Hooters Of America, Inc. v. Phillips

39 F.Supp.2d 582 (1998)

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Nature of the Case

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Facts

P filed a complaint seeking a declaratory judgment that the arbitration agreements signed by Phillips were valid and enforceable. D denied she had entered into an enforceable arbitration agreement covering her dispute with P. D claimed that the agreements were neither knowingly nor voluntarily entered into, and were unconscionable adhesion contracts violative of public policy. D also alleged that the procedures deprived her of due process, substantive protection against sexual harassment, and statutory remedies under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. D counterclaimed. D sought damages and injunctive relief against P for violations of Title VII, based on the alleged hostile environment and harassing behavior, culminating in a constructive discharge. While D was bartending at P, Gerald Brooks allegedly grabbed and slapped her buttocks while in the presence of P management and customers. D responded that Brooks should not touch her, to which he allegedly responded that 'he would cram her shorts down her face.' Management witnessing the event advised her that she should let the matter go because nothing could be done to correct Gerald Brooks' behavior as he was the brother of the CEO. D submitted her written resignation citing the incident of June 19 and management's alleged failure to take remedial action as the reason for her constructive discharge. D received her Notice of Right to Sue from the EEOC on November 25, 1996, for her individual counterclaim and filed the action within 90 days, on January 15, 1997. Her counterclaim for sexual harassment seeks damages, injunctive relief, and reinstatement to a harassment-free workplace. The counterclaim is brought on behalf of D and a proposed class known as 'Hooters Girls.' The class counterclaim asserts that P will attempt to enforce these purportedly unfair arbitration procedures against any class member who seeks a judicial forum for violations of Title VII. The class counterclaim asserts four causes of action. The first claim is for a declaratory judgment that the purported arbitration agreements deprive class members of substantive and procedural rights under Title VII and are unenforceable. The second asserts that promulgation of such mandatory and unfair arbitration procedures deprives the proposed class of equal employment opportunities because of their sex, and is itself a violation of Title VII. The third contends that Hooters has retaliated against class members who have opposed its unlawful employment practices, in violation of § 704 of Title VII, 42 U.S.C. § 2000e-3. The fourth asserts that by its promulgation of such mandatory unfair arbitration procedures, P has deprived the class members of the right to an impartial determination of a civil action and the right to substantive remedies guaranteed by law, on account of their sex, in violation of § 706(f) & (g) of Title VII, 42 U.S.C. § 2000e-5(f) & (g). D received her Notice of Right to Sue on the arbitration issue class counterclaim involving the arbitration agreement on January 9, 1997, which was within 90 days of the filing of the counterclaim. P asked that the counterclaim be dismissed with prejudice, and it be awarded costs and expenses, including attorney's fees. P argues that D knowingly and voluntarily entered into an arbitration agreement that specifically covered sexual harassment claims and that any lack of information regarding the Rules was D's own fault.