Rowe v. ZF North America, Inc.

Roger Rowe, Plaintiff v. ZF North America, Inc., et al., Defendants

No. 3:20-cv-1296

United States District Court, N.D. Ohio, Western Division

July 19, 2021

MEMORANDUM OPINION AND ORDER

Jeffrey J. Helmick United States District Judge

I. Introduction

On June 12, 2020, Plaintiff Roger Rowe filed a complaint against his alleged former employer, ZF North America, Inc., asserting employment discrimination, interference, and retaliation claims under the ADA, ERISA, and Ohio law. (Doc. No. 1). On October 26, 2020, Rowe amended his complaint to include as defendants Richard O'Laughlin and Tammy Burroughs, the Plant Manager and Plant H.R. Manager, respectively, at the time of his termination. (Doc. No. 9). The Amended Complaint alleged ERISA interference and retaliation against all Defendants (Counts 1 & 2), ADA discrimination and retaliation against ZF (Counts 3-5), and a state law claim of aiding and abetting discrimination against O'Laughlin and Burroughs (Count 6). (Id.).

Currently pending is a motion to compel arbitration and to dismiss the Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6) filed by all Defendants. (Doc. Nos. 10 & 10-1). Rowe filed opposition (Doc. No. 12), and Defendants replied (Doc. No. 13). For the reasons stated below, I grant the motion to compel arbitration and dismiss the matter pending resolution of the arbitration.

II. Background

In February 2015, Rowe applied for a position with TRW Automotive Holdings Corporation, (Doc. No. 10-2 at 4-8), and was offered a position as Manufacturing Engineer at Kelsey-Hayes Company (“KH”), a subsidiary of TRW. (Id. at 9-12). Rowe began work at KH around March 30, 2015. (Doc. No. 12 at 4). Approximately two months later, ZF acquired TRW and its subsidiaries, including KH. (Doc. No. 10-2 at 1-3). Defendants assert that despite this corporate change in ownership, Rowe remained an employee of KH throughout his tenure. (Id.). Rowe disagrees and alleges ZF was his actual employer because he was subject to its policies and benefits, and ZF controlled his day-to-day work activities. (Doc. No. 12 at 6-7).

In July 2017, Rowe began experiencing pain and mobility issues associated with thoracic radiculitis which impacted his ability to lift, walk, and stand for long periods of time. (Doc. No. 9 at 5). As a result, Rowe requested and received a medical leave of absence, which commenced on May 10, 2018. (Id.). At some point after this, Rowe alleges he was advised to utilize ZF's short-term disability program, which provided up to 26 weeks of paid leave, and he did so. (Id. at 43-44). In October 2018, Rowe requested an extension of his medical leave. (Id.). His request was approved, but Rowe was transitioned to leave under the long-term disability policy which provided an additional 26 weeks of paid leave. (Id. at 44). Around February 8, 2019, Rowe received a termination letter, signed by Burroughs on ZF letterhead, stating “[w]e understand that you will be transitioning to Long Term Disability benefits effective 11/9/2018, which we will therefore consider your last day of employment . . . this will be considered an ‘administrative termination' only . . . .” (Doc. No. 12-3 at 2).

Relevant to the current motion, Rowe's signed job application to TRW included an agreement to be bound by “the TRW Alternative Dispute Resolution (ADR) policy as a condition of employment.” (Doc. No. 10-2 at 4-8). This policy required submission of “any covered dispute…between [Rowe] and [his] employer and any supervisors or managers to ADR.” (Id. at 8). Additionally, when Rowe signed his offer letter, he again agreed to be bound by the TRW Problem Resolution Policy (“TRW/KH Policy”). (Id. at 11-12).

In May 2017, ZF issued its own Problem Resolution Policy (“ZF Policy”). (Id. at 29-45). This policy covered “all employees hired or re-hired by ZF TRW Automotive Holdings Corp., TRW Automotive Holdings Corp., and their subsidiaries, successor and assigns…from November 1, 2006 through April 30, 2017.” (Id. at 30). This policy also required submission of any covered dispute to ADR. (Id. at 37).

While largely the same, the two policies do have one crucial difference: the definition of covered disputes. (See Doc. No. 10-2 (Exs. C & D)). In relevant part, the TRW/KH Policy required the following disputes to be submitted to ADR: 1) involuntary separations, such as discharges and layoffs; 2) claims of discrimination, harassment, or retaliation based on protected status; and 3) any other employment-related claim provided for by state or federal law, except as otherwise excluded. (Id. at 21). The TRW/KH Policy goes on to exclude, in relevant part, “disputes over the content, establishment, or amendment of…Company benefits or pensions….” (Id.).

The ZF Policy, by comparison, provides for the following covered disputes: 1) involuntary separations, such as discharges and layoffs; 2) claims of illegal discrimination, harassment, or retaliation; 3) claims of failure to hire, promote, or consider; 4) claims of illegal revocation of a position of employment; 5) claims of violation of either state or federal wage and hour law; and 6) any other employment-related claim provided for by state or federal law, except as otherwise excluded. (Id. at 54). The exclusionary clause of the ZF Policy, in relevant part, excludes “disputes over . . . the content, establishment, modification or elimination of any Company retirement or other benefits . . . .” (Id.).

III. Standard

In the context of a motion to compel arbitration, the court “must determine whether the parties have agreed to arbitrate the dispute at issue.” Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000). Like on summary judgment, the moving party bears the initial prima facie burden of showing the existence of an agreement to arbitrate. See Great Earth Cos., Inc. v. Simons, 288 F.3d 878, 889 (6th Cir. 2002); Denton v. Allenbrooke Nursing & Rehab. Ctr., LLC, 495 F.Supp.3d 601, 607-08 (W.D. Tenn. 2020). Then, the non-movant “must show a genuine issue of material fact as to the validity of the agreement to arbitrate.” Great Earth, 288 F.3d at 889. If the validity of the agreement to arbitrate is “not ‘in issue', [courts] must compel arbitration.” Id. (citing 9 U.S.C. § 4). Thus, viewing the facts in a light most favorable to Rowe, I must determine “whether the evidence presented is such that a reasonable finder of fact could conclude that no valid agreement to arbitrate exists.” Danley v. Encore Capital Grp., Inc., 680 Fed.Appx. 394, 397 (6th Cir. 2017) (unpublished) (quoting Great Earth, 288 F.3d at 889).

In conjunction with their motion to compel, Defendants have requested dismissal under Rules 12(b)(1) and 12(b)(6). (Doc. No. 10). Federal courts throughout the country have struggled with the correct procedural mechanism to dismiss a matter in favor of arbitration. See FCCI Ins. Co. v. Nicolas Cty. Library, 2019 WL 1234319, at *2-6 (E.D. Ky. Mar. 15, 2019) (analyzing the various standards of review employed). Yet recently, the Sixth Circuit appears to have settled on a preference for analysis under Rule 12(b)(6), stating a party's “failure to pursue arbitration in spite of a compulsory arbitration provision means that the party has failed to state a claim . . . .” Knight v. Idea Buyer, LLC, 723 Fed.Appx. 300, 301 (6th Cir. 2018) (unpublished) (citing Teamsters Local Union 480 v. United Parcel Serv., Inc., 748 F.3d 281, 286 (6th Cir. 2014)). Thus, in the event I find the existence of a valid arbitration agreement which applies to Rowe's claims, dismissal is most appropriate under Rule 12(b)(6). Id.

IV. Discussion

As a preliminary matter, Rowe devotes a large portion of his opposition on a discussion of which entity is his actual employer in an attempt to require application of the ZF Policy instead of the TRW/KH Policy. (See Doc. No. 12 at 11-14). I need not reach this issue to determine whether Rowe's claims are arbitrable. See First Union Real Estate Equity & Mortg. Invs. v. Crown Am. Corp., 23 F.3d 406, at *6 (6th Cir. 1994) (unpublished table decision) (finding district court erred by focusing on which contract would control outcome of parties' dispute rather than determining if claims were subject to arbitration).

At this stage, I am tasked only with determining whether Rowe agreed to arbitrate his specific claims, but with whom he made that agreement - the predecessor or successor entity - is not determinative of its enforceability. See, e.g., John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 550-51 (1964) (holding a company can be bound by an arbitration agreement that its predecessor signed where there is “substantial continuity of identity in the business enterprise….”); Southward v. S. Cent. Ready Mix Supply Corp., 7 F.3d 487 (6th Cir. 1993). Regardless, and as discussed below, I find either iteration of the arbitration agreement requires Rowe to submit all his claims to an arbitrator.

The Federal Arbitration Act (“FAA”) strongly favors arbitration. See, e.g., Albert M. Higley Co. v. N/S Corp., 445 F.3d 861, 863 (6th Cir. 2006); EEOC v. Waffle House, Inc., 534 U.S. 279, 289 (2002). Specifically, it provides that all agreements to arbitrate “shall be valid, irrevocable and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. State contract law will govern these generally applicable contract defenses. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995).

In the context of a motion to compel arbitration, the Sixth Circuit applies a four-prong test to determine: 1) whether the parties agreed to arbitrate; 2) the scope of that agreement 3) if federal statutory claims are asserted, whether Congress intended those claims to be arbitrated; and 4) whether to...