Crosby v. Sears Holding Corp.
Filing
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MEMORANDUM Opinion and Order Signed by the Honorable Marvin E. Aspen on 3/20/2018: Plaintiff's motion to vacate the arbitration award (Dkt. Nos. 40-41) denied with prejudice with each side bearing their own costs. The Court is bound by the arbitrator's decision, which is a final determination of all of Plaintiff's claims. Therefore, Plaintiff's claims are dismissed with prejudice and the case is terminated. Mailed notice(mad, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CHRISTOPHER M. CROSBY,
Plaintiff,
v.
SEARS HOLDING CORP.,
Defendant.
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15 C 6396
Hon. Marvin E. Aspen
MEMORANDUM OPINION AND ORDER
MARVIN E. ASPEN, District Judge:
Presently before us is Plaintiff Christopher M. Crosby’s pro se motion against to vacate
an arbitration award for Defendant Sears Roebuck and Co. (“Sears”) pursuant to the Federal
Arbitration Act (“FAA”), 9 U.S.C. § 10. (First Am. Mot. (Dkt. No. 41).) 1 For the reasons stated
below, we deny Plaintiff’s motion.
BACKGROUND
Plaintiff filed a complaint against Defendant on July 22, 2015 alleging Sears, his former
employer, discriminated against him based on race, color, and sex beginning in March 2013.
(Compl. (Dkt. No. 1) ¶¶ 6, 9.) 2 Plaintiff specifically alleges that Defendant terminated his
employment as assistant store manager, failed to stop harassment, retaliated against him, failed to
investigate his allegations of discrimination, failed adhere to his employment agreement, and
failed to follow the company’s progressive action policy, all on account of his race and sex.
1
Plaintiff filed two documents both titled “Plaintiff’s First Amended Motion to Vacate
Arbitration Award” at Docket Numbers 40 and 41. Both filings appear to contain identical
motions but include different attachments. For the purposes of our analysis, we cite to Docket
Number 41, but we have considered all attachments filed by Defendant.
2
Plaintiff filed the same complaint at Docket Numbers 1 and 6. We hereinafter cite only Docket
Number 1.
(Id. ¶¶ 12, 17, PageID#: 9–11.) After the Equal Employment Opportunity Commission
(“EEOC”) issued a Notice of Right to Sue on April 24, 2015, Plaintiff filed his pro se
employment discrimination complaint against Defendant pursuant to Title VII of the Civil Rights
Act of 1964 (42 U.S.C. § 2000e-2 and 42 U.S.C § 1981). 3 (Compl. ¶¶ 7–9, PageID#: 8.)
In response to the complaint, Defendant filed a motion to compel arbitration, which we
referred to Magistrate Judge Michael Mason. (Dkt. Nos. 14, 18.) Judge Mason found that
Plaintiff entered into a valid arbitration agreement with Defendant, that no genuine issue of
material fact existed as to whether Plaintiff had submitted the requisite form to Defendant to opt
out of the arbitration agreement, that Plaintiff’s complaint fell within the scope of the arbitration
agreement, and that Plaintiff had refused to proceed to arbitration. (Report and
Recommendations (Dkt. No. 28) at 7–11.) Accordingly, Judge Mason recommended that we
grant Defendant’s motion to compel arbitration. (Id. at 11.) Plaintiff did not object to the Report
and Recommendations by the deadline ordered by Judge Mason. We thereafter issued an order
adopting the report and recommendations, granting Defendant’s motion to compel arbitration,
and staying this action pending arbitration. (Dkt. No. 29.)
On July 21, 2017, former Magistrate Judge Arlander Keys, the parties’ arbitrator, granted
summary judgment for Defendant and dismissed all of Plaintiff’s claims, which included counts
of discrimination, harassment, fraud, retaliation, hostile work environment, breach of contract,
and slander. (Arbitration Award (Dkt. No. 39) at 10).) The arbitrator determined that Plaintiff
did not sustain his burden of showing that there was a genuine issue of material fact regarding
any of Plaintiff’s claims. (Id. at 7–10.) After learning of the arbitration award, we lifted our stay
on August 28, 2017.
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It appears Plaintiff filed his EEOC charge through counsel. (Compl. ¶¶ 7–9, PageID#: 7–8.)
Plaintiff filed the instant lawsuit without representation.
2
On September 11, 2017, Plaintiff filed a motion in this Court to vacate the arbitration
award, arguing that the arbitrator was partial and manifestly disregarded the law.
(First Am. Mot. ¶ 3.) In response, Defendant filed a brief in opposition to Plaintiff’s motion to
vacate the award and requesting we dismiss Plaintiff’s case with prejudice. (Def.’s Resp.
(Dkt. No. 42).)
LEGAL STANDARD
The FAA provides limited circumstances where a federal court may vacate an arbitration
award. 4 Under the FAA, a federal court may vacate an arbitration award only on one or more of
the following grounds: “(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrator[] . . . ; (3) where the
arbitrator[] w[as] guilty of misconduct in refusing to postpone the hearing . . . or 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 (4) where the arbitrator[] exceeded [his or her]
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). “A party petitioning a federal court to vacate
an arbitral award bears the heavy burden of showing that the award falls within a very narrow set
of circumstances delineated by statute and case law.” Cremin v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 434 F. Supp. 2d 554, 559 (N.D. Ill. 2006) (citing Wallace v. Buttar,
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Plaintiff seeks vacation of the arbitration award under both the FAA and the Illinois Arbitration
Act, 710 ILCS 5/12. (First. Am. Mot. at 1.) Since the arbitration agreement explicitly states that
it is enforceable under the FAA, and because the parties do not contest that the FAA applies to
this agreement, we apply the FAA to the present dispute. (Arbitration Policy
(Dkt. No. 15, Ex. A) at 2). See also In re Raymond Prof’l Grp., Inc., 397 B.R. 414, 429
(Bankr. N.D. Ill. 2008) (“[T]the grounds for vacating an arbitration award under the Illinois Act
and FAA on grounds pertinent here are virtually identical in that both statutes provide for
vacating an award where the arbitrators exceeded their powers, 9 U.S.C. § 10(a)(4);
710 ILCS 5/12(a)(3), or where the award was obtained by improper means 9 U.S.C. § 10(a)(1);
710 ILCS 5/12(a)(1).”).
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378 F.3d 182, 189 (2d Cir. 2004)); see also Affymax, Inc. v. Ortho-McNeil-Janssen Pharms.,
Inc., 660 F.3d 281, 284 (7th Cir. 2011) (“This list [of grounds for vacation] is exclusive; neither
judges nor contracting parties can expand it.”).
Even if the court is convinced that an arbitrator committed serious error, this alone does
not suffice to overturn the arbitrator’s decision. United Paperworkers Int’l Union,
AFL-CIO v. Misco, Inc., 484 U.S. 29, 38, 108 S. Ct. 364, 371 (1987) A court must grant an
arbitration award great deference so long as “the arbitrator is even arguably construing or
applying the contract and acting within the scope of his authority.” Id.; see also Chi. &
N. W. Transp. Co. v. United Transp. Union, 905 F.2d 171, 173 (7th Cir. 1990) (“[A] federal
court is to determine only whether or not the arbitrator interpreted the agreement, not if the
arbitrator’s interpretation of the agreement is correct.”).
ANALYSIS
In his motion to vacate the arbitration award, Plaintiff argues we should vacate the
arbitration award because the arbitrator was partial and manifestly disregarded the law in ruling
on Defendant’s motion for summary judgment. Specifically, Plaintiff contends the arbitrator’s
award failed to “point out” particular documents in the record that Plaintiff believes created a
genuine issue of material fact. (First Am. Mot. at 2.) We find that Plaintiff failed to meet his
burden of establishing a valid ground for vacating the arbitrator’s decision, and accordingly deny
his motion.
I.
Partiality
Plaintiff first argues we should vacate the arbitration award because the arbitrator was
partial to Defendant by failing to consider evidence in the record. (Id. at 2, 5.) Specifically,
Plaintiff alleges Judge Keys acted partially by failing to consider “several key documents” and
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“material facts” in the arbitration award, including Plaintiff’s deposition testimony that Sears
confiscated only black managers’ keys after a theft; evidence showing Plaintiff’s prior refusal to
communicate with the store manager, David Jennings, “due to racial differences”; 5 and Sears’
policies requiring reasons for an associate’s termination to be clearly documented and explained
to associates. 6 (First Am. Mot. at 2–4.) Plaintiff seems to argue that the evidence establishes his
claims, but was ignored by Judge Keys.
“[W]hen a claim of partiality as to an arbitration award is made, the court is under an
obligation to scan the record to see if it demonstrates evident partiality on part of the arbitrators.”
Health Servs. Mgmt. Corp. v. Hughes, 975 F.2d 1253, 1258–59 (7th Cir. 1992) (requiring
consideration of all relevant portions of the arbitration transcript “that contain the alleged
instances of evident partiality or other misbehavior, and any written submissions in the form of
objections, affidavits, etc. by the parties.”). To set aside an arbitration award for partiality, “[t]he
interest or bias of an arbitrator must be direct, definite, and capable of demonstration rather than
remote, uncertain, or speculative.” Tamari v. Bache Halsey Stuart Inc., 619 F.2d 1196, 1200
(7th Cir. 1980), cert. denied, 449 U.S. 873, 101 S. Ct. 213 (1980) (internal citation omitted).
Finally, to succeed on a motion to vacate on the basis of partiality, “[t]he losing party in
arbitration must show that partiality is more than just possible or plausible by pointing to
sufficient concrete evidence that would enable a reasonable person to conclude that there is a
legitimate question as to the partiality of the arbitrator.” Admin. Dist. Council 1 of Ill.
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In his motion, Plaintiff suggests that Defendant improperly withheld requested information
about “a racial dispute with Dave Jennings.” (First Am. Mot. at 2–3.) Any allegations of
impropriety during Discovery are irrelevant to Plaintiff’s allegations of the arbitrator’s partiality.
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Plaintiff also mentions three “major conditions” of his employment that Defendant allegedly
“overlook[ed]” presumably in its firing of Plaintiff. (First Am. Mot. at 4–5.) As Plaintiff only
alleges Defendant failed to consider this evidence, not the arbitrator, we do not consider these
arguments in our analysis of arbitrator partiality.
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of Int’l Union of Bricklayers & Allied Craftworkers, AFL-CIO v. Masonry Co., Inc.,
941 F. Supp. 2d 912, 917 (N.D. Ill. 2012); see also, e.g., Commonwealth Coatings
Corp. v. Cont’l Cas. Co., 393 U.S. 145, 148, 89 S. Ct. 337, 339 (1968) (finding an arbitrator was
partial based on an undisclosed ongoing business relationship with a party).
In reviewing the arbitration record before us, we disagree that the arbitrator failed to
consider “several key documents” in reaching his arbitration award, let alone that the arbitrator
did not consider evidence because of bias against Plaintiff. In his award, the arbitrator explicitly
stated that he considered the entire record, including Plaintiff’s briefs and submissions
responding to Defendant’s motion for summary judgment, Plaintiff’s entire deposition transcript,
sworn declarations, and a recording of Plaintiff’s unemployment benefit appeal hearing.
(Arbitration Award at 2–3.) Contrary to Plaintiff’s claims, the arbitrator specifically referred to
each of the three pieces of evidence on which Plaintiff’s motion is grounded. First, Judge Keys
referenced the office key confiscation that Plaintiff alleges the arbitrator ignored. (First. Am.
Mot. at 2; Arbitration Award at 5.) Second, Judge Keys discusses Plaintiff’s statements about
his relationship with Jennings and Jennings’ statement that Plaintiff “refus[ed] to periodically
discuss his performance during the PIP” because of “racial harassment.” (See Arbitration Award
at 5–6.) Third, the arbitrator considered Sears’ policies requiring clear explanation and
documentation of reasons for an employee’s termination in his award. (Id. at 8.)
Plaintiff fails to point to any document or piece of material evidence that the arbitrator
ignored. Rather, Plaintiff disagrees with how the arbitrator weighed the evidence in the record in
making his decision. Plaintiff’s mere disapproval with the arbitrator’s analysis and conclusions
does not constitute an adequate basis to vacate the award. Patrizzi & Co Auctioneers SA v. SDG
Corp., No. 11 C 3589, 2011 WL 5077422, at *5 (N.D. Ill. Oct. 25, 2011) (“[T]he arbitrator
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considered [evidence Patrizzi claims the arbitrator ignored] but found other evidence more
persuasive. Patrizzi disagrees with the arbitrator’s factual conclusions, but an alleged factual
error does not allow the Court to overturn the arbitration award.”); Metter v. Wachovia Sec.,
LLC, No. 08 C 2239, 2008 WL 4395086, at *2 (N.D. Ill. Sept. 23, 2008) (“Plaintiff’s argument
that the panel [of arbitrators] was wrong in its decision is insufficient to show that the arbitrators
were partial or biased.”); see also Fanning v. Bear Stearns & Co., No. 91 C 1461,
1991 WL 169057, at *1 (N.D. Ill. Aug. 27, 1991) (“Courts are extremely deferential to
arbitrators. A court may not vacate an arbitration award merely because it disagrees with the
arbitrator’s determination of law or fact.”). We therefore conclude that Plaintiff has not met his
burden of proving partiality and find no evidence of prejudice or bias in the arbitration record.
II.
Manifest Disregard for the Law
Plaintiff also alleges that the arbitrator’s decision demonstrates manifest disregard for the
law. (First. Am. Mot. at 1.) Manifest disregard for the law is not listed as a basis for vacation of
an arbitration award in § 10 of the FAA. 9 U.S.C. § 10. In Hall Street Associates,
LLC v. Mattel, Inc., the Supreme Court held that the enumerated provisions of § 10 of the FAA
provide the “exclusive” grounds for vacatur of an arbitration award. 552 U.S. 576, 590,
128 S. Ct. 1396, 1406 (2008). Since Hall Street, the Seventh Circuit has held that “‘manifest
disregard of the law’ is not a ground on which a court may reject an arbitrator’s award under the
[FAA]” unless the arbitrator’s award directs the parties to violate the law. Affymax,
660 F.3d at 284; see also Johnson Controls, Inc. v. Edman Controls, Inc., 712 F.3d 1021, 1026
(7th Cir. 2013) (“[E]ven ‘manifest disregard of the law is not a ground on which a court may
reject an arbitrator’s award’ unless it orders parties to do something that they could not otherwise
do legally (e.g., form a cartel to fix prices).”) (citing Affyman, 660 F.3d at 285). Plaintiff’s
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motion to vacate contains no basis for finding that the arbitrator ordered the parties to violate the
law. While Plaintiff may disagree with the arbitrator’s conclusions, mere mistakes made by an
arbitrator in an otherwise careful analysis fall outside the scope of our limited judicial review.
Hyatt Franchising, L.L.C. v. Shen Zhen New World I, LLC, No. 16 C 8306, 2017 WL 1397553,
at *6 (N.D. Ill. Apr. 19, 2017) (slip op.), aff’d, 876 F.3d 900 (7th Cir. 2017). Because Plaintiff
never claims that the arbitration award requires the parties to violate the law, we cannot vacate
the award based on manifest disregard of the law.
CONCLUSION
For the reasons above, we deny Plaintiff’s motion to vacate the arbitration award with
prejudice with each side bearing their own costs. (Dkt. Nos. 40–41.) We are bound by the
arbitrator’s decision, which is a final determination of all of Plaintiff’s claims. Therefore,
Plaintiff’s claims are dismissed with prejudice and the case is terminated. It is so ordered.
____________________________________
Marvin E. Aspen
United States District Judge
Dated: March 20, 2018
Chicago, Illinois
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