Tracy v. Loram Maint. of Way, Inc.
| Decision Date | 14 July 2011 |
| Docket Number | 5:10-CV-102-RLV |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | REGGIE TRACY, Plaintiff, v. LORAM MAINTENANCE OF WAY, INC., Defendant. |
THIS MATTER is before the Court on Defendant Loram Maintenance of Way, Inc.'s ("Loram") Motion to Dismiss or Transfer Venue and Memorandum of Law in Support (Docs. #4-5), filed August 8, 2010; Plaintiff Reggie Tracy's ("Tracy") Response in Opposition, (Doc. #7), filed August 31, 2010; Defendant's Motion to Strike Plaintiff's Reply and Memorandum of Law in Support (Docs. #9-10), filed September 9, 2010; and Defendant's Reply (Doc. #12), filed September 10, 2010. This matter is now ripe for disposition.
The issue before the court is whether the Court should enforce a forum selection clause in the agreement between Plaintiff-employee and Defendant-employer entitled "Confidentiality, Noncompete, Nonsolicitation and Assignment of Inventions Agreement" ("Agreement"), where the forum selection provision designates Minnesota as the appropriate venue, and Plaintiff claims the forum selection clause does not apply to his employment discrimination and is against the public policy of North Carolina, and as a result, is unenforceable.
This case arises out of allegedly unlawful employment practices performed by Loram or its employees against Tracy. (Doc. #1). Tracy, a black male resident of Catawba County, North Carolina, worked for Loram, most recently as a rail operator, from August 6, 2007 until July 14, 2009. (Doc. #1, Ex. A, ¶ 1). Loram is a company whose principle place of business is in Minnesota. (Doc. #5). Before beginning his employment, Tracy signed the Agreement with Loram, which contained a forum selection clause entitled "Choice of Law and Forum":
This Agreement shall be interpreted and governed by the laws of the state of Minnesota, without regard to the conflict of laws or principles of any other state. Any dispute relating to this Agreement shall be adjudicated only in a state or federal court of competent jurisdiction within the State of Minnesota, and Employee consents to such jurisdiction.
(Doc. #5, Ex. 1, ¶ 14). On June 29, 2010, Plaintiff initiated this suit in the North Carolina Superior Court of Catawba County alleging violations of Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e (2006), the Thirteenth Amendment of the United States Constitution as protected by 42 U.S.C. § 1981 (2006), and violations of North Carolina General Statutes, including but not limited to N.C. Gen. Stat. § 143-422.2 (1977). (Doc. #1, Ex. A, ¶¶ 22, 25, 28, 34). Plaintiff alleges that he was subject to numerous incidents of racial discrimination by Loram employees, and was denied opportunities for advancement and eventually terminated. (Doc. #1, Ex. A, ¶¶ 7, 17). Defendant later removed the case to this Court pursuant to 28 U.S.C. § 1441(a) (2006). (Doc. #1). Subject matter jurisdiction is founded on allegations involving a federal question. (Doc. #1, ¶ 4).
The Defendant now brings this motion to Dismiss or Transfer Venue to the District of Minnesota in accordance with the forum selection clause found in the Agreement. (Doc. #4). Defendant also moves to Strike Plaintiff's Reply in Opposition to Defendant's motion to Dismissor Transfer Venue, as the Plaintiff's reply was filed after the August 27, 2010 deadline without explanation. (Doc. #9, moving to strike Doc. #7).
Title VII has a specific venue provision establishing appropriate venue for all Title VII causes of action:
An action may be brought in any judicial district in the State in which the unlawful employment practices [are] alleged to have been committed, in the judicial district in which the employment records relevant to such practice are maintained and administered, or in the judicial district in which the aggrieved person would have worked but for the alleged unlawful employment practice, but if the respondent is not found within any such district such an action may be brought within the judicial district in which the respondent has his principal office.
42 U.S.C. § 2000e-5(f)(3) (2006). The venue of Title VII claims is determined based on this venue provision rather than the general federal venue provisions. 28 U.S.C. § 1391 et seq.; Perkins v. Town of Princeville, 340 F. Supp. 2d 624, 626 (M.D.N.C. 2004). However, when cases are removed to federal court from state court, venue is determined by the removal statute, 28 U.S.C. §1441. Godfredson v. JBC Legal Group, P.C., 387 F. Supp. 2d 543, 547 (E.D.N.C. 2005) (citing Polizzi v. Cowles Magazines, Inc., 345 U.S. 663, 665 (1953)). Under §1441:
[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.
28 U.S.C. § 1441. This Court has held that 28 U.S.C. § 1391 (2006) "does not apply when...defendants remove a case from state court to federal court." Scholl v. Sagon RV Supercenter, LLC, 249 F.R.D. 230, 238 (W.D.N.C. 2008) (quoting Godfredson, 387 F. Supp. 2d at 555); see also Hollis v. Florida State Univ., 259 F.3d 1295, 1299 (11th Cir. 2001) (). The same rationale precluding dismissal pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure after removal applies with equal force to Title VII's venue provision, 42 U.S.C. § 2000e-5(f)(3). Thus, since Defendant removed the case to federal court under §1441, it is precluded from now moving to dismiss under 12(b)(3). The Motion to Dismiss will be DENIED.
The Court will now consider the motion to transfer. 28 U.S.C. § 1404(a) provides that "for the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district court or division where it might have been brought." (2006). In Stewart Org., Inc. v Ricoh Corp., the Supreme Court held that § 1404(a) "governs [a district court's] decision whether to give effect to the parties' forum selection clause." 487 U.S. 22, 32 (1988). Although the presence of a forum selection clause will be a "significant factor that figures centrally in the district court's calculus," the district courts must "weigh in the balance a number of case-specific factors." Id. at 29.
A valid forum selection clause does not conclusively establish proper venue, but is "a significant factor." Brock v. Entre Comp. Ctrs, Inc., 933 F.2d 1253, 1258 (4th Cir. 1991). The forum selection clause must be applicable to the claim at issue, valid, and mandatory in order to be considered enforceable by the court. See Giammattei v. Bertram Yacht, Inc., No. 3:09-CV-399-RLV, 2010 WL 2593612 (W.D.N.C. June 23, 2010) (). Plaintiff does not dispute Defendant's contentionthat the forum selection provision is mandatory, rather than permissive. The phrase "only in a . . . court of competent jurisdiction within the State of Minnesota" indicates that this provision is mandatory. (Doc. #5, Ex. 1, ¶ 14); see, e.g. S & D Coffee, Inc. v. GEI Autowrappers, 995 F. Supp. 607, 609-10 (M.D.N.C. 1997) (). The Court will now consider whether the forum selection clause is applicable to the claims at issue and valid.
Plaintiff claims that the forum selection clause is inapplicable to his employment discrimination claims, and only applies to claims such as those involving violations of confidentiality and non-compete agreements. (Doc. #7). Plaintiff notes that this Agreement is entitled "Confidentiality, Noncompete, Nonsolicitation and Assignment of Inventions Agreement," and does not include rate of pay, termination or grievance procedures, vacations, or safety protocols. (Doc. #7, see also Doc. #5, Ex. 1). Plaintiff also argues that according to Paragraph 8 of the Agreement, titled "No Employment Contract; Employment is 'At Will,'" Plaintiff is an "at-will" employee, and thus there is no general employment contract, and his employment is only governed by applicable federal and state laws, including discrimination statutes. (Doc. #7, see also Doc. #1, Ex. A, ¶ 8).
Plaintiff points to Encompass Advisors, Ltd. v. Unapen, Inc. to support his argument that the Agreement does not implicate the matter at hand. 686 F. Supp. 2d 607 (W.D.N.C. 2009). Encompass involved three agreements, the third of which contained a forum selection clause. 686 F. Supp. 2d at 610. The court in Encompass found that because the complaint implicated the third agreement, the forum selection clause applied to the whole complaint. Id. at 612. While mainlydealing with issues not relevant to the matter at hand, the court in Encompass does consider whether the clear intent of the parties in entering into the agreement, as set out in the writing, encompasses the plaintiff's claims and thus implicates the forum selection provision. 686 F. Supp. 2d at 610. The Court will consider the clear intent of the parties as set out in the Agreement to determine whether the forum selection clause is applicable to the Plaintiff's claims.
The forum selection clause states that "[a]ny dispute relating to this Agreement" must be adjudicated in Minnesota. (Doc. #5, Ex. 1, ¶ 14). To say that a dispute is in relation to an agreement is to say that there is a "logical or natural association" or "relevance" between two things. The American Heritage Dictionary 1523 (3d ed. 1192). In Paragraph 1 of...
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