GOMEZ v. PDS TECH, INC. et al
Filing
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OPINION. Signed by Judge William J. Martini on 4/19/18. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
HERMAN GOMEZ,
Civ. No. 2:17-12351
Plaintiff,
v.
OPINION
PDS TECH, INC.; AVIALL SERVICES,
INC.; JOHN VOGT and JOHN DOES 1-5 and
6-10,
Defendants.
WILLIAM J. MARTINI, U.S.D.J.:
Plaintiff Herman Gomez brings this action against PDS Tech, Inc. (“PDS”), Aviall
Services, Inc. (“Aviall”) and John Vogt (collectively “Defendants”), alleging violations of
the New Jersey Conscientious Employee Protection Act (“CEPA”), in connection with his
purported unlawful retaliatory discharge from employment. This matter comes before the
Court on Defendants’ motion to compel arbitration and dismiss Plaintiff’s complaint (the
“Complaint”) pursuant to the Federal Arbitration Act, 9 U.S.C. § 1, et seq. There was no
oral argument. Fed. R. Civ. P. 78(b). For the reasons set forth below, Defendants’ motion
is GRANTED.
I.
BACKGROUND
Plaintiff is a New Jersey resident and former employee of Defendants. Notice of
Removal, Ex. A, Compl. ¶ 1, ECF No. 1-1 [hereinafter “Compl.”]. Defendant PDS is a
staffing agency that conducts business in New Jersey. Id. ¶¶ 2, 7. Defendant Aviall is a
corporation with a place of business in Parsippany, New Jersey. Id. ¶ 3. Defendant Vogt
is an employee of Aviall. Id. ¶¶ 4, 9.
In April 2017, PDS contacted Plaintiff and asked if he was interested in a position
as an assembly technician with its client Aviall. Id. ¶¶ 6–8. Plaintiff responded
affirmatively and PDS submitted his resume to Aviall, who subsequently interviewed him
and hired him on the spot. Id. ¶¶ 8, 10–11. Plaintiff began working at Aviall later that
month. Id. ¶ 12. Two days after he started, Plaintiff complained to Vogt about various
issues that he felt created an unlawful safety violation in the workplace. Id. ¶¶ 16–19.
Plaintiff also informed PDS of his concerns. Id. ¶ 26. Approximately a week thereafter,
PDS advised Plaintiff that Aviall had terminated his employment. Id. ¶ 29. Plaintiff filed
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the instant suit in New Jersey Superior Court, which Defendants subsequently removed to
this Court in December 2017. Id.; Notice of Removal, ECF No. 1.
Defendants now move to dismiss the Complaint and compel arbitration. Mem. of
Law in Supp. of Defs.’ Mot. (“Defs.’ Mem.”) 1, ECF No. 12-1. Defendants argue first that
federal law governs the arbitration clause in the employment agreement (the “Agreement”)
Plaintiff entered into with PDS and that the Agreement covers Plaintiff’s CEPA claims.
See id. at 2–6. Defendants next argue that the Agreement covers Plaintiff’s claims against
Aviall and Vogt because they are intended third-party beneficiaries to the Agreement
despite the fact that they are non-signatories. See id. at 9–10.
Plaintiff opposes, arguing first that the Agreement is unenforceable because the
general waiver of employment-related claims found in the arbitration clause is not a clear
and unambiguous waiver of Plaintiff’s CEPA claims.1 See Pl.’s Br. in Opp’n to Defs.’
Mot. (“Pl.’s Opp’n”) 5–6, ECF No. 15. Plaintiff further argues that the clause is
unenforceable because it does not establish the arbitration forum. Id. at 6–7. Plaintiff
finally submits that the arbitration clause lacks specific reference to CEPA, further
rendering it unenforceable. Id. at 7–8.
In their reply brief, Defendants respond that the FAA provides for an arbitration
forum when contractual language is silent thereto. Defs.’ Reply in Supp. of Their Mot.
(“Defs.’ Reply”) 1–4, ECF No. 16. Defendants further argue that the arbitration clause
sufficiently identifies the statutory claims covered by the Agreement. Id. at 5–8.
Defendants submit that Plaintiff’s CEPA claims fall within the scope of the Agreement.
Id. at 8–10. Finally, Defendants argue that Plaintiff concedes that Aviall and Vogt are
third-party beneficiaries to the Agreement. Id. at 10–11.
II.
LEGAL STANDARD
The FAA “creates a body of federal substantive law establishing and governing the
duty to honor agreements to arbitrate disputes” and expresses “a strong federal policy in
favor of resolving disputes through arbitration.” See Century Indem. Co. v. Certain
Underwriters at Lloyd’s, London, 584 F.3d 513, 522 (3d Cir. 2009). “Before compelling
a party to arbitrate pursuant to the FAA, a court must determine that (1) there is an
agreement to arbitrate and (2) the dispute at issue falls within the scope of that agreement.”
Id. at 523. “To determine whether the parties have agreed to arbitrate, [courts] apply
‘ordinary state-law principles that govern the formation of contracts.’” Id. at 524 (quoting
First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). “[O]nce a court has found
that there is a valid agreement to arbitrate, . . . the determination of whether a particular
dispute is within the class of those disputes governed by the arbitration clause . . . is a
matter of federal law.” See id. (quotation omitted). In making such a determination, “‘there
is a presumption of arbitrability[:] an order to arbitrate the particular grievance should not
The Court notes that Plaintiff’s papers repeatedly refer to Plaintiff’s “LAD” claim, which the Court assumes is a
commonly used acronym for the New Jersey Law Against Discrimination. Plaintiff did not allege an LAD claim in
his Complaint. The Court, therefore, construes Plaintiff’s papers as addressing the CEPA claims despite counsel’s
clear drafting errors.
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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.’” Id. (quoting AT&T
Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650 (1986)).
Courts in the Third Circuit apply two different standards when considering a motion
to compel arbitration. “[W]hen 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, a motion to compel arbitration should be considered under
a Rule 12(b)(6) standard without discovery’s delay.’” Guidotti v. Legal Helpers Debt
Resolution, L.L.C., 716 F.3d 764, 776 (3d Cir. 2013) (quoting Somerset Consulting, LLC
v. United Capital Lenders, LLC, 832 F. Supp. 2d 474, 482 (E.D. Pa. 2011)). “But if the
complaint and its supporting documents are unclear regarding the agreement to arbitrate,
or if the plaintiff has responded to a motion to compel arbitration with additional facts
sufficient to place the agreement to arbitrate in issue, then ‘the parties should be entitled to
discovery on the question of arbitrability before a court entertains further briefing on [the]
question.” Id. (quoting same). Under such circumstances, courts apply a summary
judgment standard. See id.
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint,
in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted.
The moving party bears the burden of showing that no claim has been stated. Hedges v.
United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under
Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in
the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975);
Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir.
1998).
III.
DISCUSSION
Plaintiff has not responded with additional facts that place the agreement to arbitrate
in issue and the Court, therefore, applies the Rule 12(b)(6) standard to Defendants’ motion.
The Agreement is unquestionably subject to federal law by virtue of the fact that Defendant
PDS is a Washington corporation with business operations in many states, which Plaintiff
does not contest. See Decl. of J. Surely (“Surely Decl.”) ¶ 2, ECF No. 12-2. “A nexus to
interstate commerce is found when citizens of different states engage in performance of
contractual obligations in one of those states because such a contract necessitates interstate
travel of both personnel and payments.” Alfano v. BDO Seidman, LLP, 925 A.2d 22, 30
(N.J. Super. Ct. App. Div. 2007) (finding that the FAA governed an arbitration agreement
where the contract evidenced a transaction involving commerce).
The question of whether the parties made an agreement to arbitrate falls under state
contract law. “Under New Jersey law, a party must prove the existence of a contract by
showing that: (1) there was a meeting of the minds; (2) there was an offer and acceptance;
(3) there was consideration; and, (4) there was certainty in the terms of the agreement.”
Allen v. Bloomingdale’s, Inc., 225 F. Supp. 3d 254, 258 (D.N.J. 2016) (internal quotation
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and citation omitted). Defendants submit, and Plaintiff does not contest, that Plaintiff
executed the Agreement with PDS prior to joining Aviall. See Surely Decl. ¶ 3, Ex. A.
The arbitration clause states:
YOU agree that YOU will settle any and all previously unasserted claims,
disputes or controversies (“Claims”) arising out of or relating to YOUR
application or candidacy for employment, employment and/or cessation
of employment with PDS, exclusively by final and binding arbitration
before a neutral Arbitrator.
Id., Ex. A at 2.
The Court rejects Plaintiff’s argument that the phrase “previously unasserted”
references past claims prior to the formation of a contract with PDS; instead, the Court
agrees with Defendants that the phrase “carves out from the arbitration agreement any
claims between the parties that had previously been asserted at the time the agreement was
signed.” See Defs.’ Reply at 9 n.3. The Court further finds that the above language is clear
and unambiguous. It is undisputed that there was an offer and acceptance and that Plaintiff
received valid consideration in the form of his subsequent employment with Aviall. The
Court, therefore, finds that PDS and Plaintiff made an agreement to arbitrate. See
Martindale v. Sandvik, Inc., 800 A.2d 872, 879 (N.J. 2002) (finding that employment
constitutes sufficient consideration to support an arbitration agreement).
The question of the Agreement’s scope falls under federal law. First, the absence
of reference to the arbitration forum does not render the Agreement unenforceable. See In
re Sprint Premium Data Plan Mktg. & Sales Practices Litig., No. 10-cv-6334, 2012 WL
847431, at *4 (D.N.J. Mar. 13, 2012) (“the pertinent federal law suggests that the
[defendant’s] arbitration clause is not unenforceable due to the absence of essential terms,”
including forum). Second, Plaintiff’s CEPA claims clearly fall under the types of claims
referenced in the Agreement. The clause states:
By way of example only, Claims include claims under federal, state, and
local statutory or common law, such as the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act, as amended, including
the amendments of the Civil Rights Act of 1991, the Americans with
Disabilities Act, the Fair Labor Standards Act, the law of contract, and the
law of tort.
Surely Decl., Ex. A at 2 (emphasis added). The absence of specific reference to CEPA
does not defeat the enforceability of the above language to Plaintiff’s claims. See Garfinkel
v. Morristown Obstetrics & Gynecology Assocs., P.A., 773 A.2d 665, 672 (N.J. 2001)
(“[W]e do not suggest that a party need refer specifically to the LAD or list every
imaginable statute by name to effectuate a knowing and voluntary waiver of rights.”). The
clause applies broad language to the types of claims covered and provides clear examples,
including anti-discrimination statutes akin to CEPA. The Court, therefore, finds that
Plaintiff’s CEPA claims fall under the scope of the Agreement. See Bleumer v. Parkway
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Ins. Co., 649 A.2d 913, 925 (N.J. Super. Ct. Law Div. 1994) (finding that CEPA claims
“are subject to arbitration under an arbitration clause in a private employment agreement
subject to the FAA”).
Finally, the Court addresses whether Defendants Aviall and Vogt are third-party
beneficiaries to the Agreement. In general, “non-signatories to an arbitration agreement
may be bound by that agreement through the application of traditional principles of contract
and agency law.” See Flexi-Van Leasing, Inc. v. Through Transp. Mut. Ins. Ass’n, Ltd.,
108 F. App’x 35, 40 (3d Cir. 2004) (quotation and citation omitted). “One such traditional
principle, applicable in the arbitration context, is the principle that a third-party beneficiary
is bound by the terms of a contract where its claim arises out of that contract.” Id. In New
Jersey, “[t]he principle that determines the existence of a third party beneficiary status
focuses on whether the parties to the contract intended others to benefit from the existence
of the contract, or whether the benefit so derived arises merely as an unintended incident
of the agreement.” Broadway Maint. Corp. v. Rutgers, State Univ., 447 A.2d 906, 909
(N.J. 1982). “The contractual intent to recognize a right to performance in the third person
is the key.” Id.
Here, the Agreement unquestionably recognizes the right of a third party to
performance by Plaintiff, namely the performance of Plaintiff’s employment duties. The
Agreement recognizes the third party as “PDS’s Client” and specifically references
Plaintiff’s “desire to be employed by PDS to provide temporary services to PDS’s Client.”
See Surely Decl., Ex. A at 1. While the Agreement does not expressly name Aviall or
Vogt, it is undisputed that Plaintiff knew he was being submitted by PDS for employment
with Aviall at the time he executed the Agreement. See Compl. ¶¶ 6–12, Ex. A at 2 (date
of execution written as April 12, 2017). Consequently, Aviall and Vogt are third-party
beneficiaries to the Agreement and Plaintiff’s CEPA claims against them are, therefore,
subject to the arbitration clause. Accordingly, Defendants’ motion to dismiss the
Complaint and compel arbitration is GRANTED. See Seus v. John Nuveen & Co., Inc.,
146 F.3d 175, 179 (3d Cir. 1998), overruled on other grounds by Green Tree Fin. Corp.–
Al. v. Randolph, 531 U.S. 79 (2000) (“If all the claims involved in an action are arbitrable,
a court may dismiss the action instead of staying it.”).
IV.
CONCLUSION
For the reasons stated above, Defendants’ motion to dismiss and compel arbitration
is GRANTED and the Complaint is DISMISSED WITHOUT PREJUDICE. An
appropriate order follows.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Date: April 19, 2018
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