Draeger v. Guardian Pest Sols., Inc.
| Decision Date | 17 June 2020 |
| Docket Number | Case No. 19-C-1880 |
| Parties | CURT DRAEGER, on behalf of himself and all others similarly situated, Plaintiff, v. GUARDIAN PEST SOLUTIONS, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Wisconsin |
DECISION AND ORDER GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION
Plaintiff Curt Draeger filed this action on behalf of himself and all others similarly situated against his former employer, Defendant Guardian Pest Solutions, Inc., asserting claims under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., and Wisconsin's Wage Payment and Collection Laws (WWPCL). This matter comes before the court on Defendant's motion to compel arbitration. For the following reasons, the motion will be granted and the case will be dismissed.
BACKGROUND
On July 30, 2018, Defendant sent Plaintiff an Offer of Employment letter (the 2018 Agreement) for a permanent, full-time position with Defendant as a Service Specialist. Dkt. No. 19-1. The 2018 Agreement contained the terms and conditions of Plaintiff's employment with Defendant, including information about his position, pay structure, benefits and pension, and special employee covenants. The pay structure provision stated:
Id. at 1. It also contained a "Dispute Resolution" section which provided:
The parties specifically agree that except as provided in (i) below, this Agreement and their relationship will at all times be maintained in strict confidence. The parties agree that any dispute or controversy arising under this Agreement or its formation or termination shall be submitted to arbitration, not litigation, for binding resolution.
Id. at 4. Plaintiff signed the 2018 Agreement on August 6, 2018, thereby accepting the conditions of employment indicated in the agreement. Id. at 5.
In December 2019, Defendant determined that it would eliminate the route Plaintiff worked. Dkt. No. 24-1. Defendant offered Plaintiff a nonexempt/hourly Service Specialist position in the Milwaukee area and provided Plaintiff with a second Offer of Employment letter (the 2019 Agreement). Dkt. No. 19-2. The agreement defined Plaintiff's pay structure as follows:
Your compensation is $17.31 per hour worked. Your wages are payable semi-monthly on the 15th, and at month end in accordance with Guardian Pest Solutions, Inc. standard payroll practices.
Id. at 1. The 2019 Agreement also included an integration clause and an arbitration provision that was identical to the provision in the 2018 Agreement. Plaintiff signed the 2019 Agreement on December 11, 2019. Plaintiff terminated his employment on December 19, 2019.
Plaintiff filed this action against Defendant on December 23, 2019, alleging violations of the FLSA and WWPCL. Plaintiff alleges that Defendant violated the FLSA by failing to account for and compensate Plaintiff and the FLSA Collective for overtime premium pay for each hour worked in excess of forty hours each workweek because Defendants' pay practices classified Plaintiff and the Collective as "exempt" for compensation purposes and Defendant failed include all forms of non-discretionary compensation in Plaintiff's and the Collective's regular rates of pay for overtime calculation purposes. Compl. ¶¶ 91-92, Dkt. No. 1. Plaintiff makes similar claims under the WWPCL on behalf of himself and the Wisconsin Class. Id. ¶¶ 103-04.
ANALYSIS
The Federal Arbitration Act (FAA) embodies a national policy favoring arbitration, AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 346 (2011), and "requires courts to place arbitration agreements 'on equal footing with all other contracts.'" Kindred Nursing Ctrs. Ltd. P'ship v. Clark, 137 S. Ct. 1421, 1424 (2017) (quoting DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463, 465 (2015)); 9 U.S.C. § 2. To compel arbitration under the FAA, three elements must be present: "(1) an enforceable written agreement to arbitrate, (2) a dispute within the scope of the arbitration agreement, and (3) a refusal to arbitrate." A.D. v. Credit One Bank, N.A., 885 F.3d 1054, 1060 (7th Cir. 2018) (quoting Scheurer v. Fromm Family Foods LLC, 863 F.3d 748, 752 (7th Cir. 2017)). "[O]nce an enforceable arbitration contract is shown to exist, questions as to the scope of arbitrable issues should be resolved in favor of arbitration." Scheurer, 863 F.3d at 752. The party opposing arbitration bears the burden of showing why the arbitration provision should not be enforced. See Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 91-92 (2000).
Plaintiff does not dispute that a valid, enforceable agreement to arbitrate certain claims exists. Instead, he asserts that the 2019 Agreement is the controlling instrument and that his wage-and-hour claims do not fall within the scope of that agreement. The 2019 Agreement contained an integration clause that reads, "[t]his Agreement constitutes the sole and complete agreement between the parties, superseding any and all other agreements between the parties." Dkt. No. 19-2. Plaintiff argues that, since the integration clause states that the 2019 Agreement supersedes all prior agreements, considering evidence of the 2018 Agreement would violate the parol evidence rule. But the parol evidence rule does not apply to this case. An agreement "is not superseded or invalidated by a subsequent integration if it is not inconsistent with the integrated contract and would naturally be made as a separate agreement." W.R. Millar Co. v. UCM Corp., 419 N.W.2d 852, 855 (Minn. Ct. App. 1988) (citing Red Lobster Inns v. Lawyers Title Ins. Corp., 656 F.2d 381, 384 (8th Cir. 1981)).1 The 2018 and 2019 Agreements are independent and govern different subject matters. After Defendant terminated Plaintiff's original position, the parties entered into a new, separate employment agreement that described the terms of Plaintiff's new position. The 2018 Agreement governed Plaintiff's employment with Defendant as a Service Specialist subject to the Production Based and Merchandise Production Pay Structure and the 2019 Agreement governed his employment with Defendant as an hourly-paid Service Specialist in the Milwaukee area. The context of the pay structure provisions in the agreements demonstrates that the agreements were made separately and governed two unrelated positions held by Plaintiff. Plaintiff's wage-and-hour claims only concern the pay structure agreed to in the 2018 Agreement. In short, the 2018 Agreement was not superseded by the 2019 Agreement and is the controlling instrument.
Having found that the 2018 Agreement is the controlling instrument, the court must now consider whether the arbitration provision in that agreement encompasses Plaintiff's claims against Defendant. The arbitration provision covers "any dispute or controversy arising under this Agreement." Dkt. No. 19-1 at 4. The Seventh Circuit has recognized that broad arbitration provisions, like the one in this case, have expansive reach and create a presumption of arbitrability. See Kiefer Specialty Flooring, Inc. v. Tarkett, Inc., 174 F.3d 907, 909-10 (7th Cir. 1999) (citing Elzinga & Volkers, Inc. v. LSSC Corp., 47 F.3d 879, 881 (7th Cir. 1995); Tracer Research Corp. v. Nat'l Envtl. Servs. Co., 42 F.3d 1292, 1295 (9th Cir. 1994)). Indeed, "the language 'arising out of' is broad in scope and reaches all disputes that have their origin in the employment contract, regardless of whether the dispute involves interpretation or performance of the contract per se." Marzano v. Proficio Mortg. Ventures, LLC, 942 F. Supp. 2d 781, 789 (N.D. Ill. 2013) (citing Gore v. Alltel Commc'ns, LLC, 666 F.3d 1027, 1033 (7th Cir. 2012)). The plain language of the arbitration provision is sufficiently broad to cover claims arising from or relating to Plaintiff's employment, and Plaintiff's wage-and-hour claims clearly arise out of the 2018 Agreement. As a result, the court finds that Plaintiff's wage-and-hour claims fall within the scope of the arbitration provision and must be submitted to arbitration.
The...
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