Lauricia v. Microstrategy Inc.

• Decision Date: 13 September 2000
• Docket Number: No. Civ.A. 00-990-A.,Civ.A. 00-990-A.
• Citation: 114 F.Supp.2d 489
• Parties: Betty J. LAURICIA, Plaintiff, v. MICROSTRATEGY INC., Defendant.
• Court: U.S. District Court — Eastern District of Virginia

Page 489

114 F.Supp.2d 489

Betty J. LAURICIA, Plaintiff, v. MICROSTRATEGY INC., Defendant.

No. Civ.A. 00-990-A.

United States District Court, E.D. Virginia, Alexandria Division.

September 13, 2000.

Claude David Convisser, Claude D. Convisser & Associates, P.C., Alexandria, VA, for plaintiff.

H. Alan Young, Young, Goldman & Van Beek, Alexandria, VA, for defendant.

MEMORANDUM OPINION

ELLIS, District Judge.

In this employment suit, plaintiff, Betty Lauricia, alleges that defendant, MicroStrategy, Inc. ("MicroStrategy"), her former employer, retaliated against her for engaging in protected activity, in violation of Title VII and the Age Discrimination in Employment Act ("ADEA"). At issue by virtue of MicroStrategy's motion to dismiss are the following questions: (1) whether MicroStrategy has waived its right under the employment contract to compel arbitration of plaintiff's retaliation claims; (2) whether jurisdiction is lacking owing to the Equal Employment Opportunity Commission's ("EEOC") issuance of a right-to-sue letter prior to the expiration of the 180-day period; and (3) whether plaintiff has failed to exhaust her administrative remedies by declining to join in conciliation efforts at the EEOC.

I

This action is one of four lawsuits growing out of plaintiff Betty Lauricia's employment dispute with defendant MicroStrategy. Plaintiff was employed as MicroStrategy's Vice President of Corporate Development Operations until August 4, 2000, when she was terminated.¹ In mid-March of this year, plaintiff informed MicroStrategy that she had filed a claim of discrimination on the basis of sex and age with the EEOC. Specifically, plaintiff's original EEOC charge alleged that MicroStrategy (i) pays its female employees fewer stock options than its male employees, (ii) failed to promote plaintiff based on her sex and age, and (iii) retaliated against plaintiff for raising these complaints within the company. Furthermore, plaintiff also filed a complaint with the United States Department of Labor's Wage and Hour Division alleging that MicroStrategy was failing to pay overtime in violation of FLSA, 29 U.S.C. §§ 201 et seq. MicroStrategy contends that, at or near the time it learned of plaintiff's EEOC charge, it also learned that plaintiff had stolen MicroStrategy documents containing trade secrets, confidential information, and information protected by the attorney-client privilege, and delivered these documents to her attorney. Subsequently, MicroStrategy placed plaintiff on paid administrative leave and filed three suits against the plaintiff.

The first suit, filed in this Court on March 16, 2000, named plaintiff and her attorney as defendants. This suit sought a declaratory judgment on the questions (i) whether defendant illegally retaliated against plaintiff in violation of the FLSA, 29 U.S.C. § 215(a)(3), and (ii) whether defendant would be liable for retaliation against plaintiff if she were fired. The complaint also alleged various state law claims, including theft of trade secrets and breach of fiduciary duty, against plaintiff and her attorney. See MicroStrategy Inc. v. Lauricia and Convisser, C.A. No. 00-453-A ("MicroStrategy I"), appeal pending, 4th Cir. No. 001483. MicroStrategy I was dismissed for lack of subject matter jurisdiction. See MicroStrategy Inc. v. Convisser, Order, C.A. No. 00-453-A (April 24, 2000).

The second suit was filed by MicroStrategy on April 27, 2000 in the Circuit Court for the City of Alexandria. Again, the named defendants were the plaintiff and her counsel, and the claims alleged were the same as the state law claims asserted in MicroStrategy I. See MicroStrategy Inc. v. Lauricia, Alex. Cir.Ct. Chancery No. 000520 (filed April 27, 2000) ("MicroStrategy II"). This suit is pending and currently in the discovery stage.

The third suit was filed in this Court on June 15, 2000, after MicroStrategy had received a copy of a letter plaintiff addressed to the Alexandria Circuit Court, stating that she intended to file a federal claim against defendant, on June 16, for, inter alia, retaliation in violation of Title VII, the ADEA, and FLSA. See MicroStrategy Inc. v. Lauricia, Civ. No. 00-985-A ("MicroStrategy III"). MicroStrategy III again names plaintiff and her counsel as defendants,² and, in this suit, MicroStrategy again seeks a declaration that its conduct did not, and would not, violate FLSA, Title VII, or the ADEA. MicroStrategy also alleged pendent state claims against plaintiff and plaintiff's counsel for civil conspiracy and violation of Virginia Code §§ 18.2-499 and -500 (combination or conspiracy to injure business reputation). This suit is currently in the discovery stage and has been consolidated with the instant suit, MicroStrategy IV. See MicroStrategy Inc. v. Lauricia, Order, C.A. No. 00-985-A (August 25, 2000).

The instant suit is the fourth lawsuit involving the plaintiff and MicroStrategy and is the only action brought by plaintiff. See Lauricia v. MicroStrategy, C.A. No. 00-990-A (filed June 16, 2000) ("MicroStrategy IV"). Although this action, as originally filed, did not include a claim for relief pursuant to FLSA, plaintiff has now sought leave to amend the complaint to add a cause of action based on retaliation in violation of FLSA. This motion has been argued and is under advisement. This memorandum opinion proceeds on the assumption that the motion will be granted and considers whether plaintiff is compelled to arbitrate plaintiff's claims of retaliation under Title VII, ADEA, and FLSA.

MicroStrategy has pursued discovery in each of these cases. Specifically, MicroStrategy has (i) propounded one set of interrogatories, (ii) served plaintiff with one request for the production of documents, (iii) caused the issuance of four third party subpoenas directed to plaintiff's former employers, (iv) conducted one deposition of plaintiff, (v) filed a motion to depose plaintiff's counsel, (vi) obtained and executed a writ of possession to seize documents in the possession of plaintiff's attorney, and (vii) filed at least two motions to compel discovery responses.

Defendant now moves to dismiss plaintiff's complaint on the grounds that she is bound to arbitrate her claims, and that she has failed to exhaust her administrative remedies because the EEOC issued its right to sue letter prematurely and because the plaintiff failed to participate in conciliation.³

II

A. Agreement to Arbitrate

The threshold question is whether the plaintiff's employment agreement with MicroStrategy compels her to arbitrate the claims she asserts here. In this regard, plaintiff signed an employment agreement, which states, in pertinent part, that

Any controversy or claim arising out of or relating to this Employee Handbook, procedures delineated in it, or the employment relationship otherwise cognizable at law and that could be the subject of legal action, shall be settled by arbitration...."

Given the breadth of this arbitration provision, it is clear that plaintiff's claims in this suit fall within the scope of the arbitration provision.⁴ The principal dispute is whether, as plaintiff contends, MicroStrategy has waived its right to seek arbitration based on its prosecution of the three separate lawsuits against plaintiff and plaintiff's attorney.

Settled principles are dispositive of this issue. A strong federal policy favors arbitration.⁵ In light of this strong federal policy, a court must "not lightly infer the circumstances constituting waiver," and the "key inquiry is whether the party opposing the stay has suffered any actual prejudice." Id. (emphasis added). In that regard, "neither delay nor the filing of pleadings by the party seeking a stay will suffice, without more, to establish waiver of arbitration," although "delay and the extent of the moving party's trial-oriented activity are material factors in assessing a plea of prejudice." Fraser v. Merrill Lynch Pierce, Fenner & Smith, 817 F.2d 250, 252 (4th Cir.1987). Also significant is that the party opposing arbitration "bears a heavy burden of proving waiver." American Recovery Corp. v. Computerized Thermal Imaging, Inc., 96 F.3d 88, 95 (4th Cir.1996) (hereinafter "ARC")(citing Britton v. Co-op Banking Group, 916 F.2d 1405, 1412 (9th Cir.1990)).

Although the line of demarcation between waiver and the absence of waiver is not always clear, it is settled that merely initiating litigation, without more, does not effect a waiver. This is because the filing of a suit, standing alone, results in no actual prejudice to the party urging waiver. Thus, in ARC, the Fourth Circuit found no prejudice to the party opposing arbitration where the party seeking arbitration initiated two suits for declaratory judgment, but had obtained no discovery prior to the early dismissal of the suits. See ARC, 96 F.3d at 95-96. Similarly, in Maxum Foundations, Inc. v. Salus Corp., 779 F.2d 974 (4th Cir.1985), the Fourth Circuit also found no prejudice where the party opposing arbitration was the only party who had conducted discovery. Id. at 982 (holding that no waiver occurred where the party opposing arbitration was actually aided rather than prejudiced by the discovery it initiated).

While the test for waiver is stringent, it is not insurmountable. When one party takes actions that compel the finding that requiring arbitration, thus staying the trial proceedings, would result in actual prejudice, a waiver of arbitration must be found. See Fraser, 817 F.2d at 252. Actual prejudice results when the party seeking to enforce an arbitration obligation engages in significant litigation activity inconsistent with an intent to arbitrate. For example, prejudice results from the discovery of matters unobtainable in arbitration and from the unnecessary delay or expense that results when an opponent delays invocation of its contractual right to arbitrate. See ARC, 96 F.3d at 95-96; Maxum, 779 F.2d 974; Fraser, 817 F.2d at 252; see also Doctor's...