Opinion
2:21-cv-1144-NR
08-23-2022
CENTURY SUPPORT SERVICES, LLC, Plaintiff, v. START NEW SETTLEMENT, LLC, d/b/a START NEW FINANCIAL, LEONARD BYERS II, KAYLA MARINOS, BRITTANY PALATAS, and EMILY SEVER, Defendants.
ORDER
J. NICHOLAS RANJAN, UNITED STATES DISTRICT JUDGE
Presently before the Court is a Motion to Compel Arbitration and Stay Litigation filed by Defendants Kayla Marinos and Brittany Palatas. ECF 16. After careful consideration, the Court grants the motion to compel arbitration, and intends to stay all other claims against the remaining Defendants pending the outcome of the arbitration.
As to the motion to compel, the Court finds that the broad language of the arbitration agreements included in the General Release and Separation Agreements cover the claims here. See ECF 24-1, ¶ 19 (“[Plaintiff and Defendants] agree any claim or dispute between them . . . whether related to this Agreement or otherwise, and any claim or dispute related to this Agreement ... shall be resolved by the American Arbitration Association”); ECF 24-2, ¶ 19 (same). “This language is strikingly similar if not identical, to numerous arbitration clauses that have been found valid under Pennsylvania law.” Sorathia v. Fidato Partners, LLC, 483 F.Supp.3d 266, 271 (E.D. Pa. 2020) (collecting cases). Because each of Century Support's claims are rooted in the alleged misappropriation of its confidential systems, and the Separation Agreements directed Ms. Marinos and Ms. Palatas to maintain any proprietary and confidential information and incorporated the terms of an Employee Proprietary Information Inventions Assignment Agreement, the claims in this case against those Defendants are well within the scope of the parties' arbitration agreements.
These letter agreements, which were drafted by Plaintiff Century Support Services, LLC on its letterhead, were supported by adequate consideration in the form of separation pay for both Ms. Marinos and Ms. Palatas, and additional benefits for Ms. Palatas. See ECF 24-1, ¶ 6(a); ECF 24-2. ¶ 6(a). And given that Century Support drafted the Separation Agreements and signed them, it intended to be bound by the arbitration agreements. See Jeffress v. Ocwen Fin. Corp., No. 15-6330, 2016 WL 3014885, at *3 (E.D. Pa. May 26, 2016) (holding that the defendant “manifested its intent to be bound by the Agreement's terms by drafting it on its letter head and requesting [the plaintiff] execute it prior to her employment”).
The Court can consider these agreements although they are not attached to the Amended Complaint because Century Support acknowledges that it entered into these agreements (ECF 13, ¶¶ 35, 43) and their existence, authenticity or enforceability is not in dispute. See Asberry-Jones v. Wells Fargo Bank, Nat'l Ass'n, No. 19-83, 2019 WL 2077731, at *3 (E.D. Pa. May 10, 2019) (considering arbitration agreement even though it was not mentioned in the complaint because the “purposes of the [FAA] would be frustrated if plaintiffs could avoid having their claims quickly compelled to arbitration simply by failing to mention the existence of clearly applicable arbitration agreements in their complaints” (cleaned up)).
The Court also finds that these arbitration clauses do not conflict with the language of the Proprietary Information Agreements, which are silent on arbitration. The Proprietary Information Agreements merely contain a consent-to-jurisdiction clause that can be read in harmony with the arbitration agreements in the later-executed Separation Agreements. See., e.g., City of Kenner v. Certain Underwriters at Lloyd's, London, No. 21-2064, 2022 WL 307295, at * (E.D. La. Feb. 2, 2022) (“[T]he clauses could be reconciled by interpreting the jurisdictional clause consistent with the arbitration clause to provide a judicial forum for disputes concerning the enforcement of arbitration awards.” (citation omitted)); Montana Assoc. of Counties Prop. & Cas. Tr. v. Certain Underwriters at Lloyd's, No. 19-196, 2020 WL 6202673, at *3 (D. Mont. Oct. 22, 2020) (“A more reasonable interpretation ... is that the service-of-suit clause provides a judicial avenue to compel arbitration or enforce an arbitration award.”).
Finally, given the apparent relatedness of the claims against Ms. Marianos and Ms. Palatas and those against the other Defendants, a stay of the remaining litigation is appropriate. That is, Century Support is pursuing the same theories of liability and seeking the same form of relief against all Defendants in this case. ECF 13, ¶¶ 81-96, 118-122, 128-132; ECF 21, p. 13. And the same core factual issues underlie the claims against the other Defendants who are not subject to arbitration. “Accordingly, in light of the significant overlap among the issues to be decided in this action and those likely to be decided during arbitration, the Court concludes that a stay is appropriate.” Pike Co., Inc. v. Tri-Krete Ltd., 349 F.Supp.3d 265, 281 (W.D.N.Y. 2018) (collecting cases); see also Wiser v. Archer DanielsMidland Co., No. 09-91E, 2009 WL 3448642, at *3 (W.D. Pa. Oct. 26, 2009) (Cohill, J.) (“Upon review of the allegations contained in Plaintiff's Amended Complaint, we find that the factual bases underlying the breach of contract claim and the tort claims are interrelated and therefore, it is in the best interests of all involved.to stay the entire proceedings pending completion of [arbitration]”); Neal v. AstaFunding, Inc., No. 13-3438, 2014 WL 131770, at *5 (D.N.J. Jan. 6, 2014) (staying litigation where the “resolution of arbitration will involve issues overlapping and bearing upon disputes raised in this action”).
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For these reasons, this 23rd day of August, 2022, it is hereby ORDERED that the Motion to Compel Arbitration and Stay Litigation filed by Ms. Marinos and Ms. Palatas (ECF 16) is GRANTED. Century Support is hereby COMPELLED to submit its claims in the Amended Complaint against Ms. Marinos and Ms. Palatas to arbitration.
IT IS FURTHER ORDERED that the parties must confer about whether the remaining Defendants will voluntarily submit to a consolidated arbitration, for the sake of efficiency. The parties must submit a joint status report regarding the same by no later than August 30, 2022; if there is no agreement, then the Court will enter the stay at that time.