De Dios v. Brand Energy & Infrastructure Servs., No. C 18-4011-MWB

CourtUnited States District Courts. 8th Circuit. Northern District of Iowa
Writing for the CourtMARK W. BENNETT U.S. DISTRICT COURT JUDGE NORTHERN DISTRICT OF IOWA
PartiesSAMUEL DE DIOS, Plaintiff, v. BRAND ENERGY AND INFRASTRUCTURE SERVICES, Defendant.
Docket NumberNo. C 18-4011-MWB
Decision Date13 June 2018

SAMUEL DE DIOS, Plaintiff,
v.
BRAND ENERGY AND INFRASTRUCTURE SERVICES, Defendant.

No. C 18-4011-MWB

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA WESTERN DIVISION

June 13, 2018


OPINION AND ORDER REGARDING DEFENDANT'S MOTION TO DISMISS AND/OR STAY AND COMPEL ARBITRATION and PLAINTIFF'S MOTION TO CONDUCT DISCOVERY

TABLE OF CONTENTS

I. INTRODUCTION ........................................................................... 2

A. Factual Background ............................................................... 2

1. The arbitration agreement ................................................ 2
2. The accident and aftermath .............................................. 4

B. Procedural Background ........................................................... 5

II. LEGAL ANALYSIS ........................................................................ 6

A. The Motion To Conduct Discovery .............................................. 6

1. Arguments of the parties .................................................. 7
2. Applicable standards ....................................................... 7
3. Application of the standards ............................................. 9

B. The Motion To Compel Arbitration ........................................... 12

1. Arguments of the parties ................................................ 12
2. Applicable standards ..................................................... 13
3. Application of the standards ........................................... 15
a. Unconscionability ................................................ 15
b. Lack of consideration ........................................... 18
4. Summary ................................................................... 19

C. Dismiss Or Stay? .................................................................. 19

III. CONCLUSION ............................................................................ 20

Page 2

In this action, originally filed in the Iowa District Court for Woodbury County and removed to this court, plaintiff Samuel De Dios claims that his former employer, defendant Brand Energy And Infrastructure Services, wrongfully terminated him for asserting rights under the Iowa Workers' Compensation Act. Brand has moved dismiss or, alternatively, to stay, and compel arbitration of De Dios's claim pursuant to an Agreement to Arbitrate in De Dios's employment application. De Dios contends that the court should not enforce the Agreement to Arbitrate, because it is unconscionable, where signing it was a condition of his employment and it binds only him, and because there is no consideration for it. De Dios also seeks leave to conduct discovery to further develop the factual record on the pending Motion To Compel Arbitration.

I. INTRODUCTION
A. Factual Background

1. The arbitration agreement

As part of his application for employment with Brand, De Dios signed the following Agreement to Arbitrate:

TO BE READ AND SIGNED BY APPLICANT

I understand my employment is contingent on acceptance of agreement to arbitrate claims, under FAA, and I DO AGREE AND CONSENT that I will settle any and all previously unasserted claims, disputes, or controversies arising out of or relating to my candidacy for employment, employment and/or cessation of employment with Brand, exclusively by final and binding arbitration before a neutral Arbitrator. By way of example only, such claims include claims under federal, state, and local statutory or common law, such as the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, including the amendments of the Civil Rights Act of 1991, the Americans with Disabilities Act, the law of contract and the law of tort.

Defendant's Exhibit A, Excerpt of Application, page 2 of 4.

Page 3

On the date of his application, De Dios also signed a Brand Dispute Resolution Program Acknowledgement, which stated the following:

I have received, read and understand the Brand Dispute Resolution Program for Employees. I also understand and agree that as a condition of my at-will employment and continued employment, I will submit to and seek to resolve any disputes arising out of or relating to my application or candidacy for employment, employment and/or cessation of employment through the Brand Dispute Resolution Program. I understand that this Dispute Resolution Program provides for binding arbitration as the exclusive, final and required method to resolve all covered claims that I otherwise have a right to litigate in court.

I acknowledge that I have had sufficient time to review and consider the Brand Dispute Resolution Program, and to ask whatever questions I may have about the Program to the Company or to my private counsel, before signing this acknowledgement form.

Defendant's Exhibit B, Acknowledgement.

The Brand Dispute Resolution Program provides for a four-step dispute resolution process. Defendant's Exhibit D, Dispute Resolution Program. Step Four of the process provides for arbitration, as follows:

STEP FOUR—ARBITRATION

If the dispute has not been resolved in Steps One or Two, or mediation has not succeeded, the exclusive, final and required method to resolve covered claims, that you would have a right to litigate in court, is through binding arbitration. Either you or Brand may request arbitration. While you do not have to proceed through each of the options in their exact numerical order, the Program is designed with multiple steps to maximize the possibility of resolution prior to arbitration. Any employment and/or personal injury claim arising out of or relating to Brand and employees at-will employment or other disputes covered in this Program, which have not been

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resolved through Steps One, Two or Three (Mediation), shall be governed by the Federal Arbitration Act (FAA) and resolved by final, binding arbitration administered by the American Arbitration Association under its current Employment Rules, and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof.

Defendant's Exhibit D, Dispute Resolution Program, 5 (emphasis in the original). The Program also provides that the employee "must pay a $50 processing fee to take your legal dispute to an outside resolution process, such as arbitration," but that "Brand will pay any additional administrative costs associated with the arbitration that exceed this $50 fee." Id.

2. The accident and aftermath1

De Dios alleges, and Brand admits, that, on April 8, 2016, De Dios was assigned by Brand to work on a construction site located on the private property of CF Industries. To enter the property, he had to drive past a security gate and a security guard. De Dios alleges, and Brand admits, that, after entering the property, a vehicle driven by Jonathan Elizondo crashed into the back of his vehicle. De Dios alleges that the collision damaged his vehicle and caused him injuries, including a lower back injury, which Brand denies. De Dios reported the collision and his work injury to Brand's safety manager, Ismael Barba. Brand admits that De Dios reported an off-the-job injury. De Dios alleges that Brand authorized him to choose a medical provider to provide care for the work injury, which Brand denies. De Dios chose to be treated at St. Luke's Hospital. After treating De Dios in the emergency room at St. Luke's Hospital, the ER doctor ordered De Dios not to return to work until April 11, 2016. Brand admits these allegations, but denies the treatment was for a work injury.

Page 5

De Dios alleges that, on April 11, 2016, he returned to work with Brand, but his back pain worsened, which Brand denies. De Dios alleges that, on April 14, 2016, Brand sent him home because of his work injury, but Brand admits only that it allowed De Dios to go home on April 14, 2016, after De Dios stated to the Safety Manager, upon arrival, that he was not ready to return to work. De Dios alleges that, on April 14, 2016, Brand authorized De Dios to choose a medical provider to care for his work injury, which Brand denies. De Dios alleges that, on April 15, 2016, his family doctor, Alisa M. Olson, DO, treated him for the work injury, which Brand denies for lack of information. De Dios alleges that, also on April 15, 2016, Dr. Olson wrote a letter to Brand regarding De Dios's work injury, which Brand also denies for lack of information. De Dios alleges that, on April 15, 2016, he asserted his rights under the Iowa Workers' Compensation Act, which Brand denies. De Dios contends that, on April 19, 2016, Brand notified him that it had decided to terminate his employment. Brand admits that it terminated De Dios's employment, but contends that the termination, effective May 1, 2016, was for job abandonment.

B. Procedural Background

De Dios filed his Petition against Brand in state court on January 4, 2018, alleging wrongful termination for asserting rights under the Iowa Workers' Compensation Act. On February 13, 2018, Brand removed this action to this court and filed its Answer denying De Dios's claim and asserting, among other affirmative defenses, that De Dios's claim was subject to an agreement to submit it to binding arbitration.

On February 20, 2018, Brand filed the Motion To Dismiss And/Or Stay And Compel Arbitration (Motion To Compel Arbitration) now before me. On March 30, 2013, De Dios filed his Resistance To Motion To Compel Arbitration. Brand filed its Reply on April 4, 2018. A week later, on April 11, 2018, De Dios filed his Motion To

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Conduct Discovery, which is also now before me. On April 24, 2018, Brand filed its Resistance to that motion. De Dios filed no reply.

United States Magistrate Judge Kelly K.E. Mahoney held a scheduling conference with the parties on May 2, 2018. On May 17, 2018, she entered a text order holding in abeyance issuance of a scheduling order and discovery plan, as discussed at the May 2, 2018, scheduling conference, pending my ruling on Brand's Motion To Compel...

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