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A requirement that workers at Lithia Ford Lincoln Mercury of Roseburg must take employment claims to an arbitrator rather than go to court was upheld last week under a ruling by the Oregon Court of Appeals.
The court held that former Lithia employee Rechelle Motsinger, who alleged in a lawsuit that she was fired after reporting sexual harassment by other employees, should have pursued her complaints through arbitration.
The three-member panel overruled a decision by Douglas County Circuit Judge Ronald Poole to have the case heard in court. Poole erred, the Court of Appeals ruled, when he turned down a request from Lithia to have Motsinger’s court case set aside pending arbitration.
Poole denied the defense motion after determining that an employee contract signed by Motsinger agreeing to have disputes settled by arbitration was unenforceable because it was “unconscionable.”
An unconscionable contract is one that is so one-sided that it gives one party an unfair advantage over the other.
“The court found that the contract wasn’t unconscionable,” said William Wheatley, a Eugene attorney who is representing Lithia in the case. “It also recognized that arbitration and mediation are valuable tools that can be used to settle a dispute.”
Motsinger’s attorney, Shane Swilley of Portland, could not be reached immediately for comment. A listing for Motsinger does not appear in the Roseburg telephone directory.
Motsinger worked for Lithia for 14 months as a part-time receptionist. During the course of her employment, she said she was subjected to repeated acts of sexual harassment by several male employees. She was later fired and Motsinger clamed that her termination was partially due to retaliation for reporting the alleged harassment to company management.
Motsinger’s attorney, Shane Swilley, argued that the employment contract placed his client into an unequal bargaining position. The arbitration clause was imposed upon her as a condition of employment and she didn’t have any way to negotiate its terms, he said.
The arbitration clause was contained in a packet of about 50 new-hire forms Motsinger said she was required to sign to go to work for the car dealership. She said she was given less than two hours to read those forms, along with 20 other documents that didn’t need to be signed.
She also said the contract provided a greater benefit to her employer because while it required her to settle all disputes through arbitration, Lithia wasn’t held to the same restriction. In addition, she said the contract did not guarantee she would not have to pay the costs associated with arbitration.
Lithia said it did not use any high pressure tactics to compel Motsinger to consent to arbitration. The company said it gave her time to read through all of the forms and to ask questions. The record supports that assertion, the Court of Appeals decision said.
The 13-page decision, written by Judge Walter Edmonds Jr., said Motsinger had not proved her employment contract was unconscionable.
The court found that the presence of unequal bargaining power, by itself, did not make a contract unconscionable. That could only be determined on a case-by-case basis, the court said.
In this instance, the arbitration process was bound by state and federal arbitration rules. The arbitrator had to be a retired Oregon circuit court judge who was mutually acceptable to both sides. In addition, the rules of pleading and evidence were to follow federal district court rules. The arbitrator was also bound by federal court procedures and had to deliver a reasoned written opinion.
Either party has the right to have the arbitrator’s ruling reviewed by a second arbitrator. That review would follow the law and procedures used by the Court of Appeals.
“The arbitration clause does not impose any limits on discovery or admissible evidence, apart from those limitations that apply in federal district court, nor does it impose tight deadlines on the filing of claims,” Edmonds wrote. “In effect, (the) plaintiff is entitled to all of the same remedies — and most of the same procedural protections — as (the) defendant; she simply must bring her claims in a different forum.”
The case now goes back to Douglas County Circuit Court. Wheatley said he will ask Poole once again to have the case set aside so that it could be brought before an arbitrator.
• You can reach reporter John Sowell at 957-4209 or by e-mail at jsowell@newsreview.info.
The court held that former Lithia employee Rechelle Motsinger, who alleged in a lawsuit that she was fired after reporting sexual harassment by other employees, should have pursued her complaints through arbitration.
The three-member panel overruled a decision by Douglas County Circuit Judge Ronald Poole to have the case heard in court. Poole erred, the Court of Appeals ruled, when he turned down a request from Lithia to have Motsinger’s court case set aside pending arbitration.
Poole denied the defense motion after determining that an employee contract signed by Motsinger agreeing to have disputes settled by arbitration was unenforceable because it was “unconscionable.”
An unconscionable contract is one that is so one-sided that it gives one party an unfair advantage over the other.
“The court found that the contract wasn’t unconscionable,” said William Wheatley, a Eugene attorney who is representing Lithia in the case. “It also recognized that arbitration and mediation are valuable tools that can be used to settle a dispute.”
Motsinger’s attorney, Shane Swilley of Portland, could not be reached immediately for comment. A listing for Motsinger does not appear in the Roseburg telephone directory.
Motsinger worked for Lithia for 14 months as a part-time receptionist. During the course of her employment, she said she was subjected to repeated acts of sexual harassment by several male employees. She was later fired and Motsinger clamed that her termination was partially due to retaliation for reporting the alleged harassment to company management.
Motsinger’s attorney, Shane Swilley, argued that the employment contract placed his client into an unequal bargaining position. The arbitration clause was imposed upon her as a condition of employment and she didn’t have any way to negotiate its terms, he said.
The arbitration clause was contained in a packet of about 50 new-hire forms Motsinger said she was required to sign to go to work for the car dealership. She said she was given less than two hours to read those forms, along with 20 other documents that didn’t need to be signed.
She also said the contract provided a greater benefit to her employer because while it required her to settle all disputes through arbitration, Lithia wasn’t held to the same restriction. In addition, she said the contract did not guarantee she would not have to pay the costs associated with arbitration.
Lithia said it did not use any high pressure tactics to compel Motsinger to consent to arbitration. The company said it gave her time to read through all of the forms and to ask questions. The record supports that assertion, the Court of Appeals decision said.
The 13-page decision, written by Judge Walter Edmonds Jr., said Motsinger had not proved her employment contract was unconscionable.
The court found that the presence of unequal bargaining power, by itself, did not make a contract unconscionable. That could only be determined on a case-by-case basis, the court said.
In this instance, the arbitration process was bound by state and federal arbitration rules. The arbitrator had to be a retired Oregon circuit court judge who was mutually acceptable to both sides. In addition, the rules of pleading and evidence were to follow federal district court rules. The arbitrator was also bound by federal court procedures and had to deliver a reasoned written opinion.
Either party has the right to have the arbitrator’s ruling reviewed by a second arbitrator. That review would follow the law and procedures used by the Court of Appeals.
“The arbitration clause does not impose any limits on discovery or admissible evidence, apart from those limitations that apply in federal district court, nor does it impose tight deadlines on the filing of claims,” Edmonds wrote. “In effect, (the) plaintiff is entitled to all of the same remedies — and most of the same procedural protections — as (the) defendant; she simply must bring her claims in a different forum.”
The case now goes back to Douglas County Circuit Court. Wheatley said he will ask Poole once again to have the case set aside so that it could be brought before an arbitrator.
• You can reach reporter John Sowell at 957-4209 or by e-mail at jsowell@newsreview.info.
