Johnson v. Orkin, LLC

556 F. App'x 543
Court of Appeals for the Seventh Circuit·Decided June 4, 2014·No. No. 14-1130·Published·Cited by 36 cases

Opinion

ORDER

Irenn Johnson appeals the district court’s order compelling arbitration and dismissing his employment-discrimination suit against Orkin, LLC, his former employer. Because we conclude that arbitration agreements between Johnson and the company preclude the litigation of his claims in federal court, we affirm.

Johnson applied for a job with Orkin in early 2005. The company initially told him that he was not selected for the position but nonetheless hired him about a month later. When applying for the job Johnson signed an “Agreement to Arbitrate.” That agreement requires Johnson “to abide by the Company’s Dispute Resolution Policy and to arbitrate any dispute, claim, or controversy regarding or arising out of [his] application for employment (as defined by the Company’s Policy, a copy of which [he] may request at any time) that may arise between [him] and the Company, its parents, subsidiaries, affiliates and any other person or entities acting as its agent.” Later, when he was hired, he signed a nearly identical arbitration agreement that covered “any dispute, claim, or controversy” regarding his “employment.” Both agreements state that Johnson understood “that by agreeing to arbitrate, [he] waive[s] any right to trial by judge or jury in favor of having such dispute resolved by arbitration.”

Johnson signed the arbitration agreements without reading the Dispute Resolution Policy. He did not ask for a copy of the Policy before signing the agreement that came with his job application, but when he learned that he would not be hired, he asked the company for “all information used in making decisions relevant to [his] employment.” Orkin furnished [544] some documents, but it did not include a copy of the Policy, and Johnson did not object to its absence. When Orkin later offered him a job, he signed the second arbitration agreement, again without having received or read the Policy. The Policy describes the arbitration procedure. It also defines some terms in the arbitration agreements (for example, “disputes” means “claims, actions or suits”) but leaves other terms, such as “claims” and “controversies,” alone.

Four months after Johnson got the job, Orkin fired him, and Johnson challenged the discharge.. He filed administrative charges of discrimination, which resulted in right-to-sue letters in 2011. (The nearly six years that it took for administrative closure is unexplained.) Johnson then sued Orkin in federal court. He asserted that the company first refused to hire him and then fired him because of his arrest record in violation of the Illinois Human Rights Act, see 775 ILCS § 5/2-103, and because of his race (African American) in violation of Illinois law, see id. § 5/2— 102(A), and Title VII of the Civil Rights Act of 1964, see 42 U.S.C. § 2000e-2(a). He also alleged that the company had retaliated against him for protected activity. See id. § 2000e-3(a); 775 ILCS § 5/6-101(A). Finally, he alleged that the arbitration agreements violated Title VII.

Orkin moved to compel arbitration and dismiss under Federal Rule of Civil Procedure 12(b)(1) on the ground that the agreements to arbitrate divested the district court of subject-matter jurisdiction. Orkin supported its motion with copies of the two agreements and the Dispute Resolution Policy referenced in them. Johnson countered that the agreements were unenforceable because they were unconscionable, did not cover his claims, and referred to a Policy that he never received. The district court dismissed the suit, concluding that the agreements were enforceable because on their “face” they bar Johnson from litigating his claims in court. Johnson moved for reconsideration, arguing for the first time that the agreements were unenforceable for yet another reason — breach, by virtue of Orkin’s failure to furnish a copy of the Policy or follow it. He also sought leave to amend his complaint to add various Orkin employees as defendants. The district court denied Johnson’s motions.

Before addressing the merits of Johnson’s appeal, we note as a preliminary matter that Orkin should have moved to dismiss under Rule 12(b)(3) for improper venue, not under Rule 12(b)(1) for lack of subject-matter jurisdiction. “Subject-matter jurisdiction ... refers to a tribunal’s power to hear a case, a matter that can never be forfeited or waived.” Union Pac. R.R. Co. v. Bhd. of Locomotive Eng’rs & Trainmen, 558 U.S. 67, 81, 130 S.Ct. 584, 175 L.Ed.2d 428 (2009) (internal quotation marks omitted). An arbitration agreement, however, can be waived by the parties, so the effect of such an agreement on a lawsuit is not jurisdictional. Gabbanelli Accordions & Imports, L.L.C., v. Gabbanelli, 575 F.3d 693, 695 (7th Cir.2009). An arbitration clause is simply a type of forum-selection clause, see id., and a motion seeking dismissal based on an agreement to arbitrate therefore should be decided under Rule 12(b)(3). Auto. Mechs. Local 701 Welfare & Pension Funds v. Vanguard Car Rental USA, Inc., 502 F.3d 740, 746 (7th Cir.2007). Nonetheless, the mistaken reference to subject-matter jurisdiction is immaterial. Johnson does not argue that this procedural misstep affects the outcome of the appeal, and, under Rule 12(b)(3), the district court was free to consider the parties’ arbitration agreements. See Faulkenberg v. CB Tax Franchise Systems, LP, 637 F.3d 801, 809-10 (7th Cir.2011) (explaining that court may con[545] sider materials outside the pleadings when evaluating Rule 12(b)(3) motion). We therefore proceed to the merits.

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Johnson v. Orkin, LLC, 556 F. App'x 543 (7th Cir. 2014).

556 F. App'x 543 (Johnson v. Orkin, LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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