Mercadante v. Xe Services, LLC

78 F. Supp. 3d 131, 2015 U.S. Dist. LEXIS 4845, 2015 WL 186966
CourtDistrict Court, District of Columbia
DecidedJanuary 15, 2015
DocketCivil Action No. 2011-1044
StatusPublished
Cited by18 cases

This text of 78 F. Supp. 3d 131 (Mercadante v. Xe Services, LLC) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mercadante v. Xe Services, LLC, 78 F. Supp. 3d 131, 2015 U.S. Dist. LEXIS 4845, 2015 WL 186966 (D.D.C. 2015).

Opinion

MEMORANDUM OPINION

COLLEEN KOLLAR-KOTELLY United States District Judge

Plaintiffs C.J. Mercadante, Robert Biddle, Johnny Jefferson, and Phillip W. OHara (collectively “Plaintiffs”) brought this action on their own behalf and on behalf of a putative class against Defendants XE Services, LLC; U.S. Training Center, Inc.; USTC Security Consulting, LLC f/k/a Blackwater Security Consulting, LLC; and Blackwater Worldwide Trust, Health and Welfare Plan and Trustees (collectively, “Defendants” or “Blackwa-ter”). Plaintiffs assert a series of claims— including breach of contract, fraud, and breach of fiduciary duty under the Employment Retirement Income Security Act of 1974 — and allege, among other things, that they were misclassified as independent contractors and denied various employment benefits. See First Am. Compl. for Damages & Declaratory & Injunctive Relief & Class Relief (“First Am. Compl.”), ECF No. 11. Presently before the Court is Defendants’ [24] Second Renewed Motion to Compel Arbitration. Upon consideration of the pleadings, 1 the relevant legal authorities, and the record as a whole, the Court GRANTS Defendants’ motion. The Court concludes that the parties have delegated the authority to determine questions of arbitrability to an arbitrator and that the delegation agreement survives Plaintiffs’ challenges to its validity. Having resolved this gateway question, the remainder of Plaintiffs’ arguments are for an arbitrator — not the Court — to consider. Accordingly, this action is STAYED during the pendency of the arbitration.

*134 I. BACKGROUND

The question before the Court is whether the parties have delegated to an arbitrator — through a valid delegation agreement — the question of whether the underlying claims brought by Plaintiffs are arbitrable. Because the Court resolves that gateway question in the affirmative, concluding that the parties have validly delegated questions of arbitrability to an arbitrator, the Court recites only the background that informs the Court’s answer to that gateway question.

A. Factual Background

Between 2006 and 2009, each plaintiff served as a security contractor in Iraq or Afghanistan under contracts that Blackwa-ter held with the U.S. Department of State. See Mercadante Decl. ¶ 2; Biddle Deck ¶2; OHara Deck ¶ 2; Jefferson Deck ¶ 2; Defs.’ Supp. Statement ¶¶ 62, 108, 144, 194. Each plaintiff signed an Independent Contractor Service Agreement (ICSA) with Blackwater. See Defs.’ Statement of Undisputed Material Facts in Support of Defs.’ Supp. Br., ECF No. 38-1 (“Defs.’ Supp. Statement”), ¶ 31 (Plaintiff Mercadante); id. ¶ 77 (Plaintiff Biddle); id. ¶ 119 (Plaintiff OHara); id. ¶ 154 (Plaintiff Jefferson). Plaintiffs’ claims pertain to their work for Blackwater in this period and primarily revolve around their argument that they were inappropriately categorized as independent contractors rather than as employees. See First Am. Compl, ¶¶ 12, 21.

Each ICSA includes an identical arbitration clause. See Pis.’ Response to Defs.’ Statement of Undisputed Material Facts (“Pis.’ Response Facts”), ¶¶ 41 (Merca-dante), 76 (Biddle), 125 (OHara), 157 (Jefferson’s first ICSA); 163 (Jefferson’s second ICSA). The clause reads in full:

[ 2 ] LawlExclusive Venue/Arbitration. This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina, applicable to contracts made and to be fully performed therein, excluding its conflict of laws principles; provided, however, to the extent that BSC [Black-water Security Consulting, LLC] provides DBA Insurance[ 3 ] to Contractor and Contractor’s Group, Contractor and Contractor’s Group hereby agree that the remedies and benefits provided by the United States Department of Labor shall be the sole and exclusive remedies in place of all other liability of BSC; provided further, that to the extent an action is brought on behalf of Contractor or Contractor’s Group, regardless of what is plead in any complaint, Contractor waives the right to any venue other than the United States Department of Labor or a federal court with jurisdiction to review such matters. Contractor and BSC hereby agree that any dispute regarding interpretation or enforcement of any of the parties’ rights or obli *135 gations under this Agreement shall be resolved by binding arbitration according to the ■rules of the American Arbitration Association. Proceeding to arbitration and obtaining an award thereunder shall be a condition precedent to the bringing or maintaining of any action in any court with respect to any dispute arising under this Agreement, except for the institution of a civil action of a summary nature where the relief sought is predicated on there being no dispute with respect to any fact or relief of an injunctive nature. Contractor hereby waives any rights to seek removal of any dispute to the state or federal courts.

Id. (emphasis added). The rules of the American Arbitration Association (“AAA”) provide for an arbitrator to decide questions of arbitrability. See AAA Employment Arbitration Rules and Mediation Procedures, Rule 6. Three of the plaintiffs — Mercadante, OHara, and Jefferson — acknowledge that the initials on the pages that include the arbitration clause are theirs; Plaintiff Biddle stated that he did not know whether the initials on those pages were his. Defs.’ Supp. Statement ¶ 32 (Mercadante); id. ¶ 120 (OHara); id. ¶¶ 155, 165 (Jefferson); id. ¶ 78 (Biddle). The parties dispute the circumstances that surround the signing of ICSAs, including the dates on which the ICSAs were signed. See, e.g., Pis.’ Response Facts ¶ 10.

Each plaintiff also signed one or more additional “schedules” providing further details about each plaintiff’s assignment, which were dated after the ICSAs. Each schedule includes the following language:

This Schedule [] is incorporated into and made part of that certain agreement entitled “Independent Contractor Service Agreement” between Blackwater and Contractor. All other terms and conditions of the Independent Contractor Service Agreement shall remain unchanged.

Defs.’ Supp. Statement ¶ 47-48 (Merca-dante’s Schedule 3.1 — Compensation Policy). See id. ¶¶ 52, 55 (Mercadante’s Schedule A — Engagement Specific Information); id. ¶¶ 94-95 (Biddle’s Schedule 3.1; id. ¶¶ 98-99 (Biddle’s second Schedule 3.1); id. ¶ 104 (Biddle’s Schedule A); id. ¶ 134 (OHara’s first Schedule A); id. ¶ 143 (OHara’s second Schedule A); id. ¶¶ 174, 178 (Jefferson’s Schedule 3.1); id. ¶¶ 183-84 (Jefferson’s first Schedule A); id. ¶¶ 188-89 (Jefferson’s second Schedule A). While some of the plaintiffs acknowledge having read this statement regarding incorporation in the ICSA when signing the schedules, others deny having read it.

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Cite This Page — Counsel Stack

Bluebook (online)
78 F. Supp. 3d 131, 2015 U.S. Dist. LEXIS 4845, 2015 WL 186966, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mercadante-v-xe-services-llc-dcd-2015.