A federal judge in Baltimore ruled that a gender discrimination lawsuit against Ripken Professional Baseball will continue, rejecting Ripken’s argument that the case should be dismissed or that arbitration should be compelled.
Interesting facts. A woman takes a job with Ripken Baseball in 2006 as an Account Representative. She gets promoted to Assistant General Manager of Ticket Sales in 2010. In 2011, she started dating a subordinate employee which she claims happened all the time at Ripken (like it does in the rest of the world) in spite of the fact that the employee handbook says it is a no-no. Ripken – not Cal, I’m referring to the organization – fires her, citing the relationship and, perhaps more importantly, that they told others to lie about the affair. The woman alleges that she was treated differently from her male colleagues who engaged in similar behavior with subordinates.
If true, maybe she was discriminated against? But that does not answer the question. Maybe she was discriminated against because she was not as good an employee as the others. The question, in this case, is whether she would have been fired if she was a man. Boy, that is a tough question for a judge or jury to figure out.
Anyway, the issue, for now, is in a much closer grasp: can Ripken compel arbitration? When the woman was hired by Ripken Baseball, she signed a Problem Support Policy (PSP) Acknowledgement and Agreement, which declared it as a valid and binding legal obligation connected to her hiring or continued employment. The PSP outlined a procedure for anyone who felt they had a problem requiring management’s attention. A section titled “Policy Application” explained that the PSP applied to all applicants and team members of RPB, and was meant to deal with almost all issues faced by team members, except for situations where another specific process was in place (such as unemployment claims and benefit plan disputes). The section also mentioned that all steps in the process would be enforced unless prohibited by state law, and that the policy didn’t necessarily create any entitlement to progressive discipline or termination only for cause. The employment relationship was considered “at-will.”
But the court says arbitration was not required for two reasons. First, there was no consideration for the arbitration clause. For arbitration agreements between employers and employees, employment or continued employment does not act as consideration for the employee’s promise to arbitrate. So the court has to figure out whether the agreement itself contains sufficient consideration, which usually involves a mutual exchange of promises to arbitrate.
The arbitration agreement lacked mutuality of consideration because it only required one party to submit disputes to arbitration. This lack of “mutuality of obligation” between the employer and the signing employee makes the arbitration provision invalid.
No Access to Neutral Forum
But, more interestingly, at least to me because it might relate to nursing home cases, is that two defects in the arbitration agreement make it unfair and unconscionable because it denies the woman access to a neutral forum. The court found that while the arbitration provision appeared to apply equally to both parties, its failure to provide a neutral forum for resolving disputes renders it unenforceable under Fourth Circuit law.
Generally, the defense of unconscionability cannot be used in a way that targets the mere existence of an arbitration agreement as the basis for invalidating it. However, state law applications that obstruct the objectives of the FAA by interfering with arbitration’s fundamental attributes may be preempted by the federal statute. State law cannot undermine the informality of arbitration but when an arbitration agreement contains provisions that deny one party access to a neutral arbitral forum, that is a different story.
In this case, Ripken PSP’s arbitration provision gives them exclusive control over the list of arbitrators that may be used. In other words, the deck is stacked against the Plaintiff. We see this with insurance companies all the time. They want to use the same arbitrators that have never seen a case they can’t undervalue. It is just, the court concludes, not fair.
The arbitration clause Ripken wanted to invoke also failed to provide sufficient rules by which arbitration would proceed, giving the plaintiff no assurance of procedural due process.
Boy, the local media has steered clear of this story. I mean, Cal may not have even met the woman. I can’t imagine he is remotely involved in these issues. But the fact that it is “Ripken baseball” does make it news. I think it is fair to say – and maybe he has earned it – that Cal Ripken would get at least one free murder in Baltimore without consequences.
Unrelated, Ripken baseball tournaments are ridiculously – ridiculously! – expensive. But the Ripken baseball experience is awesome. Playing on Cal Sr.’s yard in Aberdeen – that is money.
(If you are reading this post, please keep in mind my firm does not handle gender discrimination or any other types of employment claims. We handle only serious personal injury cases. That’s it!)