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Schwalm v. TCF National Bank

United States District Court, D. South Dakota, Southern Division

December 28, 2016

LaVAE SCHWALM, Plaintiff,



         Plaintiff, LaVae Schwalm, brought this lawsuit against defendant, TCF National Bank (TCF). TCF moves to compel arbitration and to dismiss the complaint. Docket 7. Schwalm objects to defendant's motions. Docket 9. For the reasons stated below, the court grants defendant's motion to compel arbitration.


         The facts, viewed in the light most favorable to Schwalm, the non-moving party, are:

         In 2013, LaVae Schwalm began using to search for accounting positions in eastern South Dakota. is an online service that utilizes an algorithm to match applicants to potential employment opportunities and recommends certain employment opportunities to applicants. recommended several positions to Schwalm based on her geographical location and interests. After looking through's recommendations, Schwalm picked jobs that interested her. Then, using information from Schwalm's previously uploaded resume, would populate the job applications and Schwalm would correct any errors and answer the prescreening questions before approving and submitting the application.

         In November 2013, Schwalm states that she recalls recommending an account services position at TCF to her. Schwalm admits that she indicated to that she was interested in the position, but she denies that she ever submitted an application. In November of 2013, Schwalm had an in-person interview at TCF where she presented a physical copy of her resume. She was not hired. In January of 2014, Schwalm had another in-person interview at TCF. Schwalm avers that during the interview one of the interviewers indicated that TCF did not have an application for her. But TCF determined that her resume was sufficient and offered her a job. Schwalm began working at TCF on February 3, 2014.

         TCF's Dispute Resolution Policy (DRP) allows employees to opt out of the agreement within 60 calendar days of their start date. Schwalm states that she did not opt out of the policy because she did not know about or understand the policy. She claims that TCF never gave her a copy of the DRP and never explained the DRP to her. TCF, however, submitted a copy of its “Employee Acknowledgement Receipt” dated February 6, 2014, that was signed by LaVae Schwalm. Docket 8-1 at 16. The Acknowledgment Receipt indicates that Schwalm received a copy of the “Employee Highlights” and “Dispute Resolution Policy.” Id.

         During Schwalm's employment, she made three discrimination and harassment complaints against her supervisor to TCF supervisors and its Human Resources representatives. The complaints were dated February 16, 2015, March 13, 2015, and March 14, 2015. On March 20, 2015, Schwalm met with TCF supervisors about her complaints. Afterwards, TCF informed Schwalm that her supervisor had been disciplined for his behavior. In May 2015, Schwalm again reported to TCF's Human Resources that she remained in a hostile work environment and required medical leave because of ongoing discriminatory treatment. Human Resources granted the medical leave. On June 1, 2015, TCF terminated Schwalm's employment.

         Schwalm then filed this action against TCF alleging age discrimination and retaliation. TCF asserts that these claims must be resolved under its arbitration agreement. Schwalm denies that she entered into the arbitration agreement.


         Whether or not parties entered into an arbitration agreement falls to judicial determination. Neb. Mach. Co. v. Cargotec Solutions, LLC, 762 F.3d 737, 741 (8th Cir. 2014). The Federal Arbitration Act does not specify what evidentiary standard parties seeking to avoid arbitration must meet. Id. at 742. But courts have analyzed the issue using a summary judgment standard- viewing the evidence in the light most favorable to the non-moving party. Id.


         This case deals with a question of law as to whether the controversy between Schwalm and TCF is covered by a valid arbitration agreement and should therefore be dismissed and directed to proceed to arbitration. Through the Federal Arbitration Act (FAA), Congress established a policy in favor of arbitration. Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220, 226 (1987).

         The FAA “provides that written agreements to arbitrate controversies arising out of an existing contract ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.' ” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (quoting 9 U.S.C. § 2). The FAA “mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” Id. (citing 9 U.S.C. §§ 3, 4). The “court's role under the FAA is therefore limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute.” ProTech Indus. Inc. v. URS Corp., 377 F.3d 868, 871 (8th Cir. 2004). “However, a party who has not agreed to ...

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