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Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 

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United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Submitted April 14, 2015*

Decided April 14, 2015

Before

RICHARD A. POSNER, Circuit Judge

JOEL M. FLAUM, Circuit Judge

ILANA DIAMOND ROVNER, Circuit Judge

No. 14-3183

CYNTHIA JOHNSON,

Plaintiff-Appellant,

v.

WESTERN & SOUTHERN LIFE 

INSURANCE COMPANY,

Defendant-Appellee.

Appeal from the United States District 

Court for the Southern District of Indiana, 

Indianapolis Division.

No. 1:13-cv-01659-SEB-DKL

Sarah Evans Barker,

Judge.

O R D E R

Cynthia Johnson appeals the district court’s order compelling arbitration and 

dismissing her employment-discrimination suit against Western & Southern Life 

Insurance Company, her former employer. We conclude that Johnson’s suit was 

properly dismissed on the ground that the arbitration agreement bars the litigation of

her claims in federal court. We affirm the judgment but modify the dismissal to be 

without prejudice.

* After examining the briefs and the record, we have concluded that oral 

argument is unnecessary. Thus the appeal is submitted on the briefs and the record.

See FED. R. APP. P. 34(a)(2)(C).

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with Fed. R. App. P. 32.1

 

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When Johnson (who worked for Western & Southern for six years) was promoted 

from agent to sales manager and again when she later became a sales representative, she 

signed an agreement titled “Agreement and Receipt for Dispute Resolution Program.”

That agreement requires her to submit “all legal claims or disputes . . . to binding 

arbitration” as set forth in the company’s Dispute Resolution Program (DPR) booklet. By 

signing the agreement, Johnson acknowledged that she had “received a copy” of the

dispute-resolution booklet and “read and understood its contents.” The DPR booklet 

provides that “[c]laims and disputes subject to arbitration include”—with a few 

exceptions irrelevant to this appeal—“all those legal claims you may now or in the future 

have against the Company.” The DPR booklet also contains a delegation provision that 

grants the arbitrator “exclusive authority to resolve any dispute relating to the 

interpretation, arbitrability, applicability, enforceability or formation of the agreement to 

arbitrate including, but not limited to, any claim that all or any part of the agreement is 

void and voidable.” A related document signed by Johnson states that she may not

“commence any arbitration or action under the DRP or otherwise relating to [her] 

employment . . . more than six months after the date of termination of such 

employment.”

Johnson resigned from her position as sales representative in March 2013 and 

then sued Western & Southern, claiming that the company had discriminated against 

her based on race (African-American) and gender in violation of Title VII of the Civil 

Rights Act of 1964, 42 U.S.C. § 2000e-2(a), and asserting state-law contract and tort 

claims. (She also sued other defendants, but they are not parties to this appeal.)

Western & Southern moved to compel arbitration and to dismiss Johnson’s suit 

for improper venue under Federal Rule of Civil Procedure 12(b)(3). In support of its 

motion, the company submitted copies of the DRP booklet and the agreements Johnson 

had signed. Johnson contended that the arbitration agreement was unenforceable 

because, she maintained, it was unconscionable, she had had “no opportunity to 

bargain” before signing it, and she did not “remember ever being given the dispute 

resolution program booklet.” She did not, however, challenge the validity of the 

delegation provision.

The district court granted the company’s motion to dismiss and to compel 

arbitration. The court reasoned that it could not even consider Johnson’s challenges to 

the validity of the arbitration agreement because its delegation provision—materially 

identical to the one enforced by the Supreme Court in Rent-A-Center, West, Inc. v. Jackson, 

561 U.S. 63, 65–66, 72 (2010)—confers exclusive authority on the arbitrator to decide 

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whether the arbitration agreement is enforceable. Dismissal also was warranted, the 

court continued, because Johnson had not commenced arbitration within the six-month 

time limit contained in her employment agreement, and thus she was “time-barred 

from . . . attempting to pursue arbitration.”

On appeal, Johnson generally argues that the district court was wrong to 

conclude that her claims against Western & Southern are subject to arbitration. But in her 

brief she does not contest—or even mention—the validity of the delegation provision. 

The district court was therefore required to do as the Supreme Court directed in 

Rent-A-Center: treat the delegation provision as valid and enforce it, thereby letting the 

arbitrator decide Johnson’s challenges to the validity of the arbitration agreement.

See Rent-A-Center, 561 U.S. at 72, 75–76.

The district court’s order does contain one misstep that we must address: By 

concluding that Johnson is “time-barred from now attempting to pursue arbitration,” the 

district court improperly ruled on a matter that is presumptively reserved for the 

arbitrator. See BG Group plc v. Republic of Argentina, 134 S. Ct. 1198, 1206–07 (2014); 

Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 85–86 (2002); Employers Ins. Co. of 

Wausau v. Century Indem. Co., 443 F.3d 573, 577 (7th Cir. 2006); Citigroup, Inc. v. Abu Dhabi 

Inv. Auth., 776 F.3d 126, 128–30 (2d Cir. 2015). Western & Southern contends that the 

district court properly reached the issue of timeliness, relying on the Supreme Court’s 

decision in John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543 (1964), for the proposition 

that a court may reach this and other “procedural” issues when doing so would operate 

as a complete bar to arbitration. But the company’s reliance on that decision is 

misplaced. In that case the Supreme Court adopted the rule that, “[o]nce it is 

determined . . . that the parties are obligated to submit the subject matter of a dispute to 

arbitration, ‘procedural’ questions which grow out of the dispute and bear on its final 

disposition should be left to the arbitrator.” Id. at 557 (emphasis added). The Supreme Court 

has applied this rule consistently, making clear in more recent decisions that federal 

courts must presume that the parties intended arbitrators to decide whether a party has

complied with time limits and other arbitrational prerequisites. See BG Group, 134 S. Ct.

at 1206–07; Howsam, 537 U.S. at 85–86. Western & Southern has offered no reason to 

upset that presumption here.

And so the district court should not have dismissed Johnson’s suit on the ground 

that her claims were untimely. By dismissing the suit on timeliness grounds, the court 

dismissed it on the merits and thus with prejudice. Pavlovsky v. VanNatta, 431 F.3d 1063, 

1064 (7th Cir. 2005). The district court’s dismissal, however, should have been without

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prejudice. The company moved to compel arbitration and to dismiss for improper venue

under Federal Rule of Civil Procedure 12(b)(3), which we note is the correct rule to 

invoke in these circumstances, see Auto. Mechs. Local 701 Welfare & Pension Funds v. 

Vanguard Car Rental USA, Inc., 502 F.3d 740, 746 (7th Cir. 2007). And a dismissal for 

improper venue is without prejudice because it is not an adjudication on the merits. 

FED. R. CIV. P. 41(b); see In re IFC Credit Corp., 663 F.3d 315, 320 (7th Cir. 2011); Rollins v. 

Wackenhut Servs., Inc., 703 F.3d 122, 132 (D.C. Cir. 2012). Accordingly, we MODIFY the 

district court’s dismissal to be without prejudice. As so modified, the judgment of the 

district court is 

AFFIRMED.

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