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Situated v. Utilimap Corp..

United States District Court, S.D. Illinois

June 25, 2015

CIPRIANO MARTINEZ and PATRICIO DONES, on behalf of themselves and all others similarly situated, Plaintiffs,
UTILIMAP CORP., Defendant.


J. PHIL GILBERT, District Judge.

This matter comes before the Court on defendant Utilimap Corporation's motion to compel plaintiffs Cipriano Martinez and Patricio Dones to arbitrate this dispute and to stay this litigation pending completion of arbitration (Doc. 35). The plaintiffs have responded to the motion (Doc. 53), and Utilimap has replied to that response (Doc. 55). The Court also considers the plaintiffs' motion for class certification (Doc. 3).

I. Background

Each plaintiff[1] worked as an at-will employee for Utilimap, a full-service utility inspection company, as an hourly laborer in the Ground Line Treatment Division for about two years. In their work for Utilimap, the plaintiffs dug around utility poles, inspected them and treated them with wood preservatives. They allege that they routinely worked more than forty hours a week, but that Utilimap did not pay them one and one-half times their regular pay rate for those excess hours. This practice is referred to as "straight time for overtime." Additionally, they allege that Utilimap did not pay them for all the hours they worked even at their regular "straight time" pay rates. They claim this occurred because the plaintiffs' foremen, who recorded the hours plaintiffs worked, systematically failed to record hours the plaintiffs spent travelling between job sites and performing necessary preparatory activities.

The plaintiffs filed this lawsuit in March 2014. They allege five causes of action: a claim for failure to pay for all hours worked at the agreed hourly pay rate in violation of the Illinois Wage Payment and Collection Act, 820 ILCS 115/1 et seq. (Count I); a claim for failure to pay overtime wages in violation of the Illinois Minimum Wage Law, 820 ILCS 105/1 et seq. (Count II); a claim for failure to pay Dones the straight and overtime wages he is due in violation of the Maryland Wage Payment and Collection Law, Md. Code Ann., Labor & Employment § 3-501 et seq. (Count III); a claim for failure to pay Dones overtime wages in violation of the Maryland Wage and Hour Law, Md. Code Ann., Labor & Employment § 3-401 et seq. (Count IV); and a claim for failure to pay overtime wages in violation of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (Count V). They also assert they should be allowed to file a collective action in Count V under 29 U.S.C. § 216(b) and a class action in Counts I through IV under Federal Rule of Civil Procedure 23 on behalf of those similarly situated to them.

Utilimap believes this dispute is subject to mandatory arbitration based on an arbitration agreement the plaintiffs signed when they first started working for Utilimap. Utilimap's employee handbook describes its arbitration policy generally:

Arbitration Policy
The Company has adopted an arbitration policy to resolve all employment disputes between employees and the Company. The Company believes that arbitration provides a fair, confidential and prompt way to resolve any differences that may arise between an employee and it. A complete copy of this policy will be provided to all employees with this handbook for their review and signature.

2010 Employee Handbook 43. Attached to the employee handbook as Exhibit B2[2] is a more detailed description of the policy that includes the following relevant terms:

In consideration of your continued and/or initial employment with Utilimap Corporation, if an employment dispute arises related to your employment with Utilimap Corporation, the Company requests that you agree to submit any such dispute arising out of your employment... (including, but not limited to... any claims, demands or actions based upon any claim for wages, salary or commissions claimed to be due...) exclusively to binding arbitration under the Federal Arbitration Act, 9 U.S.C., Section 1.... Arbitration shall be the exclusive means of resolving any dispute arising out of your employment or termination from employment by Utilimap Corporation, and no other action can be brought by you in any court or any other forum.
By simply accepting or continuing employment with Utilimap Corporation and your signature hereafter, you automatically agree that arbitration is the exclusive remedy for all disputes arising out of or related to your employment with Utilimap Corporation and you agree to waive all rights to a civil court action regarding your employment and the termination of your employment with Utilimap Corporation. There under, only an arbitrator, and not a judge nor a jury, will decide your dispute. The arbitrator also will decide all disputes related to this arbitration agreement.
* * *
I acknowledge that I have read and understand the above arbitration policy and that I voluntarily agree to submit to final and binding arbitration any and all claims and disputes that are related in any way to my employment... with Utilimap Corporation including but not limited to those set out above. I understand that final and binding arbitration will be the sole and exclusive remedy for any such claim against Utilimap Corporation, and each of its employees, officers, directors or agents, parents, subsidiaries, affiliates and successor companies and that by agreeing to use arbitration both I and Utilimap Corporation agree to forego any right we each may have had to a jury trial on issues covered by the arbitration policy. Any judicial review of the arbitrator's decision will be only to the extent allowed by the Federal Arbitration Act and/or related to the enforcement of the arbitrator's award. I further acknowledge that this arbitration agreement constitutes the entire agreement between me and Utilimap Corporation and may not be modified or rescinded except in writing signed by both me and Utilimap Corporation.

2010 Employee Handbook, Ex. B2, 50-51. Below this is a space for an employee to sign. Martinez signed a copy of Exhibit B2 on August 20, 2010, and Dones signed on February 15, 2011, presumably around the respective times they each began working for Utilimap.

The plaintiffs argue the arbitration agreement is unenforceable because it is illusory in that Utilimap can unilaterally modify its employee handbook to escape its obligation to arbitrate. It further argues that Utilimap has waived any right it may have to demand arbitration by waiting until a year after this action was filed, and participating in this litigation until then, to invoke the arbitration clause.

II. Analysis

All parties agree that the arbitration agreement in this case is covered by the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16. The FAA is a "congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary. The effect of the section is to create a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act." Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983); accord Perry v. Thomas, 482 U.S. 483, 488 (1987). The FAA provides that "[a] written provision in... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction... shall be valid, irrevocable, and enforceable...." 9 U.S.C. § 2; see Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443-44 (2006); Matthews v. Rollins Hudig Hall Co., 72 F.3d 50, 53 (7th Cir. 1995). "[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability." Moses H. Cone, 460 U.S. at 24-25; accord County of McHenry v. Insurance Co. of the West, 438 F.3d 813, 823 (7th Cir. 2006). Nevertheless, the Court must remember that the intentions of the parties in entering an arbitration ...

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