Piascik v. Biomass Controls PBC

JEFFREY PIASCIK, Plaintiff, v. BIOMASS CONTROLS PBC a Delaware Corporation also known as Biomass Controls PBC Corp.;BIOMASS CONTROLS, LLC a Connecticut Limited Liability Company;JEFF HALLOWELL; and RICK WOJCIK, Defendants.

NO. 5:20-CV-26-FL

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION

May 26, 2020

ORDER

This matter is before the court on defendants' motion to stay and compel arbitration or, in the alternative, to transfer venue. (DE 18). Plaintiff responded and defendant replied. In this posture, the issues raised are ripe for ruling. For the following reasons, defendants' motion to stay and compel arbitration is granted.

STATEMENT OF THE CASE

Plaintiff commenced this action January 22, 2020, against defendants, who are alleged to be plaintiff's former employers, asserting claims for breach of employment agreement, for violation of the North Carolina Wage and Hour Act, and, in the alternative, for violation of the Connecticut Wage Statutes. Plaintiff, who asserts jurisdiction on the basis of diversity of citizenship, seeks damages, unpaid wages, liquidated damages, attorneys' fees and interest. Plaintiff attaches to the complaint as exhibits an employment agreement he executed on November 1, 2017 (the "Employment Agreement"), and an email regarding a compensation plan sent April 12, 2019.

Defendants filed the instant motion on March 10, 2020, seeking an order staying the present action and compelling arbitration before the American Arbitration Association ("AAA"). In the alternative, defendants move to transfer venue to the United States District Court for the District of Connecticut. In support of the motion, defendants rely upon an affidavit of defendant Rick Wojcik ("Wojcik"), who is the chairman of the board of defendant Biomass Controls, LLC ("Biomass"),¹ a Connecticut company with principal place of business in Connecticut.

Plaintiff responded in opposition to the instant motion on March 31, 2020, relying upon plaintiff's affidavit and a termination letter. Defendants replied on April 9, 2020, relying on correspondence between the parties and affidavits of Wojcik and defendant Jeffrey Hallowell ("Hallowell"), who is the chief executive officer ("CEO") of defendant Biomass.

STATEMENT OF FACTS

The facts alleged in the complaint may be summarized as follows. Defendant Biomass is "engaged in the business of patenting technology for biosolids waste treatment." (Compl. ¶ 10).

Plaintiff, a citizen and resident of Wake County, North Carolina, executed the Employment Agreement, on November 30, 2017, which provides that, effective January 1, 2018, plaintiff is engaged by defendant Biomass as "President." (Employment Agreement (DE 1-1) at 2). Defendant Hallowell executed the Employment Agreement on behalf of defendant Biomass, on December 1, 2017. (Id. at 4).

According to the Employment Agreement, plaintiff "will report to the CEO with a dotted line to the Board of Directors," with duties including responsibility "to grow the business byacquiring profitable projects and skilled talent to position [defendant Biomass] as the worldwide leader in the Sanitation Economy." (Id.). According to the Employment Agreement, plaintiff "will be responsible for day-to-day operations of the Durham North Carolina facility." (Id.).

With regard to compensation, the Employment Agreement states: "The Company shall pay to Employee² for the services to be rendered hereunder a salary equivalent to $200,000 annually." (Id.). It also provides for 15 days of paid vacation per year. (Id. at 3). The Employment Agreement further provides that "[e]ither the Company or Employee may terminate Employee's employment at any time . . . with or without cause," except as provided in a section of the Employment Agreement captioned "Change of Controls Compensation." (Id. at 2-3). In addition "[e]xcept as otherwise agreed in writing, neither the Company nor Employee shall have any further obligation to each other by way of compensation or otherwise." (Id. at 2).

An April 12, 2019, email from defendant Wojcik to plaintiff, copying defendant Hallowell, referenced as "Exhibit B" in the complaint, provides for a "Base Salary" for plaintiff of $100,000.00. (Compl., Ex. B. (DE 1-2) at 2). According to plaintiff, "[t]hat email provided for a restructuring of [plaintiff's] compensation, which included a decrease in his annual salary from $200,000 to $100,000." (Compl. ¶ 19). Defendants allegedly "made the changes in compensation set forth in Exhibit B retroactive to January 1, 2019." (Id. ¶ 20). According to the complaint, plaintiff's "paychecks following his receipt of Exhibit B were either withheld entirely or decreased below the $100,000/year pay rate in order to reimburse Biomass for what Defendants characterized as an overpayment of [plaintiff's] salary from January 1, 2019 through April 12, 2019." (Id.).

Plaintiff alleges that "[t]he decision to reduce [plaintiff's] annual salary as reflected in Exhibit B was made unilaterally by Defendants." (Id. ¶ 21). Plaintiff "never agreed to a reductionin his annual salary to $100,000." (Id. ¶ 22). "At no time have the parties ever executed any written instrument amending, supplementing, cancelling or discharging the terms of the Employment Agreement." (Id. ¶ 23). According to the complaint, plaintiff "was involuntarily discharged from his position effective October 3, 2019." (Id. ¶ 24). "As of the date of termination," plaintiff allegedly "had 74 hours of accrued, unused vacation time remaining for the year 2019 and 112 hours for 2018." (Id. ¶ 25). Defendants allegedly owe, but have not paid, plaintiff for such vacation time and plaintiff's allegedly unpaid wages, upon plaintiff's demand therefor. (Id. ¶¶ 26-28).

The Employment Agreement includes the following arbitration clause (hereinafter "arbitration agreement"):

8. Remedies

(a) Arbitration — Company and Employee agree that if any disputes arise between them, the disputes will be submitted exclusively to binding arbitration in the US. This means that disputes will be decided by an arbitrator, rather than a court or jury, and that Employer and Employee waive their rights to a court or jury trial. This includes claims of wrongful discharge, discrimination, harassment, and any injury to physical, mental, or economic interests. Also, all disputes are covered by this Arbitration clause whether based on claimed violations of statutory, contractual, or common law rights.

The only disputes between the Company and the Employee not covered by this Agreement are claims for unemployment insurance or workers' compensation, claims under the National Labor Relations Act.

(Employment Agreement (DE 1-1) at 3-4) (emphasis in original).

COURT'S DISCUSSION

Section 3 of the Federal Arbitration Act ("FAA") provides:

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.

9 U.S.C. § 3. Section 4 authorizes a "party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration [to] petition [a] United States district court . . . for an order directing that such arbitration proceed in the manner provided for in such agreement." 9 U.S.C. § 4. Section 4 provides that, when presented with such a motion, a court "shall hear the parties, and upon being satisfied that the making of the agreement for arbitration . . . is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement." Id.

In reviewing a motion to compel arbitration, the "court accepts as true the allegations in the complaint that relate to the underlying dispute between the parties." Berkeley Cty. Sch. Dist. v. Hub Int'l Ltd., 944 F.3d 225, 233 (4th Cir. 2019) (quotations omitted). If, however, the "'making of the arbitration agreement be in issue,' then 'the court shall proceed summarily to the trial thereof.'" Id. (quoting 9 U.S.C. § 4). The court is obliged to conduct a trial only "when a party unequivocally denies 'that an arbitration agreement exists,' and 'show[s] sufficient facts in support thereof," under a summary judgment standard. Id. (quoting Chorley Enters., Inc. v. Dickey's Barbecue Rests., Inc., 807 F.3d 553, 564 (4th Cir. 2015)).

When faced with a motion to compel arbitration, the court analyzes only two "gateway matter[s]." Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2006). First, the court must determine whether "a valid agreement to arbitrate exists between the parties." Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 938 (4th Cir. 1999). Second, where the court concludes there is such an agreement, the court next asks whether "the specific dispute falls within the substantive scope of that agreement." Id.

Here, the "gateway matter[s]" are satisfied with respect to the arbitration agreement contained in the Employment Agreement. Howsam, 537 U.S. at 83. First, the arbitration agreement is valid, where it is in writing and it is contained with the Employment Agreement thatplaintiff executed personally. (See Employment Agreement (DE 1-1) at 4). Second, the scope of the arbitration agreement is clear and broad, stating that "Company and Employee agree that if any disputes arise between them, the disputes will be submitted exclusively to binding arbitration in the US," and that "[t]his includes claims of wrongful discharge . . . an any injury to . . . economic interests." (Id. at 3-4). Further, "all disputes are...