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Hormoz v. 1-800-Pack-Rat, LLC

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

January 24, 2018

1-800-PACK-RAT, LLC, Defendant.



         Plaintiff Jourik Hormoz filed a complaint against defendant 1-800-Pack-Rat alleging violations of the Surface Transportation Assistance Act (“STAA”), 49 U.S.C. § 31100 et seq., the Illinois Whistleblower Act, 740 Ill. Comp. Stat. § 174/1, et seq., and wrongful termination. Defendant has moved to transfer the case to the District of Maryland pursuant to 28 U.S.C. § 1404. For the reasons described below, defendant's motion is denied.


         Plaintiff worked for defendant as a truck driver, allegedly crossing state lines frequently, from March of 2015 to December 3, 2015, when he was fired. On March 9, 2015, plaintiff reviewed and submitted a number of documents through Paycom, defendant's “online onboarding and payroll system.” Doc. 20, Ex. A. One such document was defendant's Alternative Dispute Resolution Policy (“ADR Policy”), which plaintiff acknowledged receiving and signed electronically. Id. Plaintiff alleges that during his employment he routinely worked more hours than the Department of Transportation allows and that he was directed, but refused, to falsify his driver logs to conceal the violations. Plaintiff claims he was fired for refusing to falsify records and because defendant believed that plaintiff planned to report defendant for violations of safety regulations. These claims form the basis of the instant suit.


         Motions to transfer venue are governed by 28 U.S.C. § 1404, which reads in pertinent part: “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district of division where it might have been brought or to any district of division to which the parties have consented.” Courts considering a motion to transfer would ordinarily “weigh the relevant factors and decide whether, on balance, a transfer would serve the convenience of the parties and witnesses and otherwise promote the interest of justice.” Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, 134 S.Ct. 568, 581 (2013) (internal quotations omitted). But the calculus changes when the parties agree to a valid forum-selection clause, “which represents the parties' agreement as to the most proper forum.” Id. (internal quotations omitted). In such circumstances, “a district court should ordinarily transfer the case to the forum specified in that clause.” Id. According to the Seventh Circuit:

Atlantic Marine clarified that the presence of a valid forum-selection clause requires district courts to adjust their usual § 1414(a) analysis [ ]. First, the plaintiff's choice of forum merits no weight. Second, and relatedly, a court evaluating a defendant's § 1404(a) motion to transfer based on a forum-selection clause should not consider arguments about the parties' private interests. . . . And because public-interest factors will rarely defeat a transfer to the contractually chosen forum, the practical result is that forum-selection clauses should control except in unusual cases.

In re Mathias, 867 F.3d 727, 731 (7th Cir. 2017) (internal quotations and alterations omitted).

         Additionally, “as the party defying the forum-selection clause, the plaintiff bears the burden of establishing that transfer to the forum for which the parties bargained is unwarranted.” Atlantic Marine, 134 S.Ct. at 581. Plaintiff claims to have met this burden because: (1) plaintiff is exempt from the Federal Arbitration Act, 9 U.S.C. § 1, et seq. (“FAA”); and (2) the forum-selection clause in the arbitration agreement is unenforceable. The court will address these claims in turn.

         I. FAA Exemption

         Plaintiff first argues that he is exempt from the FAA because he is a transportation worker, and the FAA provides that it does not “apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”[1] 9 U.S.C. § 1. According to plaintiff, he falls within this exception because he often crossed state lines while working for defendant. Defendant argues that plaintiff is not exempt because FAA exemption applies “to contracts of employment (collective bargaining agreements)” only, and that plaintiff was an at-will employee who did not have an employment contract with defendant.[2]Defendant is mistaken for at least two reasons.

         First, defendant cites no support for its argument that Section 1 of the FAA applies only to collective bargaining agreements, and the court knows of none. In fact, the Seventh Circuit and Illinois courts have found that transportation workers are exempt from the FAA regardless of whether they are parties to a collective bargaining agreement. See, e.g., Sherwood v. Marquette Transp. Co., LLC, 587 F.3d 841 (7th Cir. 2009) (Noting in dicta that, “[t]he Federal Arbitration Act does not apply because Sherwood was a seaman, and nothing in the Act shall apply to contracts of employment of seamen and some other workers.”); Atwood v. Rent-A-Ctr. E., Inc., 2016 WL 2766656 (S.D. Ill. May 13, 2016) (finding individual transportation worker who was not a party to a collective bargaining agreement was exempt from the FAA).

         Defendant faults plaintiff for citing cases that concern collective bargaining agreements to support his argument that transportation workers are exempt from the FAA. See Int'l Broth. of Teamsters Local Union No. 50 v. Kienstra Precast, LLC, 702 F.3d 954 (7th Cir. 2012); Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Cartage Co., 84 F.3d 988 (7th Cir. 1996). Those cases do indeed concern collective bargaining agreements, but nowhere in those opinions does the Seventh Circuit suggest that its holdings are limited to collective bargaining agreements, and this court sees no reason to so conclude.

         Second, even assuming plaintiff was an at-will employee, the ADR Policy that plaintiff signed electronically is a contract governing his employment with defendant. Because that employment was as a transportation worker, plaintiff is exempt from the FAA. Defendant argues for the first time in its reply brief that the ADR Policy should be enforced despite this exemption, urging the court to find that the ADR Policy is enforceable under the Illinois Uniform Arbitration Act, 710 ILCS 5/1, et seq., which provides no exemption for transportation workers. The court rejects this argument because defendant failed to raise it in its motion to dismiss, “and courts should normally refrain ...

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