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Sixel, LLC v. Penning

United States District Court, D. Oregon, Eugene Division

January 24, 2019

SIXEL, LLC, an Oregon limited liability Company, Plaintiff,
v.
JOHN A. PENNING III, MICHAEL LUM, MICHAEL W. MOONEY, KRISTOPHER NICHTER, ROBERT J. HAYES, MELISSA A. GALVAN PETERSON, ELIZABETH M. FLO, RES, LAUREN F. MISHLER, JEREMIAH GERALD, ILONA CAMBRON, MARTEN A. KAMMERMAN, THERESA F. TERRI CAMPBELL, ERICKA L. GREGORY, NEPTUNE A. LYNCH XI, KATHERTNE JONES and KYLE ELLIOTT, individuals, VOLAIRE AVIATION CONSULTFNG, PNC, an Indiana corporation, UMB, INC., a Delaware corporation, AIRPORT STRATEGY AND MARKETING LIMITED, a United Kingdom corporate entity, doing business in Oregon as UMB, LLC, Defendants.

          OPINION AND ORDER

          AIKEN AIKEN, JUDGE.

         Plaintiff, Sixel, LLC, brings this action against a number of former employees, alleging that the employees misappropriated trade secrets after termination of their employment in violation of the Defend Trade Secrets Act ("DTSA") (18 U.S.C. § 1836). Plaintiff also brings a number of related claims, including Breach of Confidentiality Agreement, Breach of Covenant Not to Compete, Breach of the Duty of Good Faith and Fair Dealing, Breach of the Duty of Loyalty, Breach of Fiduciary Duty and Intentional Interference with Prospective Economic Advantage. Defendants, John A. Penning III, Robert J. Hayes, Michael Lum, Michael Mooney, Kristopher Nichter, Melissa Galvan Peterson, Elizabeth Flores, and Lauren Mishler ("Petitioners"), have filed a Petition to Compel Arbitration (doc. 28) pursuant to the terms of their Employee Handbook and Employee Contract (the "Employment Agreement") with plaintiff. For the reasons set forth herein, the petition is granted.

         BACKGROUND

         Plaintiff is the successor to Sixel Consulting Group, Inc. ("SCG") which employed defendants. SCG, located in Eugene, Oregon, was established by Mark Sixel in 2001, and engaged in consulting, marketing, and air-service development specializing in using proprietary technology to help determine the most profitable airline routes for clients to pursue and how to optimally allocate their resources.

         As a condition of employment, petitioners were required signed the Employment Agreement, which included various provisions such as a covenant not to compete, as well as confidentiality and non-solicitation provisions. The Employment Agreement also included a provision whereby the parties agreed to settle disputes through an arbitration process. Crucially, for the present motion, Section 7 of the Employment Agreement for each of the petitions contains a subsection dealing with "Arbitration and Equitable Relief." Specifically, Section 7-10(a) in each of the Employment Agreements provides:

"Except as provided in Section 7-10(b) below, [Petitioner] agrees that any dispute, claim or controversy concerning [Petitioner's] employment or the termination of [Petitioner 's] employment or any dispute, claim or controversy arising out of, or relating to, any interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in Eugene, Oregon, in accordance with the rules then in effect of the American Arbitration Association. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court having jurisdiction. The Company and [Petitioner] shall each pay one-half of the costs and expenses of such arbitration, and each party shall separately pay that party's counsel fees and expenses."

(emphasis added).

         In late 2016, plaintiff claimed to experience financial difficulties, which resulted in several employee layoffs and voluntary resignations. Following this period, petitioners established an aviation consulting business. Plaintiff now alleges that defendants and others conspired in starting these companies to improperly take several of plaintiffs clients and make use of plaintiffs protected intellectual property. Plaintiff pursued these allegations by filing a complaint in the Circuit Court of the State of Oregon. Defendants then removed the case to this Court pursuant to 28 U.S.C. §§ 1331, 1367, 1441, 1446, and Fed R. Civ. P. 81(c).

         Petitioners now seek to compel arbitration under the terms of the Employment Agreement mentioned above.[1]

         LEGAL STANDARD

         Under the Federal Arbitration Act ("FAA"), arbitration agreements are "valid, irrevocable, and enforceable, save upon such grounds as exist at law or equity for the revocation of any contract." 9 U.S.C. § 2. Any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25 (1983). An order to arbitrate should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. United Steelworkers of America v. Warrior & GulfNavigation Co., 363 U.S. 574, 582-583 (1960). When considering arbitrability, the court determines (1) whether a valid agreement to arbitrate exists, and if it does, (2) whether the agreement encompasses the dispute at issue. Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th. Cir. 2008).

         Pursuant the FAA, the interpretation of an arbitration agreement is generally a matter of state law. Stolt-Nielsen S.A. v. Animal FeedsInt7 Corp., 559 U.S. 662, 681, (2010). Oregon, like the federal courts, recognizes a presumption in favor of arbitrability. See Livingston v. Metro. Pediatrics, LLC, 234 Or.App. 137, 147 (2010), citing to United Steelworkers of America v. Warrior & GulfNavigation Co., 363 U.S. at 582.

         DISCUSSION

         Here, the parties agree that a valid arbitration agreement exists; the specific language is contained in the Employment Agreement. Because there is a valid agreement, the only remaining question is whether the agreement encompasses the disputes at issue-including whether the parties agreed to arbitrate arbitrability. Petitioners argue that the language contained in the Employment Contract is plain and, thus, any claims arising out of their ...


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