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National Federation of Blind v. The Container Store, Inc.

United States District Court, D. Massachusetts

July 27, 2016

NATIONAL FEDERATION OF THE BLIND, MARK CADIGAN, MIKA PYYHKALA, LISA IRVING, ARTHUR JACOBS, HEATHER ALBRIGHT, and JEANINE KAY LINEBACK, Plaintiffs,
v.
THE CONTAINER STORE, INC., Defendant.

          MEMORANDUM & ORDER

          NATHANIEL M. GORTON, UNITED STATES DISTRICT JUDGE

         The defendant, The Container Store, Inc., has filed objections to the Report and Recommendation (“R&R”) of Magistrate Judge M. Paige Kelley, which the Court addresses and overrules as follows:

         As plaintiffs note in their response to defendant’s objections (Docket No. 69), most of defendant’s arguments were presented to Magistrate Judge Kelley through defendant’s reply brief. Accordingly, those arguments were considered and ruled upon by the Magistrate Judge. Defendant’s objections do, however, raise one item of evidence not presented to Magistrate Judge Kelley and one argument presented only at oral argument. Neither persuades this Court to sustain the objections.

         Furthermore, the Court notes that the issue of whether it should resolve plaintiffs’ contention that the arbitration agreement was unconscionable and illusory rather than deferring to the arbitrator with respect to those issues was not clearly addressed in the R&R. As explained below, because a resolution by this Court leads to the most efficient outcome, it will decide those issues and accept and adopt the R&R in full.

         A. Issues Raised by Defendant’s Objections

         1) Defendant’s Training Manual

         In response to Magistrate Judge Kelley’s holding that the In-Store Plaintiffs did not receive notice that they were entering into an agreement which would waive their right to proceed in court, defendant now claims that the In-Store Plaintiffs must have received notice because its training manual instructs employees to explain the terms and conditions to customers. Defendant’s argument is, nevertheless, unavailing.

         The manual does not instruct employees to tell customers that the terms and conditions exist, nor does it instruct them to explain the terms and conditions to customers. Instead, it states that employees should

[a]llow the customer the opportunity to review [the terms and conditions on the screen] and then ask them to press the I Accept button.

         It further states that “upon the customer’s request, ” the employee may give the customer a paper copy of the terms and conditions.

         Assuming those instructions were followed, they would not provide notice to a blind customer either that the terms and conditions existed or that they included terms which required the customer to waive his/her right to litigate in court. A blind customer would not be able to see the terms on the screen when he/she was given an opportunity to review them and therefore the customer also would not know to ask for them to be read aloud. Nor would a blind customer necessarily know to ask for a paper copy of the terms and conditions which he/she would not be able to read even if he/she were given one. Accordingly, the Court agrees with Magistrate Judge Kelley’s finding that the In-Store Plaintiffs did not receive notice of the terms of the agreement and that therefore no valid agreement was consummated.

         2) Defendant’s Ratification Argument

         Defendant further contends that even if plaintiffs did not consent to the terms of the loyalty program at the time they enrolled, they later ratified the arbitration agreement by participating in the loyalty program. That objection, which was raised before Magistrate Judge Kelley only at oral argument, will be overruled for two reasons. First, as Magistrate Judge Kelley explains in a footnote of her R&R, the argument fails because defendant has presented no evidence that plaintiffs participated in the loyalty program after enrolling.

         Second, defendant presented its loyalty program in such a manner that plaintiffs would have believed that they were simply enrolling in a customer benefits program. Nothing would have indicated to plaintiffs that they were entering into an agreement which would require them to waive legal rights. Defendant’s training manual indicates that employees are instructed to describe the program by telling customers about benefits ...


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