DARDEN RESTAURANTS, INC. v. WILDRED OSTANNE , 255 So. 3d 382 ( 2018 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
DARDEN RESTAURANTS, INC., a Florida Corporation, DUKE DEMIER,
an individual, and JEDLER St. PAUL, an individual,
Appellant,
v.
WILFRED OSTANNE,
Appellee.
No. 4D17-3590
[October 3, 2018]
Appeal of a non-final order from the Circuit Court for the Seventeenth
Judicial Circuit, Broward County; Michael L. Gates, Judge; L.T. Case No.
17-800 CACE (12).
Patrick G. DeBlasio, III, and Laurie M. Weinstein of Littler Mendelson,
P.C., Miami, for appellant Darden Restaurants, Inc.
Chris Kleppin and Chelsea A. Lewis of Glasser & Kleppin, P.A.,
Plantation, for appellee.
FORST, J.
Darden Restaurants, Inc. (“Darden”) appeals from the trial court’s order
denying its motion to compel arbitration and stay the underlying
employment discrimination action filed by former employee Wilfred
Ostanne. Darden argues the court erred in denying the motion, in part,
because the parties had specifically agreed to delegate the issue of
arbitrability to the arbitrator. We agree with this argument and reverse
for an order submitting the issue of arbitrability to the arbitrator. Because
this issue is dispositive, we decline to address the remaining issues.
Background
In 2010, the parties signed an agreement titled “Dispute Resolution
Process” (“DRP”). The DRP was a stand-alone agreement, not part of an
employment contract. The DRP provides for a four-step process to address
and resolve “covered employment-related disputes”: open door, peer
review, mediation, and arbitration. The first three steps apply to all
employment-related disputes or claims brought by the employee against
the company (or vice versa) other than those listed as exceptions. The
employee initiates the first two steps, and from there “the dissatisfied party
can submit the matter to mediation.” Thereafter, “[u]pon receiving the
timely written notice that mediation has concluded without resolution . .
. and if the dispute involves a legal claim, either the Employee or the
Company can submit the matter to binding arbitration.”
Regarding arbitration, the DRP provides:
Only disputes which state a legal claim may be submitted to
Arbitration, which is the fourth and final step of DRP. The
arbitrator has the authority to dismiss disputes that do not
state a legal claim. Examples of legal claims may include but
are not limited to: claims that arise under the Civil Rights Act
of 1964, Americans With Disabilities Act, Fair Labor
Standards Act, Age Discrimination in Employment Act, Family
Medical Leave Act, Employee Retirement Income Security Act,
unfair competition, violation of trade secrets, any common law
right or duty, or any federal, state or local ordinance or
statute.
The DRP is the sole means for resolving covered
employment-related disputes, instead of court actions.
Disputes eligible for DRP must be resolved only through
DRP, with the final step being binding arbitration heard
by an arbitrator. This means DRP-eligible disputes will
NOT BE RESOLVED BY A JUDGE OR JURY. Neither the
Company nor the Employee may bring DRP-eligible
disputes to court. The Company and the Employee waive
all rights to bring a civil court action for these disputes.
The DRP also contains a delegation clause, which provides that “[t]he
arbitrator has the sole authority to determine the eligibility of a dispute for
arbitration and whether it has been timely filed.” (emphasis added).
In January 2017, Ostanne sued Darden and two Darden employees
after filing charges of racial/ethnic discriminatory and retaliatory practices
against Darden with the Florida Commission on Human Relations and the
Equal Employment Opportunity Commission (EEOC). Ostanne alleged
that he was subjected to ongoing racial slurs by co-workers; that
management was aware but unwilling to act; that the slurs worsened after
he complained; that two employees battered him; that he was overlooked
for management positions for which he qualified; that he was demoted for
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complaining; that his hours were reduced to next to nothing; and that he
was ostensibly fired despite Darden’s denial of such, and then suspended
indefinitely.
Counts 1 through 4 alleged Florida Civil Rights Act violations against
Darden for the discharge, discriminatory terms and conditions of
employment, retaliation, and creating a hostile work environment. Counts
5 and 6 alleged civil battery and assault against Darden and two of
Ostanne’s former co-workers. Ostanne alleged that the former co-workers’
actions were so “open, obvious, and pervasive” that Darden knew or should
have known of the conduct.
Darden moved to stay the proceedings and to compel arbitration based
on the DRP. Over Ostanne’s objection, the matter was first heard at a
motion calendar hearing. Ostanne requested an evidentiary hearing,
arguing he did not recall signing the agreement and Darden had waived
arbitration by not following the dispute resolution process, i.e., Darden did
not afford Ostanne the requisite peer review or mediation before seeking
arbitration. Ostanne also suggested that Darden’s position during the
EEOC process, urging a “no cause finding,” was inconsistent with
arbitration.
Darden disputed the need for an evidentiary hearing as Ostanne had
not furnished an affidavit in opposition to the motion to compel to create
a factual issue. It also argued that its participation in the EEOC process
was not a waiver. Darden did not address its failure to invoke peer review
or mediation before arbitration, which as the DRP is drafted, are conditions
precedent to arbitration. The trial court summarily denied Darden’s
motion without prejudice.
Darden then filed a renewed motion to compel arbitration, which
incorporated its first motion and also pointed to the DRP’s “delegation
clause.” Ostanne again responded that a valid agreement to arbitrate did
not exist, and that Darden had waived arbitration. He attached a
supporting affidavit stating that he was unaware of the DRP, contending
that it was never reviewed or discussed with him.
At the hearing, Darden directed the court to Ostanne’s 2010 signing of
the DRP and the delegation clause which provides that the arbitrator is to
decide issues of arbitrability. Darden also cited case law which holds that
the party opposing arbitration must specifically challenge the delegation
provision (not just the arbitration provision itself), or “the delegation
provision remains enforceable as a matter of law.” See, e.g., Allied Prof’ls
Ins. Co. v. Fitzpatrick, 169 So. 3d 138, 141-42 (Fla. 4th DCA 2015) (citing,
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e.g., Rent–A–Center, W., Inc. v. Jackson, 561 U.S. 63, 72 (2010) (unless the
plaintiff “challenged the delegation provision specifically, we must treat it
as valid . . . , leaving any challenge to the validity of the [arbitration]
[a]greement as a whole for the arbitrator.”)).
Ostanne opposed the motion to compel on six grounds: (1) Darden
waived the “delegation clause” argument for failure to raise it during the
first hearing; (2) Darden waived the right to arbitrate having failed to follow
the “mandatory” steps preceding arbitration; (3) the DRP contains
exceptions to arbitration, some of which were raised in the complaint
(though Ostanne did not identify any); (4) the Florida Civil Rights Act “itself
states that the claims can’t go to arbitration” since it provides that the
right to trial by jury is preserved; (5) Darden acted inconsistently with and
waived arbitration when it asked the agency to dismiss the charge during
the administrative proceedings; and (6) because the claims did not concern
a breach of the employment contract, they did not fall within the clause.
Darden replied that it did not waive its “delegation clause” argument
because the court did not address the merits of the motion at the first
hearing. Darden maintained that the sole issue for the court was whether
Ostanne signed an agreement which contained an arbitration clause with
a delegation provision.
The trial court summarily denied Darden’s motion to compel
arbitration. 1
Analysis
Darden argues the court erred in denying its motion to compel
arbitration because, among other reasons, the parties’ DRP agreement
specifically delegated the issue of arbitrability to the arbitrator. We apply
the de novo standard of review. See Allied Prof’ls Ins. Co., 169 So. 3d at141 (citing BDO Seidman, LLP v. Bee, 970 So. 2d 869, 874 (Fla. 4th DCA
2007) (“[T]he standard of review applicable to the trial court’s construction
of an arbitration provision, and to its application of the law to the facts
found, is de novo.”) (citation omitted)).
1 See Arrasola v. MGP Motor Holdings, LLC, 172 So. 3d 508, 514 (Fla. 3d DCA
2015) (“The Revised Florida Arbitration Code authorizes the trial court
‘summarily to decide’ a motion to compel arbitration ‘unless it finds that there is
no enforceable agreement to arbitrate.’”) (citing § 682.03(1)(b), Fla. Stat. (2014)).
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We agree with Darden’s argument. The plain language of the DRP’s
arbitration provision states that “[t]he arbitrator has the sole authority to
determine the eligibility of a dispute for arbitration and whether it has
been timely filed.” Ostanne did not challenge the delegation clause itself
in his discrimination lawsuit. “Absent a direct challenge, we must treat
the delegation provision as valid and allow the arbitrator to determine the
issue of arbitrability.” Newman for Founding Partners Stable Value Fund,
LP v. Ernst & Young, LLP, 231 So. 3d 464, 467 (Fla. 4th DCA 2017) (quoting
Angels Senior Living at Connerton Ct., LLC v. Gundry, 210 So. 3d 257, 258
(Fla. 2d DCA 2017)); see also Allied Prof’ls Ins. Co., 169 So. 3d at 141-42
(citing Rent–A–Center, W., Inc., 561 U.S. at 74).
We further agree with Darden’s contention that its participation in the
EEOC process was not a waiver. An employer does not waive arbitration
by participating in EEOC proceedings. See Gordon v. Shield, 41 So. 3d
931, 934 (Fla. 4th DCA 2010) (citing Marie v. Allied Home Mortg. Corp., 402
F.3d 1, 16 (1st Cir. 1998)).
Lastly, we note that each party has accused the other of failing to follow
the four-step dispute resolution process. 2 To the extent that Darden has
failed to comply with conditions precedent to arbitration, the delegation
clause leaves that issue to be addressed by the arbitrator. See Cooper v.
Fine, 705 So. 2d 131, 131 (Fla. 4th DCA 2005) (finding that “whether
conditions precedent to arbitration were fulfilled . . . is a question for the
arbitrator”).
Conclusion
Based on the foregoing, we reverse the trial court’s order denying
Darden’s motion to compel arbitration and remand for entry of an order
submitting the issue of arbitrability to the arbitrator. See Allied Prof’ls Ins.
Co., 169 So. 3d at 142.
Reversed and remanded.
TAYLOR and CONNER, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
2As stated, the DRP provides that the employee initiates the first two steps (open
door and peer review) of the four-step process.
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