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Fox v. Computer World Services Corp.

United States District Court, District of Columbia

February 1, 2013

Phillip W. FOX, Plaintiff,

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Steven Philip Steinberg, Stone/Mont PLLC, Washington, DC, for Plaintiff.

James Matthew Coleman, Maureen Ross Knight, Constangy, Brooks & Smith, LLP, Fairfax, VA, for Defendants, Computer World Services Corp. and Farrukh Hameed.

Christopher H. Mills, Jason A. Storipan, Fisher & Phillips LLP, Murray Hill, NJ, Bradford A. Lehew, Joel W. Rice, Fisher & Phillips LLP, Chicago, IL, for Defendants, C2 Essentials, Inc. and Kimberly Lundy.



Plaintiff Phillip Fox has sued his former employers: Computer World Services Corp. (" CWS" ); C2 Essential, Inc. (" C2" ); Farrukh Hameed, President and CEO of CWS; and Kimberly Lundy, Director of Strategic Human Resources for C2. He brings this action under the District of Columbia Human Rights Act (" DCHRA" ), D.C.Code § 2-1402.11 et seq. , and District of Columbia common law, alleging age discrimination, retaliation, and failure to pay earned bonus compensation. Compl. [Dkt. # 1-1] ¶¶ 1, 61-109. In response, defendants have moved to dismiss the case on the grounds that the Court should compel Fox to arbitrate his claims in accordance with an arbitration agreement between the parties. For the reasons set forth below, the Court concludes that the arbitration agreement is enforceable and that Fox must arbitrate his claims against all defendants. Therefore, it will grant defendants' motions to dismiss and compel arbitration.


The following facts are undisputed except where noted. Defendant CWS is an information technology solutions and network operations company that outsources

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its recruiting, human resources, and other back-office administrative functions to co-defendant C2. Compl. ¶¶ 5, 6; Fox Affidavit, Ex. 1 to Pl.'s Reply in Opp. to Defs.' Mot. to Dismiss [Dkt. # 24-1] (" Fox Aff." ) ¶¶ 3, 7. The relationship between CWS and C2 is governed by a joint employment agreement whereby C2 acts as a " co-employer" and " share[s] many employer liabilities" with CWS. Compl. ¶ 12. Pursuant to this relationship, C2 recruited Fox for employment with CWS and on September 25, 2009, Fox received an employment offer letter from CWS. Fox Aff. ¶ 3; CWS Employment Offer Letter, Ex. 1 to Compl. (" Employment Offer Letter" ). The letter outlined the terms of Fox's employment with CWS including the requirement that " any disputes arising out of the employment relationship [ ] be resolved by arbitration...." Employment Offer Letter at 3. The letter directed Fox to indicate his acceptance of the offer and its terms by signing and returning the letter. Id. at 2. Fox never signed the offer letter but he asserts in his complaint that he " accepted" its terms and began working for CWS on September 30, 2009, as the Director of Bids and Proposals/Chief Engineer. Compl. ¶¶ 9-10, 13.

On his first day of work, Fox attended a new employee orientation that was conducted by a C2 employee. Fox Aff. ¶ 8; see also Catherine Gouldin Affidavit, Ex. A to C2 Reply in Supp. of Mot. to Compel. Arb. (" C2 Reply" ) [Dkt. # 26-1] ¶ 3. During the orientation, the C2 employee asked Fox to review, acknowledge, and complete a number of online forms including an arbitration agreement that provided in part:

I understand that the term " C2" in this Agreement is defined to include C2, any other entity that is a signatory to this Agreement including without limitation any client who may be a signatory to this Agreement, any subsidiary and affiliated entities.... All parties to this agreement agree to the resolution by arbitration of all claims, disputes or controversies (" Claims" ), whether or not arising out of my employment, or its termination, that all or any of the entities identified collectively as " C2" may have against me or that I may have against all or any such C2 entities, or against their respective officers, directors, employees or agents. The claims covered by this Agreement include, but are not limited to, Claims for wages or other compensation due; Claims for breach of any contract or covenant (express or implied); tort Claims; Claims for discrimination of any kind ... and Claims for violation of any federal, state, or other governmental law, statute, regulation, ordinance ...
[Administrative Claims:] Except for claims that I may have for workers' compensation or unemployment compensation, all parties to this agreement agree not to initiate or prosecute any lawsuit or administrate action in any way related to any Claim covered by this Agreement, other than as set out in this Agreement.
Required Notice of All Claims and Statute of Limitations: All parties to this agreement agree that one bringing a Claim must give written notice of any such Claim to the other party within six (6) months.... Otherwise, the claim shall be void and deemed waived even if there is a federal or state statute of limitations that would have given more time to pursue such Claim.
Discovery: Each party shall have the right to take the deposition of one individual and any expert witnesses designated by another party.... Additional discovery may be had only where the arbitrator ... so orders, upon a showing of substantial need.

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Either party, at its expense, may arrange for and pay the cost of a court reporter....
Arbitration Fees and Costs: All parties to this agreement agree to share the fees and costs of the arbitrator. If I am initiating the claim, I am responsible for $150 towards the filing fee ... Each party will deposit funds for its share of the arbitrator's fee, in an amount and manner determined by the arbitrator....

Agreement to Arbitrate, Ex. 2 to Compl. at 1-2; Fox Aff. ¶ 9. The arbitration agreement (" Agreement" ) included signature lines for " Employee" on one side and for " C2 Portfolio Essentials, Inc." and a " Co-Employer" on the other side. Agreement to Arbitrate at 3. Fox electronically signed the arbitration agreement on September 30, 2009, and a C2 representative signed it two days later on October 2, 2009. Id. CWS never signed the signature line for a " co-employer" and was never mentioned by name in the agreement. Id.

In his complaint, Fox asserts that on March 7, 2011, defendants Hameed, president and CEO of CWS, and Lundy, Director of Strategic Human Resources for C2, " summarily terminated [him]— effective immediately— because his ‘ position was being eliminated due to the lack of new business and the need for his technical skill set.’ " Compl. ¶ 37. In an exchange of letters between March 11 and May 6, 2011, Fox accused CWS and C2 of terminating him because of his age in violation of the Age Discrimination in Employment Act and demanded additional compensation according to the terms of the CWS employment offer letter. Fox Letters to CWS and C2 (March 11, 2011 and April 1, 2011), Exs. 3-4 to Compl. Both companies disputed Fox's allegations and directed Fox to submit his claims to arbitration pursuant to the arbitration agreement. Letters from CWS and C2 and Their Attorneys (March 28, 2011 and May 6, 2011), Exs. 4 and 6 to Compl. In an April 1, 2011 letter to defendants, Fox questioned the enforceability of the arbitration agreement and refused to submit his claims to arbitration. Fox Letter to CWS and C2, Ex. 4 to Compl. at 1-2. On August 23, 2011, Fox filed a discrimination and retaliation claim against CWS with the Equal Employment Opportunity Commission (" EEOC" ). Fox EEOC Claim, Ex. B to C2 Reply [Dkt. # 26-2].

On January 25, 2012, Fox filed an action against CWS and C2 under the DCHRA and D.C. common law in the District of Columbia Superior Court alleging age discrimination, retaliation, and failure to pay earned bonus compensation. Compl. ¶¶ 61-109. In his complaint and his later pleadings, Fox asserts that the arbitration agreement with C2 is unenforceable because the provisions regarding the filing of administrative claims, the statute of limitations, discovery, and fee-sharing are unconscionable. Compl. ¶ 16; Pl.'s Opp. to Defs.' Mot. to Dismiss [Dkt. # 24] (" Pl.'s Opp." ) at 18-19. He further argues that he did not agree to arbitrate his disputes with CWS because CWS did not sign the arbitration agreement. Compl. ¶ 15.

After removing the case to this Court, the C2 defendants (" C2" ) filed a motion to compel arbitration and dismiss Fox's complaint, or, in the alternative, to stay the underlying proceedings pending the outcome of the arbitration. C2 Mem. in Supp. of Mot. to Compel Arb. [Dkt. # 6] (" C2 Mem." ) at 1. In its motion, C2 contends that the arbitration agreement is not unconscionable but to address Fox's concerns about the cost of arbitration, it offered to waive the fee-sharing provision and bear all the arbitration costs. C2 Mem. at 10-11. The CWS defendants (" CWS" ) also moved to compel arbitration

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and dismiss Fox's complaint under Federal Rules of Civil Procedure 12(b)(1) and (b)(6), or, in the alternative, to stay the proceedings pending arbitration under Section 3 of the Federal Arbitration Act (" FAA" ), 9 U.S.C. § 1 et seq. CWS and Hameed Mot. to Dismiss, or Stay Ct. Proceedings and Compel Arb. and Mem. in Supp. [Dkt. # 7] (" CWS Mem." ) at 1. In its motion, CWS adopts C2's arguments regarding the enforceability of the arbitration agreement. Id. at 2. CWS also asserts that it was party to that arbitration agreement, and that even if the Court concludes otherwise, it should ...

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