Motion to Compel Arbitration of Employment Discrimination Claims Denied; Claims Did Not “Arise Out Of” Confidentiality Agreement

In Ahmad v. Colin Day, et al, 20 Civ. 4507, 2021 WL 3700552 (S.D.N.Y. Aug. 20, 2021), the court denied the defendants’ motion to compel arbitration of plaintiff’s claims of employment discrimination. In sum, plaintiff asserts that his former employer and two individual defendants discriminated against him because of his race, color, religion and national origin.

From the decision:

Turning to the arbitration clause itself, we note that, unlike cases cited by defendants, the clause does not state that any claims arising out of Ahmad’s “employment” would be subject to arbitration. This is also not a case where there was an “employment contract” that contained a provision providing for arbitration of disputes “arising under … this Agreement” (that is, under the employment contract). Instead, the arbitration clause appears in a document entitled “Employee Confidentiality & Propriety Rights Agreement.” This Confidentiality Agreement is not an employment contract and indeed explicitly states as much. Instead, the Confidentiality Agreement recites a series of duties and other obligations that are imposed on the employee. The main provisions are: (1) the employee must keep company information confidential and not misuse it; (2) the employee must keep information belonging to prior employers confidential; (3) the employee acknowledges that any work by the employee belongs to the company; (4) the employee must inform the company of the development of certain information; (5) the employee must not take certain actions during his employment or for one year after leaving employment to interfere with the defendants’ business; and (6) the employee must not provide certain services to others during his employment. There is also a provision entitled “Remedies” that gives only iCIMS (not the employee) the right to obtain certain forms of relief in any action to enforce the Confidentiality Agreement. The arbitration clause states that the parties agree to arbitrate “[a]ny dispute, controversy or claim arising out of or related to this Agreement or any breach of this Agreement.”

The question before us is therefore whether Ahmad’s complaint of discrimination in employment “arise[s] out of” or is “related to” the Confidentiality Agreement. While these phrases are “broad” in relation to the Confidentiality Agreement, Ahmad makes no claims seeking to enforce any provision of the Confidentiality Agreement. More to the point, no reasonable person reading the arbitration clause in the Confidentiality Agreement could conclude that it was intended to cover claims of employment discrimination given that the obligations in the Agreement do not involve the overall terms and conditions of employment. Instead, the obligations involve specific enumerated conditions, largely relating to confidentiality, that are placed on an employee’s continued employment.

[Citations omitted.]

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