989 F. Supp. 2d 132
D. Mass.2013Background
- Jeremy Paradise accepted an at‑will employment offer from Eagle Creek in August/September 2007, began work October 1, 2007, and was terminated September 21, 2010.
- Eagle Creek’s August 15, 2007 offer letter stated employment was conditioned on signing an Employment, Non‑Competition, and Confidentiality Agreement (ENCCA) that contained an arbitration clause; the ENCCA was not attached due to an error.
- Paradise returned a signed offer letter on September 26 and requested the ENCCA that day; he never returned a signed ENCCA before starting work, but faxed the ENCCA’s first page (and later a signature page for a different document) on September 28.
- Eagle Creek treated the ENCCA as a condition of employment and reasonably believed Paradise had accepted its terms; Paradise remained silent and never objected or attempted to negotiate the ENCCA.
- Paradise sued alleging unpaid commissions and violations of the Massachusetts Wage Act; defendants moved to compel arbitration and the court held a bench trial limited to whether a valid arbitration agreement existed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of arbitration clause (formation) | Paradise argues no valid arbitration agreement because he never signed the ENCCA. | Eagle Creek argues the offer letter incorporated the ENCCA, Paradise accepted the conditioned offer, and conduct/silence formed a contract. | Court held a valid contract formed incorporating the ENCCA; Paradise is bound and the claims fall within the arbitration clause. |
| Arbitrability of Wage Act claim | Paradise contends arbitration clause is unenforceable because it would preclude mandatory treble damages/other Wage Act remedies. | Eagle Creek contends arbitration can proceed and any invalid waiver of remedies can be severed. | Court severed the ENCCA term barring punitive/special/exemplary damages, preserving arbitration; Wage Act claim is arbitrable. |
| Forum‑selection/choice‑of‑law effects | Paradise argued forum selection (Minnesota) would deny Massachusetts Wage Act rights. | Eagle Creek argued forum clause doesn't strip substantive Wage Act rights; severance and choice rules protect remedies. | Court found plaintiff waived the forum argument and presented no evidence Minnesota law would impair Wage Act rights; forum clause does not render arbitration unenforceable. |
| Applicability to non‑signatory (Behrendt) | Paradise asserted claims against his supervisor, who did not sign ENCCA. | Defendants argued claims against Behrendt are intertwined with employer claims and subject to arbitration. | Court held claims against Behrendt are arbitrable to same extent as those against Eagle Creek because they are inextricably intertwined. |
Key Cases Cited
- Dixon v. Perry & Slesnick, P.C., 75 Mass. App. Ct. 271 (discussing judicial resolution of gateway arbitrability issues)
- Feeney v. Dell Inc., 454 Mass. 192 (court decides whether parties are bound by arbitration clause)
- Kristian v. Comcast Corp., 446 F.3d 25 (1st Cir.) (arbitrability questions about clause scope are gateway issues)
- Melia v. Zenhire, Inc., 462 Mass. 164 (arbitration cannot circumvent Wage Act; forum not guaranteed by Wage Act)
- Machado v. System4 LLC, 465 Mass. 508 (unwaivable treble damages under Wage Act require severance of offending arbitration terms)
- Scherk v. Alberto‑Culver Co., 417 U.S. 506 (arbitration agreements are enforced like other contracts)
- Volt Info. Scis., Inc. v. Board of Trs. of Leland Stanford Jr. Univ., 489 U.S. 468 (parties aren’t required to arbitrate absent agreement)
- Campbell v. General Dynamics Corp., 407 F.3d 546 (1st Cir.) (elements for compelling arbitration)
- InterGen N.V. v. Grina, 344 F.3d 134 (1st Cir.) (scope and enforceability standards for arbitration clauses)
- Wright v. Universal Maritime Serv. Corp., 525 U.S. 70 (clarifies supplemental inquiry for federal‑statutory claims to ensure arbitration is appropriate)