction to confirm arbitration awards upon application by a party to the

arbitration;18 however, this review is “extraordinarily narrow”19 and “exceedingly

deferential.”20 Section 10 of the FAA establishes four grounds for vacating an

arbitration award:

(1) Where the aware was procured by corruption, fraud, or

undue means;

(2) Where there was evident partiality or corruption in the

arbitrators, or either of them;

(3) Where the arbitrator was guilty of misconduct in refusing

to postpone the hearing, upon sufficient cause shown, or in

refusing to hear evidence pertinent and material to the

controversy; or of any other misbehavior by which the rights

of any party have been prejudiced; or

17 See Rec. Doc. 14-9.

18 9 U.S.C. § 9.

19 McKee v. Home Buyers Warranty Corp. II, 45 F.3d 981, 983 (5th Cir. 1995).

20 Prestige Ford v. Ford Dealer Computer Servs., Inc., 324 F.3d 391, 393 (5th Cir. 2003) (abrogated on

other grounds, Hall St. Associates, L.L.C. v. Mattel, Inc, 552 U.S. 576 (2008)).

60270

(4) Where the arbitrator so exceeded his powers or so

imperfectly executed them that a mutual, final, or definite

award on the subject matter submitted was not made.21

Judge Brown of the Eastern District of Louisiana provided a succinct summary of the

relationship between 9 U.S.C. § 10 and the manifest disregard standard:

Prior to 2008, the Fifth Circuit unequivocally recognized

“manifest disregard of the law” as a non-statutory basis for

vacatur.

However, in the 2008 case Hall Street Associates, L.L.C. v.

Mattel Inc., the United States Supreme Court declined to

recognize “manifest disregard of the law” as a non-statutory,

independent ground for vacatur. Immediately following Hall

Street, the Fifth Circuit adopted the Supreme Court's position,

stating that “to the extent that manifest disregard of the law

constitutes a nonstatutory ground for vacatur, it is no longer a

basis for vacating awards under the FAA.”

But then, in the 2010 case Stolt-Nielsen, S.A. v. AnimalFeeds

Int'l Corp., the Supreme Court backtracked by stating that it

would “not decide today whether ‘manifest disregard’ survives

our decision in [Hall Street] as an independent ground for

review or as a judicial gloss on the enumerated grounds for

vacatur set forth in 9 U.S.C. § 10.” Following Stolt-Nielsen, a

Circuit split has developed. The Second, Fourth, Sixth, and

Ninth Circuits have recognized “manifest disregard of law” as

a basis for vacatur. Whereas the Seventh and Eleventh

Circuits have concluded that “manifest disregard of law” is no

longer a legitimate basis for vacatur. Neither the Supreme

Court nor the Fifth Circuit have clarified their position following

Stolt-Nielsen.22

21 9 U.S.C. § 10(a).

22 Warren v. Geller, 386 F.Supp.3d 744, 757-58 (E.D. La. 2019) (citations omitted).

60270

Notably, Jones does not argue for application of the four statutory grounds for

vacatur; rather, she only argues that Pilie’ manifestly disregarded the law.

Notwithstanding the applicability of this standard for vacatur, even assuming the

standard applies, Jones has not demonstrated that vacatur is warranted under the

facts of this case.

In Louisiana, a second action is precluded under res judicata when the

following elements are met: (1) the judgment is valid; (2) the judgment is final; (3) the

parties are the same; (4) the cause or causes of action asserted in the second suit

existed at the time of final judgment in the first litigation; and (5) the cause or causes

of action asserted in the second suit arose out of the transaction or occurrence that

was the subject matter of the first litigation.23 However, there are three exceptions

that preclude the application of the res judicata test,24 and Jones argues that one

such exception exists: when the judgment reserved the right of the plaintiff to bring

another action.25

Jones argues that the Patterson Order reserved her right to bring another

action by stating that “[t]his award is in full settlement of all claims and counterclaims

submitted to this arbitration. All claims not expressly granted herein are hereby

denied.”26 According to Jones, her Title VII claim was preserved by this statement

because she did not submit it for consideration in the Patterson Arbitration, and by

23 Burguieres v. Pollingue, 2002-1385 (La. 2/25/03), 843 So.2d 1049, 1053 (citing LA. REV. STAT. 13:4231).

24 LA. REV. STAT. 13:4232.

25 Rec. Doc. 14-1 p. 5.

26 Id.; Rec. Doc. 14-8 p. 2.

60270

dismissing her arbitration case based on res judicata, Pilie’ manifestly disregarded

the law.27 A manifest disregard of the law is:

more than error or misunderstanding with respect to the law.

The error must have been obvious and capable of being

readily and instantly perceived by the average person

qualified to serve as an arbitrator. Moreover, the term

‘disregard’ implies that the arbitrator appreciates the

existence of a clearly governing principle but decides to ignore

or pay no attention to it.28

Further:

In order for an arbitrator to manifestly disregard the law, “the

governing law alleged to have been ignored by the arbitrators

must be well defined, explicit, and clearly applicable.”29

Pilie’ reviewed the elements of res judicata and found that Jones was unable

to dispute the applicability of any of the res judicata elements. Further, in

consideration of Jones’ argument that the Patterson Order reserved her right to bring

another action, Pilie’ evaluated Jones’ reliance upon Terrebonne Fuel & Lube, Inc. v.

Placid Refining Co. and distinguished that case from the Jones’ case, ultimately

finding that “[n]o such reservation of rights pertains to this case.”30 The question

before the Court under the manifest disregard standard is not whether Pilie’ was

correct, but only whether Pilie’ understood and applied the relevant law to the facts

presented to her. Here, Pilie’ consulted the relevant law and analyzed the appropriate

jurisprudence in reaching her conclusion that res judicata barred Jones’ second

27 Rec. Doc. 14-1 p. 5-6.

28 Citigroup Glob. Mkts. v. Bacon, 562 F.3d 349, 354 (5th Cir. 2009).

29 Tortorich v. Musso, 2007 WL 3244396 (E.D. La. 2007) (citing Prestige Ford, 324 F.3d at 395).

30 Rec. Doc. 14-9 p. 5-6 (citing Terrebonne Fuel & Lube, Inc. v. Placid Refining Co., 666 So.2d 624 (La.

1996)). Notably, Jones’ own argument relies on this case. Rec. Doc. 14-1 p. 5.

60270

arbitration. Thus, there was no manifest disregard of the law in the Pilie’ Arbitration,

and because Jones has not argued any statutory grounds for vacatur, there is no

basis for vacatur of the Pilie’ Order. Consequently, Jones’ Motion to Vacate is

DENIED.

B. Motion to Confirm Arbitration Award

Michaels moves to confirm the Pilie’ Order.31 Jones’ Opposition to this Motion

is the same argument that Pilie’ manifestly disregarded the law in her findings.32 The

Court has already held that Jones did not carry her burden. Moreover, the FAA at

Section 9 provides that:

[i]f the parties in their agreement have agreed that a judgment

of the court shall be entered upon the award made pursuant

to the arbitration, and shall specify the court, then at any time

within one year after the award is made any party to the

arbitration may apply to the court so specified for an order

confirming the award, and thereupon the court must grant

such an order unless the award is vacated, modified, or

corrected as prescribed in sections 10 and 11 of this title. If no

court is specified in the agreement of the parties, then such

application may be made to the United States court in and for

the district within which such award was made.33

Here, the arbitration agreement entered into between Jones and Michaels states that

“[j]udgment on any award may be entered and enforced in any court of competent

jurisdiction.”34 Because the Motion to Confirm was timely filed within one year of the

award, the Court affirms the Pilie’ Order under Section 9 of the FAA, and Michaels’

31 Rec. Doc. 17.

32 Rec. Doc. 22.

33 9 U.S.C. § 9.

34 Rec. Doc. 17-4 p. 4.

60270

Motion to Confirm is GRANTED. The Pilie’ Arbitration Award dated May 7, 2019, of

which a true and correct copy is attached hereto as Exhibit A and is incorporated by

reference herein, is CONFIRMED.

III. CONCLUSION

For the reasons set forth above, Jones’ Motion to Vacate, Correct, or Modify

Arbitration Award35 is DENIED and Michaels’ Motion to Confirm Arbitration Award36 is

GRANTED.

Judgment shall be entered accordingly.

IT IS SO ORDERED.

Signed in Baton Rouge, Louisiana on June 9, 2020.

S

CHIEF JUDGE SHELLY D. DICK

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

35 Rec. Doc. 14.

36 Rec. Doc. 17.

60270