Harassment claims should be arbitrated, not litigated: Appeals court

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    Reprints

    arbitration

    A federal appeals court has overturned a lower court ruling and held a former car dealership network worker’s hostile work environment and sexual harassment claims should be arbitrated, not litigated.

    DeAngela Solomon began working for Madison Heights, Michigan-based CARite Corporate LLC in September 2015 and in June 2016 was transferred to its Taylor, Michigan, location, according to Monday’s ruling by the 6th U.S. Circuit Court of Appeals in Cincinnati in DeAngela Solomon v. CARite Corporate LLC, et al.

    At her new location, her supervisor allegedly began behaving inappropriately, including discussing female coworkers’ intimate lives and physical attributes.

    A coworker allegedly participated in these conversations, telling coworkers that Ms. Solomon was promiscuous and had had plastic surgery to enhance her appearance.

    Ms. Solomon also claimed that on one occasion, the supervisor made a particularly lewd, sexually suggestive remark to her in front of coworkers. She resigned in August 2018.

    Ms. Solomon had signed an arbitration agreement in July 2017. She claimed she was told that if she did not sign, she would be terminated and had been given little time to review the document.

    She admitted, however, that she had read through the document for five to ten minutes before signing it, that she had some post-secondary education, and that she had experience reviewing car sales contracts, although she said she did not understand the arbitration agreement nor had the opportunity to consult a lawyer.

    Ms. Solomon filed suit against CARite, the supervisor and the coworker in U.S. District Court in Detroit in August 2019, charging sex discrimination and a hostile work environment under Title VII of the 1964 Civil Rights Act and state law and defamation.

    The defendants filed a motion to compel arbitration, which the district court denied, reasoning Ms. Solomon had been coerced by her supervisor into signing because she was “incapacitated by her fragile economic position” and the supervisor’s threat to terminate her if she did not sign, among other issues.

    Ms. Solomon was not coerced or incapacitated when she signed the arbitration agreement, a unanimous three-judge appeals court panel said, in overturning the lower court’s ruling.

    Ms. Solomon claimed “she was coerced into signing the arbitration agreement because (the supervisor) threatened to fire her if she did not sign the agreement and, at the time, she was a single mother to a disabled child and she needed to keep her job,” the ruling said.

    But fear of financial ruin alone “is insufficient to establish duress; it must also be established that the person applying the coercion acted unlawfully,” the panel said, in citing an earlier ruling.

    “Because CARite had a legal right to fire Solomon as an at-will employee, CARite’s conditioning of Plaintiff’s continued employment on her signing the arbitration agreement does not amount to unlawful conduct. Therefore, Solomon has not shown that she was coerced into signing the agreement.”

    The district court also erred in holding Ms. Solomon was incapacitated when she signed the agreement. To hold a plaintiff is incapacitated under Michigan law, the plaintiff must show she was “of unsound mind or insane when it was made,” the panel said, citing an earlier ruling and noting Ms. Solomon did not contend that.

    “Further, the economic pressure that Solomon might have felt to sign the agreement to maintain her employment is insufficient to constitute incapacity,” the decision said.

    The ruling also held that Ms. Solomon “possessed sufficient experience, background, and education to knowingly and voluntarily waive her Title VII claims.”

    The panel reversed the lower court’s ruling with instructions to grant the defendants’ motion for summary judgment and compel arbitration of Ms. Solomon’s claims.

    CARite attorney Scott James Preston, a shareholder with Ogletree Deakins Smoak & Stewart P.C. in Indianapolis, said in a statement, “We are pleased with the Sixth Circuit’s decision to reverse the district court and hold that CARite’s arbitration provision is valid and enforceable. … We look forward to prevailing at arbitration.”

    Ms. Solomon’s attorney did not respond to a request for comment.