PHILADELPHIA – A federal court has determined that a woman’s discrimination lawsuit against her former employer, a charter school, will instead proceed to arbitration.
A Dec. 2 ruling from U.S. District Court Judge J. Curtis Joyner redirected plaintiff Shonte Watkins’s employment discrimination case against Vision Academy Charter School to arbitration, but also threw out the school’s motion to dismiss the suit.
Watkins brought suit against Vision Academy Charter School on Feb. 4, and the school responded with two motions on April 13, one being a motion to dismiss and the other to compel mediation and arbitration pursuant to the employment agreement. The plaintiff opposed such motions.
After limited discovery as to the estimated costs and fees associated with the specific mediation and arbitration, Vision Academy Charter School again moved for the complaint to be redirected to mediation and arbitration, which Watkins again opposed.
“This Court finds that the present dispute is within the scope of the agreement. The agreement is governed by Pennsylvania contract law and was entered into as a condition of plaintiff’s employment with the proper intent, definite terms, and consideration required by Pennsylvania law. It provides that ‘any dispute between the parties regarding or related to this agreement’ must be submitted to arbitration,” Joyner said.
In order to invalidate the employment agreement and render it unenforceable, Joyner said, Watkins must prove both procedural and substantive unconscionability.
“This Court finds that the agreement was a contract of adhesion. Plaintiff had no reasonable opportunity to negotiate, as her signature was a condition of her employment, and the balance of bargaining power was clearly favorable to her employer given plaintiff’s education and resume at the time of her hiring. Therefore, this Court finds the agreement is procedurally unconscionable,” Joyner said.
“Turning now to substantive unconscionability, this Court must determine whether the terms of the agreement unreasonably favor the stronger party. At issue here is the fee splitting clause, the ‘loser pays’ clause, and the venue selection provision. Regarding the first two provisions, fee-allocating clauses unreasonably favor the stronger party if the weaker party can show that the clauses have a “likelihood of [imposing] prohibitive costs.”
In receiving unemployment benefits for seven weeks post-termination, Joyner found that Watkins did not provide sufficient proof that estimated costs for arbitration may be problematic for her, given her level of salary.
“In totality, this Court finds that plaintiff is not at such a disadvantage to render arbitration inappropriate. The fee-allocating provisions are found to be substantively unconscionable and thus unenforceable, but they can be severed from the agreement, as they are neither essential parts of the agreement nor part of a systematic effort to impose an inferior forum,” Joyner concluded.
“Defendant’s motion to dismiss and to compel mediation and arbitration is granted in part as to the provisions of the arbitration agreement exclusive of the fee-allocating provisions and denied in part as to the motion to dismiss.”
U.S. District Court for the Eastern District of Pennsylvania case 2:20-cv-00656
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com