SBM Site Services, LLC v. Alvarez

          FINDINGS AND RECOMMENDATION

          Susan M. Bazis United States Magistrate Judge

         This matter is before the Court on Petitioner's Motion to Compel Arbitration. (Filing No. 18.) For the reasons set forth below, the undersigned will recommend that the motion be denied.

         BACKGROUND

         Petitioner hired Respondent Raul Alvarez (“Alvarez”) as a custodial supervisor in October, 2014. (Filing No. 1.) When he was hired, Alvarez signed an arbitration agreement in which he agreed to submit “any and all claims arising out of or related to [his] employment that could be filed in a court of law, including but not limited to, claims of unlawful harassment or discrimination . . . [and] wrongful discharge” to binding arbitration. (Filing No. 20.) On or about November 16, 2015, Alvarez was suspended without pay. His employment was terminated in December, 2015.

         On or about December 4, 2015, Alvarez filed a charge of discrimination with the Lincoln Commission on Human Rights (“LCHR”), the Nebraska Equal Opportunity Commission (“NEOC”), and the Equal Employment Opportunity Commission (“EEOC”), asserting that he was “subjected to different terms and conditions of employment and a hostile work environment, denied a promotion . . . and suspended without pay due to [his] national origin . . . and [his] age . . . in violation of Title 11 of the Lincoln Municipal Code, the Nebraska Fair Employment Practices Act, Title VII of the Civil Rights Act of 1964 as [a]mended, the Age Discrimination in Employment Act of 1967 and the Nebraska Age Discrimination in Employment Act.” (Filing No. 1-2.)

         The LCHR investigated Alvarez's claims and facilitated mediation between Petitioner and Alvarez. However, the mediation was unsuccessful. On January 6, 2017, Alvarez requested that the LCHR set the matter for public hearing. (Filing No. 20-2.)

         On January 26, 2017, the LCHR issued a Charge of Discrimination (Filing No. 20-2) and scheduled the matter for hearing. On March 2, 2017, Petitioner filed a Petition to Compel Arbitration (Filing No. 1) in this Court, requesting that Alvarez be compelled to “arbitrate his employment disputes against [Petitioner], ” and that the LCHR proceedings be enjoined. (Filing No. 1.) In the LCHR proceeding, Petitioner moved to adjourn the public hearing and stay the matter pending a ruling on the Petition filed in this Court. The hearing officer granted Petitioner's request and issued an order staying all proceedings pending the outcome of this case. (Filing No. 20-2.)

         Petitioner filed its Motion to Compel Arbitration (Filing No. 18) on August 9, 2017. The motion requests that Alvarez be compelled to “arbitrate his claims pursuant to the arbitration agreement he signed.” (Filing No. 18.) Alvarez opposes the motion.

         DISCUSSION

         Under the Federal Arbitration Act (“FAA”), “[a] party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition . . . for an order directing that such arbitration proceed in the manner provided for in such agreement.” 9 U.S.C. § 4. The FAA was enacted “to reverse the longstanding judicial hostility to arbitration agreements . . . and to place arbitration agreements upon the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corporation, 500 U.S. 20, 24 (1991). The FAA evinces a “liberal federal policy favoring arbitration agreements.” Moses H. Cone Memorial Hospital v. Mercury Construction Corporation, 460 U.S. 1, 24 (1983). “[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Id. at 24-25. Nevertheless, “arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002) (quoting Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582 (1960)).

         A court asked to compel arbitration under the FAA must address two questions: (1) whether a valid agreement to arbitrate exists and (2) whether the arbitration agreement encompasses the issues in dispute. Larry's United Super, Inc. v. Werries, 253 F.3d 1083, 1085 (8th Cir. 2001). The Court must grant a petition to compel arbitration “if a valid arbitration clause exists which encompasses the dispute between the parties.” 3M Co. v. Amtex Sec., Inc., 542 F.3d 1193, 1198 (8th Cir. 2008).

         In this case, the existence of an arbitration agreement between Petitioner and Alvarez is not in question.^[1] The real issue presented is whether Alvarez can be compelled to arbitrate the claims scheduled for hearing before the LCHR. The undersigned concludes that he cannot.

         The LCHR administers Title 11 of the City of Lincoln, Nebraska's Municipal Code (“Title 11”). Title 11 delineates certain unlawful employment practices, including refusal “to hire, or to discharge any individual, or otherwise to discriminate against any individual . . . because of such individual's race, color, religion, sex, disability, national origin, ancestry, age, or marital status.” Lincoln Mun. Code § 11.08.40. The purpose of Title 11 is to effectuate the City of Lincoln's policy of fostering “employment of all employable persons in the city on the basis of merit regardless of their race, color, religion, sex, disability, national origin, ancestry, age, or marital status.” Lincoln Mun. Code § 11.08.010. Among other things, the LCHR is authorized to request that the City Attorney institute legal proceedings to protect the rights and privileges of complainants. Lincoln Mun. Code § 11.02.040.

         An individual alleging an unlawful discriminatory practice under Title 11 may file a verified complaint with the LCHR. Lincoln Mun. Code § 11.02.060. After the complaint is filed, the LCHR notifies the individual named in the complaint (“respondent”) and conducts an investigation. If the LCHR determines, after the investigation, that there is reasonable cause to believe the allegations in the complaint are true, the LCHR uses informal methods of conference, conciliation, or persuasion to eliminate the unlawful practice. Lincoln Mun. Code § 11.02.060. If the unlawful practice is not resolved by informal methods, the LCHR must “cause to be issued and served in the name of the [LCHR] a charge requiring the person or persons named in the charge . . . to answer the allegations . . . and appear at a public hearing.” Lincoln Mun. Code § 11.02.070 (emphasis added). If the hearing officer concludes that a discriminatory practice as defined by Title 11 has occurred, the hearing officer will prepare a written findings of fact, which is submitted to the LCHR “for entry of an appropriate order.” Lincoln Mun. Code § 11.02.070. The LCHR thereafter issues an order directing ...