Summary
compelling arbitration of termination of employment claim pursuant to clause requiring arbitration of "any dispute, controversy or claim . . . arising out of or relating to or concerning the provisions of this Agreement . . . or arising out of your employment with us or otherwise concerning any rights, obligations, or other aspects of your employment relationship, including, without limitation, discrimination claims"
Summary of this case from Calamia v. Riversoft, Inc.Opinion
02 CIV. 6872 (DLC)
November 21, 2002
Alan A. D'Ambrosio, Christoph C. Heisenberg Winston Strawn, New York, NY, Attorneys for the Plaintiff
John S. West, Allred, Maroko Goldberg, Los Angeles, CA, Attorneys for the Defendant.
OPINION AND ORDER
Plaintiff Cap Gemini Ernst Young U.S. LLC ("Cap Gemini") has brought this diversity action to enforce an arbitration clause in an employment agreement with former employee defendant John Nackel ("Nackel"). Nackel has sued Cap Gemini in his home state of California following the termination of his employment, asserting violations of California's statutory prohibitions against employment discrimination and against retaliation for complaints regarding such discrimination. That California suit has now been removed to federal court in California. Cap Gemini seeks to enjoin Nackel from proceeding with the California litigation and to compel him to submit any claims of employment discrimination or retaliation to the New York arbitration that Cap Gemini has already initiated. For the following reasons, Cap Gemini's motions are granted.
BACKGROUND
The employment agreement ("Employment Agreement") that Nackel executed contained the following pertinent provisions:
[A]ny dispute, controversy or claim . . . arising out of or relating to or concerning the provisions of this Agreement, any agreement between you and the Firm relating to or arising out of your employment with us or otherwise concerning any rights, obligations or other aspects of your employment relationship, including, without limitation, discrimination claims, or your relationship in respect of the Firm . . . shall be finally settled by arbitration in the City of New York before, and in accordance with the arbitration procedures set forth in the attached Annex 4, and the commercial arbitration rules then obtaining of the American Arbitration Association (the "AAA").
* * *
This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of laws provisions.
Annex 4 to the Employment Agreement provides that discovery will be allowed "if authorized" by the arbitrators and that the arbitrators shall have "no power" to award punitive damages unless they are provided for by statute and may not be waived by agreement or damages "not measured by the prevailing party's actual damages. . . ."
Nackel does not dispute that the Employment Agreement includes an arbitration clause and that that clause encompasses the claims brought in the California litigation. Nackel contends instead that this Court must apply the choice of law rules of the forum state, New York, and that pursuant to those rules, the law of California will determine whether the underlying dispute is subject to arbitration. Nackel contends that California law invalidates the arbitration clause of the Employment Agreement to the extent that it would purport to cover California statutory employment discrimination claims. Alternatively, he argues that New York law would not require the arbitration of his claims since New York law would enforce California's public policy against arbitration of claims brought under California employment discrimination statutes. Specifically, Nackel argues that the arbitration of his claims would violate California public policy to the extent that it would limit his remedies, curtail his right to discovery, limit the ability for meaningful judicial review of any decision, and not provide for payment of arbitrators' fees.
Discussion
The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., was enacted to promote the enforcement of privately entered agreements to arbitrate, "according to their terms." Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 54 (1995) (citation omitted). Accord Chelsea Square Textiles, Inc. v. Bombay Dyeing Mfg. Co., 189 F.3d 289, 294 (2d Cir. 1999). There is a strong federal policy favoring arbitration as an alternative means of dispute resolution. ACE Capital Re Overseas Ltd. v. Cent. United Life Ins. Co., No. 01-9449, 2002 U.S. App. LEXIS 21715, at *9 (2d Cir. Oct. 18, 2002). In accordance with that policy, where, as here, the existence of an agreement to arbitrate is undisputed, doubts as to whether a claim falls within the scope of that agreement should be resolved in favor of arbitrability. Id. (citation omitted).
It is well established that "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." ATT Tech., Inc. v. Comm. Workers of Am., 475 U.S. 643, 648 (1986) (citation omitted). "When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally . . . should apply ordinary state-law principles that govern the formation of contracts." First Options, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Nonetheless, "[u]nless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator." ATT, 475 U.S. at 649.
Under New York law, which governs the Employment Agreement, contractual terms are ambiguous when they "suggest more than one meaning when viewed objectively by a reasonably knowledgeable person who has examined the context of the entire integrated agreement." Scholastic, Inc. v. Harris, 259 F.3d 73, 82 (2d Cir. 2001) (citation omitted) (applying New York law). Thus, when the contract's "terms have a definite and precise meaning and are not reasonably susceptible to differing interpretations, they are not ambiguous." Id. "Where the contract is unambiguous, courts must effectuate its plain language." Seabury Const. Corp. v. Jeffrey Chain Corp., 289 F.3d 63, 68 (2d Cir. 2002) (applying New York law).
The plain language of the arbitration clause at issue here evidences a clear and unmistakable intent to refer the issue of arbitrability to the arbitrators. As was true in Bell, Nackel's Employment Agreement contains a broad arbitration clause. Bell, 293 F.3d at 564-65.
Fundamentally, Nackel's argument is not that the claims he has made in the California litigation fall outside the agreement to arbitrate, but rather that as a matter of public policy he should not be forced to arbitrate statutory claims when that arbitration will limit his procedural rights and his potential recovery. As to this argument, the law is well settled. Statutory employment claims are fully arbitrable. Desiderio v.National Assoc. of Securities Dealers, Inc., 191 F.3d 198, 204-205 (2d Cir. 1999). See also EEOC v. Luce, Forward, Hamilton Scripps, 303 F.3d 994, 999 (9th Cir. 2002). While Desiderio, 191 F.3d at 204, addressed the arbitrability of claims based under Title VII, 42 U.S.C. § 2000e et seq., its reasoning is entirely applicable to Nackel's arguments about the California state statutes upon which he has sued. In any event, the federal policy in favor of arbitration expressed in the FAA would override any contrary expression in a state employment discrimination statute. As the Supreme Court observed in Southland Corp. v. Keating, 465 U.S. 1 (1984),"[i]n creating a substantive rule applicable in state as well as federal courts, Congress intended to foreclose state legislative attempts to undercut the enforceability of arbitration agreements." Id. at 16.
Conclusion
Plaintiff's application to compel defendant to arbitrate his claims against the plaintiff and to stay the defendant from pursuing those claims through judicial proceedings in California is granted.
SO ORDERED