Winkler v. Total Quality Logistics, LLC
Filing
21
MEMORANDUM Opinion and Order. For the reasons stated herein, Defendant's motion to compel arbitration 8 is granted. Civil case terminated. Signed by the Honorable Harry D. Leinenweber on 12/13/2018:Mailed notice(maf)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BRIAN WINKLER,
Plaintiff,
Case No. 18 C 3707
v.
Judge Harry D. Leinenweber
TOTAL QUALITY LOGISTICS, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
Defendant Total Quality Logistics, LLC moves to dismiss this
suit and compel Plaintiff Brian Winkler to litigate his claims in
arbitration.
(Def.’s Mot., Dkt. No. 8.)
The Court finds the
parties entered into a binding arbitration clause encompassing the
claims Winkler pursues, so the Court grants Defendant’s Motion.
Winkler’s suit is dismissed without prejudice as stated herein.
I.
BACKGROUND
According to Winkler’s Complaint, he worked for Defendant in
Cook County as a Logistics Accounts Executive (initially as a
Trainee in that role) from August 14, 2017, to May 8, 2018.
As an
Executive, Winkler received part of his pay in the form of a 25%
commission on all sales he made.
Then, on April 26, 2018, Winkler
discovered a syringe in the garbage can at his workplace.
Winkler
suspected the syringe could have been used for illegal purposes,
so he shared his discovery with a supervisor, who responded by
immediately escorting Winkler from the work premises and ordering
him to take a drug test.
Winkler did so, and Defendant suspended
him without pay pending the test’s outcome.
Despite issuing that suspension, however, Defendant continued
to contact Winkler with work-related questions.
The Complaint
suggests Winkler responded to those questions, thus his claim that
“he was still working for Defendant” without pay.
Dkt. No. 1.)
(Compl. ¶ 13,
On May 8, 2018, Winkler learned two things.
First,
his drug test results had come back positive for prescription
medications.
Second,
even
though
Winkler
allegedly
had
a
prescription for the medication in question, Defendant had decided
to terminate him on the basis of his drug test results.
In this suit, Winkler contends Defendant never paid him for
his time spent on suspension nor gave him the commissions he earned
on sales made prior to his termination.
Those allegations amount
to three claims: In Count I, a claim under the Fair Labor Standards
Act, 29 U.S.C. § 201 et seq., for wages and overtime owed for those
weeks Winkler allegedly worked while on suspension; in Count II,
a claim under the Illinois Sales Representative Act, 820 ILCS
120/2, for commissions earned prior to his termination; and in
Count III, a common law retaliatory discharge claim, in which
Winkler contends he was only forced to take a drug test and
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thereafter fired because “he notified a supervisor regarding the
possibility
(Compl.
of
¶ 24.)
illegal
In
activity
addition,
occurring
Winkler
in
the
workplace.”
originally
pursued
a
declaratory judgment count seeking a ruling that the non-compete
clause in his employment contract is overly vague.
Winkler has
since voluntarily dismissed that fifth count, however, so the Court
need not consider it now.
(See Minute Entry, July 31, 2018, Dkt.
No. 10.)
Defendant responds to these charges by moving the Court to
dismiss Winkler’s Complaint in full and compel Winkler to take his
claims to arbitration.
arbitration
agreement
In so moving, Defendant relies upon the
(hereafter,
“the
Agreement”)
contained
within the employment contract Defendant and Winkler signed prior
to the start of Winkler’s employment.
1 to Def.’s Mot., Dkt. No. 8-1.)
(Arbitration Agreement, Ex.
Winkler admits the Agreement
exists and that he signed it, yet he contends the Agreement is
unconscionable and thus void.
In addition, Winkler argues the
Agreement should be ignored because it lacks consideration and
compels arbitration procedures that make no sense.
Winkler cabins
these final two objections within his unconscionability argument,
but they are actually discrete arguments that deserve separate
treatment.
The Court addresses these at the end of this opinion.
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II.
DISCUSSION
Before proceeding, the Court notes that all three of Winkler’s
claims fall within the scope of the Agreement, which explicitly
includes “any and all of the Parties’ rights, causes of action, or
claims against or between one another that arose out of or in any
way
relate
to
[Winkler’s]
employment
with
otherwise excluded in this agreement.”
§ 1.A, Dkt. No. 8-1.)
[Defendant]
unless
(Arbitration Agreement
Those exceptions are discussed in greater
detail below (see infra at Part II.A.1), but none provides a carve
out for Winkler’s allegations.
Given that, the key question is whether the Agreement applies
to the instant dispute.
state-law
principles
of
To decide as much, the Court applies
contract
formation.
Gore
v.
Alltel
Commc’ns, LLC, 666 F.3d 1027, 1032 (7th Cir. 2012) (citation
omitted).
Here, as the Agreement provides, the applicable corpus
is Ohio state law.
(Arb. Agreement § 5.)
A.
Unconscionability
“[W]hen examining an arbitration clause, a court must bear in
mind the strong presumption in favor of arbitrability and resolve
all doubts in favor of arbitrability.”
Ball v. Ohio State Home
Servs., Inc., 861 N.E.2d 553, 555 (Ohio Ct. App. 2006) (citation
and internal quotation marks omitted).
Still, that presumption
may be overcome on the grounds of unconscionability.
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Id.
If a
party wishes the court to void a contract for unconscionability,
the party must carry the burden of proving the agreement is both
substantively and procedurally unconscionable.
Taylor Bldg. Corp.
of Am. v. Benfield, 884 N.E.2d 12, 25 (Ohio 2008) (citations
omitted).
Winkler argues, as he must, that the Agreement fails in both
respects.
But his response brief is no portrait of clarity, and
it often conflates the two forms of unconscionability.
the
Court
takes
each
form
of
unconscionability
That said,
in
turn
and
addresses Winkler’s arguments as each becomes relevant.
1.
Substantive
Substantive Unconscionability
unconscionability
concerns
the
terms
of
the
contract and “requires a determination of whether the contract
terms
are
commercially
transaction.”
reasonable
in
the
context
of
the
Neel v. A. Perrino Constr., Inc., No. 105366, 2018
WL 2148445, at *3 (Ohio Ct. App. May 10, 2018).
On this front,
Winkler seems to have two arguments: (1) the Agreement foists big
or unnecessary costs upon him; and (2) the Agreement is one-sided.
The first argument has no purchase.
that
prohibitive
cost
renders
the
To succeed in arguing
Agreement
unconscionable,
Winkler must do more than baldly assert the costs are too high.
See
Benfield,
arbitration
884
failed
N.E.2d
to
at
25
demonstrate
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(finding
costs
party
rose
to
resisting
level
of
unconscionability) (citing Faber v. Menard, Inc., 367 F.3d 1048,
1054 (8th Cir. 2004) (requiring party claiming that arbitration
was
cost-prohibitive
to
“present
specific
evidence
of
likely
arbitrators’ fees and its financial inability to pay those fees”)).
Moreover,
Defendants
suggest
Winker
fails
to
adduce
evidence
showcasing these purported costs because the costs imposed on him
by the Agreement are actually quite low.
The Agreement exempts
Winkler from any initial outlay greater than $200, and even that
will be borne by Defendant upon a showing of indigence.
Agreement § 8, Dkt. No. 8-1.)
(Arb.
The cost argument avails Winkler of
nothing.
Winkler’s second substantive unconscionability argument is
that the Agreement is one-sided: He contends the Agreement excludes
“all of those claims that an employer might bring against an
employee,” but almost none that an employee might bring against an
employer.
(Winkler’s
Resp.
3,
Dkt.
No.
11.)
But
that
characterization is not accurate—the imbalance is not as great as
Winkler contends.
initiated
actions
unemployment
The Agreement excludes only: certain employee(as
benefits
required
or
by
worker’s
law),
such
compensation;
as
claims
and
for
employer-
initiated actions predicated on violations of a separate agreement
between the parties, namely the self-explanatory “Employee NonCompete, Confidentiality, and Non-Solicitation Agreement.”
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(Arb.
Agreement § 1.B.)
So, while the Agreement leaves open greater
access to the courts for Defendant than for Winkler, it is not
clear that said imbalance is sufficient to render the Agreement
substantively unconscionable.
Indeed,
this
Agreement
resembles
the
permissible—and
yet
imperfectly balanced—arbitration agreement contemplated in H.H.
Franchising Systems, Inc. v. Pawson, No. 1:17-CV-368, 2018 WL
1456131, at *6 (S.D. Ohio Mar. 23, 2018).
In that case, the
arbitration agreement advantaged the plaintiff by providing it,
alone, with the right to demand that any dispute involving more
than $100,000 be litigated rather than arbitrated.
Still, the
court refused to find the agreement substantively unconscionable,
noting that “[w]hile this particular clause provides [p]laintiff
an
advantage—the
opportunity
to
choose
litigation
over
arbitration—not shared by [d]efendants, it is not so one-sided as
to be considered commercially unreasonable.”
Id. at *6.
Winkler and Defendant share a similarly lopsided Agreement.
Here,
Like
the clause in Pawson, the Agreement here benefits one side over
the other and yet does not “oppress or unfairly surprise” the
disadvantaged party. Id. The imbalance of which Winkler complains
fails to render the Agreement substantively unconscionable.
That failure alone dooms Winkler’s efforts to resist the
arbitration compelled by the Agreement.
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But even if Winkler’s
substantive-unconscionability arguments had prevailed, he still
could not show that the Agreement is procedurally unconscionable.
2.
Procedural Unconscionability
“Procedural unconscionability concerns the formation of the
agreement and occurs when no voluntary meeting of the minds is
possible.”
Miller-Holzwarth,
Inc.
v.
L-3
Commc’ns,
Corp.,
No. 4:09CV2282, 2010 WL 2253642, at *3 (N.D. Ohio June 2, 2010)
(citation omitted).
is
procedurally
“In determining whether an arbitration clause
unconscionable,
courts
consider
the
relative
bargaining positions of the parties, whether the terms of the
provision were explained to the weaker party, and whether the party
claiming that the provision is unconscionable was represented by
counsel at the time the contract was executed.”
Schaefer v. Jim
Brown, Inc., 33 N.E.3d 96, 100 (Ohio Ct. App. 2015) (citation and
internal quotation marks omitted).
“Procedural unconscionability
is not conditional on the existence of any one factor, but instead,
is
a
fact-sensitive
question
that
considers
circumstances of each individual case.”
the
surrounding
Id. (citation omitted).
Winkler’s procedural unconscionability argument focuses on
what he views as the parties’ dissimilar bargaining positions:
Defendant drafted the Agreement and could demand of Winker whatever
it wanted, leaving Winkler no resource but to sign.
The problem
with this argument is that nothing in the record or Winkler’s
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briefing suggests Winker was as trapped as he now suggests.
simply could have walked away from the table.
his argument.
He
And that dispels
“When a candidate for employment is free to look
elsewhere for employment and is not otherwise forced to consent to
the arbitration agreement, the agreement to arbitrate is not
unconscionable.”
W.K. v. Farrell, 853 N.E.2d 728, 737 (Ohio Ct.
App. 2006) (citations omitted). Winkler has not carried his burden
to show procedural unconscionability, so his efforts to void the
Agreement on this ground fails.
B.
Winkler’s Other Arguments
As mentioned above, two of Winkler’s arguments do not fit
neatly within the unconscionability analysis.
The first of these
is Winkler’s contention that because he “gained nothing” from the
Agreement,
the
Agreement
fails
for
(Winkler’s Resp. 6-8, Dkt. No. 11.)
muster,
however,
because
mutual
lack
of
consideration.
That argument cannot pass
assent
to
arbitrate
claims
suffices for consideration.
See Price v. Taylor, 575 F. Supp. 2d
845, 853 (N.D. Ohio 2008).
Winkler’s earlier-recounted objection
that the Agreement provides an imbalance of benefits does not
undercut that rule.
parties
promised
to
Compare id. (finding consideration where both
submit
all
disputes
not
excluded
by
the
agreement’s terms to arbitration), with Harmon v. Philip Morris
Inc., 697 N.E.2d 270, 272 (Ohio Ct. App. 1997) (finding lack of
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consideration where agreement required employees to arbitrate all
claims against employer, but effectively allowed employer to avoid
arbitration of all claims against its employees).
Winkler’s second miscellaneous argument is an objection to
the mechanics envisioned by the Agreement.
Winkler claims the
Agreement makes no sense because it at once demands that the
arbitration take place here, in Cook County (see Arb. Agreement
§ 3 (reciting that the arbitration shall take place in the county
where the employee last worked for the employer)), and yet be
subject
to
the
procedures
and
rules
of
the
Cincinnati
Bar
Association Arbitration Services (“CBAAS”) (see id. § 7).
It is
not clear how these provisions are incongruous, however.
Today,
this Court applied Ohio law.
Surely an arbitrator could likewise
apply CBAAS rules even when the arbitration she presides over takes
place
somewhere
other
than
Cincinnati.
Winkler’s
final
miscellaneous objection is no reason to invalidate the Agreement.
III.
CONCLUSION
The parties here entered into a binding Agreement which
compels arbitration of the three claims Winkler pursues in his
Complaint.
That Agreement is neither unconscionable nor otherwise
materially flawed as Winkler contends.
The Court accordingly
enforces that Agreement, compels the parties to arbitrate their
dispute, and dismisses the instant case without prejudice to
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Winkler
later
challenging
the
arbitration
decision.
See
HTG
Capital Partners, LLC v. Doe, No. 15 C 02129, 2016 WL 612861, at
*8 (N.D. Ill. Feb. 16, 2016).
Defendant’s Motion to Compel
Arbitration is granted.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
Dated: 12/13/2018
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