NASCIMENTO et al v. ANHEUSER-BUSCH COMPANIES, LLC
OPINION. Signed by Judge Claire C. Cecchi on 8/24/2016. (seb)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
VICTOR NASCIMENTO and AUDRY
Civil Action No. 2:15-02017 (CCC)
CECCHI, District Judge.
Defendant Anheuser-Busch Companies, LCC (“Defendant,” “Annheuser-Busch,” or the
“Company”) moves to dismiss the action filed by Plaintiffs Victor Nascimento and Audry Yule
(“Plaintiffs”) pursuant to federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) and to compel
arbitration pursuant to the federal Arbitration Act, 9 U.S.C. § 4. ECF No. 6. Plaintiffs oppose
the motion. ECF No. 12. The Court decides the motion without oral argument pursuant to
federal Rule of Civil Procedure
For the reasons set forth below, the Court grants
Defendant’s motion to compel arbitration.
FACTUAL AND PROCEDURAL BACKGROUND
The following facts are accepted as true for the purposes of the instant Motion. Until
The Court considers any new arguments not presented by the parties to be waived. See Brenner
v. Local 514, United Bhd. of Carpenters & Joiners, 927 F.2d 1283, 1298 (3d Cir. 1991) (“It is
well established that failure to raise an issue in the district court constitutes a waiver of the
2010, Plaintiffs were employees of Jersey Eagle Sales Company (“Jersey Eagle”). Compl.
In or about 2012, Defendant purchased Jersey Eagle and Plaintiffs submitted applications for
employment with Defendant. çç Affidavit of Carol Verdon (“Verdon Aff.”), ECF No. 6-2, Ex.
A, Ex. B. The text of those applications stated in relevant part:
I agree that work-related disputes between the
Company and me will be subject to final and binding arbitration
under the Company’s Dispute Resolution Program [(“DRP”)]. I
further agree that arbitration will be the exclusive method the
Company and I will have for final and binding resolution of claims
covered by the DRP.
(the “Employment Application”). jç Plaintiffs each signed the Employment Application on
September 30, 2010.
Following submission of the Employment Applications, Defendant
sent Plaintiffs offers of employment stating:
Anheuser-Busch uses a Dispute Resolution Program (“DRP”) for
all employment related disputes, the last step of which is final and
binding arbitration. The DRP will be a term and condition of your
employment and your exclusive remedy for any employment
claims you may have. By accepting employment with Anheuser
Busch Sales of New Jersey, you agree to submit all claims to the
(the “Offer Letter”). Verdon Aff. Ex. C, Ex. D. Mr. Nascimento signed his Offer Letter on
October 29, 2010. Verdon Aff. Ex. C. Ms. Yule did not sign her Offer Letter until November 2,
2010. Verdon Aff. Ex. D.
On or about November 1, 2010, Defendant gave Plaintiffs a copy of its Dispute
Resolution Policy (“DRP” and, collectively with the Employment Application and the Offer
Letter, the “Arbitration Agreement”). Verdon Aff.
10. On the first page of the DRP was a
section entitled “SPECIAL NOTICE TO EMPLOYEE,” which provided:
This policy constitutes a binding agreement between you and the
company for the resolution of employment disputes. By continuing
your employment with Anheuser-Busch Companies, Inc., or any of
its subsidiary companies (“Company”), you and the Company are
agreeing as a condition of your employment to submit all covered
claims to the Anheuser-Busch Dispute Resolution Program
(“DRP”), to waive all rights to a trial before a jury on such claims,
and to accept an arbitrator’s decision as the final, binding and
exclusive determination of all claims.
Verdon Aff. Ex. Eat 1.
On or about September 5, 2014, Defendant terminated Plaintiffs’ employment. Compl.
On January 8, 2015, Plaintiffs filed a Complaint in the Superior Court of New Jersey,
Hudson County, asserting claims for wrongful discharge and racial discrimination in violation of
the New Jersey Law Against Discrimination.
ECF. No. 1 at 8-13.
On March 19, 2015,
Defendant removed the action to this Court. ECF No. 1. On April 9, 2015, Defendants moved
to dismiss Plaintiffs’ Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and
12(b)(6), and to compel arbitration pursuant to the Federal Arbitration Act, 9 U.S.C.
On November 20, 2015, this Court requested further briefing clarifying the parties’
positions as to whether the plain language of the DRP required the arbitrator’s written award to
be kept confidential. ECF No. 20. The parties submitted supplemental lriefing on December
11,2015. ECF Nos. 21, 22.
The Presumption of Arbitrability
There is a strong federal policy in favor of arbitration rooted in the Federal Arbitration
See, e.g., Puleo v. Chase Bank, N.A., 605 F.3d 172, 178 (3d Cir. 2010).
“[FAA] reflects an emphatic federal policy in favor of arbitral dispute resolution.” KPMG LLP
v. Cocchi, 132 S.Ct. 23, 25 (2011) (emphasis added). In considering the validity of an arbitration
agreement, “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 defense to arbitrability.”
Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24—25; see also
Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452 (2003).
As such, a motion to compel
arbitration “should not be denied unless it may be said with positive assurance that the arbitration
clause is not susceptible of an interpretation that covers the asserted dispute.”
Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582—83 (1960).
Motion to Compel Arbitration
Even in light of the strong federal presumption of arbitrability, arbitration is “strictly a
matter of contract.” Bel-Ray Co. v. Chemrite (Pty) Ltd., 181 F.3d 435, 444 (3d Cir. 1999). “If a
party has not agreed to arbitrate, the courts have no authority to mandate that he do so.” Id.
Thus, in deciding whether a party may be compelled to arbitrate under the FAA, a court must
first consider “(1) whether there is a valid agreement to arbitrate between the parties and, if so,
(2) whether the merits-based dispute in question falls within the scope of that valid agreement.”
Flintkote Co. v. Aviva PLC, 769 F.3d 215, 220 (3d Cir. 2014) (citation and internal quotation
As to the first consideration, a district court “must initially decide whether the
determination is made under Federal Rule of Civil Procedure 12(b)(6) or 56.”
Bracewell & Guiliani, LLP, 618 F. App’x 114, 117 (3d Cir. 2015). The Rule 12(b)(6) standard
is appropriate where “it is apparent, based on the face of a complaint, and documents relied upon
in the complaint, that certain of a party’s claims are subject to an enforceable arbitration clause.”
Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 776 (3d Cir. 2013) (citation
and internal quotation marks omitted).
The Rule 56 standard is appropriate where: (1) “the motion to compel arbitration does not
have as its predicate a complaint with the requisite clarity to establish on its face that the parties
agreed to arbitrate,” or (2) “the opposing party has come forth with reliable evidence that is more
than a naked assertion.
that it did not intend to be bound by the arbitration agreement, even
though on the face of the pleadings it appears that it did.” IcJ at 774. Summary judgment under
Rule 56 is appropriate if the record demonstrates that there is no genuine issue as to any material
fact, and, construing all facts and inferences in a light most favorable to the non-moving party,
“the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477
U.s. 317, 322 (1986) (citing Fed. R. Civ. P. 56); see also Pollock v. Am. Tel. & Tel. Long Lines,
794 F.2d 860, 864 (3d Cir. 1986).
Standard of Review
As a threshold matter, the Court must determine which standard of review governs
Defendant’s motion. In this case, the existence of an agreement to arbitrate is not apparent from
the face of Plaintiffs’ Complaint, which does not mention the DRP, the Employment
Application, or the Offer Letter.
Instead, Defendant’s motion to compel arbitration relies
exclusively on matters outside the pleadings. Accordingly, the Rule 56 standard governs. As
Plaintiffs do not request discovery or contest the Arbitration Agreement’s existence, the Court
will consider Defendant’s motion on the existing record. See Par—Knit Mills, Inc. v. Stockbridge
Fabrics Co., 636 F.2d 51, 54, n.9 (3d Cir. 1980) (holding the existence of an agreement to
arbitrate may be decided by the court as a matter of law “when there is no genuine issue of fact
concerning the formation of the agreement”); Alexander v. Raymours Furniture Co., No. CIV.A.
13-5387, 2014 WL 3952944, at *3 (E.D. Pa. Aug. 13, 2014) (considering a motion to compel
arbitration under the summary judgment standard on the existing record where the plaintiff did
not contest the existence of the defendant’s arbitration policy or request discovery).
Validity of the Arbitration Agreement
As Plaintiffs do not appear to argue their claims are outside the scope of the Agreement,
the only question before this Court is whether a valid arbitration agreement exists.
reasons set forth below, this Court finds the Arbitration Agreement is valid and therefore
Plaintiffs argue the Arbitration Agreement is invalid for the following reasons: (1) the
provisions in the Employment Application and Offer Letter do not meet the requirements for a
knowing and voluntary waiver of the right to a jury trial; (2) the Arbitration Agreement is an
illusory promise because Defendant reserved for itself the unilateral right to modify the terms of
the contract; (3) the Arbitration Agreement is invalid because it does not explain the differences
between arbitration and litigation; (4) the Arbitration Agreement is unconscionable because it
limits discovery; and (5) the Arbitration Agreement violates public policy because it requires the
parties to keep the award confidential. ECF No. 12 at 1. This Court addresses each of those
arguments in turn.
Notice of Waiver of Jury Trial Right
Plaintiffs first argue the Arbitration Agreement is invalid because the Offer Letter and
Employment Agreement do not specifically state that by agreeing to arbitration, the employee
gives up the right to a jury trial. Although the DRP does state that “[bJy continuing employment
with Aitheuser-Busch ,“ the employee accepts the DRP and “waive[s] all right to a trial before
a jury,” Verdon Aff. Ex. E at 1, Plaintiffs contend that provision does not apply to them because
Plaintiffs received the DRP only after signing the Offer Letter and commencing employment
with Defendant. P1. Br. in
The Court disagrees, finding Plaintiffs accepted the jury waiver set forth in the DRP by
continuing their employment with Defendant.
New Jersey courts have held that where an
arbitration agreement states an employee accepts its terms by continued employment, the
agreement will bind an employee who continues employment beyond the agreement’s effective
date. See Jaworski v. Ernst & Young U.S. LLP, 441 N.J. Super. 464, 474—75 (N.J. App. Div.
2015) (citing Martindale v. Sandvik, Inc., 173 N.J. 76, 88—89 (2002) (“[I]n New Jersey,
continued employment has been found to constitute sufficient consideration to support certain
Here, the DRP specifically states employees accept its
terms by continued employment and Plaintiffs continued their employment with Defendant for
nearly four years after receiving the DRP.3 Accordingly, the Court finds Plaintiffs are bound by
the DRP’s jury waiver.
Plaintiffs next argue the Arbitration Agreement is illusory because Annheuser-Busch
retained the right to modify or discontinue the DRP. “New Jersey Courts, in accordance with the
The Court notes that Plaintiff Yule appears to have received the DRP prior to signing
her Offer Letter. See Verdon Aff. ¶10, Ex. D.
To the extent Plaintiffs contend the Appellate Division’s decision in Barr v. Bishop
Rosen & Co., 442 N.J. Super. 599 (N.J. App. Div. 2015) should guide this Court’s reasoning, the
facts of that case are distinguishable. The plaintiff employee in Barr received a memorandum
explaining that his employer’s arbitration policy contained a jury waiver in 2000 but did not sign
a contract containing an arbitration clause until 2009.
jçi. at 607—10. The Appellate Division
carved out a limited exception to the rule it articulated in Jaworski, holding that, in light of the
intervening nine-year gap, the two documents could not be read together to form a valid
arbitration agreement. Here, by contrast, Plaintiff Yule received the DRP prior to signing her
Offer Letter and Plaintiff Nascimento received the DRP approximately three days after he signed
his Offer Letter.
Restatement [of Contracts], define an illusory promise as a ‘promise which by [its] terms make
performance entirely optional with the promisor whatever may happen, or whatever course of
conduct in other respects he may pursue.” Del Sontro v. Cendant Corp., 223 F. $upp. 2d 563,
577—78 (D.N.J. 2002) (quoting Restatement (Second) of Contracts
Plaintiffs contend the Arbitration Agreement is illusory because it provides Defendant
“may, at its sole discretion, modify or discontinue the DRP at any time by giving the Employee
30 calendar days’ notice.” Verdon Aff. Ex. E at 3. However, that provision further states “any
dispute pending in the DRP at the time of any announced change [shall be adjudicated] under the
terms of the procedure as it existed when the dispute was initially submitted to the DRP.” Id.
Accordingly, although Defendant retains the right to modify the DRP as applied to future
disputes, it has no right to modify the DRP as applied to an existing dispute. Therefore, once a
dispute is submitted, its performance under the Arbitration Agreement is not “entirely optional”
and the Agreement is therefore not illusory. See Bourgeois v. Nordstrom, Inc., No. CIV.A. 112442 KSH, 2012 WL 42917, at *5_6 (D.N.J. Jan. 9, 2012) (holding Nordstrom’s reservation of
the right to change terms in the future without affecting existing claims did not make the
arbitration agreement an illusory promise under New Jersey law).
Enforceable Jury Waiver
Third, Plaintiffs argue the Arbitration Agreement is not an enforceable jury waiver under
New Jersey law. In determining whether an arbitration agreement is valid, this Court’s analysis
is guided by principles of contract formation. See AT&T Mobility, 131 S. Ct. at 1746. To
satisfy the requirements to knowing waiver of a jury right in an arbitration agreement under New
Jersey law, “the [arbitration] clause, at least in some general and sufficiently broad way, must
explain that the plaintiff is giving up her right to bring her claims in court or have a jury resolve
the dispute.” Atalese, 219 N.J. at 1746.
Here, as discussed above, the DRP states that by continuing employment with
Annheuser-Busch, the employee “waive[s] all right to a trial before a jury.” Verdon Aff. Ex. E
at 1. It further explains the procedural differences between arbitration and a judicial proceeding
in a subsection entitled “How does arbitration differ from a court trial?” Id. at 22. Thus, the
Arbitration Agreement not only explains that the employee waives the right to a jury trial, it
specifies the procedures the employee forgoes in agreeing to arbitration. Accordingly, the Court
finds the Arbitration Agreement’s jury waiver is enforceable.
Fourth, Plaintiffs assert the Arbitration Agreement is unconscionable because it “unduly
restricts discovery” by capping the number of depositions and interrogatories. ECF No. 12 at 18.
However, discovery is not insufficient merely because it is less than would be permitted in a
court of law.
See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31 (1991).
arbitration agreement may impose limitations on discovery as long as those limitations are not so
severe as to deprive the parties of ‘a fair opportunity to present their claims.” Pyo v. Wicked
Fashions, Inc., No. CIVO9-2422(DRD), 2010 WL 1380982, at *8 (D.N.J. Mar. 31, 2010)
(quoting Gilmer, 500 U.S. at 31(1991) (upholding discovery limitations in the context of an
employment discrimination suit based on age)).
Here, the DRP permits each party to serve ten interrogatories, depose two fact witnesses
and all expert witnesses named by the other party, and request document production. Verdon
Aff. Ex. E Art. 7.3(a)—(c). It further provides that “[t]he arbitrator may grant, upon good cause
shown, either party’s request for additional or alternative discovery above and beyond [the
aforementioned provisions].” Plaintiffs fail to explain how these provisions, apart from limiting
discovery, deprive them of a fair opportunity to present their claims. Accordingly, the Court
finds Plaintiffs’ contention that the Arbitration Agreement is unconscionable without merit.
Finally, Plaintiffs argue Article 17.4 of the DRP is unconscionable because it requires the
parties to keep the arbitration award confidential. Plaintiffs’ argument relies on Delta funding
Corp. v. Harris, 189 N.J. 28 (2006), in which the New Jersey Supreme Court stated “[i]t is not
unconscionable to require that the proceedings before the arbitrator be kept confidential when the
arbitrator’s written award is not required to be kept confidential.” Id. at 50. Plaintiffs argue
Delta Funding thus “implicitly held that arbitration agreements that require the parties to keep
the arbitrator’s award confidential are unconscionable.” ECF No. 22 at 1. Even if this Court
were to adopt Plaintiffs reading of Delta funding, the DRP is not unconscionable because
Article 17.4 does not require the parties to keep the arbitration award confidential.
Article 17.4 of the DRP states “[n]either party shall agree to publish the Arbitrator’s
award or arrange for publication of the award.” Verdon Aff. Ex. E Art. 17.4. Plaintiffs assert,
without explanation, that the DRP s prohibition on the publication of the award requires the
award to be kept strictly confidential.
$ P1. Supp’l Br., ECF No. 22, at 1-2. Defendant
disagrees and represents that
[i]n agreeing not to publish the award, the parties agreed to refrain
from submitting the award to the AAA or a publishing service,
such as BNA, for public dissemination. This agreement does not,
however, prevent the parties from, inter alia, using the award in
subsequent court proceedings to enforce or vacate the award
Article 17.4 would not prevent the award’s
discovery during, for example, a similar proceeding brought in a
similar locale wherein analogous theories are raised.
Def. Supp’l Br., ECF No. 21, at 1. By contrast, “confidential” means “information to be kept
secret, imparted in confidence.”
Confidential, Black’s Law Dictionary (10th ed. 2014).
Accordingly, the Court does not find that Article 17.4 requires the arbitration award to be kept
For the foregoing reasons, this Court finds the parties
arbitration is granted. An appropriate order follows this opinion.
CLAIRE C. CECCHI, U.S.D.J.
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