Owens v. Int'l Bus. Machs. Corp.
| Decision Date | 09 December 2022 |
| Docket Number | 22-cv-00852 (APM),22-cv-00901 (APM) |
| Parties | JAMES OWENS, Petitioner, v. INTERNATIONAL BUSINESS MACHINES CORP., Respondent. JOHN HOLTMAN, Petitioner, v. INTERNATIONAL BUSINESS MACHINES CORP., Respondent. |
| Court | U.S. District Court — District of Columbia |
In these non-consolidated actions, Petitioners ask the court to vacate rulings dismissing as untimely their arbitration requests against Respondent International Business Machines Corporation (“IBM”). The Petitioner in Owens is James Owens, a former employee of IBM who worked at the corporation from 1997 to 2020, and the Petitioner in Holtman is John Holtman, a former employee of IBM who worked at the corporation from 1983 to 2020.
IBM terminated the Petitioners' employment as part of a layoff in May 2020. Owens was 50 years old at the time and Holtman[1]was 60. Petitioners signed a severance agreement, which offered the employees a severance payment in exchange for a waiver of legal claims, other than claims under the Age Discrimination in Employment Act (“ADEA”), which would need to be pursued in individual arbitration. The arbitration agreement includes a timing provision that states:
To initiate arbitration, you must submit a written demand for arbitration to the IBM Arbitration Coordinator no later than the expiration of the statute of limitations (deadline for filing) that the law prescribes for the claim that you are making or, if the claim is one which must first be brought before a government agency, no later than the deadline for the filing of such a claim. If the demand for arbitration is not timely submitted, the claim shall be deemed waived. The filing of a charge or complaint with a government agency or the presentation of a concern through the IBM Open Door Program shall not substitute for or extend the time for submitting a demand for arbitration.
Owens Mot. to Provisionally Seal Documents, ECF No. 4 [hereinafter Owens Mot. to Seal], Ex. 1, ECF No. 4-3 [hereinafter Owens Ex. 11], at 32; Holtman Mot. to Provisionally Seal Documents, ECF No. 3 [hereinafter Holtman Mot. to Seal], Ex. C, ECF No. 3-3 [hereinafter Holtman Ex C], at 33. This provision gave Petitioners 180 days to demand arbitration of ADEA claims, which mirrors the ADEA limitations period. See 42 U.S.C. § 2000e-5(e)(1); 29 U.S.C. § 626(d). Petitioners' last day to timely demand arbitration in writing was on November 17, 2020.
Petitioners attempted to bring an ADEA claim against IBM in arbitration. Petitioners electronically filed their respective arbitration demands with JAMS, the designated alternative dispute forum on November 17, 2020, and mailed the required written demands to IBM the following day on November 18, 2020. IBM moved to dismiss both matters as untimely. The arbitrator dismissed the matters on November 19, 2021, and denied Petitioners' Motions for Reconsideration on January 6 and January 7, 2022.
Before this court are the parties' cross-motions, with Petitioners seeking to vacate the arbitrator's dismissals and IBM seeking their confirmation. For the reasons that follow, Petitioners' Motions are denied and Respondent's Motions to Confirm Arbitration Awards are granted.
Petitioners move to vacate the arbitration rulings pursuant to Section 10 of the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1, et seq., which provides narrow grounds for a district court to vacate an arbitrator's decision. Specifically, 9 U.S.C. § 10 provides that “the United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration,” including, as relevant here, where “the arbitrators were guilty of misconduct . . . in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced”; or “where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.” 9 U.S.C. §§ 10(a)(3)-(a)(4).
Under the FAA, “judicial review of arbitral awards is extremely limited,” Kurke v. Oscar Gruss & Son, Inc., 454 F.3d 350, 354, (D.C. Cir. 2006) (quoting Teamsters Loc. Union v. United Parcel Serv., Inc., 272 F.3d 600, 604 (D.C. Cir. 2001)), and the court “must confirm an arbitration award where some colorable support for the award can be gleaned from the record,” LaPrade v. Kidder, Peabody & Co., 94 F.Supp.2d 2, 4 (D.D.C. 2000). “[C]ourts may vacate an arbitrator's decision only in very unusual circumstances.” Mesa Power Grp., v. Gov't of Can., 255 F.Supp.3d 175, 182 (D.D.C. 2017) (quoting Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 568 (2013)).
“Section 10 of the FAA provides the FAA's exclusive grounds for vacating an award.” Id. at 183 (quoting Hall St. Assocs. v. Mattel, Inc., 552 U.S. 576, 584 (2008)) (emphasis added) (cleaned up). “‘[A]s long as [an honest] arbitrator is even arguably construing or applying the contract and acting within the scope of his authority,' the fact that ‘a court is convinced he committed serious error does not suffice to overturn his decision.'” E. Associated Coal Corp. v. United Mine Workers of Am., 531 U.S. 57, 62 (2000) (quoting Paperworkers v. Misco, Inc., 484 U.S. 29, 38 (1987)). And under § 10(a)(4) “‘it is only when an arbitrator strays from interpretation and application of the agreement and effectively ‘dispenses his own brand of industrial justice' that his decision may be unenforceable.'” Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 671 (2010) (quoting Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509 (2001)) (brackets omitted). In sum, “only if ‘the arbitrator acts outside the scope of his contractually delegated authority'-issuing an award that ‘simply reflects his own notions of economic justice' rather than ‘drawing its essence from the contract'- may a court overturn his determination.” Oxford Health, 569 U.S. at 569 (quoting E. Associated Coal, 531 U.S. at 62) (cleaned up). Therefore, “the sole question” is “whether the arbitrator (even arguably) interpreted the parties' contract, not whether he got its meaning right or wrong.” Id.
Petitioners also argue that an arbitration ruling may be vacated because it manifestly disregards the law. The Supreme Court has said, however, that Sections 10 and 11 “provide the FAA's exclusive grounds for expedited vacatur and modification.” Hall St., 552 U.S. at 584. The D.C. Circuit nevertheless has assumed without deciding that “manifest disregard of the law” survives as a separate ground for vacatur. Affinity Fin. Corp. v. AARP Fin. Inc., 468 Fed. Appx. 4, 5 (D.C. Cir. 2012) (). This court also assumes without deciding that “manifest disregard of the law” is a valid ground for vacatur under the FAA. Assuming the doctrine survives, manifest disregard can only be established if “(1) the arbitrators knew of a governing legal principle yet refused to apply it or ignored it altogether and (2) the law ignored by the arbitrators was well defined, explicit, and clearly applicable to the case.” LaPrade v. Kidder, Peabody & Co., 246 F.3d 702, 706 (D.C. Cir. 2001).
At the outset, the court notes that it does not rule on the parties' cross-motions in a vacuum. Various district courts have considered the same arguments made by the same petitioners' counsel against the same respondent. In each instance, these courts have upheld arbitrators' dismissals on timeliness grounds. See Smith v. IBM, No. 21-cv-03856-JPB, 2022 WL 1720140, at *7 ; Chandler v. IBM, No. 21-cv-6319-JGK, 2022 WL 2473340, at *6-7 (S.D.N.Y. July 6, 2022); Lodi v. IBM, No. 21-cv-6336-JGK, 2022 WL 2669199, at *4 (S.D.N.Y. July 11, 2022); In re IBM Arb. Agreement Litig., No. 21-cv-6296-JMF, 2022 WL 2752618, at * 7-9 (S.D.N.Y. July 14, 2022). This court does so, too.
Illustrative is Smith v. IBM, a case involving the same petitioner's counsel and nearly identical facts and arguments at issue here-an arbitration demand served one day late. See 2022 WL 1720140 at *2. There, the district court dismissed the petition to vacate and granted IBM's motion to confirm. Id. at *7. As to FAA § 10(a)(3), the petitioner in Smith argued that the arbitrator had ignored factual evidence including a timely JAMS filing and logistical difficulties brought on by the COVID-19 pandemic, but the district court found that the petitioner's arguments were merely “founded on a disagreement with the Arbitrator's conclusion.” Id. at *3. Further, the petitioner asserted that the arbitrator did not assess the burden of the mailing requirement versus the “prevailing standard for conducting business electronically,” but the court found that the arbitrator “was not obliged to do so; rather, his duty was to enforce the terms of the Agreement between the parties.” Id. at *4. As to the petitioner's FAA § 10(a)(4) arguments, including a purported failure to apply equitable tolling, the district court found that the arbitrator had followed the terms of the arbitration agreement in dismissing the petitioner's claim as untimely. Id. at *5. Lastly, the court found without merit the arguments related to the enforceability of the agreement's timing provision. Id. at *5-7. This court reaches the same conclusions here.
Petitioners argue that the arbitrator “failed to consider key facts pertinent to this case, including that Petitioner timely filed his demand with JAMS, that the COVID-19 pandemic made same-day mailing impracticable, and that IBM's requirement that Pet...
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