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Moreno v. Progistics Distribution, Inc.

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

August 2, 2018

Karina Moreno, on behalf of herself and other plaintiffs similarly situated, Plaintiff,
Progistics Distribution, Inc., Defendant.



         Plaintiff Karina Moreno (“Moreno) filed a collective action lawsuit against defendant Progistics Distribution, Inc. (“Progistics”) alleging gender-based pay discrimination and failure to pay overtime wages in violation of state and federal wage laws. R. 1. Currently before the Court is Progistics's motion to compel arbitration and stay proceedings. R. 19. For the following reasons, the Court grants Progistics's motion.


         Progistics employed Moreno, an Illinois resident, as a semi-truck driver delivering goods in Illinois from November 2016 until she resigned in March 2018. R. 1 at 3-4; R. 19-1 ¶ 3. On November 14, 2016, Moreno signed a document titled “Employee Acknowledgment of Receipt” (“Acknowledgment”). R. 19-1 at 8. The first paragraph of the Acknowledgement states:

This is to acknowledge that I have received a copy of the Employee Handbook. This Handbook sets forth the terms and conditions of my employment as well as the rights, duties, responsibilities, and obligations of my employment with Progistics Distribution Inc. I understand and agree that it is my responsibility to read and familiarize myself with all of the provisions of the Handbook. I further understand and agree that I am bound by the provisions of the Handbook, particularly the provision relating to the mandatory, binding arbitration of any employment related dispute. I understand that by agreeing to arbitration, I am waiving the right to a trial by jury of the matters covered by the ‘Arbitration' provisions of the Handbook.

R. 19-1 at 8.

         Progistics's Vice President of Human Resources Lisa Smith explains that the Acknowledgment Moreno signed was “located at the end of” Progistics's October 2015 Employee Handbook for Illinois (“2015 Illinois Handbook”). R. 19-1 ¶ 5. Section 1.5 of the 2015 Illinois Handbook is titled “Arbitration Policy.” R. 22-3 at 6. It states:

In consideration of your employment with Progistics Distribution, its promise to arbitrate all employment-related disputes, and your receipt of the compensation, pay raises, and other benefits paid to you by the company, at present and in the future, you agree that any and all controversies, claims, or disputes with anyone (including the company and any employee, officer, director, or benefit plan of the company, in their capacity as such or otherwise), whether brought on an individual, group, or class basis, arising out of, relating to, or resulting from your employment with Progistics Distribution, or the termination of your employment with the company, including any breach of this agreement, shall be subject to binding arbitration under the terms and conditions set forth in the at-will employment, confidential information, invention assignment, and arbitration agreement between you and Progistics Distribution (or such other confidentiality agreement between you and the company, each the “confidentiality agreement”). In the event the confidentiality agreement between you and the company does not contain an arbitration provision, then you nevertheless agree to arbitrate any and all claims set forth above in a neutral, mutually agreeable forum according to the applicable minimum standards for arbitration.

Id. Moreno did not enter into any separate confidentiality agreement with Progistics regarding arbitration. R. 19-1 ¶ 5.

         The 2015 Illinois Handbook also provides the following disclaimer in Section 1.2:

The Company reserves the right to modify, rescind, delete, or add to the provisions of this Handbook from time to time in its sole and absolute discretion. This Employee Handbook is not a binding contract between the Company and its employees, nor is it intended to alter the at-will employment relationship between the Company and its employees. The Company reserves the right to interpret the policies in this Handbook and to deviate from them when, in its discretion, it determines it is appropriate.

R. 22-3 at 5.

         In an affidavit filed in support of her opposition to arbitration, Moreno disputes receiving a copy of the 2015 Illinois Handbook. R. 22-1 ¶¶ 5-6. Another Progistics employee, Christian Moreno, also filed an affidavit in support of Moreno's opposition stating that he was told by general manager Ralph Scumacci that there was no employee handbook for Illinois. R. 22-4 ¶ 2. Christian Moreno states that he was given a May 2016 Handbook instead for “California locations only” (“2016 California Handbook”) that did not contain an arbitration policy. R. 22-4 ¶ 2; R. 22-5.

         Smith responds to these assertions in her own affidavit explaining that the 2015 Illinois Handbook “was in effect at the location where Plaintiff and Christian Moreno were employed, ” and that both of them would have received it when they began their employment in November 2015. R. 24-1 ¶¶ 4-5; R. 19-1 ¶¶ 4-5. Smith further states that “Site Managers such as Mr. Scumacci are typically not able to advise Progistics's employees concerning the applicability of employee handbooks” because they “are employed by a different entity and, as such, their employment is subject to a different employee handbook.” R. 24-1 ¶ 4. And Smith explains that “[a]fter Progistics entered into a relationship with Avitus Group, which was after the issuance of the October 1, 2015 Employee Handbook and after Plaintiff began her employment, any employee handbooks issued in conjunction with Avitus Group contained an acknowledgment of receipt form that was different from” the Acknowledgment signed by Moreno. Id. ¶ 6.

         On March 2, 2018, Progistics distributed by email to Moreno and other employees an updated Employee Handbook, which does not specify that it applies to any particular state (“2018 Handbook”). R. 22-1 ¶¶ 2-3. The 2018 Handbook states that “[a]ll previously issued Employee Handbooks and any inconsistent policy statements or memoranda are superseded.” Id. ¶ 3. The 2018 Handbook does not contain an arbitration policy section or otherwise address arbitration. Smith explains that “[a]t the time of the issuance of the 2018 Progistics Distribution Employee Handbook on March 2, 2018, Progistics no longer included reference to its arbitration program in its employee handbooks. However, Progistics maintained its pre-existing arbitration program with its employees and continued to enter into arbitration agreements with its employees separate from that handbook.” R. 24-1 ¶ 2. Moreno resigned two weeks after the 2018 Handbook was issued.

         Moreno filed this lawsuit on March 13, 2018. R. 1. Progistics's counsel subsequently provided Moreno's counsel with the Acknowledgement and 2015 Illinois Handbook and requested that Moreno stipulate to arbitration. R. 19-2 ¶¶ 3-8. Progistics offered to submit the dispute to the American Arbitration Association (“AAA”) under the AAA's Employment Arbitration Rules and offered to pay filing and other arbitration fees. Id. ¶ 12. After Moreno's counsel declined to stipulate to arbitration (id. ¶ 11), Progistics moved to compel arbitration under the Federal Arbitration Act (“FAA”), 9 U.S.C. § 2 (2012). R. 19.


         Motions to compel arbitration are reviewed under a summary judgment standard. Tinder v. Pinkerton Sec., 305 F.3d 728, 735 (7th Cir. 2002). The “opposing party must demonstrate that a genuine issue of material fact warranting a trial exists.” Id. “[T]he evidence of the non-movant ...

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