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James A. Corrigan, Jr., and Tim J. Barry, Both Individually and On Behalf of All Others Similarly Situated, and Gary Alsobrooks v. Domestic Linen Supply Co.

July 20, 2012

JAMES A. CORRIGAN, JR., AND TIM J. BARRY, BOTH INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, AND GARY ALSOBROOKS, PLAINTIFFS,
v.
DOMESTIC LINEN SUPPLY CO., INC., DEFENDANT.



The opinion of the court was delivered by: Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER

Plaintiffs James A. Corrigan Jr. and Tim J. Barry, individually and on behalf of similarly situated employees, brought a collective and putative class action complaint against defendant Domestic Linen Supply Co, alleging violations of the Fair Labor Standards Act "FLSA", 29 U.S.C. §201 et seq. (Count I), and violations of the Illinois Wage Payment and Collection Act "IWPCA", 820 ILCS 115/1 et seq., the Michigan Wage and Fringe Benefits Act "MWFBA", M.C.L. §408.471 et seq., and other state laws (Count II). Additionally, Plaintiff Gary Alsobrooks has filed an individual action against defendant, alleging breach of contract and fraud (Counts III & IV).*fn1 Defendant has moved to dismiss or in the alternative compel arbitration on all counts. Plaintiffs Corrigan and Barry oppose the motion. Alsobrooks has agreed to arbitrate his claims. For the reasons stated below, defendant's motion is granted.

FACTS

Defendant is a corporation, headquartered in Michigan, but also doing business in Illinois. Defendant is in the business of supplying uniforms, linens, and other materials to businesses.

Plaintiff Barry was hired as a Service Manager, sometime on or before November 20, 2003, and signed an agreement titled Employment/Trade Secrets Agreement (The Barry Agreement). The Barry Agreement governs use of company information, the employment relationship, and paycheck adjustments, and provides:

"[A]ny controversy or claim arising out of or relating to this agreement or breach thereof (including any and all relief sought arising out of the termination of employment) shall be settled by arbitration in accordance with the commercial arbitration rules of the American Arbitration Association .."

Plaintiff Corrigan was hired as a Route Salesman/Driver, sometime on or before June 18, 2009, and signed a similar agreement titled Employment/Trade Secrets Agreement (The Corrigan Agreement). The arbitration clause in the Corrigan Agreement reads in pertinent part:

"[A]ny controversy or claim arising out of or relating to this agreement or breach thereof (including any and all relief sought out of the employment relationship or the termination of employment) shall be settled by arbitration in accordance with the commercial or employment rules of the American Arbitration Association (as the nature of the claim dictates) .."

Plaintiffs allege that during "the last three years" they were required to work in excess of 40 hours per week, but were paid a salary based on a 40-hour workweek, and not compensated for hours worked in excess of 40 hours in violation of FLSA, IWPCA, and MWFBA.

DISCUSSION

Defendant has moved to compel arbitration, arguing that each plaintiff entered into an employment agreement containing valid arbitration clauses. Courts review a motion to compel arbitration under a summary judgment standard in accordance with Federal Rule of Civil Procedure 56(c). Tickanen v. Harris & Harris, Ltd., 461 F. Supp. 2d 863, 866 (E.D. Wis. 2006). Movants are required to "provide sufficient evidence in support of their claims such that a reasonable jury could return a verdict for them under applicable law." WFC Commodities Corp., v. Linnco Futures Group, Inc., 1998 WL 834374, *2 (N.D. Ill. 1998). The court may consider exhibits and affidavits regarding the arbitration agreement in question. Reineke v. Circuit City Stores, Inc., 2004 WL 442639, *1 (N.D. Ill. 2004).

Agreements containing arbitration clauses are no different than other agreements and must be upheld "save upon such grounds as exist in law or in equity for the revocation of any contract." 9 U.S.C. § 3. The Federal Arbitration Act (FAA) was passed to ensure that valid agreements to arbitrate would be enforced by courts. Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). Upon finding a valid arbitration agreement, courts generally compel arbitration. Id. In accordance with the FAA courts are required to stay proceedings until arbitration is held "if the court determines there is an agreement in writing to submit to arbitration and the proceeding filed with the court is subject to arbitration under this agreement." Tickanen, 461 F. Supp. 2d at 866. "The court's only role when presented with a question of arbitrability is to determine, (1) whether a valid arbitration agreement exists and (2) whether the scope of the parties dispute falls within the agreement." Tickanen, 461 F. Supp. 2d at 866 (quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000).

It is the job of the courts to interpret agreements and determine the validity of the contract in question. See Stolt-Nielsen S.A. v. AnimalFeeds Int't Corp., __ U.S. __, 130 S. Ct. 1758, 1774-75 (2010). Offer, acceptance, and consideration form the base of any valid contract.

See e.g. Steinberg v. Chicago Medical School, 69 Ill. 2d. 320, 329 (Ill. 1977). In the instant case, there is no dispute that both plaintiffs willingly entered into their respective agreements in return for employment by defendant. Therefore, offer, acceptance, and consideration all ...


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