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AlixPartners, LLP v. Brewington

United States District Court, E.D. Michigan, Southern Division

September 4, 2015

ALIXPARTNERS, LLP, Plaintiff,
v.
CHARLES BREWINGTON, Defendant

         As Amended September 9, 2015.

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          For AlixPartners, LLP, Plaintiff: Jason C. Schwartz, David J. Debold, Gibson, Dunn, Washington, DC; Karl G. Nelson, Gibson, Dunn, Dallas, TX.

         For Charles Brewington, Defendant: Steven E. Aldous, Forshey & Prostok LLP, Dallas, TX.

         Hon. Gerald E. Rosen, Chief United States District Judge. Magistrate Judge David R. Grand.

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         AMENDED OPINION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

         Gerald E. Rosen, Judge

         I. INTRODUCTION

         On December 30, 2014, Plaintiff AlixPartners LLP, a global consulting and business advisory firm organized under the laws of the state of Delaware,[1] filed this declaratory judgment action pursuant to 28 U.S.C. § 2201 against Defendant Charles Brewington, a Texas resident and former employee of Plaintiff. The action was precipitated by Defendant's demand for class action arbitration against Plaintiff based on allegations of Plaintiff's racial discrimination, which Defendant filed with the American Arbitration Association (" AAA" ) on November 24, 2014. Plaintiff claims that the arbitration clause in its employment agreement with Defendant made no mention of a right to pursue an arbitration claim on behalf of a class, and accordingly Plaintiff seeks an order precluding Defendant from pursuing its claim via arbitration. Currently before the Court is Defendant's Motion to Dismiss for lack of personal jurisdiction, improper venue, and, alternatively, for change of venue. Dkt # 7.

         Having reviewed and considered the parties' briefs and supporting documents and the entire record of this matter, the Court has determined that the pertinent allegations and legal arguments are sufficiently addressed in these materials and that oral argument would not assist in the resolution of this motion. Accordingly, the Court will decide the parties' motions " on the briefs." See L.R. 7.1(f)(2). This Opinion and Order sets forth the Court's ruling.

         II. PERTINENT FACTS

         Defendant was hired by Plaintiff in April 2013 as a recruiter for Plaintiff's Dallas,

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Texas office. As part of his hiring, Defendant signed an Employment Agreement which, as relevant here, required legal actions relating to any termination of his employment to be brought before the American Arbitration Association (" AAA" ), rather than a state or federal court, for resolution. The relevant portion of the Agreement reads:

Except for any action by the Company seeking any injunctive relief or other equitable relief against you, any dispute arising out of or in connection with any aspect of this Agreement and/or any termination of employment thereunder (including by way of example but not limitation, disputes concerning alleged civil rights violations, employment discrimination of any kind including on the basis of any protected category under federal or state law, retaliation, wrongful discharge, entitlement to overtime pay, sexual harassment, breach of express or implied contract or tort), shall be exclusively subject to binding arbitration under the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (" AAA" ), provided all substantive rights and remedies including any applicable damages provided under any pertinent statute(s) related to such claims, the right to representation by counsel, a neutral arbitrator, a reasonable opportunity for discovery, a fair arbitral hearing, a written arbitral award containing findings of facts and conclusions of law, and any other provision required by law, shall be available in the AAA forum. Any decision of the arbitrator shall be final and binding as to both parties, and enforceable by any court of competent jurisdiction. Nothing contained herein shall prohibit you from filing any claim or charge with any appropriate governmental agency. You hereby waive your right to adjudicate claims against the Company in court and opt instead to arbitrate any such claims.

Employment Agreement, Dkt. # 9, Ex. A, at 4. At the time of Defendant's hiring, both parties signed the Agreement without dispute.

         As relevant here, Defendant's hiring occurred between Plaintiff's Southfield, Michigan office and Defendant's Texas residence. Defendant alleges, and Plaintiff does not appear to dispute, that Defendant's three in-person pre-employment interviews were conducted by Plaintiff's employees in its Dallas office. Brewington Decl., Dkt. # 7-1, ¶ 2 (describing interviews with Joel Bines, Jay Marshall, and Caralyn Markets). However, Plaintiff notes that, as part of the evaluation process, Defendant spoke on the telephone with Dr. Leslie Evola, an AlixPartners employee located in Michigan, who then prepared a summary report of Defendant's interviews. Severson Decl., Dkt. # 9-1, ¶ 8. Following the successful completion of the interview process, Defendant signed the Employment Agreement in Texas, and sent it to Plaintiff's offices in Michigan, where it was received and processed by Plaintiff's human resources department. Id. ¶ ¶ 9-11.[2] In addition to the arbitration provision quoted above, the Employment Agreement signed by Defendant also contained a Michigan choice-of-law provision, stating that " the Agreement and its performance [is to] be construed and interpreted in accordance with the law of the State of Michigan." Employment Agreement, at 4.

         After being hired and completing his employment paperwork, Defendant began work on April 15, 2013. Brewington Decl., Dkt. # 7-1, ¶ 3. On April 22 and 23, 2013, Defendant attended a mandatory orientation session in Plaintiff's Michigan office,

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along with several other new employees. Orientation e-mail, Dkt. # 9-1; Brewington Decl., ¶ 3. Defendant then returned to Texas and worked fulltime from Plaintiff's Dallas office. Brewington Decl., ¶ 3. While working in the Dallas office, however, Defendant maintained substantial connection to Plaintiff's Michigan office. Defendant was assigned primarily to recruit for Plaintiff's Financial Advisory Services (" FAS" ) group. Diefenbacher Decl., ¶ 5. As part of his duties, he worked directly with Patricia Diefenbacher, Director of Human Resources for AlixPartners, who worked in the Michigan office. Id. ¶ ¶ 2, 5. Defendant communicated with Diefenbacher " on many occasions" via both e-mail and telephone as Defendant recruited employees for various AlixPartners offices.

         Defendant also worked with Ray Kantor, Plaintiff's Internal Audit Director, who also works in the Michigan office. Kantor Decl. ¶ 2-3. According to Kantor, " Brewington actively worked to recruit candidates to fill internal audit positions for which I have responsibility as Internal Audit Director in AlixPartners' Southfield, Michigan office." Id. ¶ 3.[3] A September 6, 2013 e-mail sent by Defendant to Kantor provides substantial evidence for this statement. In the email, Defendant provided for Kantor a list of six individuals that Defendant had identified for Plaintiff's " Detroit Internal Audit Manager" position. September 6, 2013 e-mail, Dkt. # 9-2, Ex. A. Defendant further stated, " In addition, I've reached out to an additional 55 Audit Staff, Seniors, and light Managers in the Detroit Metro area and will continue networking with them based on their availability to connect . . . I'm on vacation today, however the activity will continue once I return next week." Id. In a November 18, 2013 follow-up e-mail from Defendant to Kantor, Defendant stated, " I believe we're making strides in the Detroit Internal Audit Manager search . . . I believe I've connected with close to 50% of the Detroit Audit Big 4 population . . . I'll continue networking with the Detroit/Southfield market." November 18, 2013 e-mail, Dkt. #9-3, Ex. A. All of the e-mail servers that were used by Defendant in sending these e-mails were located in Plaintiff's Michigan office. Gruber Decl., Dkt. # 9-4, ¶ 3.

         After about a year of employment with Plaintiff, Defendant was terminated in March 2014. The parties disagree as to the reasons for the termination. Plaintiff maintains that the termination was due to repeated " deficiencies in [Defendant's] performance." Pl.'s Mot. for Summary Judgment, Dkt. # 11, at 2 n.1. Defendant, however, alleges that the termination was racially motivated and unlawful. Accordingly, Defendant filed a demand for arbitration with the AAA alleging claims of racial discrimination under Title VII. Critically, however, Defendant did not file the demand on behalf of only himself, but rather, as Plaintiff described the demand, " on behalf of himself and a purported, nation-wide class of current, former, and potential AlixPartners employees cin various positions and circumstances." Id. at 3.

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          In response, Plaintiff filed this declaratory judgment action, asserting that it " is entitled to a declaration that, as a matter of law under the Federal Arbitration Act, the parties' Agreement, and the controlling precedent of this circuit, [Defendant] is precluded from pursuing claims in arbitration on behalf of any absent individual or purported class, whether in the AAA arbitration already filed or in any other arbitration forum, because AlixPartners did not agree to, and the parties' Agreement does not authorize, the arbitration of disputes on a class basis." Pl.'s Compl., Dkt. # 1, ¶ 28.

         Defendant subsequently filed this Motion to Dismiss (Dkt. # 7), asserting that (1) the Court lacks personal jurisdiction over Defendant, (2) the Eastern District of Michigan is not the proper venue for this action, and (3) in the alternative, the Court should transfer the case to another district pursuant to 28 U.S.C. § 1404(a). The Court addresses each argument below.

         III. DISCUSSION

         A. Rule ...


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