Sorathia v. Fidato Partners, LLC
| Citation | 483 F.Supp.3d 266 |
| Decision Date | 31 August 2020 |
| Docket Number | CIVIL ACTION NO. 19-6143,CIVIL ACTION No. 19-4253 |
| Parties | Daksha SORATHIA, Plaintiff, v. FIDATO PARTNERS, LLC, et al., Defendants. Daksha Sorathia, Plaintiff, v. Fidato Partners, LLC, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
W. Charles Sipio, Karpf Karpf & Cerutti P.C., Bensalem, PA, for Plaintiff.
Elizabeth A. Malloy, Kelly Kindig, Cozen O'Connor, Philadelphia, PA, for Defendants.
Plaintiff Daksha Sorathia brings this lawsuit against her former employer Fidato Partners, LLC ("Fidato") as well as Fidato's Chief Executive Officer John Rapchinksi and Fidato's Chief Operating Officer Nichelle Shoreman (collectively "Defendants"), alleging denial of overtime compensation, gender discrimination, and retaliatory termination in response to protected expression. Plaintiff sets forth claims under the Civil Rights Act of 1964 ("Title VII"), the Fair Labor Standards Act ("FLSA"), the Equal Pay Act ("EPA"), and the Pennsylvania Minimum Wage Act ("PMWA").
Defendants have filed a Motion to Compel Arbitration urging that the controlling Employment Agreement mandates that this dispute be entirely resolved through arbitration. After careful review of this Agreement, I conclude that Plaintiff's claims do not fall within the scope of its terms and, consequently, I will deny Defendants’ Motion.
As explained below, Federal Rule of Civil Procedure 12(b)(6) applies to my review of the factual background. In deciding a motion under Federal Rule of Civil Procedure 12(b)(6), I must accept all factual allegations in the complaint as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading, the plaintiff may be entitled to relief. Atiyeh v. Nat'l Fire Ins. Co. of Hartford, 742 F. Supp. 2d 591, 596 (E.D. Pa. 2010). Therefore, the following facts are taken from Plaintiff's Complaints:
Defendant Fidato is "a consulting and recruiting employer providing placement(s) of its employees to third-party companies in the areas of accounting, risk management, and information technology primarily in the Mid-Atlantic region." Plaintiff Daksha Sorathia was hired by Defendants on or about June 10, 2019. Defendants placed Plaintiff at a third-party business Clairvate Analytics where she performed accounting duties for nearly three months. Defendants paid Plaintiff on an hourly basis at a rate of $55.00 per hour. (Compl., No. 19-cv-4253, ¶¶ 7, 12–15.)
Plaintiff alleges that, due to gender-based discrimination on the part of Defendants, this hourly rate was less than that of comparator male employees. Plaintiff also claims that she worked "overtime" for most of her employment, meaning in excess of forty hours per week, but that Defendants failed to adjust Plaintiff's hourly rate for those overtime hours. Plaintiff asserts that she received the same hourly pay for every hour worked over the course of her employment, irrespective of how many hours she had worked in any particular week. (Compl., No. 19-cv-4253 ¶¶ 7, 12, 14, 15, 17, 22; Compl., No. 19-cv-6143 ¶¶ 18–20.)
Upon observing that her overtime hours were not paid at an increased rate, Plaintiff raised concerns with Defendants, both verbally and in writing, that she was being paid below what was legally required for hourly employees. Plaintiff maintains that, as a W-2 employee, she is entitled to one and a half times the standard pay for those hours worked in excess of forty hours per week. (Compl., No. 19-cv-4253 ¶¶ 26–27.)
Within close temporal proximity to Plaintiff raising this issue, some of Defendants’ other employees allegedly began to raise similar concerns as to their lack of overtime rate adjustment. In response, Defendants conducted in-person meetings with several of these employees. Throughout these interactions, Defendants maintained that Plaintiff and others were not entitled to overtime compensation as they were legally exempt based on the nature of their employment. According to Plaintiff, Defendants never adjusted the pay rates for overtime hours of Plaintiff or other similarly-situated employees who raised concerns. (Compl., No. 19-cv-4253 ¶¶ 24–28.)
On or about August 28, 2019, not long after Plaintiff first raised this overtime issue, Defendants terminated her employment. Plaintiff alleges that her termination was, in large part, retaliatory as a result of Defendants’ perception that Plaintiff encouraged other employees to express concerns regarding Defendants’ lack of adjusted overtime payment. Plaintiff also claims that her termination and failure to receive a full-time position offer were primarily the result of gender-based discrimination and that Defendant Fidato disproportionately offered permanent positions to comparator male employees.
On September 16, 2019, Plaintiff filed this lawsuit alleging that her lack of adjusted overtime compensation and retaliatory termination violated the FLSA and PMWA. On December 27, 2019, Plaintiff filed a second lawsuit against only Defendant Fidato asserting that Plaintiff's lower hourly rate based on her gender, the lack of a full-time employment offer, and retaliatory termination all violated Title VII and the EPA. On January 20, 2020, I administratively consolidated these two cases.
Defendants have filed this Motion to Compel Arbitration of all claims pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 3 – 4. Defendants base their Motion on an arbitration clause within the "Employment Agreement" ("Agreement") that Plaintiff signed as a condition of her employment.
Motions to compel arbitration are assessed under either the Federal Rule of Civil Procedure 12(b)(6) standard for motions to dismiss or the Rule 56 standard for summary judgment. See Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764 (3d Cir. 2013). As one court has explained:
[W]here the complaint does not establish with clarity that the parties have agreed to arbitrate ..., a Rule 12(b)(6) standard is not appropriate because the motion cannot be resolved without consideration of evidence outside the pleadings, and, if necessary, further development of the factual record. In such circumstances, the non-movant must be given a limited opportunity to conduct discovery on the narrow issue of whether an arbitration agreement exists. Afterwards, the court may entertain a renewed motion to compel arbitration, this time judging the motion under a Rule 56, summary judgment standard.
The choice between these standards reflects the competing aims of the Federal Arbitration Act ("FAA"). Id. at 764. On one hand, the FAA's "interest in speedy dispute resolution" encourages application of the swifter Rule 12(b)(6) motion to dismiss standard, which consequentially avoids the " ‘inherent delay of discovery’ " that results from the Rule 56 alternative. Id. (quoting Somerset Consulting, LLC v. United Capital Lenders, LLC, 832 F. Supp. 2d 474, 481 (E.D. Pa. 2011) ). On the other hand, the United States Court of Appeals for the Third Circuit has stressed that at times a "more deliberate pace is required" for review of arbitrability disputes, calling for application of Rule 56. Guidotti, 716 F.3d at 774.
The primary indicator of which standard is appropriate is the complaint itself. See Silfee v. Automatic Data Processing, Inc., 696 F. App'x 576 (3d Cir. 2017). "[W]hen it is apparent, based on ‘the face of a complaint, and documents relied upon in the complaint,’ that certain of a party's claims ‘are subject to an enforceable arbitration clause, a motion to compel arbitration should be considered under a Rule 12(b)(6) standard without discovery's delay.’ " Id. (quoting Guidotti, 716 F.3d at 776 ). If, however, "the complaint and its supporting documents are unclear regarding the agreement to arbitrate, or if the plaintiff has responded to a motion to compel arbitration with additional facts sufficient to place the agreement to arbitrate in issue" then courts should consider the motion to compel arbitration under a Rule 56 standard. Guidotti, 716 F.3d at 776 (quoting Somerset, 832 F. Supp. 2d at 482 ). Should a court apply the Rule 56 standard, "the parties should be entitled to discovery on the question of arbitrability before a court entertains further briefing on [the] question." Id.
Here, although the Complaints make no mention of the Employment Agreement or arbitration provision therein, that fact does not foreclose operation of a Rule 12(b)(6) standard. See Asberry-Jones v. Wells Fargo Bank, Nat'l Ass'n, No. Civ. A. 19-83, 2019 WL 2077731 at *3 (E.D. Pa. May 10, 2019) ( ). Defendants have attached the Employment Agreement to their Motion to Compel Arbitration, Plaintiff does not dispute she received and signed the Employment Agreement containing the arbitration clause, and neither party has referenced additional facts beyond those set out in the Complaints and Employment Agreement. (Pl.’s Opp'n Mot. to Compel Arbitration 1.) Indeed, the crux of the dispute between the parties centers on the scope and enforceability of that arbitration agreement. Accordingly, I will apply the Rule 12(b)(6) standard to the Motion before me.
Under Rule 12(b)(6), a defendant bears the burden of demonstrating that the plaintiff has not stated a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6) ; see also Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 20...
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