United States District Court, D. Maine
ORDER ON DEFENDANT'S MOTION TO COMPEL
ARBITRATION
NANCY
TORRESEN UNITED STATES DISTRICT JUDGE.
Before
me is Defendant Edward Aronowitz's motion dismiss or stay
and to compel arbitration. (ECF No. 14). For the reasons that
follow, the Defendant's motion is
GRANTED.
BACKGROUND
On
December 31, 2003, Plaintiff Perfect Fit, LLC
(“Perfect Fit”)-then named
Foster & Levesque-acquired a duty-gear distribution
business called Perfect Fit/Shield Wallets, Inc. from
Defendant Aronowitz and his brother. Compl. ¶¶
18-20, 22. (ECF No. 1). As part of that transaction, Perfect
Fit agreed to employ Aronowitz as a salesperson for ten
years. Compl. ¶ 26. Perfect Fit also purchased
“all rights and privileges in and to the name
‘Perfect Fit Shield Wallets,' and all other general
intangibles associated with the sale of products and
operation of the company.” Compl. ¶ 23. According
to Perfect Fit, this included an email account created by
Aronowitz named “pfsw@aol.com.” Compl.
¶¶ 19, 24.
Perfect
Fit employed Aronowitz until December 31, 2013, when his
employment agreement expired. Compl. ¶ 31. Perfect Fit
and Aronowitz then extended their relationship by entering
into a five-year Independent Contractor Agreement dated
December 31, 2013 (the “IC
Agreement”). Compl. Ex. 2 (ECF No. 1-2). In
addition to setting out Aronowitz's responsibilities as
an independent sales representative for Perfect Fit, the IC
Agreement included a covenant through which Aronowitz agreed
not to compete with or solicit customers from Perfect Fit
when his contract with Perfect Fit terminated. Compl.
¶¶ 33-37. The IC Agreement also included an
arbitration provision, which stated in relevant part that
“[a]ny controversy or claim arising out of, or relating
to this Agreement, or the breach thereof, shall be settled by
mediation . . . and if mediation does not resolve the
dispute, by binding arbitration.” IC Agreement ¶
11.
Aronowitz
worked as an independent contractor for Perfect Fit until
December 31, 2018. Compl. ¶ 42. Throughout his time as
an employee and as a contractor for Perfect Fit, Aronowitz
had access to a broad array of customer information
maintained by Perfect Fit, including Perfect Fit's
customer lists. Compl. ¶ 49. Aronowitz also regularly
made use of the “pfsw@aol.com” account to arrange
sales and to conduct other company business. Compl. ¶
43.
Shortly
after Aronowitz left Perfect Fit, the company learned that
Aronowitz had emailed Perfect Fit's customer lists and
other confidential information to his personal email account.
Compl. ¶¶ 55-58. Perfect Fit has since discovered
that Aronowitz is now working as a salesperson for a
competitor and is attempting to solicit Perfect Fit's
customers on the competitor's behalf. Compl. ¶¶
63-64, 73-80. Perfect Fit has also determined that Aronowitz
is the only person who knows the login credentials for the
“pfsw@aol.com” account, which Perfect Fit
believes continues to receive emails related to Perfect
Fit's business. Compl. ¶ 60. Aronowitz has refused
to provide Perfect Fit access to the account. Compl.
¶¶ 61-62.
On
April 15, 2019, Perfect Fit filed suit against Aronowitz for
breach of the parties' noncompetition agreement (Count
V), misappropriation of trade secrets (Counts III, IV), and
conversion of the “pfsw@aol.com” account (Count
VII).[1] Along with its Complaint, Perfect Fit
filed a motion for a temporary restraining order
(“TRO”) or a preliminary
injunction to prevent Aronowitz from soliciting additional
Perfect Fit customers. (ECF No. 3). On April 16, 2019, I
declined to grant Perfect Fit's request for a TRO and
directed the Defendant to inform the court within three days
whether it intended to pursue arbitration under the IC
Agreement. (ECF No. 10). The Defendant duly responded that it
intended to move to compel arbitration of the Plaintiff's
claims (ECF No. 11), and on April 24, 2019, filed the motion
at bar.
DISCUSSION
The
Federal Arbitration Act provides that “[a] party
aggrieved by the alleged failure, neglect, or refusal of
another to arbitrate under a written agreement for
arbitration may petition any United States district court . .
. for an order directing that such arbitration proceed in the
manner provided for in such agreement.” 9 U.S.C. §
4. The FAA also provides for the stay of suits already in
federal court pending arbitration. Id. § 3.
Federal
courts will grant a motion to compel arbitration pursuant to
the FAA when “(i) there exists a written agreement to
arbitrate, (ii) the dispute falls within the scope of that
arbitration agreement, and (iii) the party seeking an
arbitral forum has not waived its right to
arbitration.” Combined Energies v. CCI, Inc.,
514 F.3d 168, 171 (1st Cir. 2008)).
The
Defendant argues that the factors required to compel
arbitration are present, and that I should dismiss this case
because the Plaintiff's claims all are arbitrable. The
Plaintiff concedes that the parties are bound by a written
agreement to arbitrate and that at least some of the
Plaintiff's claims fall within the scope of that
agreement. The Plaintiff argues, however, that the Defendant
has waived his right to arbitration. The Plaintiff further
argues that only some of its claims are arbitrable, and that
therefore if any of its claims are sent to arbitration, then
this action should be stayed rather than dismissed in its
entirety. I address each of these arguments in turn.
I.
Whether the Defendant has Waived His Right to
Arbitrate
“[A]rbitration
clauses are not set in cement: such clauses can be waived,
either expressly or through conduct.” Joca-Roca
Real Estate, LLC v. Brennan, 772 F.3d 945, 946-47 (1st
Cir. 2014). ...