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CAP GEMINI ERNST & YOUNG U.S. v. ARENTOWICZ

June 22, 2004.

CAP GEMINI ERNST & YOUNG U.S. LLC, Plaintiff,
v.
CHARLES ARENTOWICZ, Defendant.



The opinion of the court was delivered by: DEBORAH BATTS, District Judge

Memorandum & Order

Before the Court is Defendant Charles Arentowicz's ("Arentowicz") Motion to Dismiss or Stay the above-captioned action pursuant to Rule 12(b) of the Federal Rules of Civil Procedure. Plaintiff Cap Gemini Ernst & Young U.S. LLC ("Cap Gemini") has cross-moved to compel arbitration in this district.

For the reasons that follow, Defendant's Motion to Dismiss or Stay is DENIED and Plaintiff's Motion to Compel is GRANTED.

  BACKGROUND

  Plaintiff Cap Gemini is a large multi-national corporation which provides consulting, technology and outsourcing services here in the United States and abroad. (Compl. ¶ 4.) In April 2000, Cap Gemini hired Defendant Arentowicz to serve as Vice President and the two entered into an employment Agreement (the "Agreement"). (Compl. ¶ 13; Notice of Cross-Motion, Exh. 1.) In the case of employment disputes, the Agreement required that the parties arbitrate the disagreement. Specifically,
any dispute, controversy or claim between us arising out of or relating to or concerning the provisions of this Agreement, any agreement between you and the Firm relating to or arising out of your employment with us or otherwise concerning any rights, obligations or other aspects of your employment relationship, including, without limitation, discrimination claims, or your relationship in respect of the Firm ("employment related matters"), shall be finally settled by arbitration in the City of New York before, and in accordance with the arbitration procedures set forth in the attached Annex 4. . . .
(Agreement ¶ 5.)
  Annex 4, in turn, established the procedures that the Plaintiff and Defendant would follow in arbitration. It states in pertinent part:
 
nothing contained herein shall prevent a party from seeking temporary relief with respect to a dispute. A party may apply to a court . . . for a temporary restraining order, preliminary injunction, or such other temporary emergency relief. Neither an application for temporary emergency relief, nor a court's consideration or granting of such relief shall (A) constitute a waiver of the right to pursue arbitration . . . or (B) delay the appointment of an arbitration panel or the progress of arbitration proceedings.
  (Id., Annex 4, ¶ iv.) The Agreement also contained a choice-of-law provision that "[t]his Agreement shall be governed by and construed in accordance with the laws of the State of New York." (Id. ¶ 6.) Additionally, Annex 4 states that "[t]he employee and the Employer acknowledge that the forum designated above [any federal or state court in New York City] has a reasonable relation to the employment Agreement, and to the employee's relationship to the Employer." (Id., Annex 4.)
  Finally, the Agreement requires that the employee acknowledge that:
I HAVE READ THIS AGREEMENT AND FULLY UNDERSTAND AND ACCEPT ITS TERMS. I ACKNOWLEDGE THAT I HAVE AGREED TO WAIVE ANY RIGHT I MAY HAVE TO HAVE ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO OR CONCERNING THE PROVISIONS OF THIS AGREEMENT DETERMINED BY A COURT OF LAW AND THAT ALL SUCH DISPUTES SHALL BE RESOLVED THROUGH ARBITRATION. I SPECIFICALLY ACKNOWLEDGE THAT THE REMEDIES AVAILABLE UNDER THE ARBITRATION PROVISION OF THIS AGREEMENT ARE MORE LIMITED THAN THOSE WHICH WOULD BE AVAILABLE IN A COURT OF LAW.
(Agreement.)
  This lengthy acknowledgment appears directly above Defendant's signature, dated April 22, 2000. (Id.)

  Arentowicz worked at Cap Gemini from April 2000 until December 2002; he was based in the Clark, New Jersey offices. (Compl. ¶ 6.) His supervisor was Kenneth Nowack, who worked out of Cap Gemini's corporate headquarters at 5 Times Square, New York, New York. (Nowack Aff. ¶¶ 1-4.) In the performance of his duties, Arentowicz made periodic trips into New York to attend meetings. (Id. ¶¶ 5-7.)

  In October 2003, Arentowicz filed a lawsuit in New Jersey state court, seeking damages for unlawful termination in violation of New Jersey anti-discrimination laws. (Arentowicz Compl. ¶¶ 49-51; Compl. ¶ 1.) Arentowicz additionally sought to have the state court declare the arbitration provisions unconscionable. (Arentowicz Compl. ¶¶ 46-48.) Cap Gemini timely removed the action to the United States District Court in New Jersey. (Notice of Cross-Motion, Exh. 3; Compl. ¶ 1.) Cap Gemini moved to dismiss the New Jersey action or alternatively to transfer it to the Southern District of New York. (Notice of Cross-Motion, Exh. 10.) To date, the motion is still pending.

  Plaintiff Cap Gemini then filed an action here seeking both a declaratory judgment that Arentowicz must pursue his claims before the American Arbitration Association (the "AAA") in New York City and a stay in the New Jersey proceedings. (Compl. ¶¶ 15-17.) The Court denied Cap Gemini's Order to Show Cause to compel arbitration and to stay the New Jersey proceedings. (Ct. Order, Jan. 15, 2004; Notice of Cross-Motion, Exh. 6.) At the same time, Cap Gemini commenced an arbitration before the AAA in New York City, which notified the parties that the arbitration would proceed. (Notice of Cross-Motion, Exh. 9.)

  Defendant has refused to arbitrate and subsequently moved to stay or dismiss because of a "first filed" action in federal court in New Jersey. (Id., Exh. 8.) Plaintiff cross-moved to compel arbitration.

  DISCUSSION

  I. First Filed Action

  It is well-established that the "first filed" rule mandates that "where an action is brought in one federal district court and a later action embracing the same issue is brought in another federal court, the first court has jurisdiction to enjoin the prosecution of the second action," City of New York v. Exxon Corp., 932 F.2d 1020, 1025 (2d Cir. 1991) (quoting Meeropol v. Nizer, 505 F.2d 232, 235 (2d Cir. 1974)), unless special circumstances exist that would "justify giving priority to ...


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