United States District Court, N.D. Illinois
March 8, 2004.
DAVID REINEKE, Plaintiff, V. CIRCUIT CITY STORES, INC., Defendants
The opinion of the court was delivered by: REBECCA PALLMEYER, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff David Reineke filed this action against his former
employer, Defendant Circuit City Stores, Inc., alleging violations of the
Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.,
and the Family Medical Leave Act, 29 U.S.C. § 2601 et seq.
Defendant moves to dismiss or stay the action and to compel arbitration
pursuant to a Dispute Resolution Agreement that both parties signed at
the time Plaintiff submitted his employment application,
Plaintiff argues that the court should deny Defendant's motions because
Defendant failed to produced Plaintiff's complete personnel file,
including his employment application, upon request, as required by the
Illinois Personnel Record Review Act, 820 ILCS 40/1 et seq. In
Plaintiff's view, the court should construe Defendant's failure to
produce the personnel file as a concealment of a material fact, raising
an equitable estoppel to the arbitration request In the alternative,
Plaintiff argues that the court should decline to enforce the arbitration
agreement because it denies him a forum to vindicate his statutory
For the reasons set forth here, the court concludes that Defendant's
loss of Plaintiff's personnel file, while disappointing, does not defeat
its right to compel arbitration of Plaintiff's claims. Defendant's motion
is granted and this case is dismissed without prejudice. BACKGROUND
Courts treat motions to compel arbitration as assertions that they are
deprived of subject matter jurisdiction during the course of arbitration.
Robert Half lnt'l, Inc. v. Thompson, No. 98 C 1080, 1999 WL
138849, at *1 (N.D. III. Mar. 5, 1999) (citing Evans v. Hudson
Coal Co., 165 F.2d 970, 972 (3d Cir. 1948)). Accordingly, for
purposes of this motion, the court draws the background facts from the
parties' pleadings, but will also consider attached exhibits and
affidavits. Cf. Lujan v. Defenders of Wildlife, 504 U.S. 555,
561 (1992). Where the facts are disputed, the court accepts Plaintiff's
version, Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987), but
here the facts are largely undisputed.
Plaintiff submitted an application for employment with Circuit City
Stores on May 5, 1995. (Plaintiff's Employment Application, Exhibit 1 to
Affidavit of Teri C. Miles (hereinafter, "Miles Aff."), Exhibit A to
Defendant's Motion to Dismiss.) Plaintiff does not challenge Defendant's
assertion that in 1995, its form employment application incorporated a
Dispute Resolution Agreement ("DRA") calling for arbitration of "any and
all . . . claims, disputes or controversies arising out of or relating to
[the prospective employee's] application or candidacy for employment,
employment and/or cessation of employment with Circuit City. . . ."
including claims under federal or state statutes or at common law.
(Id.) The DRA provided, further, that it could be used in
support of a motion to dismiss and to compel arbitration. (Id.)
Defendant furnished a copy of its Dispute Resolution Rules and Procedures
to each job applicant. (Miles Aff. ¶ 5.) There is no genuine dispute
that Plaintiff executed the DRA. A copy of the first page of Plaintiff's
employment application, as well as the third page, which refers to the
DRA and on which his signature appears, is attached as Exhibit 3 to the
Miles Affidavit. (Employment Application pages, Exhibit 3 to Miles Aff.)
Plaintiff nevertheless contends that Defendant lost its right to
enforce the arbitration agreement because, at some point between 1995 and
2001, Defendant's managers misplaced Plaintiff's personnel file, and with it, the original signed copy
of Plaintiff's application. In August 2001, Plaintiff went on medical
leave due to a work-related eye injury (Complaint ¶ 8), and when he
returned to work in October, he alleges, he learned he had been demoted
to a position incompatible with accommodations he needed. (Complaint
¶¶ 13-16.) On November 2, 2001, Plaintiff's attorney requested that
Defendant furnish a copy of Plaintiffs "entire personnel file,"
including, specifically, his employment application. (Nov. 2, 2001 Letter
of Michael Delaney to Heather Crawford, Exhibit A to Plaintiff's Answer
to Defendant's Motion to Dismiss (hereinafter, "Plaintiffs Response.").)
Donna Hughes Latta of Defendant's legal department responded by letter
dated November 14, 2001, advising Mr. Delaney that Defendant was "in the
process of scanning personnel files" and that Mr. Reineke's file was
missing; Ms. Latta promised to provide the file when it was available.
(Nov. 14, 2001 Letter of Donna Hughes Latta to Michael Delaney, Exhibit B
to Plaintiff's Response.)
On December 5, 2001, Plaintiff filed a complaint with the Illinois
Department of Labor under the Personnel Records Review Act, seeking
access to his personnel file. (Department of Labor Complaint, Exhibit C
to Plaintiff's Response.) Donna Hughes Latta responded to the complaint
in a letter dated December 21, 2001 in which she explained that Defendant
had not yet been able to locate Plaintiffs personnel file. (December 21,
2001 Letter of Donna Hughes Latta to Illinois Department of Labor,
Exhibit E to Plaintiff's Response.) Plaintiff alleges that he was
constructively discharged from his position with Defendant on May 22,
2002. (Complaint ¶ 20.) As of July 10, 2002, his personnel file was
still missing. (July 10, 2001 Letter of Donna Hughes Latta to Michael
Delaney, Exhibit K to Plaintiffs Response.) Plaintiff filed this lawsuit
on May 13, 2003 (Complaint), and Defendant promptly moved to dismiss or
stay the case and compel arbitration.
The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq.,
governs the enforceability, validity, and interpretation of a contract's arbitration clause when the
contract "evidenc[es] a transaction involving commerce."
9 U.S.C. § 2; see Jain v. de Mere, 51 F.3d 686, 688 (7th Cir. 1995).
Arbitration agreements executed between employers and employees are
enforceable under the FAA. Indeed, Defendant here won an important
victory on this issue in Circuit City Stores, Inc. v. Adams,
532 U.S. 105 (2001), where the Court held that, except where transportation
workers' rights are at issue, employment contracts that include
arbitration agreements are generally subject to enforcement pursuant to
the FAA. Id. at 121-22. In a case such as this, where the rights
invoked by Plaintiff are governed by federal law, the court has
jurisdiction over Defendant's petition to compel arbitration of the
dispute. 9 U.S.C. § 4, If the court determines that the parties have
entered into an arbitration agreement and one party has failed to comply,
the court "shall make an order directing the parties to proceed to
arbitration in accordance with the terms of the agreement." Id.
Longstanding federal policy strongly favors arbitration. Green Tree
Fin. Corp. v. Randolph, 531 U.S. 79, 91 (2000) (citing Moses
H. Cone Mem'l Hosp, v. Mercury Constr. Corp., 460 U.S. 1,
24 (1983)), and doubts concerning the scope of an arbitration clause
should be resolved in favor of arbitration. Moses H. Cone, 460 U.S. at
25. Significantly, the party opposing the motion to compel arbitration
bears the burden of establishing that Congress intended to preclude
arbitration of the respective statutory claims. Id. at 92. With
respect to issues of contract formation concerning the arbitration
agreement, the court will rely on state law. Koveleskie v. SBC
Capital Mkts., Inc., 167 F.3d 361, 367 (7th Cir. 1999); Gibson
v. Neighborhood Health Clinics, Inc. 121 F.3d 1126, 1130 (7th Cir.
1997). In this case, the court looks to Illinois contract law because the
agreement was signed and the dispute arose in Illinois. See
Koveleskie, 167 F.3d at 367.
Notably, Plaintiff does not argue that Congress has expressed an
intention that FMLA or ADA claims may not be the subject of arbitration.*fn1 Instead,
Plaintiff contends that Defendant's failure to meet its obligations under
state law, specifically, the Illinois Personnel Record Review Act, 820
ILCS 40/1 et seq., estops it from seeking enforcement of the
arbitration agreement. The Personnel Record Review Act guarantees
Illinois workers the right, upon request, to review the personnel records
maintained by their employers. An employer who fails willfully to provide
such records on request is barred from using them in state court
Personnel record information which was not
included in the personnel record but should have
been as required by this Act shall not be used by
an employer in a judicial or quasi-judicial
proceeding. However, personnel record information
which, in the opinion of the judge in a judicial
proceeding or the hearing officer in a
quasi-judicial proceeding, was not intentionally
excluded from the personnel record may be used by
the employer in the proceeding if the employee
agrees or has been given a reasonable time to
review the information.
820 ILCS 40/4.
For several reasons, this court concludes that the Personnel Record
Review Act does not bar Defendant from seeking enforcement of the
arbitration agreement here. First, as the Seventh Circuit explained in
Park v. City of Chicago, 297 F.3d 606, 611-12 (7th Cir. 2002),
it is the Federal Rules of Evidence, not state law principles, that
control the admissibility of evidence in federal court. In Park,
a Title VII case, plaintiff cited the Personnel Record Review Act in her
motion to bar the introduction in evidence of documents that the
defendant had produced in discovery but had not disclosed in response to
plaintiff's earlier request for inspection of her personnel files. The
district court denied that motion, and the Court of Appeals affirmed,
citing Hanna v. Plumer, 380 U.S. 460 (1965), for the proposition that the admissibility of
evidence and matters of practice and procedure are governed by federal
law, not state law. This court is even less inclined to bar Defendant
Circuit City from introducing the arbitration agreement which, unlike the
documents at issue in Park, does not constitute substantive
evidence relating to the merits of Plaintiff's statutory claims.
In Park, the district court noted that there was no evidence
that the defendant had intentionally withheld the documents at issue. The
Personnel Record Review Act itself provides that where the court finds
that personnel record information was not intentionally withheld from
disclosure, such information is admissible if the employee is provided an
opportunity to review the information. That test is clearly met in this
case. There is no logical or factual basis here for a finding that
Defendant's inability to produce the original personnel file was
intentional. Further, although it is undisputed that Defendant has never
produced Plaintiff's personnel file, it has in fact produced a copy of
the arbitration agreement at issue in this case, Presumably from a source
other than Plaintiff's personnel file, Defendant has located copies of
certain pages of the arbitration agreement, including the signature page,
Although Defendant did not retain a copy of page two of the agreement, it
has provided a copy of that page from its form agreement. Those documents
are, in this court's view, satisfactory under FED. R. EVID. 1004.
Plaintiff does not argue that the copies are inaccurate, nor can he argue
that he has not been given a "reasonable time to review the information"
as provided in the Act,
Plaintiff's remaining arguments also do not satisfy the court that
Defendant's motion should be denied. Plaintiff characterizes Defendant's
failure to produce his personnel file as supporting equitable estoppel.
The single case he cites, McInerney v. Charter Golf, Inc., 176
lll.2d 482, 680 N.E.2d 1347 (1997), involved an employee's promise to
forego a competing job opportunity in return for his employer's oral
promise of lifetime employment. The Illinois Supreme Court found the
employer was not equitably estopped from arguing that the statute of
frauds rendered the alleged lifetime employment promise unenforceable. Id. at
492, 680 N.E.2d at 1352, Those circumstances bear little resemblance to
the case before this court. The McInerney court explained that
equitable estoppel arises where "one party has relied upon another
party's misrepresentation or concealment of a material fact."
Id. Defendant Circuit City's failure or inability to produce a
copy of the arbitration agreement does not constitute a misrepresentation
or concealment of any material fact. Indeed, Plaintiff does not suggest
that he was unaware of the existence of the arbitration agreement that he
Finally, Plaintiff argues that the arbitration agreement is
unenforceable because it effectively denies him any forum to vindicate
his rights. He notes that Defendant's failure to provide a copy of the
arbitration agreement to him before filing of this lawsuit effectively
prevented him from filing an arbitration demand within the one year
limitation period set forth in the Dispute Resolution Rules and
Procedures. (Dispute Resolution Rules and Procedures, Exhibit 4 to
Defendant's Motion, Rule 4b(i).) As Defendant's reply makes plain,
however, Defendant views a lawsuit filed within one year of the
challenged employment action as a timely demand for arbitration.
(Affidavit of Teri C. Miles, Exhibit A to Defendant's Reply Memorandum,
¶ 7.) Defendant has committed that it will not raise a limitations
defense to arbitration of Plaintiff's claim.
One last observation: Plaintiff himself was or should have been aware
of the existence of the arbitration clause at the time he filed this
lawsuit. Nevertheless, because Defendant's inability to produce
Plaintiff's personnel file, including a copy of the arbitration
agreement, arguably deprived Plaintiff's counsel of relevant information,
the court will expect Defendant to reimburse Plaintiff for the filing fee
he incurred in filing this lawsuit.
Because all of the claims raised in Plaintiff's complaint are subject
to arbitration, the court grants Defendant's motion to dismiss (Doc. No.
3-1) and to compel arbitration (Doc. No. 3-3). See Fedmet Corp. v. M/V Buyalyk, 194 F.3d 674, 678 (5th Cir.
1999). The motion for stay (Doc. No. 3-2) is denied without prejudice.
This case is dismissed without prejudice to arbitration of Plaintiff's
claims. The court will retain jurisdiction over this case for purposes of
enforcing this order. ENTER: