By Wayne D. Garris Jr., J.D.
The plaintiff had entered into a service contract (with an arbitration agreement) with Credico, a Comcast contractor, but not with the Comcast affiliate.
A marketing executive who entered into a service agreement with a Comcast contractor to market Comcast products and services must arbitrate her sexual harassment claims against the contractor, a federal court in Connecticut held. However, the court denied the Comcast affiliate’s motion to compel arbitration because it was not a party to the service contract, and so could not avail itself of the contract’s arbitration provision. Under Illinois law, Comcast, as a nonsignatory, would have to show that it detrimentally relied on the plaintiff’s statements or conduct as a party to the arbitration agreement with the contractor. But Comcast failed to make the required showing; thus, its motion was denied (Andreoli v. Comcast Cable Communications Management, LLC, March 16, 2020, Meyer, J.).
The plaintiff is the CEO of Gianni Rae Associates, Inc. (GRA), a marketing services company. GRA contracted with Credico, which provides sales and marketing services to telecommunications companies, to market and sell Comcast products and services. The service agreement, which she signed as GRA’s agent or employee, included an arbitration provision. Alleging that her supervisor, a Comcast sales executive, had subjected her to repeated acts of sexual harassment and assault, she filed suit under the Connecticut Fair Employment Practices Act against both Comcast and Credico as joint employers.
Motion to compel arbitration. Both employers moved to compel arbitration, arguing that the plaintiff was required to arbitrate her claim. The plaintiff argued that the arbitration clause applied to GRA only and that she had merely signed the agreement on GRA’s behalf; thus, the clause had no effect on her individual sexual harassment claim.
Credico’s motion. The court turned to the plain language of the arbitration agreement between Credico and GRA. The provision stated that "references to Credico, [the marketing company], and ‘the parties’ includes the parties’ respective subsidiaries, affiliates, agents, employees, predecessors in interest, successors and assigns." The court held that the plaintiff was "without a doubt" an agent or employee of GRA; thus, when she agreed to arbitration on behalf of the company, she was binding herself to arbitration as its employee or agent. So Credico’s motion to compel was granted.
Comcast’s motion. Comcast was not a party to an arbitration agreement; however, it argued that the plaintiff was equitably estopped from refusing to arbitrate her claims against Comcast. It pointed to Second Circuit precedent holding that a party to an arbitration agreement may be compelled, on equitable estoppel grounds, to arbitrate claims against a nonsignatory when "the issues that the non-signatory is seeking to resolve in arbitration are intertwined with those that are subject to an arbitration agreement, and the relationship among the parties justifies a conclusion that the party who agreed to arbitrate with another entity should be estopped from denying an obligation to arbitrate a similar dispute with the non-signatory to the arbitration agreement."
Illinois law applies. Comcast’s recitation of Second Circuit precedent was correct, the court said. However, the Supreme Court held in Arthur Andersen LLP v. Carlisle that doctrines such as "assumption, piercing the corporate veil, alter ego, incorporation by reference, third-party beneficiary theories, waiver and estoppel" are governed by "traditional principles of statelaw." Here, the arbitration agreement explicitly stated that it was governed by Illinois law. Thus, Comcast would have to prove that equitable estoppel applied, under Illinois law, in order to compel arbitration.
Under Illinois law, equitable estoppel applies when a nonsignatory that moves to compel arbitration can show that it "detrimentally relied on the statements or conduct of the party signatory to an arbitration agreement who seeks to avoid arbitration with the non-signatory." Here, Comcast failed to set forth any evidence that it detrimentally relied on the fact that the plaintiff signed an arbitration agreement with Credico, thus it did not establish grounds for equitable estoppel under Illinois law. Comcast’s motion to compel arbitration was dismissed.
Stay pending arbitration. The court granted Credico’s motion to stay litigation of the plaintiff’s claims against it pending arbitration. Comcast argued that litigation of the claims against it should likewise be stayed to prevent prejudice to Credico, but the court held that Comcast did not have standing to raise claims of prejudice on behalf of Credico.
The case is No. 3:19-cv-00954.
Attorneys: Emanuele Robert Cicchiello (Cicchiello & Cicchiello, LLP) for Angelina Andreoli. Anthony S. Califano (Seyfarth Shaw) for Comcast Cable Communications Management, LLC and Credico [USA] LLC.
Companies: Comcast Cable Communications Management, LLC; Credico [USA] LLC
Cases: Arbitration CoverageLiability SexualHarassment Procedure ContractClaims StateLawClaims GCNNews IllinoisNews
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