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Horne v. Starbucks Corp.

United States District Court, E.D. California

June 29, 2017

CHAD HORNE, Plaintiff,
STARBUCKS CORPORATION, a Washington corporation, and DOES 1 through 100, inclusive, Defendants.



         Through the present action, Plaintiff Chad Horne (“Plaintiff”) sues his former employer, Defendant Starbucks Corporation (“Starbucks), on grounds that he was discriminated against, and ultimately constructively discharged, due to his sexual orientation. Plaintiff alleges various claims premised on harassment, retaliation and discrimination in contravention of both California's Fair Employment and Housing Act (“FEHA”) and public policy. Plaintiff further alleges wage and hour claims in violation of the California Labor Code. Although Plaintiff's lawsuit was initially filed in Placer County Superior Court, it was removed here on diversity of citizenship grounds pursuant to 28 U.S.C. §§ 1332 and 1441.

         Starbucks now seeks an order compelling arbitration under the terms of its Mutual Arbitration Agreement entered into by Plaintiff as a condition of his employment. Starbucks requests that this Court either dismiss or stay the present litigation pending arbitration. For the reasons stated below, Defendant's Motion to Compel Arbitration (ECF No. 9) is GRANTED.[1]


         A. Complaint

         Plaintiff began working as a barista for Starbucks in Auburn, California on April 12, 2016. He claims that throughout his employment with Starbucks, which lasted less than two months, he “was forced to endure an openly hostile work environment based upon his sexual orientation and/or his perceived sexual orientation.” Pl.'s Compl, ¶ 8. He claimed that he was belittled and insulted based on his orientation and mannerisms and was told by his General Manager to “tone down” his affect. Id. at ¶¶ 10-14. Plaintiff states that two co-workers went so far as to push their bodies against him in a “physically threatening manner” which caused Plaintiff to “feel threatened and caused him to cry uncontrollably.” Id. at ¶ 9.

         On June 3, 2016, Plaintiff alleges he was told by Starbuck's Reginal General Manager that Plaintiff “had caused an uncomfortable work environment because he [could] not' control his behavior and mannerism.'” Id. at 15. Plaintiff was then sent home and states he decided the next day that he had “no other reasonable option but to terminate his employment” with Starbucks since he “could no longer tolerate the openly hostile work environment” to which he was subjected. Id. at 16.

         On September 29, 2016, Plaintiff filed the instant lawsuit in state court. As indicated above, Starbucks proceeded to timely remove the case to federal court on November 16, 2016. Citing its agreement with Plaintiff to arbitrate any disputes arising out of the course of his employment, Starbucks subsequently filed the present Motion to Compel on January 13, 2017.

         B. Arbitration Agreement

         On or about October 1, 2014, Starbucks began implementing a requirement that, as a condition of employment, all new hires must agree to arbitrate any claims arising out of their employment. Decl. of Matthew Kennedy, ¶ 3. When Plaintiff submitted his online application for employment on May 1, 2016, he was expressly notified of that requirement. Id. at ¶ 7, Ex. C. After he received an offer of employment and before commencing work at Starbucks, Plaintiff was required to electronically sign a Mutual Arbitration Agreement which specifically encompassed any claims pertaining to compensation, harassment, discrimination, retaliation . . . accommodations or termination of employment.” Id. at Ex. J.

         The Arbitration Agreement provided, in pertinent part, that 1) it was a Mutual Agreement to Arbitrate by Starbucks and the employee; 2) any arbitration would be governed by the rules of the American Arbitration Association; 3) Starbucks would pay all costs unique to arbitration; 4) a neutral arbitrator would be mutually selected by the parties; 5) the arbitrator would be required to issue a written ruling within 30 days following the conclusion of the arbitration hearing. Id. The Agreement further delineated the discovery to which each side would be entitled, which included three interrogatories, 25 requests for products of document, and “a maximum of two eight-hour days of depositions of witnesses.” Id. The terms of the Agreement also authorized the arbitrator to decide any dispute related to discovery and empowered the arbitrator to allow additional discovery beyond that set forth above “upon a showing of substantial need by either party or upon a showing of an inability to pursue or defend certain claims.” Id.


         By its terms, Starbuck's Arbitration Agreement is governed by the Federal Arbitration Act, 9 U.S.C. § 1, et seq. (“FAA”). The FAA allows “a party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration [to] petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in [the arbitration] agreement”. 9 U.S.C. § 4.

         Given this statutory directive, courts must compel arbitration in disputes covered by a legally binding arbitration agreement. Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). Valid arbitration agreements must be “rigorously enforced” given the strong federal policy in favor of enforcing arbitration agreements. Perry v. Thomas, 482 U.S. 483, 489-90 (1987) (citation omitted). To that end, the FAA “leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in the original). In deciding whether to compel arbitration proceedings under the FAA, the court's role is limited to ‚Äúdetermining (1) ...

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