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Oyekan v. Education Corporation of America

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

February 28, 2019

JULIUS OYEKAN, Plaintiff,
v.
EDUCATION CORPORATION OF AMERICA, Defendant.

          ORDER

          R. Bryan Harwell United States District Judge.

         This action arises from Plaintiff's allegations that his former employer, Education Corporation of America, violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et. seq. as amended (“Title VII”), in the form of sex discrimination, retaliation, as well as allegations against Defendant leading to a defamation claim.[1] This lawsuit was initially filed in state court but removed to federal court on June 29, 2018. [ECF #1]. Presently before the Court is Defendant's Motion to Compel Arbitration. [ECF #5]. Plaintiff filed his response to this motion on July 13, 2018. [ECF #8]. Defendant filed its reply on July 20, 2018. [ECF #10]. In accordance with 28 U.S.C. § 636(b)(1)(B) and Local Civil Rule 73.02 (D.S.C.) this matter was referred to a Magistrate Judge for pretrial handling. This matter is now before the Court after issuance of the Report and Recommendation (“R&R”) of United States Magistrate Judge Kaymani D. West. [ECF #15]. In the R&R, the Magistrate Judge recommends granting Defendant's motion. This matter is now before the Court for disposition. For the following reasons, the Court grants Defendant's motion.[2" name="FN2" id= "FN2">2]

         Factual and Procedural Background

          According to the allegations within the Complaint, Dr. Oyekan began working as an instructor for Defendant Education Corporation of America's medical assistant program around July of 2012. Dr. Oyekan alleges that he was the recipient of harsh and unfair treatment throughout his employment by female supervisors who discriminated against him based on his sex. Dr. Oyekan alleges once he began reporting this unfair treatment to Defendant, he was retaliated against, and ultimately terminated on May 19, 2016, for reasons that were false and/or pretextual. Thereafter, Plaintiff filed this lawsuit, alleging sex discrimination in violation of Title VII, retaliation in violation of Title VII, and a state law claim for defamation. This case was removed to federal court on June 29, 2018, pursuant to 28 U.S.C. § 1331, because Plaintiff alleges violations of a federal law, and the state law claim falls under the supplemental jurisdiction of this Court. Defendant also removed this case pursuant to diversity jurisdiction under 28 U.S.C. § 1441.

         On June 29, 2018, Defendant also filed a Motion to Compel Arbitration. [ECF #5]. In support of its motion, Defendant argues that Dr. Oyekan executed an Arbitration Agreement on September 17, 2015, that requires him to arbitrate these claims. [ECF #5-2, pp. 1-2; ECF #5-1, Ex A]. The Arbitration Agreement was attached as an exhibit to the Declaration of Kerenna Jones, a paralegal and employee of Defendant. [ECF #5-1. Ex. A]. Defendant further states that Dr. Oyekan executed a New Employee Handbook and Arbitration Policy acknowledgment on September 17, 2015, which is also attached to the Declaration of Ms. Jones. [ECF #5-1, Ex. B]. The Arbitration Agreement (the “Agreement”) provides that the parties agree that any dispute, controversy or claim “arising out of or related to this Agreement, the employment relationship between the parties, or the termination of the employment relationship shall be resolved by binding arbitration.” [ECF #5-1, Ex. A]. Further, the Agreement specifically provides that it includes claims under the Civil Rights Act of 1964.” [ECF #5-1, Ex. A]. Finally, the Agreement states that the parties waive their right to have any dispute, claim, or controversy decided by a judge or jury in a court.” [ECF #5-1, Ex. A]. Defendant therefore argues that pursuant to the Federal Arbitration Act and Rule 12(b)(3) of the Federal Rules of Civil Procedure, Plaintiff's claims are subject to arbitration pursuant to the express terms of the Arbitration Agreement. Defendant further seeks its attorneys fees and costs associated with the filing of this motion because it asserts that it provided Plaintiff's counsel with a copy of the Agreement and requested Plaintiff consent to arbitration in order to avoid the expense of motion practice.

         Plaintiff argues that the Acknowledgment of Handbook and Policies, which contains language stating that the provisions within the handbook do not create a contract between Defendant and its employees undermines the validity of Defendant's argument that the Agreement is a contract. Further, Plaintiff argues that because Defendant's policies are one-sided and Plaintiff was in a substantially weaker bargaining position than Defendant, the Agreement is unconscionable. Finally, Plaintiff argues that Defendant's voluntary removal to federal court waived its ability to seek arbitration of Plaintiff's claims.

         Within the R&R, the Magistrate Judge considered Plaintiff's arguments but ultimately recommended that the motion be granted. Plaintiff filed objections to the recommendation, raising the same arguments he raised in response to the motion. Plaintiff again argues that the Agreement is not contractual, the Agreement is unconscionable, and that Defendant waived arbitration by removing this action to federal court. Defendant responded to the objections, pointing out that Plaintiff merely restated his prior arguments and does not provide any reason to reject the R&R. On December 14, 2018, this case was stayed by Order of the Magistrate Judge in light of the express terms of an Order issued by the Middle District of Georgia. [ECF #24]. The stay was lifted on February 4, 2019. [ECF #32].

         Discussion

          I. Review of the Magistrate Judge's R&R

         The Magistrate Judge makes only a recommendation to the district court. The recommendation has no presumptive weight. The responsibility to make a final determination remains with the district court. Mathews v. Weber, 23 U.S. 261');">423 U.S. 261, 270-71 (1976). The district court is charged with making a de novo determination of those portions of the R&R to which specific objection is made, and the court may accept, reject, or modify, in whole or in part, the recommendation of the Magistrate Judge, or recommit the matter with instructions. 28 U.S.C. § 636(b)(1).

         The district court is obligated to conduct a de novo review of every portion of the Magistrate Judge's report to which objections have been filed. Id. However, the court need not conduct a de novo review when a party makes only “general and conclusory objections that do not direct the [C]ourt to a specific error in the [M]agistrate's proposed findings and recommendations.” Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir. 1982). The Court reviews only for clear error in the absence of a specific objection. See Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005).

         II. Review of the Motion to Compel

          Defendant filed its Motion to Compel Arbitration pursuant to the Federal Arbitration Act (the “FAA”) 9 U.S.C. §§ 3 and 4, as well as the Agreement. The FAA evidences a liberal federal policy that favors arbitration agreements. Adkins v. Labor Ready, Inc., 303 F.3d 496, 500 (4th Cir. 2002) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). Sections 3 and 4 of the FAA provide two parallel methods for enforcing an arbitration agreement: (1) an order staying litigation in matters raising a dispute referable to arbitration; or (2) an order compelling arbitration. Chorley Enters. v. Dickey's Barbecue Rests. Inc., 807 F.3d 553, 563 (4th Cir. 2015). Courts will compel arbitration under Section 4 if: (1) the parties entered into a valid agreement to arbitrate claims; and (2) the dispute or claims in question fall within the scope of the arbitration agreement. Id. In order to determine whether the parties agreed to arbitrate, ordinary state law principles govern the issue of contract formation. Am. Gen. Life & Acc. Ins. Co. v. Wood, 29 F.3d 83');">429 F.3d 83, 87 (4th Cir. 2005) (citing First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). The standard of review for a motion to compel arbitration is akin to the burden on summary judgment. Chorley, 807 F.3d at 564. In considering a motion to compel arbitration, a court may consider matters outside the pleadings. Witness Insecurity, LLC v. Hale, No. 5:12-CV-293-JG, 2013 WL 12162297, at *3 (E.D. N.C. Sept. 27, 2013).

         Defendant additionally styles the motion as a motion to dismiss the pleading pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure. Rule 12(b)(3) permits a party to file a motion to dismiss for improper venue. Pee Dee Health Care, P.A. v. Sanford, 204');">509 F.3d 204, 209 (4th Cir. 2007). When a defendant raises its motion pursuant to Rule 12(b)(3), the plaintiff bears the burden of proving ...


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