Middle District of North Carolina Magistrate Recommends Dismissal of Complaint for Race and National Origin Discrimination Due to Arbitration Agreement

A recent federal opinion from the Middle District of North Carolina  confirms the enforceability of agreements to arbitrate in the employment context.  In Peraza v. Rent-A-Center, a Hispanic plaintiff filed a pro se suit for alleged employment discrimination on the basis of race and national origin, as well as for retaliation.  The complaint alleged that the plaintiff complained of his supervisors’ disparate treatment of Hispanic customers only to have no corrective action taken in response.  Additionally, the plaintiff alleged that his supervisors began to retaliate against him for making the complaint by writing him up for small attendance-related infractions for which non-Hispanics were not disciplined.  Finally, after the plaintiff reported the supervisors’ conduct to HR, his employment was terminated.  The plaintiff filed suit under Title VII of the Civil Rights Act of 1964.

The defendant employer promptly filed a motion to dismiss the complaint and order the case to arbitration on the basis of an arbitration agreement that the plaintiff signed during his employment.  That agreement stated that the parties “mutually consent to the resolution by arbitration of all claims or controversies, past, present or future, including without limitation, claims arising out of or related to [Plaintiff's] application for employment, assignment/employment, and/or the termination of [Plaintiff's] assignment/employment.”  The agreement specifically covered claims of employment discrimination and harassment. 

Furthermore, the agreement provided that an arbitrator must also decide “gateway issues of arbitrability.” On this point, the agreement stated that “[t]he Arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to any claim that all or any part of this Agreement is void or voidable.”  

The Magistrate Judge made short work in concluding that the arbitration agreement controls under the “liberal federal policy favoring arbitration agreements.”  The Magistrate also recognized that the parties’ agreement to arbitrate even gateway issues of arbitrability is likewise enforceable.  In fact, that very issue, the Magistrate noted, has been recently decided by the United States Supreme Court in another Rent-A-Center case, Rent-A-Center, West, Inc.  v. Jackson, 130 S. Ct. 2772 (2010).

For these reasons, the Magistrate issued a recommendation that the defendant’s motion be granted.

As explained, the plaintiff was pro se, or representing himself, in the matter.   

In opposing the motion, the plaintiff argued that the case should remain in court, in part because of language concerns.  Indeed, the response itself reflected both that the plaintiff was unrepresented and limited in his command of the English language.  Here too, the Magistrate quickly determined that such challenges must be taken to the arbitrator for resolution.

The case is a reminder of the strict harshness with which courts enforce signed arbitration agreements.  Under current case law, employers are free to require employees to enter such agreements – despite the EEOC’s express condemnation of this practice – and even threshold issues of arbitrability can be reserved for determination by the arbitrator. 

Age Discrimination Cases on the Rise in North Carolina Even as Courts Require Exacting Proof

Claims of workplace age discrimination have steadily increased in North Carolina and the nation at large in recent years.  According to EEOC filing statistics, there were fewer than 20,000 age discrimination charges filed during each of years 1997 through 2007.  There have been more than 22,000 age discrimination charges filed in each year since 2007, with more than 23,000 age discrimination charges filed in three of those five years. 

The upward trend is likely due to several factors.  For example, the combination of an expanding number of elderly workers from the large baby boomer population and a sputtering U.S. economy, which continues to result in downsizing by employers, has resulted in a large field of displaced older workers.  A changing work environment, which is increasingly reliant on relatively new technology and associated skills, also renders younger workers more attractive than veteran employees in some instances.  For these and other reasons, the growing incidence of age discrimination claims is likely to continue in coming years.

There are two basic methods to proving a case of age discrimination.  First, a plaintiff can present direct evidence of discrimination.  Direct evidence is evidence that proves discriminatory motive without the need for inference.  A classic example would be if an employer fired an employee and said, “I am firing you because you are too old.”  A manager’s note or email stating, “Smith is too old for the job; we need someone younger,” would qualify as direct evidence.  Rarely is such direct, “smoking gun” evidence available in this day and age.

The second method for proving discrimination is called the McDonnell-Douglas burden-shifting paradigm.  It involves a three step process.  First, the plaintiff must establish what is called a prima facie case of discrimination.  If this can be done, the employer must then come forward with a legitimate, non-discriminatory reason for the decision.  In response, the plaintiff must then present evidence sufficient to find the employer’s explanation is a pretext, or false excuse, and sufficient to conclude that discrimination was the true motive.

In order to establish the opening prima facie showing of discrimination, a plaintiff, must demonstrate that: (1) he is a member of a protected class, (i.e., over age 40); (2) he suffered adverse employment action; (3) he was performing his job duties at a level that met his employer's legitimate expectations at the time of the adverse employment action; and (4) the position remained open or he was replaced by a substantially younger individual. 

In the age discrimination context, the prima facie case often times is not difficult to establish. In fact, older workers frequently meet all of the elements as a mere function of their age and experience.  A worker over 40 satisfies the protected class requirement.  An older worker who has been with an employer for many years presumably has been meeting the employer’s expectations for some time.  Additionally, the odds are that an older worker will be replaced by someone younger.  Thus, if a veteran employee suffers an adverse employment action, he or she is well on the way to satisfying the prima facie case of discrimination.

Nevertheless, successfully proving age discrimination under the McDonnell-Douglas framework is very difficult for several reasons.  For one, the vast majority of North Carolina workers are employed at-will, meaning the employer may fire the employee for any reason so long as it is not an illegal one.  The employer need only respond to the prima facie case of age discrimination by producing a single, legitimate, non-discriminatory reason for the challenged action.  Courts have repeatedly emphasized that the offered reason need not be a wise one, so long as it was a non-discriminatory reason that the employer truly believed.  The courts simply will not second guess the business wisdom of an employer’s personnel decision. 

There are other considerations that make age discrimination claims difficult to win.  The courts, for instance, have recognized that only the plaintiff’s performance at the time of the decision is relevant to assessment of the discrimination claim.  As such, an employee with twenty more years of stellar work performance could still fail to prove his case if work performance were poor at the time of the challenged decision.  Perhaps the most difficult proof aspect is that the plaintiff must ultimately prove that the employer was motivated by discriminatory intent.  Intent is a very difficult element to prove and requires skillful, experienced counsel well-versed in effective methods for proving offered excuses pretextual and developing persuasive evidence of discriminatory animus.  Overcoming the at-will employment presumption also demands skillful representation.  Frequently, we see age discrimination claims pursued by unrepresented, pro se litigants.  Such claims are almost sure to fail given the proof difficulties involved.

In fact, perhaps because of the growing number of age discrimination claims, courts have become increasingly demanding and exacting in the level of proof required of age discrimination plaintiffs.  A recent case from the Western District of North Carolina demonstrates this tendency of the courts, as well as the proof difficulties outlined above.  We will discuss this recent case in our next post as we continue our discussion of workplace age discrimination.

Federal Court dismisses Age Discrimination suit brought by North Carolina employment applicant

A recent North Carolina employment law decision confirms the importance of timely filed EEOC charges and adequately framed pleadings in employment discrimination actions.  The case, Hansen v. Siemens Energy, 2012 Westlaw 5388920 (W.D.N.C. 2012), reaffirms important procedural defenses that can arise in response to defectively grounded or presented claims of employment discrimination.

The plaintiff, Elmer Hansen, unsuccessfully applied for a welder maintenance position with Siemens Energy on two separate occasions.  He first applied on September 16, 2010 by electronically uploading his resume to the company’s career website.  After completing an online assessment, Mr. Hansen received a required Career Readiness Certificate, but he did not thereafter receive an invitation to participate in the next phase of training. 

Roughly one year later, Mr. Hansen learned from a CharlotteObserver newspaper article that Siemens still had need for skilled workers.  Mr. Hansen then re-applied for the same welder-maintenance position in January of 2012.  After again receiving no invitation to interview, Mr. Hansen filed a charge of discrimination with the EEOC in March of 2012.  

Mr. Hansen later filed a federal lawsuit against Siemens in which he alleged that the company failed to hire him, on both occasions, because of age discrimination.  Siemens filed a motion to dismiss the complaint, which the Court recently granted.

In its ruling, the Court first dismissed the employment discrimination claim arising from the 2010 application because the plaintiff failed to file a timely EEOC charge of discrimination with respect to that application.  Under the applicable AgeDiscrimination in Employment Act, a person alleging age discrimination must file a charge of discrimination with the EEOC within 180 days of the discriminatory act.  Because the plaintiff’s charge of discrimination was not filed until March of 2012, the Court made short work of dismissing the age discrimination claim as to the 2010 application.

The Court then dismissed the remaining age discrimination claim on grounds that the plaintiff failed to state a claim for relief adequately with respect to the 2012 application.  Here, the Court noted the plaintiff’s obligation to plead facts sufficient to render the claim of age discrimination plausible, as opposed to merely conceivable.  The Court cited to the United States Supreme Court’s Twombly line of cases for this principle.

The Court then determined that the plaintiff’s complaint, even as to the 2012 employment application, was fatally defective in several particulars.  For example, the Court noted that the complaint contained no allegation as to whether the plaintiff’s application was, in fact, rejected, or whether the position sought remained open or was filled by a similarly qualified younger person.  In fact, the complaint failed to present any allegations with respect to what other applicants were considered and/or chosen, or how an inference of discrimination could otherwise be supported.  The Court found the plaintiff’s mere conclusory statement that he believed discrimination had occurred insufficient to state a valid cause of action.

Notably, the plaintiff in this case represented himself in what is known as a pro se capacity.  Early in its decision, the Court noted that pro se complaints are to be construed liberally so as “to ensure that valid claims do not fail for lack of legal specificity.”  The Court further explained that courts must look beyond the face of the complaint to allegations made in any materials filed by the pro se plaintiff in order to ensure that “form does not trump substance.”  At the same time, the Court emphasized that, under the Twombly line of authority, even a pro se plaintiff is obligated to plead facts sufficient to “budge claims across the line from conceivable to plausible.” 

After weighing these somewhat competing considerations, the Court had no apparent reservation about dismissing the case.  The ruling therefore underscores the importance of capable counsel for all parties in employment litigation.