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Siggelkow v. Northwest Group, Inc.

United States District Court, D. Oregon, Portland Division

January 22, 2019

GARRY THOMAS SIGGELKOW, an individual, Plaintiff,
NORTHWEST GROUP, INC., a domestic corporation, RAJEEV K. GUPTA, an individual, Defendants.



          OPINION & ORDER


         Plaintiff Garry Siggelkow brings this employment-related action against his former employer Northwest Group, Inc. (NGI) and NGI's President Rajeev Gupta. Defendants move to compel arbitration pursuant to an alternative dispute resolution agreement. I deny the motion.


         I. Factual Background

         In his Amended Complaint, Plaintiff alleges that Defendants employed him to work at their Jack-in-the-Box fast food restaurants throughout Oregon. Am. Compl. ¶ 5. Although he was hired as NGI's "Director of Service Delivery," id. ¶ 6, his job was to travel to the restaurants to perform maintenance work. Siggelkow Decl. ¶ 3. He had a written employment contract, signed by Gupta, in which Defendants promised to reimburse Plaintiff for mileage, travel expenses, and other reasonable expenses associated with his work. Am. Compl. ¶ 7 & Ex. 1. Plaintiff alleges that Defendants did not fully reimburse him for these expenses. Id. ¶¶ 8. As a result, when his employment ended, Plaintiff alleges he was owed "considerable amounts" for unpaid mileage, travel, and other reasonable expenses. Id. ¶ 9; see also Id. ¶¶ 14-17 (breach of contract claim allegations seeking $3, 805.04 in damages on that claim).

         Plaintiff further alleges that Defendants misclassified him as an exempt employee under the Fair Labor Standards Act and Oregon statutes, paying him a salary of $60, 000 per year with no opportunity for overtime pay. Id. ¶¶ 20, 43. He alleges he should have been classified as a non-exempt hourly employee and paid overtime for hours worked in excess of forty per week as required by the wage statutes. Id. ¶¶ 21, 44. He alleges that Defendants denied him at least 1, 160 hours of overtime work during his period of employment from January 9, 2017 through January 4, 2018. Id. ¶¶ 23, 24; see also Id. ¶¶ 36, 45 (unpaid wages owed on overtime claim at least $36, 238.40).

         In support of their motion, Defendants submit a copy of an offer of employment ("Employment Agreement") by Defendants to Plaintiff which was signed by Gupta and Plaintiff, as well as Michele Smith, NGI's Human Resources Manager. Gupta Decl., Ex. B, ECF 9 at 16. Plaintiff was offered the position of Director of Service Delivery, with a start date of January 9, 2017. Id. Other benefits and employment terms are recited in the employment agreement. Id. There is no mention of any employee or personnel handbook or dispute resolution policy. Id.

         Defendants also rely on a "Mediation/Arbitration Agreement Acknowledgement [sic]," ("Arbitration Agreement") signed by Plaintiff and dated January 9, 2017. Id., Ex. C, ECF 9 at 18. Because its terms are relevant to the motion, I recite them here:

My signature on this document acknowledges that I understand the Dispute Resolution Policy as specified in the Employee Handbook and agree to abide by its conditions. I also acknowledge that I understand that my employment is at-will and may be terminated at any time, with or without reason, by either NGI or myself. I further agree that, in accordance with NGI's Dispute Resolution Policy, I will submit any dispute arising under or involving my employment or termination of employment with NGI within one (1) year from the date the dispute first arose. I agree that arbitration shall be the exclusive forum for resolving all disputes arising out of or involving my employment or termination with NGI. I agree that I will be entitled to legal representation, at my own cost, during arbitration. I further understand that I will be responsible for half of the cost of the arbitrator and any incidental costs of arbitration.
I acknowledge that I have received or have had the opportunity to read this arbitration agreement. I understand that this arbitration agreement requires that disputes involving matters subject to the agreement be submitted to mediation or arbitration pursuant to the Dispute Resolution Process rather than to a judge or jury in court.


         In his Declaration opposing the motion, Plaintiff states that he did not see the Dispute Resolution Policy referred to in the Arbitration Agreement until his attorney received a copy of it during this litigation in October 2018. Siggelkow Decl. ¶ 11. Although he does not deny that he signed the Arbitration Agreement on his first day of work, he states that he signed it sometime during the day after he had actually begun working. Id. According to Plaintiff, Gupta told Plaintiff he needed to sign it. Id. Plaintiff states he requested a copy of the Dispute Resolution Policy at that time. Id. ¶ 13. When he had not received it later that week, he asked for it again. Id. Plaintiff states that in response, he was told by NGI's Director of Training that NGI did not provide copies of the employee handbook or Dispute Resolution Policy to employees because Gupta did not want to pay the costs associated with photocopying the documents. Id.

         Smith states that Plaintiff signed his Employment Agreement on January 7, 2017. Smith Decl. ¶ 3, ECF 20. This contradicts the January 9, 2017 date on the Employment Agreement itself. Gupta Decl., Ex. B, ECF 9 at 16 (date shown at top of Employment Agreement is January 9, 2017 and underneath each of the three signatures of Gupta, Smith, and Siggelkow, the date is printed as January 9, 2017, with the exception of the date under Smith's signature which shows the year as 2016 and which I assume is a typographical error). Given the dates shown on the Employment Agreement, I assume the January 7, 2017 date recited by Smith in her Declaration is a mistake and that she meant to state that Plaintiff signed the Employment Agreement on January 9, 2017. Smith also states that Plaintiff went through orientation where he was provided a copy of the employee handbook containing the Dispute Resolution Policy. Smith Decl. ¶ 3. She asserts that Plaintiff had notice of the entire Dispute Resolution Policy "since he started working at [NGI]." Id. ¶ 5.

         The Dispute Resolution Policy is not in the record. On October 25, 2018, ten days after Defendants filed the instant motion to compel arbitration, Defendants' then-counsel filed a Declaration in which he stated that he was submitting a copy of the "company manual and ADR policy" to the Court in camera. Hoover Oct. 25, 2018 Decl. 3, ECF 14. A hard copy of the document was delivered to the Court on or about the day the Declaration was filed. In a November 7, 2018 Minute Order, I explained that parties may not unilaterally submit in camera documents. ECF 18 (citing case law regarding the presumption of access to court records and the general right to inspect and copy public records, including judicial records and documents). Because there was no court order allowing submission of in camera documents, I stated that I would disregard the in camera submission of the company handbook and ADR policy. Id. I ordered Defendants to file the document as an exhibit to a declaration or to file a properly supported motion to file the document under seal. Id. Defendants did neither. Thus, there is no copy of the company handbook and ADR policy in the record.

         II. Procedural Background

         Plaintiff first initiated this case against Defendants in "Small Claims Court"[1] in Multnomah County on May 11, 2018, seeking reimbursement for $3, 805.04 in unclaimed travel expenses, and $400 in costs. Wilson Decl., Ex. 1, ECF 17 at 4-7. In response, Defendants filed a General Notice of Appearance. Id., Ex. 2, ECF 17 at 8-10. Defendants then filed several motions. Tr. of State Ct. Procdgs. (Small Claims Court), ECF 3 at 18-20 (motion to allow attorney to represent Defendants in Small Claims Court); at 62-63 (motion to dismiss Gupta due to corporate shield); at 86-87 (motion to dismiss for lack of personal jurisdiction due to insufficient process); at 96-97 (motion to dismiss due to improper venue). The motions were denied. Id. at 28 (denying Defendants' request that they be represented by counsel); Wilson Decl., Ex. 3, ECF 17 at 12-14 (denying motions to dismiss due to corporate shield, insufficient process, and improper venue).

         Defendants also moved for an order of abatement to allow them to submit the matter to arbitration pursuant to contract. Tr. of State Ct. Procdgs., ECF 3 at 60-61. This motion was also denied. Wilson Decl., Ex. 4, ECF 17 at 15. The Small Claims Court explained that Defendants waived any contractual right to avoid a court disposition of this civil dispute by filing a general appearance. Id.

         The next week, Defendants filed a breach of contract counterclaim against Plaintiff, seeking $9, 835.91 plus attorney's fees and costs, based on allegations that Plaintiff had breached a contract by "poor execution of job performance" and causing NGI lost profits and expenses. Id., Ex. 5, ECF 17 at 16-18. Defendants demanded a jury trial "if any of their motions are not granted and the case is not dismissed." Id., ECF 17 at 17. Because of the counterclaim and jury trial demand, the case was transferred out of Small Claims Court and to Circuit Court. Plaintiff hired counsel to defend the counterclaim. Wilson Decl. ¶ 8; Siggelkow Decl. ¶ 10, ECF 16.

         Plaintiff filed an Amended Complaint in Multnomah County Circuit Court on July 30, 2018, alleging breach of contract for unpaid travel expenses and violations of the FLSA and Oregon wage laws. Wilson Decl. ¶ 11; Tr. of State Ct. Procdgs. (Circuit Court), ECF 4 at 11-19. Defendants then removed the case to this Court on August 13, 2018. Notice of Removal, ECF 1. They filed an Answer on August 27, 2018, in which they again demanded a jury trial "if any of their motions are not granted and the case is not dismissed." Answer to Am. Compl. at p. 5, ECF 6. As an affirmative defense, they alleged that the Complaint was prematurely filed because the employment contract required arbitration before filing suit. Id. at p. 6. And, they also brought the same counterclaim for breach of contract based on allegations that Plaintiff breached the employment agreement which required him "to act in manner to not cause excess cost and expense on the defendant NGI[.]" Id. at 6-7. This time, they sought lost profits of over $30, 000, along with attorney's fees and costs. Id.

         According to Plaintiff, after Defendants filed their Answer to the Amended Complaint, the parties held a Rule 26 discovery conference on September 26, 2018, and Plaintiff served discovery requests on Defendants on October 2, 2018. Wilson Decl. ¶ 12. ...

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