Boettcher v. SSC Glen Burnie Operating Company, LLC, et al.

Filing 20

MEMORANDUM. Signed by Judge William M Nickerson on 8/18/2016. (jnls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
GREG BOETTCHER
Plaintiff
v.

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SSC GLEN BURNIE OPERATING
COMPANY, LLC et al.
Defendants
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Civil Action No. WMN-15-3714

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MEMORANDUM
Before the Court is Defendants’ Motion to Dismiss or Stay
the Case and Compel Arbitration.
ripe.

ECF No. 14.

The motion is

Upon review of the pleadings and the applicable case law,

the Court determines that no hearing is necessary, Local Rule
105.6, and that Defendants’ motion will be granted.
On December 10, 2010, Plaintiff Greg Boettcher was hired by
Defendant SSC Glen Burnie as the maintenance supervisor for its
health and rehabilitation facility located in Glen Burnie,
Maryland.

SSC Glen Burnie is one of the ten affiliated health

and rehabilitation facilities that Defendant Sava Consulting,
LCC owns and operates in Maryland.

At the commencement of

Plaintiff’s employment and as a condition thereof, Plaintiff
received and signed three agreements.

ECF No. 17-1 ¶ 3.

Plaintiff signed a one page Employment Dispute Resolution

First,

Program (EDRP) Agreement which states:
both the Company and I agree to resolve all claims,
controversies, or disputes relating to my application

for employment, my employment and/or termination of
employment with the Company exclusively through the
Company’s Employment Dispute Resolution Program ... I
further understand and agree that if I file a lawsuit
regarding a dispute arising out of or relating to my
application for employment, my employment or the
termination of my employment, the Company may use this
Agreement in support of its request to the court to
dismiss the lawsuit and require me to use the EDR
Program instead.
ECF No. 16-1.

Second, Plaintiff received the fifteen-page EDRP

Booklet outlining the four-step process for dispute resolution:
Open Door, Facilitation, Mediation, and Arbitration.
16-2.

ECF No.

That booklet reiterates that the company and its

employees are bound by the EDRP.
received an Employee Handbook.

Third and finally, Plaintiff
ECF No. 16-4.

The Employee

Handbook advises:
You should be aware that these policies, except for
the policy of at-will employment, may be amended or
revoked, and the Company’s actions may vary from the
written policy. The contents of this Employee
Handbook do not constitute the terms and conditions of
a contract of employment. The policies, procedures
and guidelines contained in this Employee Handbook
supersede all other handbooks in circulation.
Id. at ii.

Similarly, the Employee Handbook states “[y]ou

should be aware these policies may be changed, amended, added to
or deleted, except for the policy of at-will employment.”
at 1.

Id.

The handbook includes a section regarding the EDRP and

refers to the EDRP Booklet.
Plaintiff was terminated on November 25, 2014.

On December

1, 2014, SSC Glen Burnie offered Plaintiff a severance package
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that proposed four weeks’ pay in exchange for a complete release
of claims.

On or about January 9, 2015, Plaintiff mailed a

letter to Tony Oglesby, President and Chief Executive Officer of
Sava Consulting, LLC, rejecting the severance package.
16-6.

ECF No.

In that letter, Plaintiff stated that he “wish[ed] to

avail [himself] of the employee dispute resolution (EDR)
processes.”

Id.

Further, he stated that the letter was a

formal grievance “that should trigger the internal processes.”
Id.

Plaintiff did not receive a reply “from any individual or

entity associated with or employed by” Defendants.

ECF No. 17-1

¶ 7.
A little more than a year later, on December 3, 2015,
Plaintiff brought this action against SSC Glen Burnie Operating
Company, LLC and SavaSeniorCare, LLC. 1

ECF No. 1.

According to

the Complaint, numerous acts of Plaintiff’s coworkers and
supervisors formed the basis of his claims for “Abusive
Discharge” (Count I), “Breach of Express and Implied Agreement”
(Count II), “Violations of the Overtime Requirement of the FLSA”
(Count III), and “Violations of the Wage and Hour and
Recordkeeping Requirements under Maryland Law” (Count IV).

Id.

On April 13, 2016, Defendants filed a motion to compel

1

On April 13, 2016, the Court received a Stipulation to Dismiss
Defendant, SavaSeniorCare, LLC and add Sava Consulting, LLC as a
Defendant. ECF No. 13. The Court approved that stipulation.
ECF No. 15.
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arbitration.

ECF No. 14.

Plaintiff opposed Defendants’ motion,

ECF No. 16, arguing that 1) under Maryland law, the EDRP
agreement was invalid for lack of consideration, and 2) in the
alternative, if the EDRP agreement was valid; Defendants waived
the right to arbitrate.
The EDRP Booklet provides that the “application,
interpretation and enforcement of the EDR Program is covered by
the Federal Arbitration Act.”

ECF No. 16-2 at 3.

Under the

Federal Arbitration Act (FAA), a court must stay “any suit or
proceeding” pending arbitration of “any issue referable to
arbitration under an agreement in writing for such arbitration.”
9 U.S.C. § 3.

Section 2 of the FAA makes agreements to

arbitrate “valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any
contract.”

9 U.S.C. § 2.

When evaluating an arbitration

agreement, a court must apply state law principles governing the
formation of a contract and the validity of a contract in
determining whether an enforceable agreement exists.

First

Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995).
Under Maryland law, “[t]o be binding and enforceable, contracts
ordinarily require consideration.”

Cheek v. United Healthcare

of Mid-Atlantic, Inc., 835 A.2d 656, 661 (Md. 2003).

“A promise

becomes consideration for another promise only when it
constitutes a binding obligation.”
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Id.

Unlike a binding

obligation, “[a]n ‘illusory promise’ appears to be a promise,
but it does not actually bind or obligate the promisor to
anything.”

Id. at 662.

Because an illusory promise is not

binding on the promisor an illusory promise cannot constitute
consideration.

Id.

In this case, the question before the Court is whether
retention in the Employee Handbook of the right to amend or
revoke the policies in that handbook, one of which was the EDRP,
rendered Defendants’ 2 promise to arbitrate, found in the EDRP
Agreement, illusory.

There are two cases applying Maryland law

that guide the Court’s consideration of this issue; Cheek v.
United Healthcare of Mid-Atlantic, Inc., 835 A.2d 656 (Md. 2003)
and Hill v. Peoplesoft USA, Inc., 412 F.3d 540 (4th Cir. 2005).
In Cheek, the plaintiff’s offer of employment was conditioned on
his acceptance of the defendant’s “Employment Arbitration
Policy.”

835 A.2d at 657-658.

That policy left the defendant

the unilateral “right to alter, amend, modify, or revoke the
Policy at its sole and absolute discretion at any time with or
without notice.”

Id. at 658.

The plaintiff accepted a position

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SSC Glen Burnie was a party to the arbitration agreement. Sava
Consulting, LCC is a non-signatory to that agreement.
Defendants argue that Plaintiff’s claims against both Defendants
are subject to arbitration because his allegations against them
are based on the same facts, inherently inseparable, and fall
within the scope of the arbitration clause. ECF No. 14-1 at 9.
Plaintiff does not refute this assertion; therefore, the Court
finds that any obligation to arbitrate will apply equally to
both Defendants.
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with the defendant, was subsequently terminated, and filed suit
in Maryland state court.

Id. at 658-659.

Thereafter, the

defendant filed a “Motion to Dismiss and/or Compel Arbitration
and Stay.”
Id.

Id. at 659.

The trial court granted that motion.

The Court of Appeals of Maryland (which granted certiorari

prior to any proceedings in the intermediate appellate court)
reversed, finding the defendant’s unfettered discretion to
change the arbitration agreement rendered its promise to
arbitrate illusory, and that the agreement was therefore
unenforceable for lack of consideration.

Id.

This case is distinguishable from Cheek, principally
because the Defendants’ alleged retention of the right to amend
or revoke the EDRP is found in a separate document, the Employee
Handbook.

This discrepancy is outcome determinative.

As stated

in Hill, “[i]n examining whether an arbitration agreement is a
valid contract, we examine only the language of the arbitration
agreement itself.”
664-665).

412 F.3d at 543, (citing Cheek, 835 A.2d at

In Hill, the United States Court of Appeals for the

Fourth Circuit found that the district court erred by looking
outside the arbitration agreement to the Internal Dispute
Solution (IDS) program.

Hill, 412 F.3d at 543-544.

Unlike in

the arbitration agreement, the defendant reserved the right to

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change the IDS program without notice. 3

Id. at 542.

The Fourth

Circuit concluded that because the arbitration agreement itself
clearly bound both parties to arbitration, it was supported by
adequate consideration.

Id. at 544.

The Fourth Circuit summarized the critical distinction
between Cheek and Hill:
the reservation of rights in Cheek was contained in
the arbitration policy. Looking at the four corners
of the arbitration policy in Cheek, the court
understandably concluded that the policy contained an
illusory promise. In the instant case, by contrast,
looking at the four corners of the separate
Arbitration Agreement, the agreement contains no such
illusory promise. To be sure, it is only when we are
asked to look beyond the four corners of the
Arbitration Agreement and examine the IDS Programsomething Cheek tells us we are not allowed to dothat Hill’s argument finds its support.
Id. (emphasis in original).

Following this precedent, the Court

turns to the language of the EDRP Agreement and EDRP Booklet,
and finds that both Plaintiff and Defendants are unambiguously
bound to use the EDR program as the only means of resolving
employment related disputes.

The EDRP Agreement unequivocally

sets forth both parties’ rights and obligations concerning
dispute resolution, and mandates arbitration as the final and
exclusive means for resolution.

Defendants have not reserved

for themselves the right to alter, amend, modify or revoke this

3

Plaintiff’s attempts to distinguish Hill from this case, ECF
No. 16 at 18, are without merit because they inevitably involve
an examination of the Employee Handbook.
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obligation.

Indeed, the mutuality of the obligation is

repeatedly referenced.

Because the EDRP Agreement unambiguously

requires both parties to use the EDRP, this Court finds that the
agreement is supported by valid consideration.
Further, the agreement clearly encompasses the employmentrelated dispute in this case.

As stated above, the EDRP

Agreement applies to “all claims, controversies or disputes
relating to [Plaintiff’s] application for employment,
[Plaintiff’s] employment and/or [Plaintiff’s] termination of
employment.”

ECF No. 16-1.

The non-exclusive list of potential

claims for arbitration, as identified by the EDRP agreement,
includes claims for wrongful discharge, claims for public policy
violations, and claims under the law of contract and the law of
tort.

Id.

As such, the Court concludes there is a valid

agreement to arbitrate which encompasses all of the Plaintiff’s
claims in this case.
Plaintiff argues that, if there is a valid contractual
obligation to arbitrate between the parties, the Defendants
waived the right to compel arbitration by failing to respond to
Plaintiff’s EDRP Request.

The FAA “establishes that, as a

matter of federal law, 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
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defense to arbitrability.”

Moses H. Cone Mem’l Hosp. v. Mercury

Constr. Corp., 460 U.S. 1, 24–25 (1983).

If the facts of this

case create an issue of waiver, as argued by Plaintiff, the
Court finds that Defendants’ conduct did not rise to the level
necessary for the relinquishment of the right to arbitrate.

In

the context of arbitration agreements, “waiver of the right to
arbitrate cannot be inferred in the absence of a clear
expression of intent.”

Charles J. Frank, Inc. v. Associated

Jewish Charities of Baltimore, Inc., 450 A.2d 1304, 1309 (Md.
1982).

Further, “[n]either delay nor the filing of pleadings by

the party seeking a stay will suffice, without more, to
establish waiver of arbitration.”

MicroStrategy, Inc. v.

Lauricia, 268 F.3d 244, 249 (4th Cir. 2001).
The failure to respond to Plaintiff’s letter and belated
invocation of the EDRP reflects poorly on SSC Glen Burnie and
Sava Consulting, LLC.

That type of behavior is highly

discouraged by this Court; yet, Defendants’ delay does not
constitute the type of intentional relinquishment necessary for
waiver of a known right.

Defendants filed a timely motion to

compel, and have not utilized the “litigation machinery,” in a
way that has prejudiced Plaintiff. 4

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In addition to his waiver argument, Plaintiff asserts that
Defendants should be “estopped” from compelling arbitration.
The case Plaintiff cites for support, State v. Musgrove, 217
A.2d 247 (Md. 1966), has nothing to do with estoppel.
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For the above-stated reasons, the Court will grant
Defendants’ motion.

Because Defendants have previously evaded

Plaintiff’s attempts to address his employment-related disputes,
the Court will stay this proceeding pending arbitration in lieu
of dismissal.

A separate order will issue.

_____/s/__________________________
William M. Nickerson
Senior United States District Judge

DATED: August 18, 2016

Plaintiff’s mere assertion that “fundamental principles of
estoppel oppose the Defendant’s inconsistent conduct here,” ECF
No. 16 at 23, without a supporting legal argument, is not enough
to justify the Court’s consideration of that doctrine.
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