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Manor v. Copart, Inc.

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

October 24, 2017

SARA MANOR, Plaintiff,


          Robert M. Dow, Jr. United States District Judge.

         Before the Court is Defendants' motion to compel arbitration and stay proceedings [14]. For the reasons set forth below, the Court grants Defendants' motion [14], compelling arbitration and staying this litigation in the interim. The parties are instructed to file a joint status report within seven days after the arbitrator issues a final decision, after which time the Court will set this case for a further status hearing.

         I. Background

         Plaintiff Sara Manor (“Plaintiff”) filed suit against Defendants Copart, Inc. and Copart of Connecticut, Inc. (“Defendants”) in Cook County Circuit Court, alleging that Defendants' decision to terminate her violated the Illinois Human Rights Act, Title VII of the Civil Rights Act of 1964 (“Title VII”), the Americans with Disabilities Act (“ADA”), and the Illinois Genetic Information Privacy Act. See [1-2] at 7 (first amended complaint). Footnote 1 of Plaintiff's first amended complaint explains that Plaintiff is unsure whether Copart Inc. or Copart of Connecticut Inc. is her former employer, and therefore she names both entities as Defendants. Id. at 7, n.1.

         Defendants removed the action to federal court, see [1], and answered Plaintiff's complaint, see [13]. The answer did not mention any arbitration agreement. A day later, Defendants filed an amended answer, which purported to reserve Defendants' “right to compel arbitration pursuant to the parties' binding arbitration agreement.” [14] at 2. A few days after that, Defendants filed a motion to compel arbitration [15].

         According to Defendants' motion to compel, Plaintiff was offered employment with Copart of Connecticut, Inc. in January 2014. [16] at 2. At that time, Copart of Connecticut, Inc.'s parent company, Copart, Inc., provided Plaintiff with a copy of the Copart Employee Handbook (“Handbook”), which contained a description of Defendants' Alternative Dispute Resolution Program (“DRPA”) and an acknowledgement form for Plaintiff's signature. See [16-1] at 3, ¶¶ 5-6. Defendants attach what they purport to be the electronically signed acknowledgement form, in which Plaintiff agreed to “be governed by the . . . Handbook.” [16-2] at 2-3. The acknowledgment form is also signed by Rory S. Seidens, the Vice President of Human Resources for Copart, Inc. Id.

         The DRPA included at the back of the Handbook states that Plaintiff “acknowledge[s] that, unless otherwise stated herein, any disputes or claims arising out of [her] employment or the termination of [her] employment shall only be resolved by an arbitrator and that the decision of the arbitrator is final and binding.” [16] at 3. More specifically, the DRPA states that it applies “without limitation, to disputes regarding the employment relationship . . . termination . . . and claims arising under the . . . Civil Rights Act of 1964, Americans with Disabilities Act, Family [and] Medical Leave Act, . . . Genetic Information Non-Discrimination Act, and state statutes, if any addressing the same or similar subject matters, and all other state statutory and common law claims.” Id.

         Plaintiff opposes arbitration.

         II. Legal Standard

         Pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (“Act”), “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, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. “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'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24 (1983); see also Int'l Ins. Agency Servs., LLC v. Revios Reinsurance U.S., Inc., 2007 WL 951943, at *2 (N.D. Ill. Mar. 27, 2007) (“Arbitrability is governed by federal law.”). Section 2 of the Act is “a congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary.” Moses H. Cone, 460 U.S. at 24. Thus, “[w]hen the parties have agreed to arbitrate some matters pursuant to an arbitration clause, ‘the law's permissive policies in respect to arbitration counsel that any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration.'” Local 73, Serv. Employees Int'l Union, AFL-CIO v. UChicago Argonne, LLC, No. 10 C 2903, 2011 WL 635862, at *3 (N.D. Ill. Feb. 11, 2011) (quoting Granite Rock Co. v. Int'l Bhd. Of Teamsters, 561 U.S. 287, 298 (2010)). “[A]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” Int'l Bhd. of Elec. Workers, Local 21 v. Illinois Bell Tel. Co., 491 F.3d 685, 687-88 (7th Cir. 2007) (internal quotation marks and citation omitted).

         The “gateway” question of “whether the parties are bound by a given arbitration clause” raises a substantive “‘question of arbitrability' for a court to decide.” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84 (2002). This includes the question of whether an arbitration contract binds parties who did not sign the agreement. See id.; First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943-46 (1995). By contrast, there is a “presumption . . . that the arbitrator should decide” procedural questions of arbitrability, including resolving “‘allegation[s] of waiver, delay, or a like defense to arbitrability.'” Howsam, 537 U.S. at 84 (quoting Moses H. Cone, 460 U.S. at 24-25); see also id. (“whether prerequisites such as time limits, notice, laches, estoppel, and other conditions precedent to an obligation to arbitrate have been met, are for the arbitrators to decide” (quoting Revised Uniform Arbitration Act of 2000 (“RUAA”) § 6, comment 2)); Zurich American Ins. Co. v. Watts Industries, Inc., 415 F.Supp.2d 887, 890 (N.D. Ill. 2006) (explaining that “procedural” “gateway issues of arbitrability, ” such as “waiver and estoppel, ” “are to be referred to an arbitrator for consideration” (citing Howsam, 527 U.S. at 84)).

         III. Analysis

         Under the Act, arbitration may be compelled if the following three elements are shown: a written agreement to arbitrate, a dispute within the scope of the arbitration agreement, and a refusal to arbitrate. See 9 U.S.C. § 4; Kiefer Specialty Flooring, Inc. v. Tarkett, Inc., 174 F.3d 907, 909-10 (7th Cir. 1999). In this case, it is undisputed that these three elements are present: Plaintiff, as a condition of employment, signed a written agreement to abide by the Handbook, including its arbitration clause. The arbitration agreement covers “any disputes or claims arising out of [Plaintiff's] employment or the termination of [her] employment, ” including specifically the Title VII, ADA, Genetic Information Non-Discrimination Act, and related state-law claims alleged in Plaintiff's amended complaint. [16] at 3. And Plaintiff has refused to arbitrate.

         Nonetheless, Plaintiff opposes arbitration on three grounds. First, Plaintiff argues that Defendants waived the right to arbitrate by waiting too long to invoke the arbitration agreement. Second, Plaintiff argues that Defendants are equitably estopped from enforcing the arbitration agreement because they failed to timely disclose the arbitration ...

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