O'Meara v. Intepros Inc., Civil No. 3:16CV01840 (HBF)

• Decision Date: 19 July 2017
• Docket Number: Civil No. 3:16CV01840 (HBF)
• Court: U.S. District Court — District of Connecticut
• Parties: GERALD O'MEARA, GLORIA DOMIZIANO, and KRISTINA KRUSE v. INTEPROS INCORPORATED

GERALD O'MEARA, GLORIA

DOMIZIANO, and KRISTINA KRUSE v. INTEPROS INCORPORATED

Civil No. 3:16CV01840 (HBF)

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

July 19, 2017

RULING ON MOTION TO COMPEL ARBITRATION and STAY PROCEEDINGS PENDING ARBITRATION

This action was commenced on October 14, 2016, in Connecticut Superior Court by plaintiffs Gerald O'Meara, Gloria Domiziano and Kristina Kruse, former employees of defendant IntePros Incorporated. Defendant moves to compel arbitration and for a stay of proceedings pending arbitration, pursuant to Fed. R. Civ. P. 12(b)(1), 12(b)(6), D. Conn. L. Civ. R. 7, the Federal Arbitration Act, 9 U.S.C. §1, et seq. and Conn. Gen. Stat. §52-408. [Doc. #11-1 at 1].

For the reasons that follow, defendant's Motion to Compel Arbitration and Stay Proceedings Pending Arbitration [Doc. #11] is GRANTED.

BACKGROUND FACTS¹

1. Defendant IntePros is a staffing agency which does business throughout the United States, including in Stamford, Connecticut. Compl. at Count One ¶6. It is a Pennsylvaniacorporation with a corporate office in Lexington, Massachusetts. Compl. ¶5.

2. Plaintiffs were employees of IntePros at its Stamford, Connecticut office. Compl. at Count One ¶4.

3. At the commencement of their employment, each of the plaintiffs entered into an employment agreement with defendant. [Doc. #11 Aff. Daniel Hinkley, ¶¶3-5; Def. Ex. A-C].

4. The Employment Agreements contain identical choice of law and arbitration provisions.

5. Paragraph 12 of the Employment Agreements states, "Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts." Id.

6. Paragraph 15 of the Employment Agreements states,

Arbitration. Any dispute or claims arising out of or relating to the Employee's employment or any provision of this Agreement, whether based on contract or tort or otherwise, including, but not limited to claims of sexual harassment and claims of discrimination based on race, religion, national origin, gender, age or disability, shall be submitted to arbitration pursuant to the national Rules for the Resolution of Employment Disputes of the American Arbitration Association ("AAA"). Any such dispute or claim shall be heard in the AAA's Boston Office. Any issue with respect to the arbitrability of a particular dispute or to the scope of this Section shall be decided by the arbitrator. An arbitration award rendered pursuant to this Section shall be final and binding on the parties and may be submitted to any court of competent jurisdiction for entry of a judgment thereon. Notwithstanding the aforementioned obligation to arbitrate, the Employer may sue in any court of competent jurisdiction for the Employee's violation of Section 7 [entitled "Disclosure or Misuse of Confidential Information"] and/or 8 [entitled "Restrictive Covenant"] of this Agreement.

Id.

7. From mid-January to early February of 2015, plaintiffs either resigned or were involuntarily terminated from employment.²

8. On May 29, 2015, following their resignation and/or terminations of employment, each plaintiff filed a separate administrative charge at the Connecticut Commission on Human Rights and Opportunities ("CHRO") and the U.S. Equal Employment Opportunity Commission ("EEOC").³ Compl. at Count One ¶10. After receiving releases of jurisdiction, plaintiffs commenced this action which asserts seventeen claims arising out of or relating to their employment with defendant.⁴

9. O'Meara alleges: (1) retaliation in violation of the Connecticut Fair Employment Practices Act ("CFEPA"), Conn. Gen. Stat. §46a-60(4)(Count One); (2) retaliation in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. §2000e-3,et seq. (Count Two); (3) constructive discharge (Count Three); (4) breach of contract (Count Four); (5) violation of Connecticut's Wage Statute, Conn. Gen. Stat. §31-72, et seq. (Count Five); and (6) unjust enrichment for unpaid earned commissions (Count Six).

10. Domiziano alleges: (1) sexual harassment in violation of CFEPA, Conn. Gen. Stat. §46a-60(8) (Count Nine); (2) sexual harassment in violation of Title VII, 42 U.S.C. §2000e-3, et seq. (Count Ten); (3) retaliation in violation of CFEPA, Conn. Gen. Stat. §46a-60(4)(Count Thirteen); (4) retaliation in violation of Title VII, 42 U.S.C. §2000e-3, et seq. (Count Fourteen); (5) negligent infliction of emotional distress (Count Fifteen); (6) breach of contract (Count Sixteen); and (7) violation of Connecticut's Wage Statute, Conn. Gen. Stat. §31-72, et seq. (Count Seventeen).

11. Kruse alleges: (1) sexual harassment in violation of CFEPA, Conn. Gen. Stat. §46a-60(8)(Count Seven); (2) sexual harassment in violation of Title VII, 42 U.S.C. §2000e-3, et seq. (Count Eight); (3) retaliation in violation of CFEPA, Conn. Gen. Stat. §46a-60(4)(Count Eleven); and (4) retaliation in violation of Title VII, 42 U.S.C. §2000e-3, et seq. (Count Twelve).

LEGAL STANDARD

A. Motion to Dismiss Fed. R. Civ. P. 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) provides for the dismissal of a claim when the federal court "lack[s]...jurisdiction over the subject-matter."⁵ Federal courts are courts of limited subject-matter jurisdiction and may not entertain matters over which they do not have jurisdiction. Wynn v. AC Rochester, 273 F.3d 153, 157 (2d Cir. 2001). The plaintiff bears the burden of establishing subject-matter jurisdiction by a preponderance of the evidence. Luckett v. Bure, 290 F.3d 493, 497 (2d Cir. 2002)(citation omitted). In considering a motion to dismiss for lack of subject-matter jurisdiction, the court must assume the truth of the material factual allegations contained in a complaint. J.S. ex rel. N.S. v. Attica Cent. Schs., 386 F.3d 107, 110 (2d Cir. 2004)(citation omitted). However, "jurisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to theparty asserting it." Jordan v. Verizon Corp., 391 Fed. App'x 10, 12 (2d Cir. 2010) (quoting APWU v. Potter, 343 F.3d 619, 623 (2d Cir. 2003)). "[I]n dismissing a complaint for lack of subject-matter jurisdiction under Rule 12(b)(1), a court 'may refer to evidence outside the pleadings.'" Burfeindt v. Postupack, 509 F. App'x 65, 67 (2d Cir. 2013)(quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)).

B. Motion to Compel Arbitration

Arbitration clauses are subject to the Federal Arbitration Act ("FAA"). 9 U.S.C. §1, et seq. The FAA "provides that written provisions to arbitrate controversies in any contract involving commerce 'shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'" Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 840, 844 (2d Cir. 1987)(quoting 9 U.S.C. §2); see Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67-68 (2010). Under §3 of the Federal Arbitration Act, a court in which any action is pending based upon an issue referable to arbitration "shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement...." 9 U.S.C. §3. Section 4 "directs a federal court to order parties to proceed to arbitration if there has been a 'failure, neglect, or refusal of any party to honor an agreement to arbitrate.'" Genesco, Inc., 815 F.2d at 844(quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 511 (1974)(quoting 9 U.S.C. §4)). "These provisions are mandatory: '[b]yits terms, the Act leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.'" Id. (quoting Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in original)(citing 9 U.S.C. §§3, 4)).

Before compelling arbitration, a district court must decide two threshold questions: "(1) whether the parties have entered into a valid agreement to arbitrate, and, if so, (2) whether the dispute at issue comes within the scope of the arbitration agreement." In re Am. Exp. Fin. Advisors Sec. Litig., 672 F.3d 113, 128 (2d Cir. 2011) (citations omitted). "Courts may not...invalidate arbitration agreements under state laws applicable only to arbitration provisions." Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)(emphasis in original). However, courts may invalidate arbitration agreements on the basis of "generally applicable contract defenses, such as fraud, duress, or unconscionability...." Id. "There is a strong presumption in favor of arbitration, and waiver of the right to arbitration is not to be lightly inferred." Thyssen, Inc. v. Calypso Shipping Corp. S.A., 310 F.3d 102, 104-05 (2d Cir. 2002) (quoting Coca-Cola Bottling Co. v. Soft Drink and Brewery Workers Union Local, 812, 242 F.3d 52, 57 (2d Cir. 2001)).

DISCUSSION

Defendant argues that "[b]y initiating this lawsuit, plaintiffs violated their obligation to pursue final and binding arbitration" and moves to compel arbitration and stay these proceedings pending arbitration. [Doc. #11-1 at 4].

1. Did the Parties Enter into a Valid Agreement to Arbitrate?

Plaintiffs do not challenge defendant's statutory authority to compel arbitration. Nor do they contend that they did not enter into the Employment Agreements. Rather, they argue that the Agreements should not be enforced because the choice of forum provision at paragraph 15 is unconscionable and the choice of law provision at paragraph 12 denies plaintiffs their rights to assert state law sexual harassment and retaliation claims under CFEPA and claims for unpaid commissions under the Connecticut Wage and Hour statutes.

"[T]he issue of unconscionability is an issue of substantive law which ordinarily must be construed by the law of the state which the parties chose...." Van Voorhies v. Land/home Fin. Servs., No. CV095031713S, 2010 WL 3961297, at *3 (Conn. Super. Ct. ...