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BALL v. SFX BROADCASTING

August 21, 2001

KAREN BALL AND TRACY CHRISTOPHER, ON BEHALF OF THEMSELVES INDIVIDUALLY, AND ON BEHALF OF ALL OTHER WOMEN SIMILARLY SITUATED, PLAINTIFFS,
v.
SFX BROADCASTING, INC.; LIBERTY BROADCASTING, INC.; MICHAEL FERREL; AND ROBERT AUSFELD, INDIVIDUALLY AS AIDERS AND ABETTORS, AND IN THEIR REPRESENTATIVE CAPACITIES, DEFENDANTS.



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

  MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

On July 13, 2000, plaintiffs Karen Ball ("Ball") and Tracy Christopher ("Christopher") (collectively, "plaintiffs") commenced the instant action against defendants SFX Broadcasting, Inc. ("SFX"), Liberty Broadcasting, Inc. ("Liberty"), Michael Ferrel ("Ferrel"), and Robert Ausfeld ("Ausfeld") pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., as amended, and state law.

Defendants now move to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) or (6). Plaintiffs oppose. Oral argument was heard on April 26, 2001, in Albany, New York. Decision was reserved.

II. FACTS

This action arises from the alleged discrimination against plaintiffs by defendants on the basis of plaintiffs' gender and pregnancy. The following are the facts in this case stated in the light most favorable to the nonmoving plaintiffs.

Plaintiffs were both employees of WGNA, a radio station owned by Liberty, in Albany, New York. In July 1996, after they had been employed at WGNA for some time, Liberty was purchased by SFX. Ferrel was the president of SFX. Ausfeld was the general manager of several Albany area stations for Liberty, and was hired by SFX as vice-president and general manager of those Albany area stations.

Upon SFX's assumption of control of stations previously owned by Liberty, Ausfeld instructed all employees of those stations — including employees of WGNA — to sign an employment agreement as a condition of continued employment by SFX. On July 17, 1996, Ausfeld told station employees that if they wanted to retain their jobs, they had to fill out an employment application and acknowledge receipt of an employee manual, returning both by July 19, 1996. Both plaintiffs signed a form acknowledging receipt and acceptance of the employment agreement which contained an arbitration clause (the "arbitration agreement").*fn1

The Acknowledgment which plaintiffs signed provided, in part, as follows:

I understand and agree that any dispute connected with my employment which arises after my employment's conclusion and between the Company and me, including but not limited to termination, discharge, discrimination, or retaliation shall be resolved by submission to final and binding arbitration as set forth in more detail in the Employee Manual.

(Christopher Aff., Exh. A at 28.)

Subsequently, plaintiff Ball became pregnant, and took pregnancy-related leave under WGNA's leave program. She alleges that she was discriminated against as a result of her utilization of pregnancy leave. She filed a claim with the EEOC, alleging that her employment was terminated by Ausfeld on the pretext that she was no longer needed, but that, in fact, her job duties were assigned to a nonpregnant female who lacked Ball's qualifications.

The parties unsuccessfully attempted to negotiate a resolution of Ball's claims. When these efforts failed, SFX served a demand for arbitration upon her counsel on January 10, 1997. Ball responded by commencing a state court action asserting state law claims against SFX and Ausfeld. She also obtained an order to show cause on January 29, 1997, in state court and sought a permanent stay of arbitration.

On March 18, 1997, the state trial court denied Ball's motion to stay arbitration. The court concluded (1) that the arbitration agreement was governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("FAA"); and (2) that a valid agreement to arbitrate exists between the parties.*fn2 Ball appealed the trial court's decision to the Appellate Division, Third Department. In an opinion dated December 4, 1997, the Third Department affirmed the trial court's decision on state law grounds. In re Ball and SFX Broadcasting, Inc., 236 A.D.2d 158, 160, 665 N.Y.S.2d 444 (3d Dep't 1997). Ball then attempted an appeal to the New York Court of Appeals, which declined to hear the merits of her appeal on June 16, 1998. In re Ball and SFX Broadcasting, Inc., 92 N.Y.2d 803, 677 N.Y.S.2d 73, 699 N.E.2d 433 (1998) (table).

Ball's claim was arbitrated on December 7, 1999. In an apparent effort to preserve the right to object to the arbitration, neither Ball nor her counsel attended the arbitration hearing. SFX and Ausfeld put on witnesses and introduced documentary evidence in support of their case. All parties were offered the opportunity to submit post-hearing briefs, and both SFX and Ausfeld did so. On March 7, 2000, the arbitrator rendered a decision in favor of SFX and Ausfeld.*fn3

Like Ball, Christopher claims that she was discriminated against by defendants on the basis of sex and pregnancy, and that she was retaliated against for her complaints of discrimination.*fn4 Like Ball, Christopher also filed a charge of discrimination with the EEOC. However, unlike Ball, plaintiff Christopher has never litigated the validity of the arbitration agreement in any forum. In ...


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