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Williams-Bell v. Perry Johnson Registars, Inc.

United States District Court, N.D. Illinois, Eastern Division

January 8, 2015

MARIA WILLIAMS-BELL, Individually and on behalf of all others similarly situated, Plaintiffs,
v.
PERRY JOHNSON REGISTARS, INC. and TERRY BOBOIGE, Defendants.

MEMORANDUM OPINION AND ORDER

JOAN B. GOTTSCHALL, District Judge.

Plaintiff Maria Williams-Bell contends that defendants Perry Johnson Registrars, Inc. ("PJR") and its President, Terry Boboige, violated the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201, et seq., and the Illinois minimum wage law, 820 Ill. Comp. Stat. §§ 105, et seq. by improperly classifying her as an independent contractor. Williams-Bell filed suit on behalf of herself and all others who are similarly situated. The parties agree that William-Bell's individual claims must be arbitrated pursuant to a binding arbitration clause in a contract she signed relating to auditing work that she performed for PJR. However, the parties disagree regarding who - this court or an arbitrator - should decide whether the claims brought on behalf of putative class members are arbitrable.

The defendants ask the court to dismiss the complaint in its entirety pursuant to Fed. R. Civ. P.12(b)(1) for lack of subject matter jurisdiction or Fed.R.Civ.P. 12(b)(3) for improper venue. Alternatively, they ask the court to compel arbitration of William-Bell's individual dispute and rule that the classwide arbitration is not available. Williams-Bell argues that the availability of classwide arbitration is a question for an arbitrator and that a stay of this case pending completion of arbitration - not dismissal - is the proper procedure when the court compels arbitration. For the following reasons, PJR's motion to dismiss is denied in its entirety. In addition, the court compels arbitration of Williams-Bell's individual claims and finds that an arbitrator may decide if the class claims are arbitrable. Finally, the court stays this case pending completion of arbitration proceedings.

I. BACKGROUND

Defendant PJR audits organizations based on industry standards and registers the organizations if they meet or exceed the applicable standards. Defendant Boboige is PJR's President. PJR currently employs plaintiff Williams-Bell as a lead auditor. Williams-Bell previously worked for PJR as an auditor.

Williams-Bell alleges that PJR violated the FLSA, as well as Illinois minimum wage laws, by improperly classifying certain auditors as independent contractors. Williams-Bell thus contends that PJR owes overtime compensation and wages to her and other similarly situated individuals. Williams-Bell's complaint defines the proposed opt-in collective class of similarly situated persons as "[a]ll individuals who worked for Defendants, its subsidiaries or affiliated companies, as auditors and who were misclassified as independent contractors during the relevant statute of limitations period." Dkt. 1, Compl., ¶ 19.

PJR attached an employment agreement signed by Williams-Bell - which includes an arbitration clause - to its motion to dismiss. The complaint, however, does not allege that Williams-Bell or the other auditors who are members of the putative class signed employment agreements with PJR. The complaint also does not mention arbitration.

II. ANALYSIS

The parties agree that Williams-Bell must arbitrate her individual claims. However, they disagree about the consequences of compelling arbitration ( i.e., if the court compels arbitration, should it dismiss this action or stay it pending completion of the arbitration proceedings?). They also disagree about the scope of the arbitration ( i.e., should the court compel arbitration of Williams-Bell's individual claim or allow the arbitrator to determine if he/she wishes to consider both Williams-Bell's individual claims as well as her claims on behalf of a class?).

A. PJR's Motion to Dismiss

PJR argues that because Williams-Bell agreed to arbitrate any claim against it, this case must be dismissed for lack of subject matter jurisdiction or improper venue, pursuant to Fed.R.Civ.P. 12(b)(1) and (b)(3), respectively. Williams-Bell, on the other hand, asserts that this case should be stayed pending completion of arbitration. For the reasons explained below, PJR's motion to dismiss based on lack of subject matter jurisdiction and improper venue is denied, and this action is stayed pending completion of arbitration proceedings.

1. The Employment Agreement Attached to PJR's Response

The court begins by determining if it may consider the employment agreement attached to PJR's motion to dismiss. Williams-Bell does not object to the submission of the agreement. Indeed, she agrees that she signed it. She also asserts (without directing the court to any supporting evidence) that all other similarly-situated auditors signed agreements containing the same arbitration clause. PJR did not file a reply, although the court afforded it an opportunity to do so. It thus did not dispute Williams-Bell's assertion that all of the members of the putative class are bound by the same arbitration clause.

"[I]t is well-settled that a court may look outside the complaint and consider other evidence when ruling on a motion to dismiss made pursuant to Federal Rule of Civil Procedure 12(b)(1)." Casey v. Guthrie, No. 09-CV-951, 2010 WL 1657387, at *1 n. 4 (S.D. Ill. Apr. 22, 2010). Similarly, when considering a Rule 12(b)(3) motion to dismiss for improper venue, the court may look at documents outside the pleadings. ForteCEO Services, Inc. v. Terra Contracting, LLC, No. 11 C 5179, 2012 WL 2597888, at *2 (N.D. Ill. July 3, 2012) (citing Faulkenberg v. CB Tax Franchise Sys., 637 F.3d 801, 809-10 (7th Cir. 2011)). The court will thus consider the employment agreement.

2. PJR's Motion to Dismiss for Lack of Subject Matter Jurisdiction

The agreement includes a choice of law provision that states that it "shall be interpreted and enforced in accordance with the law of the State of Michigan." Dkt. 12-1, Employment ...


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