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Brown v. Luxottica Retail North America Inc.

September 29, 2010


The opinion of the court was delivered by: Joan B. Gottschall United States District Judge

Judge Joan B. Gottschall


Plaintiffs, Marcelina Brown and Lili Echeverria, have sued defendants, Lenscrafters, Inc., Luxottica Retail North America Inc., The United States Shoe Corporation and Luxottica Group, S.p.A. Plaintiffs' First Amended Class Action Complaint pleads four counts: Count I alleges a violation of the Illinois Minimum Wage Law; Count II alleges a violation of the Illinois Wage Payment and Collection Act; Count III alleges unjust enrichment; and Count IV alleges a violation of the Fair Labor Standards Act ("FLSA"). Plaintiffs seek to represent "themselves and others who currently work, or who worked as salaried managers, including but not limited to salaried retail managers, salaried lab managers and/or salaried general managers or other positions performing similar responsibilities for the Defendants and who do not meet the tests for exemption in the State of Illinois at any time during the three-year period immediately preceding the filing of the original complaint." (Compl. ¶3.)

Defendants have moved to compel one of the named plaintiffs, Marcelina Brown, to arbitrate her claims on an individual basis pursuant to the parties' Dispute Resolution Agreement, as contained in an employee handbook given to Brown, and to stay these proceedings as to plaintiff Brown pending arbitration. Defendants' motion is not directed to plaintiff Echeverria or to the unnamed members of the class. Two defendants, Luxottica Group, S.p.A. and United States Shoe Corporation, also move to dismiss as to them for lack of personal jurisdiction. For the reasons set forth below, defendants' motions are granted.


A. Arbitration Agreement

Defendants assert that on or about October 2, 2006, while Brown was employed by Luxottica Retail North America Inc. and in consideration for her continued employment, Brown entered into a Dispute Resolution Agreement ("Agreement") with defendants. The Agreement, which is attached as an exhibit to plaintiffs' opposition, is contained in a 51-page employee handbook, called the Associate Guide. The Dispute Resolution Agreement begins on page 27 and consists of 5 pages. In a section entitled "What Exactly is Covered," the Agreement states as follows:

You and the Company each agree that, no matter in what capacity, neither you nor the Company will (1) file (or join, participate or intervene in) against the other party any lawsuit or court case that relates in any way to your employment with the Company or (2) file (or join, participate or intervene in) a class-based lawsuit, court case or arbitration (including any collective or representative arbitration claim). . . .

The Company expressly does not agree to arbitrate any claim on a class, collective or representative basis and all claims to arbitration must be brought in the name of an individual person and must proceed on an individual basis (non-class, non-representative basis). Claims of two or more persons may not be joined or consolidated in the same arbitration. . . .

The Arbitration portion of the Dispute Resolution Agreement is intended to cover all legal disputes that you could otherwise file in court. That includes, but is not limited to, all claims brought under federal, state and local statutory or common law including . . . the Fair Labor Standards Act {and] any related or similar state laws . . . . (Doc. 36 Ex. A at 28-29.)

The Agreement provides that if the employee initiates the arbitration, the employee will be required to pay a filing fee to the AAA "up to the amount required to file a lawsuit in your jurisdiction asserting the same claims. If the AAA filing fee is greater than that amount, the Company will pay the difference." (Id. at 30.) Further, the Company "will pay the entire fee of the arbitrator for his or her services and any associated costs incurred by the arbitrator or the arbitration service provider." (Id.) The Agreement further states that, if authorized by applicable law, the arbitrator could require the employee to pay the Company's attorney's fees or the Company to pay the employee's fees. (Id.) Presumably by "applicable law," the Agreement contemplates that whatever fee-shifting would be available in a lawsuit would also be available to the arbitrator; the parties have not suggested that this provision has any different meaning.

While Brown's agreement to the terms of the handbook, including the Dispute Resolution Agreement, was a condition of her continued employment, and plaintiffs assert that the Agreement was offered on a take-it-or-leave-it basis, the arbitration provision is not mandatory. Rather, the Agreement provides that "Associates may opt out of the Dispute Resolution Agreement within 30 days of receipt of this agreement." An Opt-Out form is attached to the Agreement, and the Handbook provides Opt-Out directions.

B. Analysis

The interpretation of an arbitration agreement is generally a matter of state law. Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., ___ U.S. ___, 130 S.Ct.1758, 1773 (2010). However, the Federal Arbitration Act ("FAA"), 9 U.S.C.ยง 1 et seq., imposes certain important rules, including that arbitration "is a matter of consent, not coercion." Id. (citation omitted). The primary purpose of the FAA is to ensure that private agreements to arbitrate are enforced according to their terms. Id. The FAA embodies a strong federal policy in favor of arbitration. Livingston v. ...

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