Il. Waiver

Plaintiff also argues that defendants have waived their right to arbitration on account of
their participation in the present proceedings. However, we agree with defendants that this
conclusion is not supported by the cases cited in plaintiffs response brief. In Frazier v. Merrill
Lynch Pierce, Fenner & Smith, Inc., 817 F.2d 250, 252-53 (4th Cir. 1987), waiver of arbitration
was found where the defendant delayed for several years before making a request for arbitration.
In Doctor's Associates, Inc. v. Distajo, 107 F.3d 126, 131 (2nd Cir. 1997), the court noted that
waiver might be found when a party “engages in protracted litigation that results in prejudice to
the opposing party.” This can occur when a party invokes arbitration in order to relitigate an
issue lost on motion, obtains information through discovery procedures not available in
arbitration, or subjects the other party to “unnecessary delay or expense” by not promptly
invoking the right to arbitration. Jd. In Britton v. Co-Op Banking Group, 916 F.2d 1405, 1413
(9th Cir. 1990), the court held that defendant did not waive his right to arbitration where the
request for arbitration was made upon the initial filing of the suit.

In the case at bar, there has been no discovery, nor any previous ruling on the merits of a
contested issue. Defendants invoked the arbitration agreement as the first affirmative defense in
their amended answer to plaintiff's complaint. The Court also does not agree that defendants’
filing of an answer with affirmative defenses, a counterclaim, and objections to plaintiff’s Notice
and Consent forms constitutes waiver of the agreement to arbitrate. These actions are consistent
with the pleading requirements of the Federal Rules of Civil Procedure, and merely serve to
prevent a default judgment from being entered against defendants. Therefore, the Court finds
that defendants’ conduct in these proceedings does not constitute a waiver of the arbitration

agreement.


fees and costs. Because arbitrators “possess the power to fashion the same relief as courts,”
there is nothing to suggest that these arbitration costs would not also be recoverable by the
plaintiff, should he prevail in the dispute. Johnson v. West Suburban Bank, 225 F.3d 366, 374
(3d Cir. 2000).

C. Alleged Deprivation of Right to Particular Statute of Limitations

Lastly, plaintiff argues that the arbitration agreement deprives him of the statutory right
to a two or three year statute of limitations. This conclusion is not supported by case law. Ina
situation such as this, “the function of the court is limited to determining whether there is an
agreement to arbitrate the underlying dispute and, if so, whether the agreement to arbitrate has
been breached.” Fender Corp. v. Techna-Quip Co., 953 F.2d 273, 277 (7th Cir. 1992).
Challenges that are not directly aimed at the agreement to arbitrate are referable to an arbitrator.
Jd. This is true even where the validity of the entire contract is in dispute. Matterhorn, Inc. v.
NCR Corp., 763 F.2d 866, 868 (7th Cir. 1985); Sauer-Getriebe KG v. White Hydraulics, Inc.,
715 F.2d 348, 350 (7th Cir. 1983). That plaintiff disputes the time limitation imposed by the

arbitration agreement does not preclude this Court from enforcing the arbitration agreement.

Conclusion
For the forgoing reasons, defendants’ motion for a stay pending arbitration is granted
{doc. no, 11-1], All other pending motions are dismissed as moot.

SO ORDERED ENTERED: .2//2/0.2

Lab Abb CEE tec

HON. RONALD A. GUZMAN
United States Judge



(1991). Furthermore, federal policy favors arbitration, which requires courts to “tigorously
enforce agreements to arbitrate.” Washburn v. Societe Commerciale de Reassurance, 831 F.2d
149, 150 (7th Cir. 1987) (citations omitted). Nevertheless, plaintiff contends that the agreement
is unenforceable because it is too vague, because defendants have waived their right to
arbitration, and because the agreement results in the deprivation of rights granted by the FLSA.

Each of these arguments will be considered in turn.

I. Vagueness

Plaintiff argues that because the arbitration agreement is silent on the matters of
remedies, procedures, forum, enforcement, and other attributes of a typical arbitration, it is
therefore too vague to be valid or enforceable.” However, it is settled federal policy that “any
doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration,”
including doubts about the “construction of the contract language.” Moses H. Cone Mem’l
Hosp., 460 U.S. at 24-25. The arbitration agreement, by its terms, requires the arbitration of
“any dispute . . . arising under or involving” the employment of the plaintiff by MMIC. (Mot.
Stay Pending Arbitration Ex. A at 2.) The agreement does not exclude the arbitration of any
issues or remedies, including those remedies dictated by the FLSA, and there is no reason to
believe that an arbitrator would disregard the provisions of the statute. Accordingly, there is no

reason to deny enforcement of the arbitration agreement on this basis.

? In his argument, plaintiff relies on Atkinson y. Sinclair Refining Co., 370 U.S. 238 (1962), and Butler Products Co.
v. Unistrut Corp., 367 F.2d 733 (7th Cir. 1966). However, the cases do not appear to contain either of the quotations
reproduced in the concomitant paragraph,


I. Deprivation of FLSA Rights

Plaintiff argues that the arbitration agreement is unenforceable because it deprives him of
various statutory rights provided by the FLSA. However, it is settled law that a claimant
acquiescing to arbitration does not "forgo the substantive rights afforded by the statute; it only
submits to their resolution in an arbitral, rather than a judicial, forum." Gilmer, 500 U.S. at 26
(quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985)).

The arbitration agreement signed by plaintiff contains no provision that precludes the
arbitrator from awarding the same relief under the FLSA that would be awarded by a court.
Furthermore, “[t]he Arbitration Act establishes that, as a matter of federal law, any doubts
conceming the scope of arbitrable issues should be resolved in favor of arbitration, whether the
problem at hand is the construction of the contract language itself or an allegation of waiver,
delay, or a like defense to arbitrability.” Moses H. Cone Mem’l Hosp., 460 U.S. at 24-25
(emphasis added). With these directives in mind, the Court finds that the agreement results in no
such alleged deprivation of statutory rights, and that it is fully enforceable.

A. Alleged Preclusion of Class Action

The FLSA provides that actions may be maintained “by any one or more employees for
and in behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. §
216(b) (West 2001). Plaintiff contends that the arbitration agreement he signed is unenforceable
because it would preclude him from bringing an FLSA class action against his employer.
However, the agreement signed by plaintiff contains no language that excludes class actions.

Even if a class action were not possible, the agreement would not necessarily be invalid.
In Gilmer, which involved the Age Discrimination in Employment Act, the Supreme Court

stated that “even if the arbitration could not go forward as a class action or class relief could not


nx Deder Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge Sitting Judge if Other
or Magistrate Judge Ronald A. Guzman than Assigned Judge
CASE NUMBER 01 C 6561 DATE 2/12/2002
CASE KEN MARZEK vs. MORI MILK & ICE CREAM CO..,et al
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.]
DOCKET ENTRY:
qd) Oo Filed motion of [ use listing in “Motion” box above.]
(2) o Brief in support of motion due.
(3) im Answer brief to motion due. . Reply to answer brief due.
(4) Oo Ruling/Hearing on set for at
6) O Status hearing[held/continued to] [set for/re-set for] on set for at
(6) Oo Pretrial conference[held/continued to] [set for/re-set for] on set for at .
(7) Qo Trial[set for/re-set for] on at
(8) im} [Bench/Jury trial] [Hearing] held/continued to at
(9) Q This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}
OFRCP4(m) O General Rule 21 OFRCP41(a)(1) O FRCP41(a)(2).
ao [Other docket entry) ENTER MEMORANDUM OPINION AND ORDER: Defendants’ motion
for a stay pending arbitration is granted [11-1]. All other pending motions are dismissed as moot.
(1) @ [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required. number of notices,

Notices mailed by judge's staff.

FEB 13 2002
be

Notified counsel by telephone.

Docketing to mail notices.

Mail AO 450 form,

uly initials

YAGI J

Copy to judge/magistrate judge.

courtroom Leek le ef £3420 date mate Nice
deputy’s

TBK _—
initials C4

dire yt
Date/time received in
central Clerk's Office

ailing deputy igats



be granted by the arbitrator, the fact that the [ADEA] provides for the possibility of bringing a
collective action does not mean that individual attempts at conciliation were intended to be
barred.”” Gilmer, 500 U.S. at 32 (quoting from a dissenting opinion in Nicholson v. CPC Int'l,
Inc., 877 F.2d 221, 241 (3d Cir. 1989)). The plaintiff has given no reason for why the arbitration
agreement he signed should not be accorded the same consideration as the agreement in Gilmer.

Plaintiffs to a class action in a federal forum must have individual claims that are subject
to litigation in a federal forum. See Zahn v. International Paper Co., 414 U.S. 291, 301 (1973).
In this case, plaintiff specifically agreed to arbitrate claims related to his employment at MMIC.
The strong federal policy favoring arbitration is not outweighed by plaintiff's current desire for
class treatment of his claims against defendants.

B. Alleged Forfeiture of Attorney’s Fees and Costs of Arbitration

The FLSA also provides that successful claimants shall be awarded “‘a reasonable
attorney's fee to be paid by the defendant, and costs of the action.” 29 U.S.C. § 216(b). Plaintiff
argues that the arbitration agreement strips him of this right. However, the arbitration agreement
requires only that plaintiff bear the costs of legal representation during the course of the
arbitration. The agreement does not preclude arbitrators from awarding attorney’s fees upon
resolution of the dispute. Just as plaintiff must bear his own attorney’s fees and costs in
litigation, subject to the right to recover them under § 216(b) if he prevails, it is not unfair that he
should bear them during arbitration.

Ina similar vein, plaintiff contends that because the terms of the arbitration agreement
require that he pay half the cost of the arbitrator and any incidental costs of arbitration, it impairs
his rights under FLSA to recover costs related to the bringing of the action. However, as with

the matter of attorney’s fees, the arbitration agreement does not preclude recovery of arbitration


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
KEN MARZEK, on behalf )
of himself and all other )
Plaintiffs similarly situated )
known and unknown, )
)
Plaintiff, )
)
v. ) No. 01 C 6561

)

MORI MILK & ICE CREAM COMPANY and _ ) Judge Ronald Guzman
JOHN B. MORI, )
)
Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff Ken Marzek filed a class action complaint alleging violations of the Fair Labor
Standards Act (“FLSA”) and the Portal-to-Portal Act (“PPA”) by his employer, Mori Milk & Ice
Cream Company (“MMIC”) and John B. Mori. In response, defendants filed a motion to stay
proceedings pending arbitration, based upon an arbitration agreement signed by plaintiff as part
of his employment agreement. The Court concludes that plaintiff has failed to meet his burden
of showing that the arbitration agreement should not be enforced. Therefore, defendants’ motion

for a stay is hereby granted.

Facts
Plaintiff is or was an employee of MMIC.' As a condition of employment, plaintiff
signed an employment agreement that contained an arbitration clause. The clause provides for

the arbitration of “any dispute — including but not limited to [plaintiff's] termination - arising

Plaintiff's complaint does not indicate whether plaintiff is a past or a present employee.

1


under or involving” the employment of the plaintiff. (Mot. Stay Pending Arbitration Ex. A at 2.)
On August 23, 2001, plaintiff filed this putative class action lawsuit alleging that defendants
failed to pay proper overtime compensation to MMIC employees during the two years prior to
the complaint. Defendants filed an answer in which they affirmatively defended that the plaintiff
was bound by his employment agreement to arbitrate the claim. Defendants subsequently filed

motion to stay pending arbitration of the claim.

Discussion

Defendants bring this motion pursuant to the Federal Arbitration Act (“FAA”), which
provides that federal court proceedings shall be stayed where the dispute is “referable to
arbitration” under a written arbitration agreement. 9 U.S.C. § 3 (West 2001). Whether an issue
is referable to arbitration, such that a stay and/or order to compel arbitration is appropriate, is a
question of contract interpretation, for "a party cannot be required to submit to arbitration any
dispute which he has not agreed so to submit." Matthews y. Rollins Hudig Hall Co., 72 F.3d 50,
53 (7th Cir. 1995) (quoting Schacht v. Beacon Ins. Co., 742 F.2d 386, 390 (7th Cir. 1984)).
“[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of
arbitration, whether the problem at hand is the construction of the contract language itself or an
allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone Mem’! Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983); see Miller v. Flume, 139 F.3d 1130, 1136 (7th
Cir. 1998); Flexible Mfg. Sys. Party, Ltd. v. Super Prods. Corp., 86 F.3d 96, 99 (7th Cir. 1996).

It is indisputable that statutory claims “may be the subject of an arbitration agreement,

enforceable pursuant to the FAA.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26