Dittmann v. ACS Human Services LLC
210 F. Supp. 3d 1047
N.D. Ind.2016Background
- Plaintiff William Dittmann, an ACS Human Services employee, refused to complete a workplace wellness nicotine test and screening in 2014 and was assessed (or faced) a $500 annual surcharge and denial of spousal enrollment unless his spouse complied.
- Xerox Business Services (affiliate of ACS; collectively “Xerox”) required employees to sign a Dispute Resolution Plan (DRP) and DRP Acknowledgment agreeing to mandatory arbitration of employment-related disputes, including challenges to the DRP’s enforceability.
- Dittmann alleges Quest Diagnostics (visited for testing) tested for more than nicotine, required onerous terms (indemnity, New Jersey jurisdiction, cookies, data-sharing), refused to limit testing or show the screening form, and labeled him a smoker; he asserts Title VII, ADEA, GINA, HIPAA, ADA, and state defamation claims against various defendants.
- Xerox moved to compel arbitration under the DRP; Quest moved to dismiss for failure to state claims under Rule 12(b)(6).
- The court accepted the complaint’s factual allegations for present purposes, found the DRP covers the asserted employment claims and challenges to the DRP, compelled arbitration as to Xerox/ACS and dismissed those claims without prejudice, denied Rule 11 fees, and dismissed Quest’s federal claims for failure to plead an employer/agent relationship but declined supplemental jurisdiction over state defamation, allowing limited leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability and scope of arbitration agreement (DRP) | Dittmann contends the dispute is not arbitrable because a non-signatory (Quest) is joined and he will not arbitrate without Quest; he also argues DRP is illegal/unenforceable | Xerox argues Dittmann agreed to mandatory arbitration covering all listed employment claims and challenges to the DRP, and arbitration should be compelled | Court: DRP governs these disputes (including challenges to DRP); compelled arbitration of claims against Xerox/ACS and dismissed those claims without prejudice to arbitration |
| Request for Rule 11 fees | Dittmann’s filing resisted arbitration based on Quest’s involvement | Xerox seeks fees under Rule 11 for filing a suit despite arbitration obligation | Court: Denied fees — Dittmann’s position about Quest’s role was not entirely frivolous or objectively baseless |
| Viability of federal claims against Quest (agency/employer status) | Dittmann alleges Quest acted as Xerox’s agent and therefore is liable under Title VII, GINA, ADA (and related statutes) | Quest argues Dittmann was not its employee; allegations do not plausibly show Quest was Xerox’s agent or an employer under applicable tests | Court: Dismissed federal claims against Quest for failure to plead facts showing agency/employer relationship; granted leave to amend |
| HIPAA claim and state defamation claim against Quest | Dittmann asserts HIPAA violation and defamation | Quest argues HIPAA provides no private right of action; defamation is supplemental and inadequately pleaded | Court: HIPAA claim dismissed (no private right); declined supplemental jurisdiction over defamation and dismissed it without prejudice; noted defamation facts were lacking but allowed amendment |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (federal policy favors enforcing arbitration agreements)
- Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990) (Rule 11’s purpose and standards)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: plausibility required)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard articulated)
- Alam v. Miller Brewing Co., 709 F.3d 662 (7th Cir. 2013) (Title VII agent/agency liability limited to particular circumstances)
- Hojnacki v. Klein-Acosta, 285 F.3d 544 (7th Cir. 2002) (factors for determining employee status under common-law agency)
- Groce v. Eli Lilly & Co., 193 F.3d 496 (7th Cir. 1999) (district courts should usually dismiss supplemental state claims after federal claims are dismissed)