LANG v. PTC INC.

CourtDistrict Court, D. New Jersey
DecidedNovember 12, 2021
Docket2:21-cv-04451
StatusUnknown

This text of LANG v. PTC INC. (LANG v. PTC INC.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
LANG v. PTC INC., (D.N.J. 2021).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

CRAIG LANG, Plaintiff, Civ. No. 21-04451 (KM) (ESK) v. OPINION PTC, INC., Defendant.

KEVIN MCNULTY, U.S.D.J.: This case involves a dispute between an employee, plaintiff Lang, and his former employer, defendant PTC, Inc., over unpaid wages or sales incentives. In their employment contract, the parties agreed to arbitrate such disputes, and Lang did commence an arbitration. The JAMS arbitrator ruled that the JAMS arbitration rules required PTC to bear the costs of arbitration, but correctly concluded that interpretation of the arbitration Agreement itself was reserved for the court. Lang then filed the complaint in this action, reasserting his substantive claims against PTC, and also asserting that the Agreement to arbitrate is unenforceable, because any requirement that he pay the arbitration fees and costs would unduly burden his ability to pursue his claims. PTC moves to dismiss the complaint, compel a return to arbitration, and order pro rata fee sharing. (DE 3.) For the following reasons, the motion of PTC is GRANTED IN PART and DENIED IN PART. I. BACKGROUND a. The Agreement to arbitrate Plaintiff Craig Lang worked as an “Internet of Things Sales Representative” for PTC, Inc., beginning in 2017. (Compl. ¶ 2.)1 Lang was compensated with a mixture of salary and commissions. He alleges that PTC denied him hundreds of thousands of dollars of commissions through a mix of broken promises and accounting chicanery. (Compl. ¶ 31–56.) The details of Lang’s compensation scheme and the merits of his contentions are not directly relevant at this stage. Upon being hired by PTC, Lang signed a “Proprietary Information Agreement,” within which is an arbitration agreement that requires him to arbitrate most employment related claims against PTC. (Compl. ¶ 75; Compl., Ex. A.) The five interrelated sections of the arbitration agreement potentially relevant to the case are set out in the margin.2 I summarize them as follows.

1 Certain citations to the record are abbreviated as follows: DE = docket entry number Compl. = Complaint (DE 1) Agreement = Proprietary Information Agreement (DE 1, Ex. A) 2 The language of the relevant sections of the Agreement is as follows: 14(a): The arbitration will be conducted by a single arbitrator in accordance with the Comprehensive Arbitration Rules and Procedures of JAMS (www.jamsadr.com) … The arbitrator will be selected in accordance with JAMS’ arbitrator selection rules. 14(b)(iii): Any dispute about the enforceability, applicability or interpretation of any portion of this Section 14 shall be submitted to and resolved by a court of competent jurisdiction only and shall not under any circumstances be submitted to or resolved by any arbitrator or organization sponsoring arbitration. 14(b)(iv): If a court of competent jurisdiction were for any reason to find Section 14(a) above, invalid or unenforceable as to any Claim Subject to Arbitration, PTC would no longer be obligated to arbitrate such Claim Subject to Arbitration. 14(h): PTC agrees to reimburse me for any administrative filing fees JAMS may impose to initiate arbitration. PTC further agrees to pay all travel, lodging, and meal costs of the arbitrator. PTC also agrees that if it prevails at the arbitration it will not First, § 14(a) sets out the broad outlines of how an arbitration would be administered. It provides that the “arbitration will be conducted by a single arbitrator in accordance with the Comprehensive Arbitration Rules and Procedures of JAMS (www.jamsadr.com)” and that the “arbitrator will be selected in accordance with JAMS’ arbitrator selection rules.” (Agreement § 14(a).) Second, § 14(b)(iii) requires that “Any dispute about the enforceability, applicability or interpretation of any portion of this Section 14” be submitted to a court rather than decided by an arbitrator. (Agreement § 14(b)(iii).) This section is the basis for Lang’s having filed this action in federal court. Third, § 14(b)(iv) states that if a court finds Section 14(a) “invalid or unenforceable as to any Claim Subject to Arbitration, PTC would no longer be obligated to arbitrate such Claim Subject to Arbitration.” (Agreement § 14(b)(iv).) Fourth, § 14(h) is the only section that directly addresses arbitration fees. This section states that PTC will reimburse the employee for any JAMS filing fees and that PTC will “pay all travel, lodging, and meal costs of the arbitrator.” (Agreement § 14(h).) It does not specify who will pay other arbitration costs. Fifth, § 19 is a general severability clause, which states that if any part of the agreement is held invalid, “this Agreement will be deemed reformed so that it would be enforceable to the maximum extent permitted in such

seek to recover costs from me, even if it would otherwise be entitled to do so. However, PTC retains any rights it may have to seek recovery of its attorneys’ fees. 14(k): To the extent any provision of this Section 14 Agreement conflicts with any standard rule of JAMS the provisions of this Agreement will prevail. 19: If any provision of this Agreement will be held to be invalid or unenforceable in any jurisdiction(s), such circumstance will not have the effect of rendering the provision in question unenforceable in any other jurisdiction or in any other case or circumstance or of rendering any provision hereof unenforceable. Instead, this Agreement will be deemed reformed so that it would be enforceable to the maximum extent permitted in such jurisdiction(s). (Compl., Ex. A.) jurisdiction(s).” (Agreement § 19.) There is no further clarification of how this section relates to § 14(b)(iv). Finally, § 17 of the Agreement states that the agreement is governed by Massachusetts law. (Agreement § 17.) b. Initial proceedings in arbitration and fee dispute After the compensation dispute arose, Lang duly filed a Demand for Arbitration with JAMS, as required by the Agreement. (DE 3-3, Ex. 1.) Lang sent PTC a copy of the Demand on October 6, 2020. (Id.) On November 24, 2020, the parties were informed by letter that JAMS had appointed the Hon. Carolyn E. Demarest (Ret.) as arbitrator. (DE 3-3, Ex. 2.) That same letter stated that the arbitration would be “administered consistent with the enclosed JAMS policy on Employment Arbitration, Minimum Standards of Procedural Fairness” and explained that “the only fee a consumer employee may be required to pay is $400 of the Filing Fee. All other costs, including the remainder of the Filing Fee, must be borne by the company.” (Id.) Finally, the letter stated that “[t]he paying party [i.e., PTC] has been billed a preliminary deposit.” (Id.) That invoice, for $5,000, was addressed to PTC on November 20, 2020. PTC promptly paid it. (DE 8, Ex. D.) At the Preliminary Conference with the arbitrator in December 2020, however, PTC stated for the first time that it believed the parties should split the costs of the arbitration. Lang disagreed. (Compl. ¶¶ 81–82; Compl. Ex. D, DE 1 at 38.) The arbitrator, Judge Demarest, directed both parties to submit written arguments. They did so, and on February 12, 2021, she issued a decision. Judge Demarest confirmed that JAMS would administer the case in conformity with the Minimum Standards (i.e., EMS, which impose costs on the employer), or it would not proceed. She opined that “Claimant [Lang] was clearly justified in believing he would not be required to pay pro rata costs,” and added that “Respondent’s [PTC’s] payment of the requested deposit and participation in the Preliminary Conference… appear to constitute a waiver of Comprehensive Rule 31(a) and implicit consent to the Minimum Standards.” (Compl. Ex.

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LANG v. PTC INC., Counsel Stack Legal Research, https://law.counselstack.com/opinion/lang-v-ptc-inc-njd-2021.