Mars Incorporated v. Szarzynski, Civil Action No. 2020-1344

Background

Jacek Szarzynski was a long‑time senior Mars executive (Global CFO roles) who worked from Belgium under a final employment agreement (the "SED Contract") with Mars Belgium. The SED Contract (governed by Belgian law) contains a broad arbitration clause requiring disputes to be arbitrated in Brussels under CEPANI rules and confidentiality and expense‑reimbursement provisions.
Separately, Szarzynski signed a series of Mars incentive/bonus agreements ("Incentive Agreements") that condition bonuses on nondisclosure and state Mars may seek court injunctive relief for certain breaches; those agreements do not include arbitration clauses.
Mars alleges that, while transitioning to JAB/Panera in late 2018–early 2019, Szarzynski downloaded thousands of confidential Mars documents and submitted JAB/Panera expenses to Mars, and sued in D.D.C. for DTSA/D.C. trade‑secret claims plus fraud, conversion, and unjust enrichment.
Defendants moved to dismiss/compel arbitration under the SED Contract; Mars is a nonsignatory to that contract.
The court considered (1) whether it or an arbitrator decides arbitrability and (2) whether Mars, despite being a nonsignatory, is bound by the SED Contract (third‑party beneficiary or estoppel), and whether the Incentive Agreements displace arbitration.
The court concluded Mars is a third‑party beneficiary of the SED Contract under Belgian law and must arbitrate claims against Szarzynski; claims against Szarzynski were dismissed in favor of arbitration and claims against JAB and Panera were stayed pending arbitration.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Who decides arbitrability (court v. arbitrator)?	CEPANI/SED should send gateway questions to arbitrator because SED incorporates CEPANI rules.	Same; CEPANI rules delegate arbitrability to arbitrators.	Court decides because Mars is a nonsignatory, so incorporation/delegation language is not a clear and unmistakable consent by Mars to delegate arbitrability.
Is Mars bound to arbitrate as a nonsignatory (third‑party beneficiary)?	Mars says it did not sign SED and did not bring contract claims, so it is not bound.	SED explicitly benefits "Group Companies" (including Mars) and Mars "consciously participated" in performance of the contract.	Held: Mars is a third‑party beneficiary under Belgian law and is bound to arbitrate.
Can Mars be compelled to arbitrate under equitable estoppel?	Mars argues its claims are statutory/tort and not based on the SED Contract, so estoppel is inapplicable.	Defendants argue estoppel principles apply to bind nonsignatories who seek benefits or rely on contract obligations.	Held: Court found no basis to apply estoppel; estoppel theory not the basis for arbitration here.
Do the Incentive Agreements (which allow court injunctive relief) negate arbitration?	Mars contends the Incentive Agreements demonstrate an express choice to litigate confidentiality disputes in court and supersede arbitration.	Defendants say the Incentive Agreements address only bonus program remedies and do not evince intent to replace SED arbitration for employment disputes.	Held: Incentive Agreements do not replace or displace the SED arbitration clause; they don’t eliminate Mars’ obligation to arbitrate under SED.

Key Cases Cited

AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA establishes strong federal policy favoring arbitration)
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (courts must submit disputes covered by arbitration agreements)
Rent‑A‑Center, W., Inc. v. Jackson, 561 U.S. 63 (2010) (arbitration is a matter of contract)
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (clear and unmistakable evidence required to delegate arbitrability to arbitrator)
Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019) (parties may delegate gateway arbitrability questions to arbitrators)
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (ambiguities regarding arbitrability resolved in favor of arbitration)
Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) (state contract‑law principles govern who may be bound to arbitrate)
John Wyeth & Bro. Ltd. v. CIGNA Int'l Corp., 119 F.3d 1070 (3d Cir. 1997) (disputes "arising out of or relating to" an agreement have a logical or causal connection)
Wolff v. Westwood Mgmt., LLC, 558 F.3d 517 (D.C. Cir. 2009) (doubts about arbitrability scope resolved in favor of arbitration)
Hellenic Inv. Fund, Inc. v. Det Norske Veritas, 464 F.3d 514 (5th Cir. 2006) (equitable estoppel can bind nonsignatories who assert contract‑based claims)