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Vander v. Epana Networks

August 3, 2009

KAREN VANDER, PLAINTIFF,
v.
EPANA NETWORKS, INC. AND TSM CORPORATION DEFENDANTS.



The opinion of the court was delivered by: McKENNA, D.J.

MEMORANDUM AND ORDER

This action arises from a dispute over an employment contract. The Plaintiff Karen Vander alleges she is owed six months of severance compensation (and one month of salary) from Epana Networks, Inc ("Epana") and TSM Corporation ("TSM"). This Memorandum and Order addresses Defendants' motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). Passing no judgment on the merits of Plaintiff's claims, this Court holds that Plaintiff's claims must be dismissed in favor of arbitration.

I. Factual and Procedural Background

On a 12(b)(6) motion for dismissal a court will take factual allegations in the Complaint as true. "For purposes of reviewing the dismissal of a complaint for failure to state a claim, we accept the complaint's factual allegations . . . as true." Roth v. Jennings, 489 F.3d 499, 501 (2d Cir. 2007). Karen Vander was employed by Epana as a Logistical Operations Manager. (Cmpl. ¶ 18.)

On or about October 27, 2003, Vander and Epana entered into an Employment Agreement ("Employment Agreement"). (Cmpl. ¶ 17.) The employment agreement did not provide for severance. (Cmpl. Ex. A ¶ 7.) However, the Employment Agreement provided for binding arbitration:

The parties agree that any controversy, claim, or dispute arising out of or relating to this agreement, or the breach thereof, or arising out of or relating to the employment of the Employee, or the termination thereof, including any claims under federal, state, or local statutes or common law, shall be resolved by binding arbitration in New York, before a single arbitrator. . . . (Cmpl. Ex. A ¶ 7.)

On or about July 7, 2007, Epana's President Shlomo Nimrodi presented Karen Vander with a written amendment to the Employment Agreement ("Amendment"). (Cmpl. Ex. B.)

The Amendment provided for six months of severance in the event of termination and it required that Karen Vander agree to execute the "Company's standard executive non- competition and confidentiality agreement." (Cmpl. Ex B. ¶¶ 4, 5.) The Employment Agreement was signed by Karen Vander but not by Epana. The Amendment to the Employment Agreement was not signed by either party. However, Karen Vander continued to work at Epana for a year following the presentation of the Amendment. On or around about July 29, 2009, Karen Vander was terminated without cause. (Cmpl. ¶ 28.)

On February 24, 2009, Karen Vander filed suit against Epana and TCM in the Supreme Court of New York. The suit was removed to this Court on diversity jurisdiction. Karen Vander alleges breach of express written contract, and violation of New York Labor Law under §§ 191 and 198. (Cmpl. ¶¶ 38, 44). The Plaintiff also seeks punitive damages on the basis of Defendants' bad faith. (Cmpl ¶¶ 47.)

II. Standard of Review

To avoid dismissal of claims under Fed. R. Civ. P. 12(b)(6) Plaintiff must plead "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a). However, adequate pleadings must raise a right to relief above the speculative level. "[A] plaintiff's obligation to provide the 'grounds' of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007).

The Second Circuit has held, "although 'a court must accept as true all of the allegations contained in a complaint,' that 'tenet' 'is inapplicable to legal conclusions' and '[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.'. . . '[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'" Harris v. Mills, --- F.3d ----, No. 07-CV-2283, 2009 WL 1956176 (2d Cir. July 9, 2009) (quoting Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50 (2009)).

III. The Arbitration Provision

The threshold issue in this case is whether the arbitration provision in the Employment Agreement covers the claims in the Plaintiff's Complaint. If the arbitration clause covers the claims alleged then this Court must dismiss ...


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