STANLEY R. CHESLER, District Judge.
This matter comes before the Court on the motion filed by Defendants Virbac Corporation ("Virbac") and Edward Recco ("Recco") (collectively, "Defendants") to dismiss the Complaint, and to compel arbitration. Plaintiff Robert LaFurno ("Plaintiff" or "LaFurno") opposed the motion. For the reasons that follow, Defendants' motion will be denied.
This case concerns Plaintiff's allegations of employment discrimination against his former employer, Defendant Virbac Corporation, and his former supervisor, Defendant Recco. According to the Complaint, Plaintiff began working for Virbac as a sales manager in November of 2010. Soon thereafter, in February of 2011, Plaintiff became ill with pneumonia and Lyme's Disease, and was hospitalized. Plaintiff "informed Virbac of his disabilities," and was approved for three weeks of disability leave. (Compl., ¶¶ 25-26.) During this time, Recco was hired as a new regional manager, and Plaintiff's direct supervisor. Plaintiff alleges that Recco called him at home regarding work issues, and was hostile toward Plaintiff because of his disabilities. Id. ¶¶ 30-31. When Plaintiff returned to work in mid-March, 2011, Recco continued to harass Plaintiff because of his disabilities, or "perceived disabilities," sexually harassed Plaintiff, and harassed him on the basis of his family status. Plaintiff avers that he was subjected to less favorable employment conditions because of his disabilities or perceived disabilities, and that he complained about this treatment to Virbac's Human Resources Manager, Kelli Nusbaumer ("Nusbaumer"). Id. ¶ 47. No action was taken in response to Plaintiff's complaints. Plaintiff also sought to discuss reasonable accommodations for his medical condition with Ms. Nusbaumer, but Virbac took no action in response to these requests, and never discussed the issue with Plaintiff. Id. ¶ 54. Plaintiff further alleges that Recco demanded (for personal use) free samples of Virbac's products, which Plaintiff had received for distribution to his customers. When Plaintiff refused Recco's demand, Recco retaliated against Plaintiff. Plaintiff also denied Recco's request to give a certain customer extra points, which would have entitled the customer to extra free samples. Finally, Plaintiff refused to distribute certain expired samples to his customers.
On or about May 20, 2011, Plaintiff was suspended by Virbac for "alleged poor work performance," and then terminated. Id. ¶ 68. Plaintiff asserts that the reasons given by Virbac for his termination were pretextual, and that he was actually terminated in retaliation for his complaints of discrimination, his requests for reasonable medical accommodation, and his objections related to free samples of Virbac's products. On June 2, 2011, Plaintiff, through his attorney, sent a letter to Virbac's Human Resources Manager, indicating his belief that he was discriminated against in his employment, and his intent to commence legal action to correct Defendants' unlawful actions. (Daly Cert., Ex. C; Halsband Cert., ¶ 4.) Defendants' then-counsel was forwarded a copy of the letter. On July 12, 2011, Plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"). (Halsband Cert., Ex. 1.) Plaintiff's counsel and Defendants' then-counsel engaged in settlement negotiations: Plaintiff's counsel made a settlement demand on July 18, 2011, and Defendants rejected the demand on July 25, 2011. Id. ¶ 5. On August 18, 2011, Plaintiff filed the within Complaint, raising claims under the New Jersey Law Against Discrimination ("NJLAD"), N.J.S.A. § 10:5-1 et seq., and the New Jersey Conscientious Employee Protection Act ("CEPA"), N.J.S.A. § 34:19-1 et seq. On August 29, 2011, the EEOC notified the Defendants of Plaintiff's charge of discrimination against them. (Daly Cert., Ex. D.) Thereafter, on September 26, 2011, Defendants attempted to elect arbitration by letter to the American Arbitration Association ("AAA"). Id. Ex. E. On November 11, 2011, Defendants filed the instant motion to dismiss and to compel arbitration, arguing that Plaintiff is bound to arbitrate the issues raised in the Complaint. Plaintiff opposed the motion.
The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., renders arbitration agreements enforceable to the same extent as other contracts. Seus v. Nuveen & Co., 146 F.3d 175, 178 (3d Cir. 1998). The FAA provides, in Section 2, that
"Federal law determines whether an issue governed by the FAA is referable to arbitration." Harris v. Green Tree Fin. Corp., 183 F.3d 173, 178 (3d Cir. 1999) (citing, in part, First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943, 131 L. Ed. 2d 985, 115 S.Ct. 1920 (1995) ("Arbitration is simply a matter of contract between the parties; it is a way to resolve those disputes — but only those disputes — that the parties have agreed to submit to arbitration.")). "Questions concerning the interpretation and construction of arbitration agreements are determined by reference to federal substantive law." Id. at 179 (citing Moses H. Cone Mem'l Hosp. v. Mercury Constr. Co., 460 U.S. 1, 25 n.32, 74 L. Ed. 2d 765, 103 S.Ct. 927 (1983)). In interpreting the validity and enforceability of arbitration agreements, courts may, pursuant to Section 2 of the FAA, apply state contract law. Id. Once a valid agreement to arbitrate is found, "the merits of the controversy are left for disposition to the arbitrator." Great Wester Mortgage Co. v. Peacock, 110 F.3d 222, 228 (3d Cir. 1997). If a party to a binding arbitration agreement is sued in federal court on a claim that the plaintiff agreed to arbitrate, that party is entitled to an order compelling arbitration of such claim. 9 U.S.C. § 4. Pending arbitration, the action in federal court would ordinarily be stayed. 9 U.S.C. § 3. However, "if all the claims involved in an action are arbitrable, a court may dismiss the action instead of staying it." Seus, 146 F.3d at 179.
In this case, Defendants argue that Plaintiff is bound to arbitrate the discrimination claims raised in the Complaint, pursuant to the Agreement to Arbitrate Employment Disputes ("Arbitration Agreement" or "Agreement"), entered into by Virbac and Plaintiff on October 21, 2010.
(Daly Cert., Ex. B, Sch. A.) Defendants argue that, under the terms of the foregoing provisions, they timely elected to refer the Plaintiff's claims to arbitration because Defendants were first served with notice of Plaintiff's Complaint on September 12, 2011, and were notified of Plaintiff's choice not to mediate on September 23, 2011. Therefore, Defendants contend, their election to arbitrate on September 26, 2011 was timely made within fourteen days of the filing of the Complaint and the failure of mediation. Defendants further argue that, even assuming arguendo their failure to timely elect arbitration of Plaintiff's discrimination claims, such failure does not constitute a waiver of Defendants' right to arbitrate under the Agreement.
The parties' Agreement provides, in Section 3(B), that the party who receives written notice of a Significant Dispute or Claim (defined as a dispute that "would otherwise be resolved by a legal proceeding") shall, within fourteen days of the receipt of same, notify the claimant in writing whether the party elects to submit the dispute to arbitration. (Daly Cert., Ex. B, Sch. A.) The notice should describe the circumstances leading to the dispute, and the type of remedy sought. Id. Defendants argue that, under the terms of the foregoing provisions, the June 2, 2011 letter from Plaintiff's counsel to Defendants' then-counsel did not constitute notice of a Significant Dispute or Claim under the Agreement, because the letter sought to negotiate a potential severance agreement and release for the Plaintiff, and did "not in any way constitute a legal proceeding." This argument is unpersuasive. The notion that only the formal initiation of a lawsuit constitutes notice of a "Significant Dispute or Claim" is contradicted by the plain language of the Agreement, which only requires written notice of a dispute which would otherwise be resolved by a legal proceeding. Indeed, the Agreement provides that the claimant may commence a lawsuit if arbitration is not elected within fourteen days of the receipt of notice; thus, it contemplates that notice is something other than the initiation of a lawsuit. (Daly Cert., Ex. B, Sch. A, Section 3(B).) Moreover, the June 2, 2011 letter clearly notified Defendants of Plaintiff's belief that Defendants discriminated against him because of his disability and familial status, and retaliated against him, in violation of federal and state civil rights laws, and that Plaintiff "intend[s] to commence legal action to correct these unlawful actions." (Daly Cert., Ex. C.) Thus, the Court finds that Defendants had received notice of a Significant Dispute or Claim for purposes of Section 3(B) of the Agreement on or about June 2, 2011.
Even if the Court concluded that the June 2, 2011 letter did not contain sufficient detail regarding the circumstances of Plaintiff's discrimination claims, or the relief sought, as required by Section 3(B), this detail was amply provided in the EEOC Charge forwarded to Defendants' counsel on August 29, 2011. (Daly Cert., Ex. D.) Defendants raise the somewhat dubious argument that the EEOC Charge did not put them on notice of a Significant Dispute or Claim, because the Agreement "does not alter any of the substantive rights" of the parties under the law, "including any statutory right to file a charge with an administrative agency for investigative purposes or other action by such agency." (Daly Cert., Ex. B, Sch. A, Section 2; Defs.' Br. at 16.) Defendants imply that, because Plaintiff's right to pursue administrative relief is unaffected by the Agreement, therefore any charge filed with an administrative agency cannot also constitute notice of a Significant Dispute or Claim. This leap finds no support in the Agreement. Section 2 of the Agreement merely contemplates that, although a claimant may be required to arbitrate a Significant Dispute or Claim at the election of the responding party, the claimant's right to initiate an administrative investigation or other agency action with respect to the Significant Dispute or Claim is unaffected. In other words, the EEOC may conduct an investigation of a Significant Dispute or Claim and render a recommendation, but if the responding party timely elects to arbitrate, it is the arbitrator who will finally resolve the dispute. Hence, the end of Section 2 provides that, if either party elects to arbitrate a dispute, the Agreement "simply transfers final resolution of my right or the Company's right to seek relief from either a judge or a jury to an impartial arbitrator . . ." (Daly Cert., Ex. B, Sch. A.) Nothing in this Section modifies the subsequent provisions regarding the procedure to elect arbitration.
Defendants also argue that the EEOC Charge did not constitute notice of a Significant Dispute or Claim because arbitration was mandated by the Agreement only if employment disputes could not be resolved by alternative means. Defendants quote paragraph 12.1 of the Employment Agreement, which provides:
All employment disputes shall first be discussed with Human Resources and, ultimately, if necessary, with the President of the Company. If the dispute cannot be resolved internally, the parties may mutually agree to submit the dispute to non-binding mediation. To the extent that mediation is not selected or fails to resolve the matter, the parties mutually agree to final and binding arbitration pursuant to the terms of the "Agreement to Arbitrate Employment Disputes" . . . . which is incorporated by reference herein, in order to efficiently and justly resolve any employment related disputes that may arise between them.
(Daly Cert., Ex. B.) Defendants claim that, in light of the foregoing provision, they could not have entered the fourteen-day arbitration election period until September 23, 2011, when Plaintiff allegedly declined to participate in the EEOC mediation program.
The Arbitration Agreement provides, in Section 3, that, if the party receiving notice fails to elect arbitration within fourteen days, the claimant may proceed to process his or her claim in any lawful manner, "including the initiation of a lawsuit." Id. In spite of the clear terms of this provision, Defendants argue that, even if they failed to elect arbitration within fourteen days of the receipt of notice from Plaintiff, this failure did not operate to waive their right to arbitrate the claims raised in Plaintiff's Complaint. In support of this argument, they cite paragraph 17.1 of the Employment Agreement, which provides that "[n]o delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right." (Daly Cert., Ex. B.) The same paragraph provides that no waiver by Virbac shall be effective unless it is in writing, and signed by the Company. Id. Thus, Defendants assert, any delay in their election to arbitrate Plaintiff's claims could not have constituted a waiver of their right to opt for arbitration. Defendants then cite numerous cases regarding the rare circumstances in which a court will find that a party's litigation conduct constitutes a waiver of its right to arbitrate. See, e.g., Opalinski v. Robert Half Int'l Inc., 2011 U.S. Dist. LEXIS 115534, at *15-16 (D.N.J. Oct. 6, 2011) (granting the defendants' motion to compel arbitration, holding that defendants' litigation conduct did not constitute a waiver of the right to arbitrate, pursuant to the factors set forth in Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912 (3d Cir. 1992)). However, none of these cases are analogous to the case at bar. Here, the Court need not apply the Hoxworth factors to determine whether litigation conduct constitutes a waiver of the right to arbitrate, because the Agreement between the parties explicitly provides that an election to arbitrate must be made within fourteen days, or else the claimant may proceed to file suit. See Nino v. Jewelry Exch., Inc., 609 F.3d 191, 209 (3d Cir. 2010) ("[T]he waiver determination must be based on the circumstances and context of the particular case.") (internal citation omitted). "It is well settled that where a contract provides that a demand for arbitration must be filed within a stated time and the party desiring arbitration permits the agreed period to pass without making demand, he waives his right to arbitration." Brick Twp. Mun. Utilities Auth. v. Diversified R.B. & T. Constr. Co., Inc., 171 N.J.Super. 397, 402-403 (N.J. Sup. Ct. App. Div. 1979) (internal citations omitted). Defendants assert that paragraph 17.1 of the Employment Agreement somehow negates the conditional language of the Arbitration Agreement, by requiring an explicit, written waiver of the right to arbitrate. The Court rejects this interpretation. The Arbitration Agreement creates only a limited right to arbitrate — one that is triggered by notice of a claim that would otherwise be resolved by a legal proceeding, and expires after the passage of fourteen days. Id. Paragraph 17.1 of the Employment Agreement only requires that waiver of this limited right would have to be explicit, and in writing; it does not expand the right. Moreover, the Court is not inclined to construe the Agreements in a manner that would render meaningless the limitations created by the procedures set forth in the Arbitration Agreement. See Iwanowa v. Ford Motor Co., 67 F.Supp.2d 424, 458 (D.N.J. 1999) ("It is a cardinal principle of construction that courts shall interpret contracts . . . so as to give meaning to each provision, rather than rendering some provisions, or portions thereof, superfluous.") (citing Sullivan v. Kidd, 254 U.S. 433, 439, 65 L. Ed. 344, 41 S.Ct. 158 (1921)). The Court concludes that the parties' own Agreement limits the contractual right to arbitrate to election within fourteen days' of receiving notice of the claimant's dispute. Here, such notice was provided on June 2, 2011, or, at the latest, on August 29, 2011. Because Defendants did not elect to arbitrate the dispute until September 26, 2011, more than fourteen days after the receipt of notice, Defendants waived their right to arbitrate Plaintiff's employment discrimination claims. Accordingly, the Court will deny Defendants' motion to dismiss and to compel arbitration of the claims raised in Plaintiff's Complaint.
For the foregoing reasons, Defendants' motion to dismiss the Complaint and to compel arbitration shall be denied. An appropriate form of Order will be filed together with this Opinion.
