Price v. NCR Corp.

• Decision Date: 10 December 2012
• Docket Number: No. 12 C 3413.,12 C 3413.
• Citation: 908 F.Supp.2d 935
• Parties: Mark PRICE, individually and on behalf of all others similarly situated, Plaintiffs, v. NCR CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Illinois

908 F.Supp.2d 935

Mark PRICE, individually and on behalf of all others similarly situated, Plaintiffs,

v.NCR CORPORATION, Defendant.

No. 12 C 3413.

United States District Court,

N.D. Illinois,

Eastern Division.

Dec. 10, 2012.

Ryan F. Stephan, Andrew C. Ficzko, James B. Zouras, Mark Bryan Goldstein, Stephan Zouras, LLP, Chicago, IL, for Plaintiffs.

Jason E. Barsanti, Meckler Bulger Tilson Marick & Pearson LLP, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

RUBEN CASTILLO, District Judge.

Mark Price (“Plaintiff”) brings this class action against NCR Corporation (“Defendant”) alleging violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq.; the Illinois Minimum Wage Law (“IMWL”), 820 Ill. Comp. Stat. 105/1 et seq.; and the Illinois Wage Payment and Collection Act (“IWPCA”), 820 Ill. Comp. Stat. 115/1 et seq. (R. 1, Compl.) Presently before the Court is Defendant's motion to compel arbitration and stay these proceedings pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq. (R. 12, Def.'s Mot.) For the reasons set forth herein, the Court grants Defendant's motion.¹

RELEVANT FACTS

Defendant provides computer products and services throughout the nation, including Illinois. (R. 1, Compl. ¶ 7.) Defendant keeps track of employee wages and hours and maintains employee compensation policies for all employees. ( Id. ¶ 9.) Plaintiff and putative class members were employed by Defendant and classified by Defendant as “non-exempt customer engineers” or “technicians.” ( Id. ¶¶ 5–6.) Plaintiff and putative class members had similar job descriptions, responsibilities, and compensation plans. ( Id. ¶ 8.) Plaintiffalleges that Defendant violated the FLSA, the IMWL, and the IWPCA by failing to: (1) maintain correct records of the hours he and putative class members worked; and (2) compensate Plaintiff and putative class members appropriately for scheduled overtime hours, extra hours worked before and after scheduled shifts, and meal breaks. ( Id. ¶¶ 11–13.) Plaintiff also alleges that Defendant consciously acted in this manner in order to reduce its labor and payroll costs. ( Id. ¶¶ 14–15.)

According to Defendant, Plaintiff and Defendant entered into a “Mutual Agreement to Arbitrate All Employment Related Claims” (“Agreement”) in December 2007. (R. 14, Def.'s Mem. at 2; R. 14, Def.'s Mem., Ex. B–1, Agreement.) Pursuant to the Agreement, the parties must submit to binding arbitration to resolve any dispute that cannot be resolved through “voluntary internal processes.” (R. 14, Def.'s Mem., Ex. B–1, Agreement.) Issues that proceed to binding arbitration include “every possible claim (other than workers compensation claims or claims for benefits covered by the Employee Retirement Income Security Act) arising out of or relating in any way to [Plaintiff's] employment” with Defendant. ( Id.) According to the terms of the Agreement, arbitration hearings “will by conducted by the American Arbitration Association (the “AAA”) under the AAA's rules.” ( Id.) The Agreement instructs that “[a]ny issue or dispute concerning the interpretation or enforceability of this Agreement shall be resolved by the arbitrator.” ( Id.) Additionally, the Agreement states that the parties “intend for this Agreement to be interpreted broadly to allow arbitration of as many disputes as possible.” ( Id.)

PROCEDURAL HISTORY

On May 4, 2012, Plaintiff filed his complaint with the Court in his individual capacity and on behalf of similarly situated individuals. (R. 1, Compl.) Plaintiff brings three claims against Defendant. In Counts I and II, brought on behalf of himself and others similarly situated, Plaintiff alleges that Defendant violated the FLSA and the IMWL by failing to maintain accurate records and pay overtime wages of one-and-a-half times his hourly wage. ( Id. ¶¶ 37–41, 50–52.) In Count III, Plaintiff alleges that Defendant violated the IWPCA by failing to pay him and putative class members on a timely basis, taking improper deductions for meal breaks, and failing to pay overtime wages and other benefits. ( Id. ¶¶ 58–62.) Plaintiff requests judgment against Defendant for willfully violating the FLSA, the IMWL, and the IWPCA. ( Id. ¶ E.)

On June 13, 2012, Defendant moved to compel arbitration and stay these proceedings. (R. 12, Def.'s Mot.) Defendant asserts that the Agreement requires Plaintiff to submit to binding arbitration and eliminates the Court's subject matter jurisdiction during the pendency of the arbitration. (R. 14, Def.'s Mem. at 2–3.) On July 12, 2012, Plaintiff filed a response stating that he “does not oppose Defendant's motion and agrees to pursue all claims through arbitration.” (R. 20, Pl.'s Resp.) Defendant filed a reply on July 16, 2012, arguing that “Plaintiff's response is misleading and constitutes an improper end-run around having this Court determine the scope of arbitration.” (R. 21, Def.'s Reply at 1.) Defendant requests that the Court specifically exclude Plaintiff's class claims from arbitration, arguing that because the Agreement is silent as to class arbitration, class arbitration is prohibited. ( Id.) On July 24, 2012, Plaintiff filed a sur-reply requesting that the Court grant Defendant's motion to compel arbitration and permit the arbitrator to determine whether Plaintiff may bring his class claims or, alternatively, grant Defendant's motion and specify that Plaintiff may pursue both his individual and his class claims in arbitration. (R. 26, Pl.'s Sur–Reply at 1.) Plaintiff argues that the Agreement is broadly drafted and allows arbitration of class claims, not just his individual claims. ( Id. at 3–4.)

LEGAL STANDARD

The FAA governs questions of arbitrability in both federal and state courts. Jain v. de Mere, 51 F.3d 686, 688 (7th Cir.1995). The FAA “declare[s] a national policy favoring arbitration,” Nitro–Lift Techs., L.L.C. v. Howard, ––– U.S. ––––, 133 S.Ct. 500, 503, 184 L.Ed.2d 328 (2012) (quoting Southland Corp. v. Keating, 465 U.S. 1, 10, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984)), and reflects “the fundamental principle that arbitration is a matter of contract,” AT & T Mobility LLC v. Concepcion, ––– U.S. ––––, 131 S.Ct. 1740, 1745, 179 L.Ed.2d 742 (2011) (internal citations and quotation marks omitted). The FAA provides that an arbitration clause in “a contract evidencing a transaction 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.” 9 U.S.C. § 2.² The purpose of the FAA “is to ensure that private agreements to arbitrate are enforced according to their terms.” Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 53–54, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995). “[W]hen a contract contains an arbitration clause, a strong presumption in favor of arbitration exists and courts have no choice but to order arbitration ‘unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.’ ” CK Witco Corp. v. Paper Allied Indus., 272 F.3d 419, 421–22 (7th Cir.2001) (quoting AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986)).

Under the FAA, federal district courts may compel arbitration and stay proceedings when there is: (1) a written agreement to arbitrate; (2) a dispute within the scope of the arbitration agreement; and (3) a refusal to comply with the arbitration agreement. Zurich Am. Ins. Co. v. Watts Indus., Inc. (Zurich I), 417 F.3d 682, 687 (7th Cir.2005); see also E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 289, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002). Parties may only be compelled to arbitrate issues they have agreed to arbitrate. Mastrobuono, 514 U.S. at 57, 115 S.Ct. 1212. If the Court is satisfied that the parties agreed to arbitrate, it must promptly compel arbitration. 9 U.S.C. § 4. The party opposing arbitration bears the burden of establishing why the arbitration provision should not be enforced. Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91–92, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000).

ANALYSIS

The parties do not dispute that the Agreement is enforceable. Nor do the parties dispute that the types of claims Plaintiff brings fall within the scope of the Agreement. (R. 12, Def.'s Mot. at 2; R. 20, Pl.'s Resp. at 1.) Rather, the issue is whether the Court should compel Plaintiff to arbitrate only his individual claims, or whether he may also arbitrate his class claims. (R. 21, Def.'s Reply at 3; R. 26, Pl.'s Sur–Reply at 1.) Defendant argues that because the Agreement is silent as to class arbitration, the parties did not agree to arbitrate class claims, and therefore the Court may only refer Plaintiff's individual claims to arbitration. (R. 21, Def.'s Reply at 4) (citing Stolt–Nielsen S.A. v. AnimalFeeds Int'l, 559 U.S. 662, 130 S.Ct. 1758, 1775, 176 L.Ed.2d 605 (2010)). Plaintiff argues that the Agreement explicitly allows him to arbitrate class claims because it calls for the arbitration of “every possible claim” arising out of his employment. (R. 26, Pl.'s Sur–Reply at 3.) In the alternative, Plaintiff argues that the Agreement implicitly authorizes class arbitration by not explicitly prohibiting it. ( Id. at 4–5.)

The FAA “establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24–25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). When the parties have signed an arbitration agreement, the only questions that are properly decided by a court are threshold questions of substantive arbitrability—whether the parties agreed to arbitrate a particular issue. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002). These “gateway disputes” of substantive arbitrability that a court may resolve include: “1) a dispute regarding...