United States District Court, D. Arizona
Honorable John. Tuchi, United States oh District Judge
issue is Defendant’s Motion to Compel Arbitration and
Stay Action (Doc. 10, Mot.). In Plaintiff’s initial
Response, Plaintiff argued that his Title VII claims were
“wholly separate” from his Employment Agreement
(the “Agreement”), which contained an arbitration
clause. (Doc. 14, Resp. at 1.) Therefore, Plaintiff requested
that the Court deny the Motion to Compel Arbitration.
Defendant filed a Reply, asserting for the first time that
issues of arbitrability must also be given to an arbitrator
because the arbitration agreement states “[a]ny dispute
. . . including whether the causes of action asserted are
arbitrable, will be referred to and finally determined by
arbitration in accordance with the Judicial Arbitration and
Mediation Services (“JAMS”) Streamlined
Arbitration Rules and Procedures.” (Doc. 17, Reply at
2.) Because this issue was first raised in Defendant’s
Reply, the Court requested a Sur-Reply from Plaintiff to
address the issue of delegating the question of arbitrability
to an arbitrator, which Plaintiff filed on September 11,
2019. (Doc. 19, Sur-Reply.) The Court finds this matter
appropriate for resolution without oral argument.
See LRCiv 7.2(f).
Christopher Tipp entered employment with Defendant AT&S
America, LLC (“AT&S”) on approximately
September 1, 2015. Mr. Tipp was the Director of Business
Development at AT&S, working in Arizona, until his
termination on approximately December 31, 2017. Before
beginning his employment, Mr. Tipp signed the Agreement with
AT&S containing an arbitration clause, which stated:
Any dispute, controversy or cause of action arising out of or
relating to this Agreement, including the formation,
interpretation, breach or termination thereof, including
whether the causes of action asserted are arbitrable, will be
referred to and finally determined by arbitration in
accordance with the Judicial Arbitration and Mediation
Service (“JAMS”) Streamlines Arbitration Rules
(Mot., Ex. B at 10.)
Tipp filed a Complaint against AT&S in Maricopa County
Superior Court on February 14, 2019. In the Complaint, Mr.
Tipp alleged that AT&S intentionally discriminated
against him because of his national origin, violating Title
VII of the Civil Rights Act of 1964 and 42 U.S.C. §
1981. On April 16, 2019, Defendant removed the action based
on federal question jurisdiction under 28 U.S.C. § 1331
because Plaintiff’s claims-two violations of Title VII
of the Civil Rights Act of 1964 and two violations of 42
U.S.C. § 1981-arise under the laws of the United States.
Defendant now moves to compel arbitration of
Plaintiff’s claims, and the question of arbitrability
itself, under the Agreement.
resolve a motion to compel arbitration under the Federal
Arbitration Act (“FAA”), 9 U.S.C. § 2, a
district court must determine (1) whether the parties entered
into a valid agreement to arbitrate, and (2) whether the
arbitration agreement encompasses the dispute at issue.
Lifescan, Inc. v. Premier Diabetic Services, Inc.,
363 F.3d 1010, 1012 (9th Cir. 2004). If the district court
finds that both elements are met, the FAA requires the court
to enforce the arbitration agreement. Id.
the arguments raised by the parties for and against
arbitration of Plaintiff’s claims, Defendant raises the
threshold issue of whether the Agreement contains a valid,
enforceable delegation clause providing that any question as
to the arbitrability of Plaintiff’s claim must be
resolved by an arbitrator. (Reply at 2-3.) In a contract, the
parties can agree to delegate to an arbitrator any question
as to the enforceability of an arbitration agreement, and
thus the question of arbitrability itself can be arbitrated.
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63,
68-69 (2010) (“The delegation provision is an agreement
to arbitrate threshold issues concerning the arbitration
agreement. We have recognized that parties can agree to
arbitrate ‘gateway’ questions of
‘arbitrability, ’ such as whether the parties
have agreed to arbitrate or whether their agreement covers a
particular controversy.”). As a matter of contract law,
delegation of arbitrability to an arbitrator must be clear
and unmistakable. First Options of Chicago, Inc. v.
Kaplan, 514 U.S. 938, 944 (1995); AT&T Techs. v.
Commc’ns Workers of Am., 475 U.S. 643, 649 (1986);
Momot v. Mastro, 652 F.3d 982, 988 (9th Cir. 2011).
The Court need not determine whether the moving party’s
assertion of arbitrability is “wholly
groundless.” Henry Schein, Inc. v. Archer &
White Sales, Inc., 139 S.Ct. 524, 529 (2019).
the arbitration agreement delegates “any dispute,
controversy, or cause of action arising out of or relating to
this Agreement . . . including whether the causes of action
asserted are arbitrable” to arbitration according to
JAMS Rules. (Mot., Ex. B at 10.) The language of the
arbitration agreement itself clearly states that
arbitrability must be decided by an arbitrator. The
incorporation of the JAMS Rules is further evidence that the
parties intended arbitrability be resolved by an arbitrator.
See Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th
Cir. 2015) (“[The] incorporation of the AAA rules
constitutes clear and unmistakable evidence that contracting
parties agreed to arbitrate arbitrability.”);
Oracle Am., Inc. v. Myriad Group A.G., 724 F.3d
1069, 1074-75 (9th Cir. 2013) (holding that the UNCITRAL
Rules, like the AAA rules, delegate arbitrability to an
arbitrator and, therefore, constitute clear and unmistakable
evidence of the intent to arbitrate arbitrability). By
including disputes over “whether the causes of action
asserted are arbitrable” and incorporating the JAMS
Rules, the arbitration agreement clearly and unmistakably
delegates such a dispute to arbitration under JAMS Rules.
argues that the language is not clear and unmistakable,
contending that a separate clause in the Agreement
contradicts the arbitration agreement. Section 14.5 of the
Agreement states, “If any provision in this Agreement
is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions shall
nevertheless continue . . . .” (Mot., Ex. B at 10.)
Plaintiff argues that “the Agreement envisions courts
of competent jurisdiction determining provisions of the
agreements to be invalid, while at the same time requiring
all items related to the Agreement to be arbitrated.”
(Sur-Reply at 2.) The Court disagrees. Simply because a court
of competent jurisdiction can take an action in interpreting
the contract does not mean that another tribunal cannot take
the same action. Section 14.5 does not limit the Agreement to
interpretation only by a court of competent jurisdiction.
Therefore, Section 14.5 does not confuse the language
delegating the question of arbitrability to an arbitrator in
Section 14.2 of the Agreement.
Court concludes that the delegation provision is enforceable.
Issues regarding the arbitrability of Plaintiff’s
claims remain, which the parties have thoroughly briefed,
including whether Plaintiff’s Title VII claims fall
within the scope of the arbitration agreement. But under
Ninth Circuit precedent, the Court must give effect to the
delegation provision and compel arbitration of the question
of the arbitrability of Plaintiff’s claims, including
resolution of these remaining issues. The arbitrator will
have the power to determine the enforceability of the
arbitration agreement as applied to Plaintiff’s claims
pursuant to JAMS rules.
THEREFORE ORDERED granting Defendant’s Motion to Compel
Arbitration and Stay Action (Doc. 10) and compelling
arbitration of the arbitrability of ...