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MANDEL v. SCI ILLINOIS SERVICES

July 31, 2003

SEYMOUR MANDEL, PLAINTIFF,
v.
SCI ILLINOIS SERVICES, INC., JAMES S. FORD, ANTHONY LOCOCO, DEFENDANTS



The opinion of the court was delivered by: Ronald Guzman, District Judge

MEMORANDUM OPINION AND ORDER

Seymour Mandel has filed a four-count Complaint against SCI Illinois Services ("SCI), James S. Ford ("Ford), and Anthony Lococo ("Lococo"). Mandel claims that SCI violated the Age Discrimination in Employment Act ("ADEA") and that all defendants violated the Family Medical Leave Act ("FMLA") and intentionally inflicted emotional distress on Mandel. Before the Court is the defendants' motion to dismiss the Complaint and to compel arbitration of Mandel's claims pursuant to section 3 of the Federal Arbitration Act ("FAA"). For the reasons provided in this Memorandum Opinion and Order, the Court compels arbitration of Mandel's claims and dismisses the case without prejudice with leave to reinstate after arbitration. [ Page 2]

FACTS

In March 1995, SCI purchased a funeral home chapel of which Mandel was a part-time owner and managing partner. (Compl. ¶ 14.) In connection with this purchase, Mandel entered into a ten-year employment agreement ("Agreement") with SCI. (Id.) This employment agreement contains a clause governing Dispute Resolution, (Mot, Dismiss, Ex, A, Employment Agreement § 21) This clause contains three relevant provisions. First, the clause provides that "any and all dispute [sic] among the parties to this Agreement arising out of or in connection with the interpretation, performance, or nonperformance of this Agreement shall be solely and finally settled by arbitration. . . ."

(Id.) Secondly, the clause provides that:

The arbitrator shall decide the issues submitted to him or her in accordance with (i) the provisions and purposes of this Agreement, and (ii) what is just and equitable under the circumstances, provided that all substantive questions of law shall be determined under the laws of the State of Illinois (without regard to its principles of conflicts of laws).
(Id.) Finally, the Agreeement states: "The arbitrator shall divide all costs incurred in conducting the arbitration in his finial award in accordance with what he deems just and equitable under the circumstances." (Id.)

In March 2001, Mandel had knee-replacement surgery. (Compl. ¶ 32.) As a result of this surgery, Mandel was required to take time off from work to recover from the surgery and attend physical therapy sessions. (Id. ¶ 34.) Mandel's employment was terminated after he was unable to return to work. (Id. ¶ 44.) Mandel alleges that the true reason for his discharge was his age. (Id. ¶ 24.) Mandel also alleges that by firing him, defendants violated the FMLA because Mandel's condition was a serious health condition under the FMLA and his absence from work was protected by the FMLA. (Id. [ Page 3]

¶¶ 33, 42.) Finally, Mandel alleges that defendants discharged him because he attempted to exercise his rights under the FMLA (id. ¶ 46) and that the defendants intentionally inflicted emotional distress upon Mandel (id. ¶¶ 50-54).

Defendants argue that Mandel's claims fall within the arbitration clause of the Employment Agreement, (Def.'s Mem. Supp. Mot. Dismiss, at 4.) Defendants filed a motion to dismiss the complaint and compel arbitration of Mandel's claims. (Id., at 1.)

DISCUSSION

Under the Federal Arbitration Act, federal courts must compel arbitration of proceedings if any of the issues are "referable to arbitration under an agreement in writing for such arbitration" so long as the court is "satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement." 9 U.S.C. § 3 (West 2003). When interpreting an arbitration agreement, a court must resolve any doubts concerning the scope of the agreement in favor of arbitration, Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 US. 1, 24-25 (1983), Arbitration should be compelled "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute." United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 552-83 (1960). However, because arbitration is a matter of contract between parties, a court cannot require a party to arbitrate issues that are not covered by the agreement, EEOC v. Waffle House, Inc., 534 U.S. 279, 289 (2002).

The dispute resolution clause in Mandel's employment contract provides that all [ Page 4]

disputes arising out of or in connection to the agreement shall be resolved by arbitration. In Sweet Dreams Unlimited, Inc. v. Dial-A-Mattress International, Ltd., the Seventh Circuit interpreted a similar arbitration agreement that provided that "all disputes `arising out of the [a]greement" shall be resolved by arbitration. 1 F.3d 639, 642 (7th Cir. 1993). In interpreting this contractual language, the court held that the phrase "`arising out of reaches all disputes having their origin or genesis in the contract.'" Id. at 642 (emphasis in original).

Moreover, in Matthews v. Rollins Hudig Hall Co., the Seventh Circuit faced the issue of whether an ADEA claim was governed by an arbitration contract providing that any claim relating to a breach of the agreement was governed by arbitration. 72 F.3d 50, 52-54 (7th Cir. 1995). The court reasoned that an employer's termination of an employee based on age was a violation of the employment agreement because age was not a valid cause for termination. Id. at 54, Therefore, the court concluded that ...


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