Hall-Cloutier v. Sig Sauer, Inc.

2018 DNH 010

• Court: District Court, D. New Hampshire
• Decided: January 11, 2018
• Docket: 17-cv-491-LM
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Patricia Hall-Cloutier

v. Civil No. 17-cv-491-LM Opinion No. 2018 DNH 010 Sig Sauer, Inc.

O R D E R

Plaintiff Patricia Hall-Cloutier (“Hall”) brings suit

against her former employer, Sig Sauer, Inc. (“Sig Sauer”),

alleging that Sig Sauer wrongfully terminated her for requesting

leave under the Family Medical Leave Act (“FMLA”) and in

response to her reporting violations of federal law by other Sig

Sauer employees. Sig Sauer moves to compel Hall to arbitrate

the claims she has asserted in this action and requests that the

court stay the case pending arbitration. Hall objects.

STANDARD OF REVIEW

Both Hall and Sig Sauer rely on materials beyond those

attached to or referenced in Hall’s complaint. In those

circumstances, courts in the First Circuit employ the summary

judgment standard in resolving a motion to compel arbitration.

See, e.g., Landry v. Time Warner Cable, Inc., No. 16-cv-507-SM,

2017 WL 3431959, at *1 (D.N.H. Aug. 9, 2017) (citing cases).

Therefore, Sig Sauer must show “that there is no genuine dispute as to any material fact and [that it] is entitled to” the relief

it seeks. Fed. R. Civ. P. 56(a). In reviewing the record, the

court construes all facts and reasonable inferences in the light

most favorable to the nonmovant. Kelley v. Corr. Med. Servs.,

Inc., 707 F.3d 108, 115 (1st Cir. 2013).

BACKGROUND

On September 15, 2015, Sig Sauer hired Hall as its Director

of Import/Export Compliance. Over the next year-and-a-half,

Hall performed her job well, and received at least one

performance-based raise.

During her employment, Hall identified and reported

instances in which documentation regarding the export of Sig

Sauer weapons violated applicable United States laws regarding

export license applications, agreements, and regulations. The

last one of these instances occurred in June 2017.

On June 1, 2017, Hall discovered that someone within Sig

Sauer’s Sales Department had changed the identified recipient of

a shipment of controlled weapons, as identified by the National

Firearms Act. After she investigated the matter, she learned

that the Sales Department intentionally gave the freight

forwarder incorrect paperwork to conceal the actual recipient in

violation of state and federal law.

2 Shortly after discovering the Sales Department’s conduct,

Hall reported the violation to her supervisor, Mr. Shawver.

Shawver asked Hall several questions about the violation and

suggested that Sig Sauer would need to investigate the matter

further.

Shawver was out of the office on vacation for the few days

following his discussion with Hall. While Shawver was on

vacation, Hall asked the freight forwarder for more information

and stated that there would be an investigation regarding the

shipment in question.

On the morning of June 6, 2017, Shawver called Hall and

told her that he would be in the office later that afternoon.

During that phone call, the two discussed various issues

regarding Sig Sauer’s business, but Shawver did not mention the

recent violation Hall had reported. Hall also reminded Shawver

that she would be out of the office that afternoon to attend her

mother’s oncology appointment. Hall, who had taken personal and

vacation leave caring for her mother, had notified Sig Sauer in

April 2017 that she would need to take FMLA leave throughout

2017 to care for her mother.

Later on June 6, Hall received a call from a representative

in the Human Resources department asking her to come to the

representative’s office. When she arrived, she saw Shawver

standing next to the representative’s desk. Shawver informed

3 Hall that there had been a “reorganization,” that her position

had become “redundant,” and that Sig Sauer was “letting her go.”

A security manager escorted Hall from the building shortly

thereafter.

DISCUSSION

Following her termination, Hall brought this suit in New

Hampshire Superior Court, Rockingham County, alleging a

Whistleblower Claim under RSA 275-E, and claims for wrongful

termination and FMLA retaliation. Sig Sauer removed the case to

this court and now moves to compel Hall to arbitrate the claims

she asserts in this action. Sig Sauer also requests that the

court stay the matter pending arbitration.

In support, Sig Sauer asserts that before Hall’s employment

began, she signed a “Confidential Information, Non-Solicitation,

Invention Assignment and Arbitration Agreement” (the

“Agreement”). Sig Sauer notes that the Agreement contains a

provision addressing Hall’s employment with and termination from

Sig Sauer and a provision that provides all disputes “arising

out of, related to, or resulting from” the Agreement shall be

subject to arbitration. Hall argues that her claims in this

action are not subject to the arbitration clause in the

Agreement.

4 When “construing an arbitration clause, courts and

arbitrators must ‘give effect to the contractual rights and

expectations of the parties.’” Stolt–Nielsen S.A. v.

AnimalFeeds Int’l Corp., 559 U.S. 662, 682 (2010) (quoting Volt

Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior

Univ., 489 U.S. 468, 479 (1989)). Although there exists a

federal policy favoring arbitration, that policy “does not

totally displace ordinary rules of contract interpretation.”

Paul Revere Variable Annuity Ins. Co. v. Kirschhofer, 226 F.3d

15, 25 (1st Cir. 2000). Instead, “a court must ascertain

whether: ‘(i) there exists a written agreement to arbitrate,

(ii) the dispute falls within the scope of that arbitration

agreement, and (iii) the party seeking an arbitral forum has not

waived its right to arbitration.’” Gove v. Career Sys. Dev.

Corp., 689 F.3d 1, 4 (1st Cir. 2012) (quoting Combined Energies

v. CCI, Inc., 514 F.3d 168, 171 (1st Cir. 2008)).

The parties’ dispute centers around whether Hall’s claims

alleged in her complaint fall within the scope of the Agreement.

Sig Sauer argues that Hall’s claims center around her

termination, which is plainly addressed in the Agreement. Hall

disagrees, contending that the claims she asserts in this action

do not come with the arbitration clause’s scope.

5 I. Scope of the Arbitration Clause

In determining whether a party’s claims fall within the

scope of an arbitration clause, the court focuses on the factual

allegations underlying the claims in the complaint. Dialysis

Access Ctr., LLC v. RMS Lifeline, Inc., 638 F.3d 367, 378 (1st

Cir. 2011). “In carrying out this endeavor, due regard must be

given to the federal policy favoring arbitration, and

ambiguities as to the scope of the arbitration clause itself

resolved in favor of arbitration.” Id. at 376 (citing cases)

(internal quotation marks omitted). Thus, in evaluating the

scope of an arbitration clause, “arbitration will be ordered

unless it may be said with positive assurance that the

arbitration clause is not susceptible of an interpretation that

covers the asserted dispute.” IOM Corp. v. Brown Forman Corp.,

627 F.3d 440, 450 (1st Cir. 2010) (internal quotation marks and

citations omitted).

Section 11 of the Agreement, titled “Arbitration,” provides

in relevant part:

In consideration of my employment with the Company and my receipt of compensation, pay raises and other benefits paid to me by the Company, at present and in the future, I agree that any and all controversies, claims or disputes with the Company arising out of, relating to, or resulting from this Agreement shall be subject to binding arbitration under the arbitration rules set forth in the applicable state rules of civil procedure or statute.

6 Doc. no. 4-2 at 3. Section 7 of the Agreement, titled “Effect

of At-Will Employment,” provides in relevant part:

I understand and agree that I am not employed for any particular period of time. As an employee at-will, I am free to terminate my employment, and the Company is free to terminate my employment at any time, with or without cause, for any lawful reason. If I cease to be an employee of the Company for any reason, I will promptly return to the Company all originals and copies of any documents, software, equipment, or other property of any nature belonging to the Company or containing information about the Company or its products.

Id. at 2.

Section 7 of the Agreement addresses Hall’s employment with

Sig Sauer, including termination from the company. As such, her

claims in this action, which are based on the circumstances

surrounding her termination, arise out of, relate to, or result

from the Agreement, and appear to fall squarely within the scope

of the arbitration clause. See United States ex rel. Hagerty v.

Cyberonics, Inc., 146 F. Supp. 3d 337, 348 (D. Mass. 2015)

(holding that claims alleging retaliatory termination were

within the scope of an agreement providing for arbitration of

claims “arising out of or relating to” plaintiff’s employment

and termination); United States v. Consigli Const. Co., Inc.,

873 F. Supp. 2d 409, 412 (D. Me. 2012) (noting the broad scope

of an arbitration agreement that use the “arising out of, or

relating to” language).

7 II. Other Documents Discussing Hall’s Employment

Hall argues that the arbitration clause in the Agreement

should be interpreted to apply to only specific conduct,

including her use of confidential information (Section 3),

intellectual property (Sections 4 and 5), use of company

property (Section 6), solicitation of customers (Section 8),

raiding employees (Section 9), and engaging in transactions for

personal gain (Section 10). Hall also contends that the

arbitration clause does not apply to sections dealing with the

terms of her employment, which include Section 1 (Exclusive

Services), Section 2 (Compensation and Benefits), the Section

titled “Miscellaneous Provisions,”1 and, relevant here, Section 7

(“Effect of At-Will Employment”).

In support of her interpretation of the arbitration

clause’s limited applicability, Hall contends that her

employment relationship with Sig Sauer is defined by other

documents. These include her signed offer letter, see doc. no.

8-3, and her signed acknowledgement that she received and read

Sig Sauer’s employee handbook, see doc. no. 8-4, both of which

she signed on the same day she signed the Agreement. She

contends that because these documents define the scope and terms

1 Both the “Miscellaneous Provisions” clause and the arbitration clause are numbered Section 11. This appears to be a typo.

8 of her employment relationship and because they do not

incorporate or refer to the Agreement or its arbitration clause,

the arbitration clause necessarily does not encompass her claims

arising from her termination.

Hall analogizes the facts of this case to those in Zuber v.

Vandalia Research, Inc., No. 3:12-0942, 2012 WL 4928360 (S.D. W.

Va. Oct. 16, 2012). In Zuber, as in this case, the plaintiff

brought claims against his former employer arising from his

termination. The defendant corporation moved to compel

arbitration, relying on an arbitration provision in the parties’

“Non-Competition, Non-Solicitation, Confidentiality and

Assignment Agreement” (the “Non-Competition Agreement”). Id. at

*1. The Non-Competition Agreement provided: “Any and all

disputes or controversies whether of law or fact of any nature

whatsoever arising from or respecting this Agreement shall be

decided by arbitration . . . .” The court denied the motion to

compel arbitration, noting that the plaintiff had a separate

Employment Agreement, which set forth the terms of the

plaintiff’s employment and termination. The court found that

plaintiff’s claims were not covered by the Non-Competition

Agreement. As such, the court held that the arbitration

provision in that agreement did not apply to plaintiff’s claims.

The court’s reasoning in Zuber is not applicable here.

First, the plaintiff in Zuber entered into a separate

9 “Employment Agreement” that addressed grounds for termination

not mentioned in the Non-Competition Agreement and specifically

provided that disputes concerning the plaintiff’s termination

could be heard in West Virginia state court. Id. at *3. Here,

to the extent Hall’s offer letter and signed acknowledgement

could constitute an employment agreement with Sig Sauer, they

both include nearly identical language regarding termination of

employment to that contained in Section 7 of the Agreement. In

addition, to the extent those documents could constitute an

employment agreement, that agreement does not include a

provision that allows Hall to challenge her termination in court

or otherwise undermine the arbitration clause in the Agreement.

Second, the provision in the Non-Competition Agreement in

Zuber applied only where the plaintiff’s termination resulted

from “the event of default or nonperformance by [plaintiff] of

any of the provisions in this Agreement.” Id. at *2. And, the

defendant in Zuber conceded that plaintiff’s termination did not

arise from such an event. Here, however, Section 7 provides

that Sig Sauer can terminate Hall “at any time, with or without

cause, for any lawful reason,” and thereby governs the standard

for termination of employment generally.

For these reasons, Zuber is inapplicable and Hall’s claims

are subject to the arbitration clause.

10 III. Request to Stay

Sig Sauer requests that the court compel Hall to arbitrate

and stay this matter during the arbitration. Given that the

issues raised in this action are subject to the arbitration

clause in the Agreement, however, there appears to be no reason

for the court to retain jurisdiction and stay the action.

Therefore, the parties shall have 14 days to show cause why this

action should not be dismissed in light of the court’s order.

Failure to show cause will result in the dismissal of this

action.

CONCLUSION

For the foregoing reasons, Sig Sauer’s motion to compel

arbitration and stay proceedings (doc. no. 4) is granted to the

extent it seeks to compel Hall to arbitrate the claims she

asserts in this action, but denied to the extent it seeks a stay

of the proceedings during the pendency of the arbitration. On

or before January 25, 2017, the parties shall show cause why

this action should not be dismissed in light of this order.

Failure to show cause will result in dismissal of the case.

SO ORDERED.

__________________________ Landya McCafferty United States District Judge January 11, 2018 cc: Counsel of Record