LexisNexis Risk Solutions FL Inc. v. Spiegel
Filing
43
ORDER granting in part and denying in part 20 Defendant's Motion to Compel Arbitration. Signed by Judge Daniel T. K. Hurley on 7/9/14. (lr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 14-80666-CIV-HURLEY
LEXISNEXIS RISK SOLUTIONS FL, INC.,
Plaintiff,
vs.
JACQUELYN SPIEGEL,
Defendant.
________________________________________/
ORDER GRANTING IN PART & DENYING IN PART
DEFENDANT’S MOTION TO COMPEL ARBITRATION
THIS CAUSE is before the court upon the defendant=s motion to compel arbitration and stay
proceedings, the plaintiff=s response in opposition, and the defendant=t reply [ECF Nos. 20, 29, 35].
Upon consideration, the court has determined to grant the motion as to the plaintiff’s claim for
compensatory damages, and to deny the motion as to the plaintiff’s remaining claim for permanent
injunctive relief.
I. Procedural Background
LexisNexis Risk Solutions FL Inc. (“LexisNexis”) filed this diversity action against defendant
Jacquelyn Spiegel (“Spiegel”) for breach of the confidentiality and non-compete provisions of an
employment agreement (“Agreement”) between LexisNexis and Spiegel. In its two count complaint,
LexisNexis seeks preliminary and permanent injunctive relief (Count 1) as well as compensatory
damages (Count 2) for Spiegel’s alleged breach of contract.
At the inception of the litigation, LexisNexis moved for a temporary restraining order and a
preliminary injunction against Spiegel for violating these provisions of the parties’ Agreement. After
evidentiary hearing held May 28, 2014, the court granted LexisNexis’ motion for preliminary
injunction, finding a substantial likelihood of its success in showing a breach of the confidentiality
and non-compete provisions of the Agreement. The court enjoined Spiegel from further working in
any capacity for her new employer, TLO/TransUnion, and further prohibited Spiegel from using,
disclosing, or misappropriating any of LexisNexis’ trade secrets or other confidential and proprietary
business information [ECF No. 24].
Spiegel now moves to compel arbitration of all remaining claims in this litigation pursuant to an
arbitration clause in the Agreement, and for a stay of this proceeding pending arbitration. In
response, LexisNexis contends that its remaining claims involve purely injunctive relief, which are
not arbitrable. However, in advancing this view, LexisNexis does not withdraw its breach of
contract claim and corresponding demand for compensatory damages or otherwise address the issue
of the arbitrability of this legal claim.
II. Discussion
The defendant=s motion to compel arbitration is based on an arbitration provision in the
Agreement, at paragraph 24, which provides:
All disputes in any manner relating to or arising out of this Agreement shall be
resolved through binding arbitration under the auspices of the American
Arbitration Association, or such other arbitration association as the parties may
agree. The decision or award of the arbitrator shall be binding upon the parties and
shall be enforceable by a judgment entered in a court having jurisdiction. In the
event that the arbitrator determines there is a prevailing party in the arbitration, the
prevailing party shall recover from the other party all costs of arbitration including all
reasonable attorneys’ fees incurred by the prevailing party. Notwithstanding the
foregoing, this provision shall not be construed to limit a party=s right to seek
preliminary or permanent injunctive relief in any court of competent
jurisdiction.
(emphasis added).
2
Under the Federal Arbitration Act, 9 U.S.C. §§ 1-16 (1994) (“FAA”), upon motion of a party,
district courts must compel arbitration of all claims subject to arbitration. Dean Witter Reynolds Inc.
v. Byrd, 470 U.S. 213, 218-219, 105 S. Ct. 1238, 1241-42, 84 L.Ed.2d 158 (1985). The Supreme
court has interpreted the FAA to “manifest a liberal federal policy favoring arbitration agreements,”
E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 289, 122 S. Ct. 754, 151 L.Ed.2d 755 (2002), and has
mandated that “any doubts concerning the scope of arbitrable issues should be resolved in favor of
arbitration whether the problem at hand is the construction of the contract language itself or an
allegation of waiver, delay or a like defense to arbitrability.” Moses H. Cone Memorial Hosp. v.
Mercury Const. Corp., 460 U.S. 1, 24-25, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983). On the other
hand, “the FAA does not require parties to arbitrate when they have not agreed to do so … nor does
it prevent parties who do agree to arbitrate from precluding certain claims from the scope of their
arbitration agreement.” Volt Information Sciences, Inc. v. Board of Trustees of the Leland Stanford
Junior Univ., 489 U.S. 468, 478, 109 S. Ct. 1248, 1255, 103 L. Ed. 2d 468 (1989). That is, the
parties “may limit by contract the issues which they will arbitrate.” Id at 469, 109 S. Ct. at 1256.
In determining whether to compel arbitration of a dispute, a court must first decide whether
the parties agreed to arbitrate that particular dispute. To determine this question, courts generally
should apply ordinary state-law principles that govern the formation of contracts. First Options of
Chicago, 514 U.S. 938, 944, 115 S. Ct. 1920, 131 L.Ed. 2d 985 (1995). Under Florida law, the
terms of the contract should control where the rights and interests of the parties are definitely and
clearly stated. American Express Financial Advisors, Inc. v. Makarewicz, 122 F.3d 936, 940 (11th
Cir. 1997).
In this case, the Agreement plainly carves out an exemption from its otherwise broad
3
arbitration requirement, specifically reserving the right to all parties to “to seek preliminary or
permanent injunctive relief in any court of competent jurisdiction.” Spiegel contends that this
language creates an inconsistency with the parties’ broad agreement to arbitrate all disputes relating
to or arising out of the Agreement, on theory that a judicial ruling on a request for a permanent
injunction would effectively create issue preclusion in arbitration if the district court injunctive
proceeding went forth before the arbitration proceeding. To avoid this result, Spiegel argues that the
exemption for injunctive relief should be interpreted to allow a party to seek preliminary injunctive
relief, then proceed to arbitration on all issues, and, if necessary following completion of arbitration,
return to court to enforce or challenge the award of the arbitrators.
The court cannot accept this strained interpretation of the exemption or judicial carve-out
provision of the arbitration clause, which would effectively eliminate the inclusion of “permanent
injunctive relief” from its penumbra, contrary to the plain language of the text. The judicial carveout leaves no room for ambiguity - the parties intended to allow “a court of competent jurisdiction”
to provide injunctive relief, whether preliminary or permanent. With this, the defendant is not
entitled to compel arbitration of LexisNexis’ remaining request for permanent injunctive relief.
However, LexisNexis’ request for compensatory damages, subsumed within its breach of contact
claim, plainly falls within the scope of the arbitration clause, and to the extent LexisNexis continues
to press this claim, Spiegel is entitled to proceed to arbitration upon it. See American Express
Financial Advisors, Inc. v. Makarewicz, 122 F.3d 936, 940-941 (11th Cir. 1997) (plain terms of
employment agreement left decision on whether to grant injunctive relief pending arbitration to the
courts, rather than arbitrators, where agreement provided that if dispute was submitted to arbitration,
employer was entitled to injunction from court to keep employees from violating certain restrictions
4
in agreement); Hudson Global Res. Mgmt. v Beck, 2006 WL 1722353 (M.D. Fla. 2006) (tort claims
held encompassed within arbitration agreement, while claims for injunctive and equitable relief
based on alleged breach of confidentiality agreement and misappropriation of trade secrets were not
subject to arbitration based on express exclusion in agreement); Apartment Inv. & Mgmt. Co. v.
Flamingo/South Beach I Condominium Assn, Inc., 84 So.3d 1090, 1093 (Fla. 3d DCA 2010).
III. Conclusion
An agreement to arbitrate is enforceable under federal and Florida law if: (1) a valid, written
agreement to arbitrate exists; (2) an arbitrable issue exists, and (3) the parties have not waived their
right to arbitration. Seifert v U.S. Home Corp., 750 So.2d 633, 636 (Fla. 1999). Here, all three
requirements for enforcement of arbitration are met with respect to LexisNexis’ claim for
compensatory damages arising out of Spiegel’s alleged breach of contract, as a valid, written
arbitration agreement exists between plaintiff and defendant, arbitrable issues exist as to the request
for money damages, and neither LexisNexis nor Spiegel has waived their right to arbitration on this
claim. Accordingly, under 9 U.S.C. §§ 3-4, this matter shall proceed to arbitration on the breach of
contract claim (Count 2), while the claim for permanent injunctive relief (Count 1), subsumed within
the exemption to the arbitration clause, is reserved to the court and shall be stayed pending the
outcome of arbitration.
It is accordingly ORDERED AND AJDUGED:
1. The defendant’s motion to compel arbitration is GRANTED IN PART and DENIED in
PART. The matter shall proceed to arbitration on the plaintiff’s claim for breach of contract as set
forth in Count 2 of the Complaint. The motion to compel is otherwise denied.
2. The parties shall file a status report with the court regarding the status of arbitration within
5
180 days from the date of entry of this order. The parties shall also file a status report regarding the
outcome of arbitration with the court within ten days after its completion.
3. This action shall further be STAYED during the pendency of arbitration on the breach
of contract claim.
DONE AND ORDERED in Chambers at West Palm Beach, Florida this 9th day of July,
2014.
Daniel T. K. Hurley
United States District Judge
cc. all counsel
6
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?