Anne E. Scheurer, Plaintiff-Appellee,
Fromm Family Foods LLC, Defendant-Appellant.
May 31, 2017
from the United States District Court for the Western
District of Wisconsin. No. 15-cv-770-jdp - James D. Peterson,
Kanne, Sykes, and Hamilton, Circuit Judges.
Hamilton, Circuit Judge.
Anne Scheurer filed this sexual harassment and retaliation
suit under Title VII of the Civil Rights Act of 1964 against
defendant Fromm Family Foods. During discovery, Fromm learned
that Scheurer's contract with the staffing agency that
employed her and directed her to Fromm included an
arbitration clause. Fromm moved to compel arbitration. The
district court denied the motion. Such a denial is
immediately appealable under the Federal Arbitration Act, 9
U.S.C. § 16(a)(1)(B), and Fromm has appealed. We affirm.
question is whether employer Fromm, which did not have a
written arbitration agreement with Scheurer, can enforce
against her the arbitration clause in her agreement with the
staffing agency. This question is governed by state law, in
this case, Wisconsin law. See Arthur Andersen LLP v.
Carlisle, 556 U.S. 624, 630-31 (2009). We agree with the
district court that Fromm has not shown a legal basis for
compelling Scheurer to arbitrate her Title VII claim against
Fromm. We first review the factual and procedural background
leading to this appeal. We then examine Fromm's only
theory for compelling arbitration that it has not waived.
Factual and Procedural Background
August 2013, in Beaver Dam, Wisconsin, plaintiff Anne
Scheurer applied to work at Richelieu Foods, which outsourced
its staffing needs to Remedy Intelligent Staffing, a
temporary staffing agency. The application form she signed
with Remedy for placement with Richelieu contained an
arbitration agreement. She was assigned to work for a time for
Richelieu, but that assignment ended after some months.
a year after she first applied, Remedy placed Scheurer with
Fromm Family Foods. Scheurer alleges that while working at
Fromm, her supervisor sexually harassed her. The present
appeal does not require us to consider the merits of her
claims; we assume for present purposes that her allegations
are true. Briefly she alleges that her supervisor took
advantage of his access to her personnel file to obtain her
personal telephone number and repeatedly harassed her in
unwelcome ways, including sexually explicit comments to her
in front of other employees. Scheurer alleges that she
complained to Fromm management and that the supervisor had a
history of sexual harassment and discrimination against women
in the workplace. She also alleges that Fromm took no serious
action to address the sexual harassment and instead fired
Best, the chief operating officer of Fromm, submitted an
affidavit that actually tends to support Scheurer's
claim. He testified that Fromm immediately investigated the
harassment complaint and took unspecified action against the
supervisor. So far, so good for Fromm. But Best also said
that Fromm tried to arrange a work situation that would have
separated Scheurer from the supervisor, but that when that
proved "impossible, " Fromm asked Remedy to assign
Scheurer to another client. That action seems to amount to
Fromm terminating Scheurer's employment with it, assuming
she can show joint employment. From the sequence of
complaint, unspecified discipline of the supervisor, an
unsuccessful effort to separate the two people, followed by
termination of the complaining subordinate, the inference of
retaliatory intent would not seem unreasonable.
Scheurer filed this lawsuit against Fromm- but not
Remedy-under Title VII for sexual harassment and retaliation.
42 U.S.C. §§ 2000e-2(a)(1) & 2000e-3(a).
Scheurer's mandatory disclosures in the federal discovery
process included her application to Remedy, which included
the arbitration agreement. Fromm argued that arbitration
should be compelled under the contract law principle of
equitable estoppel and because Fromm was a third-party
beneficiary of the agreement.
district court denied Fromm's motion. Scheurer v.
Fromm Family Foods, LLC, 202 F.Supp.3d 1040, 1046 (W.D.
Wis. 2016). The court correctly relied on state law and first
determined that equitable estoppel did not apply because
there was no basis for finding that Fromm relied on
Scheurer's arbitration agreement since Fromm did not even
know about it. Id. at 1043-44. The court also found
that Fromm was not a third-party beneficiary of Remedy's
agreement with Scheurer. Id. at 1045-46.
question on appeal is whether Fromm can enforce the
arbitration agreement between Remedy and Scheurer to compel
arbitration of her claims against Fromm. That ...