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Perry v. National City Mortgage

August 15, 2006


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



Before the Court is defendant National City Mortgage, Inc.'s ("Defendant" or "National City") Motion to Dismiss for Improper Venue (Doc. 7), filed pursuant to FEDERAL RULE OF CIVIL PROCEDURE 12(b)(3). Defendant asserts that a forum selection clause, provided in an agreement signed by plaintiff Derrick Perry ("Plaintiff") at the onset of his employment, operates to require this action be litigated in a court encompassing Montgomery County, Ohio (Doc. 7). For the reasons stated herein, Defendant's Motion is denied.


Briefly recounting the facts as provided by the parties, Plaintiff was employed by Defendant as a Loan Originator, or Loan Officer, from approximately September, 2004 until December, 2005, at Defendant's Swansea and Shiloh, Illinois locations (Doc. 1, ¶ 3; Doc. 8, ¶ 2). Plaintiff brought this suit (Doc. 1) pursuant to the Fair Labor Standards Act of 1938 ("FLSA"), as amended, 29 U.S.C. § 201 et seq. (Doc. 1, ¶ 1), for Defendant's failure to compensate Plaintiff for any of the substantial overtime hours worked by Plaintiff and other similarly situated employees. Plaintiff bases his claim upon the theory that Section 13 of the FLSA, 29 U.S.C. § 213, does not apply to exempt loan originators from overtime pay obligations, as set forth under Section 7(a)(1) of the FLSA (Doc. 1, ¶ 22).

In lieu of an Answer, Defendant has filed the instant motion, hinging its alleged entitlement to a dismissal on a forum selection clause found within an agreement signed by Plaintiff as part of his initial hiring. Apparently, the facts involve two agreements entered into between Plaintiff and Defendant. The first, signed September 1, 2004, by the parties, is entitled, "Loan Officer Compensation Agreement" ("Compensation Agreement") (Doc. 8, Ex. 1). The second was signed by the parties on September 2, 2004, and is entitled, "Non-Disclosure/NonSolicitation/Non-Hire Agreement" ("Non-Disclosure Agreement")(Doc. 8, Ex. 2).

The Compensation Agreement is comprised of ten sections as follows:

(I) Definitions; (II) Job Description; (III) Commission & Related Compensation; (IV) Pay Schedule; (V) Payment of Commission Upon Termination of Employment; (VI) Acknowledgment of Regulations; (VII) Proprietary and Confidential Information; (VIII) Regulated Activity; (IX) Internet Policy; and (X) Miscellaneous Information. Defendant believes the Compensation Agreement appears is relevant to Plaintiff's suit, and thus, germane to the instant Motion because Plaintiff is "challenging the terms of his Compensation Agreement . . ." (Doc. 13, p. 4).

The Non-Disclosure Agreement contains the following sections (1) Employment and Duties; (2) Compensation and Benefits; (3) Covenant of Non-Disclosure; (4) Agreement Not to Solicit; (5) Duration and Termination; (6) Taxes; (7) Successors and Assigns; (8) Governing Law, Jurisdiction, and Expenses;(9) Notices; (10) New Agreement; and (11) Effective Date. Section 8(a) of the Non-Disclosure Agreement contains the contested forum selection clause, which reads:

This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. Employee agrees to submit to, and confer exclusive jurisdiction on the United States District Court or the State Court which has original jurisdiction in Montgomery County, Ohio. (Doc. 8, Ex. 2). "This Agreement" is defined at the beginning of the document as the "NonDisclosure/Non-Solicitation/Non-Hire Agreement." Defendant argues that this forum selection clause encompasses Plaintiff's claim and therefore should apply to require Plaintiff bring suit in Montgomery County, Ohio (Doc. 7). Specifically, Defendant reaches this conclusion via its assertion that the Compensation Agreement and the Non-Disclosure Agreement should be construed as a single contract regarding Plaintiff's employment.

Plaintiff opposes Defendant's Motion to Dismiss (Doc. 12), arguing first that the forum selection clause of the Non-Disclosure Agreement does not pertain to his FLSA claim. Further, Plaintiff contends that the two Agreements should be construed as separate Agreements and therefore, the forum selection clause should only pertain to enforcing the Non-Disclosure Agreement, which is outside the scope of Plaintiff's FLSA claim.*fn1



"A challenge to venue based upon a forum selection clause can appropriately be brought as a motion to dismiss the complaint under FEDERAL RULE OF CIVIL PROCEDURE 12(b)(3)." Muzumdar v. Wellness ...

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