Rost v. Liberty Coca Cola

Background

Michael Rost sued Liberty Coca-Cola Beverages, LLC, alleging discrimination under the Americans with Disabilities Act and Title VII of the Civil Rights Act of 1964. Rost alleged that Liberty did not support his efforts to discipline a female employee whom he viewed as insubordinate, rude, and insulting. He claimed that Liberty’s treatment caused him substantial stress, disability-related leave, and ultimately his termination.

Liberty had adopted a four-step dispute-resolution process called the Solutions Program: Open Door, Human Resources Facilitation, mediation, and arbitration. The program stated that arbitration was the final forum for covered legal disputes and that employees and Liberty waived the right to seek relief in court for those disputes. Non-union employees were asked to sign an agreement acknowledging and agreeing to the program. Rost signed the agreement on June 15, 2018.

Rost used the Open Door and Human Resources Facilitation steps concerning his complaints, but he did not proceed to mediation or arbitration. Liberty terminated him in April 2020, and he filed this action on December 14, 2020.

Motion and Analysis

Liberty filed a motion to dismiss or, alternatively, to stay the case and compel arbitration under the Federal Arbitration Act. Because Liberty expressly requested an order requiring arbitration and argued that Rost’s claims had to be arbitrated, the court treated the motion as a motion to compel arbitration.

Rost did not dispute that he entered into a valid arbitration agreement, that his claims fell within its scope, or that Congress had not made claims under the Americans with Disabilities Act or Title VII non-arbitrable. He argued only that Liberty materially breached the Solutions Program by failing to properly engage in its first two steps and therefore waived its right to enforce arbitration.

The court found that Liberty had shown, by a preponderance of the evidence, that a valid arbitration agreement existed. It ruled that whether Liberty’s alleged failure to follow the earlier program steps waived its right to arbitration was a procedural dispute for the arbitrator to decide first. The court distinguished a situation in which an employer refuses to participate in arbitration after a formal arbitration demand; here, Rost argued that Liberty had not satisfied prerequisites to arbitration, not that it had refused to participate in arbitration itself.

Disposition

The motion to compel arbitration was GRANTED. The parties were ordered to arbitrate their dispute under the Solutions Program. The court STAYED the action pending completion of arbitration rather than dismissing it. The clerk was instructed to administratively close the case, without prejudice to either party moving by letter to reopen it within 30 days after the arbitration proceedings conclude.