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ARAKAWA v. JAPAN NETWORK GROUP

July 12, 1999

TAEKO ARAKAWA, PLAINTIFF,
v.
JAPAN NETWORK GROUP, AND MR. YOSHIAKI IIDA, DEFENDANTS.



The opinion of the court was delivered by: Stein, District Judge.

West

OPINION AND ORDER

Defendants Japan Network Group ("JNG") and Yoshiaki Iida have moved to compel arbitration of this employment dispute. That motion is granted because, as set forth below, a valid agreement to arbitrate was signed by plaintiff and because the Court finds that arbitration of plaintiff's Title VII claims should not be precluded simply because she may be required to pay a portion of the costs of the arbitration.

I. Background

  Plaintiff Taeko Arakawa was employed by JNG, a New York corporation
that broadcasts Japanese TV programs in North America, from 1992 through
1998, first as an Administrative Assistant to the President and then in
JNG's Hotel Sales Department. In December of 1997, JNG adopted an
"Employee Policies & Procedures Handbook," which reads in pertinent
part:

    . . any and all disputes and claims which arise out
  of or relate to your employment, to this handbook, or
  to the termination of your employment with or without
  cause, shall be settled by the final and binding
  arbitration in accordance with the Employment Dispute
  Resolution Rules of the American Arbitration
  Association.

Affidavit of Jamie A. Levitt dated March 5, 1999, Ex. 2, p. 10. On January 6, 1998, plaintiff was given the Employee Handbook and signed an Acknowledgment of Receipt ("Acknowledgment") that reiterated the language quoted above and stated that plaintiff understood and agreed to this arbitration policy.*fn1 See id., Ex. 2, p. 32.

In April of 1998, for reasons which are in dispute, Arakawa was terminated by JNG. Plaintiff claims that she was being sexually harassed by her supervisor, defendant Yoshiaki Iida, and that her termination was motivated by her refusal to travel with Iida. Defendants claim that Arakawa was terminated due to insubordination and that she refused to travel because it would interfere with her personal schedule. After her termination, Arakawa's attorney wrote JNG requesting "that the Arbitration clause of the Employee Manual be effectuated and that [JNG] immediately contact [plaintiff's attorney] to discuss the necessary procedures to start Arbitration." Levitt Aff., Ex. 3, May 13, 1998 letter. JNG responded by requesting that the parties try to resolve the dispute themselves before proceeding to arbitration.

In response, Arakawa filed this action in which she asserts claims of sexual harassment and unlawful discharge pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000a, et. seq., New York Exec. Law § 296, and the New York City Civil Rights Law, N.Y. City Admin. Code §§ 8-107 et. seq. As noted above, defendants have now moved to compel Arakawa to arbitrate their disputes.

II. Discussion

The Federal Arbitration Act ("FAA") provides that "an agreement in writing to submit to arbitration an existing controversy . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Since the passage of the FAA federal courts have recognized a "strong federal policy favoring alternative means of dispute resolution," see Oldroyd v. Elmira Sav. Bank, FSB, 134 F.3d 72, 76 (2d Cir. 1998), and, in light of that policy, "[a]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Mem'l Hosp. v. Mercury, Constr. Corp., 460 u.S. 1, 24-25, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983). See Ahing v. Lehman Bros., Inc., 1997 WL 634290, at *1 (S.D.N.Y. Oct. 14, 1997). Four factors must be considered in determining whether to compel arbitration pursuant to the FAA: 1) did the parties agree to arbitrate; 2) what is the scope of the arbitration agreement; 3) did Congress intend the federal statutory claims asserted by the plaintiff to be nonarbitrable; and 4) if only certain of the claims are arbitrable, should the court stay the balance of the proceedings pending arbitration. See Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840, 844 (2d Cir. 1987).

A. Agreement to Arbitrate

In determining whether parties have agreed to arbitrate, courts apply generally accepted principles of contract law. See id. at 845. In this action, the parties' agreement to arbitrate is evidenced by the Employee Handbook and the Acknowledgment signed by plaintiff, which itself reiterated the terms of the agreement to arbitrate. Pursuant to New York law, "a person who signs a contract is presumed to know its contents and to assent to them." See Berger v. Cantor Fitzgerald Securities, 967 F. Supp. 91, 93 (S.D.N.Y. 1997) (citations omitted). Plaintiff is bound by the agreement to arbitrate unless she can show special circumstances, such as duress or coercion, which would justify non-enforcement of the contract. See Gilmer v. Interstate /Johnson Lane Corp., 500 U.S. 20, 33, 111 S.Ct. 1647, 1655, 114 L.Ed.2d 26 (1991); Genesco, 815 F.2d at 845-46; Berger, 967 F. Supp. at 93.

Arakawa's attorney, in plaintiff's memorandum of law in opposition to this motion, claims that plaintiff only signed the contract to keep her job, and, therefore, the agreement to arbitrate is an unenforceable contract of adhesion. See Plaintiff's Memorandum of Law in Opposition to Defendant's Motion, p. 8. However, the "[m]ere inequality of bargaining power" that exists between an employee and an employer is an insufficient reason to find an arbitration agreement unenforceable. See Gilmer, 500 U.S. at 33, 111 S.Ct. at 1655-56. Moreover, plaintiff has not made the "disturbing showing of unfairness, undue oppression or unconscionability" necessary to void a contract on the basis that it is a contract of adhesion. Klos v. Polskie Linie Lotnicze, 133 ...


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