Melendez v. Starwood Hotels & Resorts Worldwide, Inc.
| Decision Date | 01 February 2013 |
| Docket Number | Civil No. 12–1516 (JAG/BJM). |
| Citation | 939 F.Supp.2d 88 |
| Court | U.S. District Court — District of Puerto Rico |
| Parties | Julio Cesar MELENDEZ, et al., Plaintiffs, v. STARWOOD HOTELS & RESORTS WORLDWIDE, INC., et al., Defendants. |
OPINION TEXT STARTS HERE
A.J. Bennazar–Zequeira, Bennazar, Garcia & Millan, CSP, San Juan, PR, Rumarie Rosado–Medina, Bufete Bennazar, CSP, Hato Rey, PR, for Plaintiffs.
Carlos E. George–Iguina, Joanna B. Matos–Hicks, O'Neill & Borges, San Juan, PR, for Defendants.
Julio C. Meléndez (“Meléndez”) and Sylvia Elizabeth Meléndez (“Mrs. Meléndez”) sued Starwood Hotels and Resorts Worldwide, Inc. (“Starwood”) and Sheraton Puerto Rico Management, LLC, (“Sheraton”), alleging age discrimination and unjust dismissal pursuant to federal and Puerto Rico law. (Docket No. 1). Defendants answered the complaint (Docket No. 14) and filed a motion to dismiss and to compel arbitration. (Docket No. 13). Specifically, defendants moved to dismiss Meléndez's claims for lack of subject matter jurisdiction and improper venue under Federal Rule of Civil Procedure 12(b)(1) and (3), and to compel arbitration under the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq. ( Id.). Defendants moved to dismiss Mrs. Meléndez's claims without prejudice or, in the alternative, to stay proceedings pending resolution of Meléndez's claims through arbitration. ( Id.). Plaintiffs opposed (Docket No. 15), and defendants replied. (Docket No. 19). This matter was referred to me under 28 U.S.C. § 636(b)(1)(A). (Docket No. 17). For the reasons that follow, defendants' motion to compel arbitration is granted.
Federal Rule of Civil Procedure 12(b)(1) is a “large umbrella, overspreading a variety of different types of challenges to subject-matter jurisdiction,” Valentin v. Hosp. Bella Vista, 254 F.3d 358, 362–63 (1st Cir.2001), including the existence of a valid arbitration agreement covering the dispute. See Evans v. Hudson Coal Co., 165 F.2d 970, 972–73 (3d Cir.1948) (). In deciding a motion to dismiss for lack of subject matter jurisdiction, the court “must construe the complaint liberally, treating all well-pleaded facts as true and drawing all reasonable inferences in favor of the plaintiffs.” Viqueira v. First Bank, 140 F.3d 12, 16 (1st Cir.1998) (citing Royal v. Leading Edge Prods., Inc., 833 F.2d 1, 1 (1st Cir.1987)). However, “the court may consider whatever evidence has been submitted,” including exhibits, without converting the Rule 12(b)(1) motion into a motion for summary judgment. Aversa v. United States, 99 F.3d 1200, 1210 (1st Cir.1996).
Under the FAA, “[a] party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have [civil or admiralty] jurisdiction ... for an order directing that such arbitration proceed in the manner provided for in such agreement.” 9 U.S.C. § 4. Federal policy strongly favors arbitration over litigation, so long as an agreement to arbitrate exists in the first place. See HIM Portland, LLC v. DeVito Builders, Inc., 317 F.3d 41, 43 (1st Cir.2003). Thus, “there is a presumption of arbitrability in the sense that ‘[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.’ ” AT & T Techs., Inc. v. Communs. Workers of Am., 475 U.S. 643, 650, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (quoting Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582–583, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)); Mun'y of San Juan v. Corp. Para El Fomento Econ. De La Ciudad Capital, 415 F.3d 145, 149 (1st Cir.2005). “By its 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.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985) (emphasis in original). Thus, if neither “the making of the agreement for arbitration” nor the “failure to comply therewith” are in issue, a court must order arbitration “in accordance with the terms of the agreement.” 9 U.S.C. § 4. If either “the making of the arbitration agreement or the failure, neglect, or refusal to perform the same” are at issue in the case, the non-moving party may demand a jury trial of that issue; in the absence of such a demand, the court “shall hear and determine such issue.” Id.
The factual background is taken from the Complaint (Docket No. 1) as well as other documents filed by the parties.
Meléndez began working for Starwood in 1999. (Docket No. 1, p. 3). In March 2008, Starwood named Meléndez as Director of Finance of the Westin Roco Ki Beach and Golf Resort in Macao, Dominican Republic. Meléndez signed an employment offer letter with Starwood (“Dominican Republic Contract”). The contract included an “Exclusive Dispute Resolution Procedure” clause (“clause”) and a “Mutual Agreement to Arbitrate” (“MAA”). (Docket No. 13, p. 2–3; Docket No. 14, p. 1). The clause stated that “[a]ny and all disputes relating to this offer letter, your transfer at Starwood or the termination of employment in the Dominican Republic will be resolved solely and exclusively through the Dominican Labor Courts pursuant to the employment rules of the Dominican Labor Code.” (Docket No. 13–1, p. 2). The MAA stated:
... Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”) and I hereby agree that, except as otherwise provided herein, all disputes and claims for which a court otherwise would be authorized by law to grant relief, in any manner, that I may have, now or in the future, during or after my employment with Starwood, of any and every kind or nature whatsoever with or against Starwood, any of Starwood's affiliated or subsidiary companies, partners, joint ventures, owners of properties Starwood manages, and/or any of his, her, its or their directors, officers, employees or agents, or any disputes and claims that Starwood may have against me (collectively, “Claims”), shall be submitted to the American Arbitration Association (“AAA”) to be resolved and determined through final and binding arbitration before a single arbitrator and to be conducted in accordance with the Dominican Labor Laws.
[...]
Starwood and I hereby agree that the Claims subject to arbitration shall include but not be limited to any and all Claims that arise out of or are related to the offer of employment, transfer or promotion extended by Starwood to me, any withdrawal or rescission of that offer, any aspect of my employment with Starwood or the terms and conditions of that employment, any claim for bonus, vacation pay or other compensation, any termination of that employment and any Claim of discrimination, retaliation, or harassment based upon age, race, religion, sex, creed, ethnicity, pregnancy, veteran status, citizenship status, national origin, disability, handicap, medical condition, sexual orientation or any other unlawful basis, or any other unlawful conduct.
[...]
By entering into this Agreement, Starwood and I each specifically acknowledge and understand that the right to the determination and/or trial of any Claims in court before any judge or jury is a valuable right, and that by signing this Agreement Starwood and I hereby knowingly and voluntarily waive any and all rights we may have to assert any Claims in any court of competent jurisdiction and to a determination and/or trial before a judge or a jury.
[...]
This Agreement shall survive my employer-employee relationship with Starwood and shall apply to any covered Claim whether arising or asserted during my employment or after the termination of my employment with the Company. This Agreement can be modified or revoked only by a writing signed by both Starwood's Executive Vice President, Human Resources and me and that expressly refers to this Agreement and specifically states an intent to modify or revoke it. This is the complete agreement of the parties on the subject of arbitration of disputes. (Docket No. 13–2, p. 1–3).
Starwood later named Meléndez as Director of Finance at the Sheraton Puerto Rico Convention Center Hotel, where he worked from June 2009 to November 2011. (Docket No. 1, p. 3). In April 2009, Meléndez signed another employment contract with Starwood for this new position (“Puerto Rico Contract”). (Docket No. 19, p. 2). This contract also included an exclusive dispute resolution procedure clause and an arbitration agreement. (Docket No. 19–1, p. 3). That clause states:
Any and all disputes relating to this offer letter, your transfer at Starwood or the termination of that employment will be resolved solely and exclusively through binding arbitration pursuant to the employment rules of the American Arbitration Association. Accordingly, you acknowledge and agree that this offer of employment and the benefits provided herein are contingent upon your execution of the Arbitration Agreement provided to you herewith (Attachment A). 1 ( Id.)
In November 2011, Meléndez was informed that he was being investigated for breaking company rules and was sent home pending outcome of the investigation. Two days later, he was informed that his employment was being terminated for allegedly sexually harassing a staff member for about a year. Meléndez was 62 years old at the time. (Docket No. 1, p. 3–5).
Defendants initially argued that Meléndez is bound by the agreement to arbitrate in...
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