Kelch v. Pyramid Hotel Group

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

SUSAN KELCH, : Case No. 1:18-cv-707

:

Plaintiff, : Judge Timothy S. Black

:

vs. :

:

PYRAMID HOTEL GROUP a/k/a :

PYRAMID CINCINNATI NORTH :

MANAGEMENT, LLC, :

:

Defendant. :

ORDER GRANTING DEFENDANT’S

MOTION TO COMPEL ARBITRATION (Doc. 9)

AND DISMISSING THIS CASE

WITHOUT PREJUDICE

This case is before the Court on Defendant’s Motion to Compel Arbitration of

Plaintiff’s Claims and to Dismiss Amended Consolidated Complaint (Doc. 9) (the

“Motion to Compel Arbitration”), as well as Plaintiff’s responsive memorandum (Doc.

10). Defendant has not filed a reply memorandum.

I. BACKGROUND

The Motion to Compel Arbitration arises in the context of an employment dispute.

Plaintiff, an individual, has filed suit against Defendant, her employer, for violations of

state/federal law. (See generally Doc. 8). In her Amended Consolidated Complaint,

Plaintiff alleges that Defendant has refused to let her work since she took an extended

medical leave back in 2017. (Id. at ¶¶ 1–24). Plaintiff’s Amended Consolidated

Complaint contains six counts: (1) age discrimination under Ohio Rev. Code

§ 4112.02(A); (2) disability discrimination under Ohio Rev. Code § 4112.02(A);

(3) retaliation under Ohio Rev. Code § 4123.90; (4) age discrimination under the ADEA;

(5) disability discrimination under the ADA; and (6) retaliation under the ADA.1 (Id. at

¶¶ 44–57).

In the Motion to Compel Arbitration, Defendant asks the Court to send Plaintiff’s

claims to arbitration, pursuant to a Mutual Arbitration Agreement (the “Arbitration

Agreement”), which Plaintiff and Defendant entered back in 2015. (See Doc. 9-1). In

relevant part, the Arbitration Agreement provides as follows:

1. Except as provided below, Employee and Hotel both agree

all legal disputes, claims, and controversies between them,

including claims relating to or arising from Employee’s

employment with the Hotel or any separation there from,

that are not specifically excluded by this Agreement

(“Claims”) will be determined and resolved exclusively by

final and binding arbitration before a single, neutral

arbitrator. Arbitration will be administered by the American

Arbitration Association (“AAA”) according to its applicable

rules for the arbitration of employment disputes (except as

otherwise set forth herein). Claims subject to arbitration

include, without limitation, statutory and common law

claims; contract and tort claims; and claims for violation of

public policy.

[. . .]

3. The only Claims excluded from this Agreement are: (a)

claims by Employee for workers’ compensation or

unemployment benefits; (b) claims by Employee for benefits

under a Hotel benefit plan or program that provides its own

process for dispute resolution; (c) claims for which this

Agreement would be invalid as a matter of law; (d) actions to

enforce this Agreement, compel arbitration, or enforce or

1 The “ADEA” refers to the Age Discrimination in Employment Act, and the “ADA” refers to

the Americans with Disabilities Act.

vacate an arbitrator’s award under this Agreement, such

actions to be governed by the Federal Arbitration Act; and (e)

claims against the owner or franchisor of a hotel property

managed by the Hotel that do not arise out of the Employee’s

employment relationship with the Hotel.

4. By agreeing to arbitration, Employee does not waive the

right to file an administrative complaint with or to seek

relief from federal or state agencies, such as the Equal

Employment Opportunity Commission, the National Labor

Relations Board, or similar agency, but waives the right to

file or obtain monetary relief in a lawsuit or court action.

(Id. at 2 (emphasis added)).2 Plaintiff’s signature appears at the bottom of the Arbitration

Agreement, after the following representation: “Employee has read and understands this

Agreement and has had the opportunity to consult with an attorney or advisor before

signing.” (Id. at 3).

II. STANDARD OF REVIEW

When asked by a party to compel arbitration under a contract, a federal court must

determine whether the parties agreed to arbitrate the dispute at issue. Stout v. J.D.

Byrider, 228 F.3d 709, 714 (6th Cir. 2000). Any ambiguities in the contract or doubts as

to the parties’ intentions should be resolved in favor of arbitration. Id. Courts are to

examine the language of the contract in light of the strong federal policy in favor of

arbitration. Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24

(1983) (stating that the FAA “is a congressional declaration of a liberal federal policy

favoring arbitration agreements, notwithstanding any state substantive or procedural

2 Section 2 of the Arbitration Agreement, which has been omitted from the language quoted

supra, merely states that the Arbitration Agreement extends to claims brought against certain

related/successor entities/persons. (Doc. 9-1 at 2).

polices to the contrary”). The “primary purpose” of the FAA is to ensure “that private

agreements to arbitrate are enforced according to their terms.” Volt Info. Scis., Inc. v. Bd.

of Trs. of Leland Stanford, Jr. Univ., 489 U.S. 468, 479 (1989).

Section 3 of the FAA provides:

If any suit or proceeding be brought in any of the courts of the United

States upon any issue referable to arbitration under an agreement in writing

for such arbitration, the court in which such suit is pending, upon being

satisfied that the issue involved in such suit or proceeding is referable to

arbitration under such an agreement, shall on application of one of the

parties stay the trial of the action until such arbitration has been had in

accordance with the terms of the agreement, providing the applicant for the

stay is not in default in proceeding with such arbitration.

9 U.S.C. § 3. Section 3 thus requires a court in which suit has been brought “‘upon any

issue referable to arbitration under an agreement in writing for such arbitration’ to stay

the court action pending arbitration once it is satisfied that the issue is arbitrable under

the agreement.” Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 400

(1967) (quoting 9 U.S.C. § 3).3

In considering a motion to compel arbitration under the FAA, a court has four

tasks: (1) it must determine whether the parties agreed to arbitration; (2) it must

determine the scope of the arbitration agreement; (3) if federal statutory claims are

asserted, it must consider whether Congress intended those claims to be nonarbitrable;

and (4) if the court concludes that some, but not all, of the claims in the action are subject

3 See also Santos v. Am. Broad. Co., 866 F.2d 892, 894 (6th Cir. 1989) (“Where the parties to a

contract that provides for arbitration have an arbitrable dispute, it is crystal clear that Congress

has mandated that federal courts defer to contractual arbitration.”).

to arbitration, it must determine whether to stay the remainder of the proceedings pending

arbitration. Stout, 228 F.3d at 714.

In determining the scope of an arbitration agreement, it is proper “to ask if an

action could be maintained without reference to the contract or relationship at issue.”

Fazio v. Lehman Bros., Inc., 340 F.3d 386, 395 (6th Cir. 2003). The Sixth Circuit applies

“the cardinal rule that, in the absence of fraud or willful deceit, one who signs a contract

which he has had an opportunity to read and understand, is bound by its provisions.”

Allied Steel & Conveyors, Inc. v. Ford Motor Co., 277 F.2d 907, 913 (6th Cir. 1960). It

is settled authority that doubts regarding the applicability of an arbitration clause should

be resolved in favor of arbitration. Id. Indeed, “any doubts are to be resolved in favor of

arbitration ‘unless it may be said with positive assurance that the arbitration clause is not

susceptible of an interpretation that covers the asserted dispute.’” Nestle Waters N. Am.,

Inc. v. Bollman, 505 F.3d 498, 504 (6th Cir. 2007) (quoting Masco Corp. v. Zurich Am.

Ins. Co., 382 F.3d 624, 627 (6th Cir. 2004)). If parties contract to resolve their disputes

in arbitration rather than in the courts, a party may not renege on that contract absent

extreme circumstances. Allied Steel & Conveyors, 277 F.2d at 913. Furthermore, a

district court’s duty to enforce an arbitration agreement under the FAA is not diminished

when a party bound by the agreement raises claims arising from statutory rights. Stout,

228 F.3d at 715.

III. ANALYSIS

Here, considering in turn each of the “tasks” espoused in Stout, the Court

concludes that all of Plaintiff’s claims must go to arbitration.

First, there is no question that the parties agreed to arbitrate. Defendant has

produced an executed Arbitration Agreement. (See generally Doc. 9-1). And Plaintiff

has not questioned its validity. (See generally Doc. 10). Second, there is no question that

the Arbitration Agreement applies to this dispute. The Arbitration Agreement provides

that the parties must arbitrate all “claims relating to or arising from [Plainitff]’s

employment with [Defendant] or any separation there from . . . .” (Doc. 9-1 at 2). Each

of Plaintiff’s claims falls under this broad language.4 (Doc. 8 at ¶¶ 44–57). And third,

none of the federal statutory claims alleged in Plaintiff’s complaint is “nonarbitrable.”

Courts in this Circuit have compelled ADEA and ADA claims alike to arbitration. See,

e.g., Jones v. U-Haul Co. of Massachusetts & Ohio Inc., 16 F. Supp. 3d 922, 943 (S.D.

Ohio 2014) (holding that an ADEA claim was arbitrable); Barna v. Wackenhut Servs.,

LLC, No. 1:07-CV-147, 2007 WL 3146095, at *7 (N.D. Ohio Oct. 25, 2007) (holding

that an ADA claim was arbitrable); accord Topf v. Warnaco, Inc., 942 F. Supp. 762, 771

(D. Conn. 1996) (holding that both an ADEA claim and an ADA claim were arbitrable).

Under such circumstances, referral to arbitration is required.

Interestingly, Plaintiff does not oppose the Motion to Compel Arbitration to the

extent as she asks the Court to refer this case to arbitration. (Doc. 10 at 1). Instead,

Plaintiff only opposes the Motion to Compel Arbitration to the extent it asks the Court to

dismiss (rather than stay) this case. (Id.) Plaintiff argues that the FAA “requires” courts

to stay (rather than dismiss) cases upon referral to arbitration. (Id. at 2).

4 The Court has reviewed the exceptions to this broad language. (Doc. 9-1 at 2). None of them

applies. (Id.)

Plaintiff’s argument is not well-taken. When an issue is referred to arbitration, a

court must stay the proceedings until the “arbitration has been had in accordance with the

terms of the [arbitration] agreement . . . .” 9 U.S.C. § 3. However, when all claims are

referred to arbitration, a court may properly dismiss the complaint. Hensel v. Cargill,

Inc., No. 99-3199, 1999 WL 993775, at *4 (6th Cir. 1999) (stating that “litigation in

which all claims are referred to arbitration may be dismissed”); see Ozormoor v. T-

Mobile USA, Inc., 354 F. App’x 972, 975 (6th Cir. 2009) (stating that “[w]e have already

rejected th[e] argument” that “9 U.S.C. § 3 requires district courts to stay suits pending

arbitration rather than dismiss them”).5 “Most district courts in this circuit agree that the

best procedure for enforcing arbitration agreements is to dismiss the court action without

5 On the Court’s review, Hilton v. Midland Funding, LLC, 687 F. App’x 515 (6th Cir. 2017), a

recent unpublished decision issued by the Sixth Circuit, aligns with this recitation of the law.

Hilton concluded that a district court did not err in dismissing a case, after referring the claim

asserted therein to arbitration, as the plaintiff had not “appl[ied]” for (i.e., asked for) a stay (as

opposed to a dismissal) in the first place. Id. at 518–19 (noting that such an application is a basic

prerequisite to obtaining a stay under the FAA). Given its focus on this threshold matter, Hilton

did not reach (and thus did not alter) the longstanding principle, espoused in Hensel, Ozormoor,

and numerous other Sixth Circuit decisions, that a case “in which all claims are referred to

arbitration may be dismissed.” Hensel, 1999 WL 993775, at *4 (stating in greater detail as

follows: “Under § 3 of the FAA, if any separate claim is referable to arbitration, then a stay of

proceedings on the remaining claims is mandatory. However, litigation in which all claims are

referred to arbitration may be dismissed.”); see also Andrews v. TD Ameritrade, Inc., 596 F.

App’x 366, 372 (6th Cir. 2014) (“Finally, the plaintiff argues that the district court erred in

dismissing his complaint instead of ordering a stay until arbitration is complete. But the law is to

the contrary: where there is ‘nothing for the district court to do but execute the judgment,’

dismissal is appropriate.” (quoting Catlin v. United States, 324 U.S. 229, 233 (1945))); Arnold v.

Arnold Corp., 920 F.2d 1269, 1275 (6th Cir. 1990) (stating that it was not “error for the district

court to dismiss the complaint” after ordering arbitration); accord Green v. Ameritech Corp., 200

F.3d 967, 973 (6th Cir. 2000) (“The weight of authority clearly supports dismissal of the case

when all of the issues raised in the district court must be submitted to arbitration.” (quoting

Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992)) (emphasis in

original)); cf. Myers v. TRG Customer Sols., Inc., No. 1:17-CV-52, 2018 WL 705629, at *2

(M.D. Tenn. Feb. 5, 2018) (interpreting Hilton together with other Sixth Circuit precedent).

prejudice.” Jones v. U-Haul Co. of Massachusetts & Ohio Inc., 16 F. Supp. 3d 922, 944

(S.D. Ohio 2014) (citing cases).6 Whether to stay or dismiss a case in which all claims

have been referred to arbitration is a matter of discretion. Gilchrist v. Inpatient Med.

Servs., Inc., No. 5:09-CV-2345, 2010 WL 3326742, at *5 n.2 (N.D. Ohio Aug. 23, 2010).

Here, all of Plaintiff’s claims must go to “final and binding arbitration,” and the parties

have not identified any other issues that require court resolution.7 (Doc. 9-1 at 2). Under

these circumstances, the Court concludes that a dismissal (rather than a stay) is proper.

IV. CONCLUSION

Based upon the foregoing, the Motion to Compel Arbitration (Doc. 9) is

GRANTED. As a result, this case is COMPELLED to arbitration and DISMISSED

without prejudice. The Clerk shall enter judgment accordingly.

IT IS SO ORDERED.

Date: 1/30/2020 s/ Timothy S. Black

Timothy S. Black

United States District Judge

6 Indeed, this Court has exercised its discretion to both stay and dismiss such cases, depending on

which approach is better suited to the facts presented. Compare Snedden v. Perkins & Marie

Callender’s Inc., No. 1:16-CV-668, 2016 WL 7049254, at *5 (S.D. Ohio Dec. 5, 2016) (staying

a case after compelling arbitration), with Jenkins v. Fifth Third Bank, No. 1:16-CV-976, 2017

WL 3605357, at *6 (S.D. Ohio Aug. 22, 2017) (dismissing case after compelling arbitration).

7 Plaintiff claims that a stay will ensure that Defendant proceeds “in accordance with” the terms

of the Arbitration Agreement. (Doc. 10 at 2). Plaintiff’s main concern appears to be that

Defendant may not pay fees/expenses in accordance with section 9 of the Arbitration Agreement.

(Doc. 9-1 at 3 (stating that, as a general matter, the “Hotel shall pay the arbitrator’s fee and

expenses”)). But Plaintiff’s mere suspicion that Defendant might breach the Arbitration

Agreement is not a sufficient reason for the Court to keep this case open upon its already busy

docket.