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Beckham v. Copart of Connecticut, Inc.

United States District Court, D. South Carolina, Columbia Division

August 22, 2017

Angelia H. Beckham, Plaintiff,
v.
Copart of Connecticut, Inc., Defendant.

          OPINION AND ORDER

          CAMERON MCGOWAN CURRIE, SENIOR UNITED STATES DISTRICT JUDGE.

         Through this action, Plaintiff Angelia H. Beckham (“Plaintiff”) seeks recovery from her former employer, Defendant Copart of Connecticut, Inc. (“Defendant”) for events surrounding and including termination of her employment. Plaintiff asserts four causes of action arising under the Americans with Disabilities Act and under state law. ECF No. 1-1. Plaintiff originally filed her Complaint in state court, Defendant removed to this court, after which Plaintiff filed an Amended Complaint. ECF Nos. 1, 1-1, 10.

         The matter is before the court on Defendant's motion to compel arbitration and to stay the case, arguing Plaintiff signed the acknowledgement page of her employee handbook, which contained an arbitration agreement, multiple times during the course of her employment. ECF No. 17.[1] Plaintiff filed a memorandum in opposition to Defendant's motion to compel arbitration, arguing the arbitration clause was part of the employee handbook, and citing a Fourth Circuit case declining to compel arbitration because the employee handbook in that case noted it did not create a binding contract. ECF No. 20; Lorenzo v. Prime Commc'ns, L.P., 806 F.3d 777 (4th Cir. 2015). Defendant filed a reply in support of its motion distinguishing this case from Lorenzo. ECF No. 21.

         For reasons set forth below, the motion to compel arbitration and to stay this action is granted. Defendant's motion to dismiss (ECF No.9) is moot.

         BACKGROUND

         In accordance with 28 U.S.C. § 636(b) and Local Civil Rule 73.02 (B)(2), D.S.C., this matter was referred to United States Magistrate Judge Shiva V. Hodges for pre-trial proceedings and a Report and Recommendation (“Report”). On July 17, 2017, the Magistrate Judge issued a Report recommending Defendant's motion to compel arbitration and to stay be granted and Defendant's motion to dismiss be rendered moot. ECF No. 22.

         The Magistrate Judge advised the parties of the procedures and requirements for filing objections to the Report and the serious consequences if they failed to do so. Plaintiff filed objections on July 26, 2017. ECF No. 23. Defendant did not file a response, and the time for doing so has passed. The matter is now ripe for resolution.

         STANDARD

         The Magistrate Judge makes only a recommendation to this court. The recommendation has no presumptive weight, and the responsibility for making a final determination remains with the court. Mathews v. Weber, 423 U.S. 261 (1976). The court is charged with making a de novo determination of any portion of the Report to which a specific objection is made. The court may accept, reject, or modify, in whole or in part, the recommendation of the Magistrate Judge, or recommit the matter to the Magistrate Judge with instructions. 28 U.S.C. § 636(b)(1). In the absence of a specific objection, the court reviews only for clear error. See Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (“in the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'”) (quoting Fed.R.Civ.P. 72 advisory committee's note))

         DISCUSSION

         Plaintiff objects to the recommendation to grant the motion to compel arbitration because she asserts the Magistrate Judge erred in distinguishing Lorenzo and determining the arbitration clause was otherwise enforceable. ECF No. 23 at 3.

         Plaintiff cites Lorenzo for the proposition that an arbitration clause in an employee handbook is unenforceable when the handbook's “acknowledgement form explicitly stated the handbook does not create a contract.” Id. at 5 (citing Lorenzo, 806 F.3d at 780). Further, Plaintiff argues the language of the handbook in this case and in Lorenzo is “nearly identical” and therefore the Report should not be adopted and arbitration should not be compelled. Id. at 7.

         The Magistrate Judge found Lorenzo did not apply because that case involved the application of North Carolina contract law, and included a second acknowledgement signed by the plaintiff acknowledging “the terms of the employee handbook, including its arbitration provision, were guidelines only and did not create any binding commitments.” ECF No. 22 at 6 (citing Lorenzo, 806 F.3d at 782). In this case, the Magistrate Judge reasoned, no separate document with a similar acknowledgement regarding the terms of the handbook has been provided. Id.

         Upon conducting a de novo review of the record, motion and responses, the Report, and Plaintiff's objections, the court agrees with the Magistrate Judge that Lorenzo is distinguishable and Plaintiff's claims are subject to arbitration. In Lorenzo, the Fourth Circuit agreed with the District Judge the defendant failed to produce evidence the plaintiff agreed to arbitrate any of her claims. Lorenzo, 806 F.3d at 779. The plaintiff in Lorenzo received an employee handbook that committed “all employment issues” to internal dispute resolution, then mediation, and finally arbitration, and noted employees “waived all rights to bring a lawsuit and to a jury trial regarding any dispute.” Id. at 780. The plaintiff signed a form acknowledging receipt of the handbook, which specifically noted “no provision should be construed to create any bindery [sic] promises or contractual obligations between the Company and the employees (management or non-management). . .I understand that the information contained in the Handbook are guidelines only and are in no way to be interpreted as a contract.” Id. When the defendant moved to compel arbitration, the Fourth Circuit relied on this provision in finding the plaintiff signed “an acknowledgement ...


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