The opinion of the court was delivered by: Ambrose, District Judge.
OPINION and ORDER OF COURT
Following her termination from employment. Plaintiff commenced
suit against her former employers, arguing that she was fired
because of age and gender discrimination. Accordingly, she
asserted claims under the Age Discrimination in Employment Act
("ADEA"), 29 U.S.C. § 621 et seq., and under Title VII of the
Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a). The Employer
believes that Spinetti is contractually obligated to resolve
these claims through an arbitration process, and has filed a
Motion to Dismiss and Compel Arbitration (Docket No. 4).
Spinetti argues that the arbitration agreement is unenforceable.
I agree that the agreement to arbitrate is unenforceable insofar
as it subjects Spinetti to paying half of the costs of
arbitration and to paying her own attorney's fees and costs,
regardless of whether she ultimately prevails. The Motion to
Dismiss and Compel Arbitration is granted, subject to the
severing of these two provisions.
Plaintiff Mary Ann Spinetti ("Spinetti") worked for more than
ten years as an employee of Service Corporation international
and Service Corporation International of Pennsylvania d/b/a
Lafayatte Memorial Park ("Lafayatte"). On October 24, 2000,
however, her employment ended. Lafayatte claims to have fired
Spinetti because she assaulted another employee. Spinetti denies
the allegation. Believing the alleged assault to be mere pretext
for age and gender discrimination, Spinetti filed suit. She
asserts claims under ADEA and Title VII.
Lafayatte maintains that, under these terms of the Agreement,
Spinetti is obligated to arbitrate her discrimination claims.
Spinetti counters that the Agreement is unenforceable both
because the cost of arbitrating her claims would be so expensive
as to prohibit her from effectively asserting her rights, and
because the Agreement deprives her of her statutory right to
recover attorney's fees and costs should she prevail. I agree
with both of Spinetti's contentions. Lafayatte's Motion to
Dismiss or Compel Arbitration is granted, subject to the
severing of these two provisions.
Summary judgment may only be granted if the pleadings,
depositions, answers to interrogatories and admissions on file,
together with any affidavits, show that there is no genuine
issue as to any material facts and that the moving party is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A
fact is material when it might affect the outcome of the suit
under the governing law. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
Rule 56 mandates the entry of judgment, after adequate time for
discovery and upon motion, against the party who fails to make a
showing sufficient to establish the existence of an element
essential to that party's case, and on which that party will
bear the burden of proof at trial. Celotex Corp. v. Catrett,
477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
In considering a motion for summary judgment, the Court must
examine the facts in the light most favorable to the party
opposing the motion. International Raw Materials, Ltd. v.
Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The
burden is on the moving party to demonstrate that the evidence
is such that a reasonable jury could not return a verdict for
the nonmoving party. Anderson, 477 U.S. at 248, 106 S.Ct.
2505. Where the non-moving party will bear the burden of proof
at trial, the party moving for summary judgment may meet its
burden by showing that the evidentiary materials of record, if
reduced to admissible evidence, would be insufficient to carry
the nonmovant's burden of proof at trial. Celotex, 477 U.S. at
322, 106 S.Ct. 2548. Once the moving party satisfies its burden,
the burden shifts to the non-moving party, who must go beyond
its pleadings, and designate specific facts by the use of
affidavits, depositions, admissions, or answers to
interrogatories showing that there is a genuine issue for trial.
Id. at 324, 106 S.Ct. 2548.
I. Payment of One-Half of Costs and Fees Associated With
As stated above, the Agreement obligates Spinetti to pay
one-half of the costs associated with arbitration. The discrete
issue before me is whether such an agreement is unenforceable.
Neither the United States Supreme Court nor the Third Circuit
Court of Appeals have resolved this matter and, in past years,
other federal courts have reached different conclusions. See
Shankle v. B-G Maintenance Mgmt. of Colorado, 163 F.3d 1230
(10th Cir. 1999); Paladino v. Avnet Computer Technologies,
Inc., 134 F.3d 1054 (11th Cir. 1998) and Cole v. Burns Intern.
Security Services, 105 F.3d 1465 (D.C.Cir. 1997) (all finding
such clauses to be unenforceable), as compared to: Koveleskie
v. SBC Capital Markets, Inc., 167 F.3d 361 (7th Cir. 1999),
cert denied, 528 U.S. 811, 120 S.Ct. 44, 145 L.Ed.2d 40
(1999), Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith,
170 F.3d 1 (1st Cir. 1999), and Arakawa v. Japan Network
Group, 56 F. Supp.2d 349 (S.D.N.Y. 1999) (all finding such
clauses to be enforceable).
Yet the Supreme Court's recent decision on a closely-related
issue provides much guidance and clarification. In Green Tree
Financial Corp. v. Randolph, 531 U.S. 79, 82, 121 S.Ct. 513,
517, 148 L.Ed.2d 373 (2000), the Court addressed, in part,
"whether an arbitration agreement that does not mention
arbitration costs and fees is unenforceable because it fails to
affirmatively protect a party from potentially steep arbitration
costs." Although the Court answered the question in the
negative, it declined to adopt a per se rule. Rather, it
acknowledged that, "[i]t may well be that the existence of large
arbitration costs could preclude a litigant such as Randolph
from effectively vindicating her federal statutory rights in the
arbitral forum." Green Tree, 531 U.S. at 90, 121 S.Ct. at 522.
Because the record did not contain any evidence of ...