# SAUNDERS v. COLLABERA INC.

> District Court, D. New Jersey · July 31, 2021

URL: https://www.frixlaw.com/law-library/cases/10271333

## Case

- **Court:** District Court, D. New Jersey
- **Decided:** July 31, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10271333

## How later opinions describe it (automated extraction)

- finding that a provision encompassing “[a]ll disputes and controversies of every kind. . . arising out of or in connection with this Agreement” should be construed broadly

## Opinion text

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

THOMAS SAUNDERS,
Plaintiff, Civil Action No. 20-15207 (MAS) (DEA)
Vv. MEMORANDUM OPINION
COLLABERA, INC.,
Defendant.

SHIPP, District Judge
This matter comes before the Court upon Defendant Collabera Inc.’s (“Collabera”) Motion
to Compel Arbitration and Stay Litigation pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 3
and 4 (“FAA”). (ECF No. 11.) Plaintiff Thomas Saunders (“Plaintiff”) filed a brief in opposition
to Collabera’s Motion (ECF No. 15), and Collabera filed a reply brief in support of its Motion
(ECF No. 16). The Court has carefully considered the parties’ briefing and decides the matter
without oral argument pursuant to Local Civil Rule 78.1. For the reasons set forth below,
Collabera’s Motion to Compel Arbitration and Stay Litigation is granted and Plaintiff's request
for discovery is denied.
I. BACKGROUND
Plaintiff filed the complaint for this class action lawsuit on October 29, 2020, in the District
Court of New Jersey in response to the following alleged events. (Compl. ff 1-8, ECF No. 1.) On
June 8, 2020, Collabera identified malware “in its network system consistent with a ransomware
attack.” (Compl. {| 4, Ex. 1.) Personal and financial information, including such information
belonging to Plaintiff and the class members, was exposed to the unauthorized third party as a

result of the ransomware attack. (Compl. ¥ 5, Ex. 1.) On June 10, 2020, Collabera became aware
that the unauthorized party had obtained such information, and Collabera subsequently mailed
notification letters to all potentially affected individuals, including Plaintiff and the class members,
on July 10, 2020. (Compl. {7 3, 5, Ex. 1.) Plaintiff asserts that he has spent time and energy
verifying his identity with creditors and monitoring credit reports and continues to suffer anxiety
and emotional distress as a result of the data breach and its ongoing effects. (Compl. J] 49-51.)
Prior to receiving the notification letter, Plaintiff had not been employed by Collabera, nor engaged
in any communications or transactions with Collabera, since his employment with Collabera ended
in August 2008. (Declaration of Thomas G. Saunders {| 4-7, ECF No. 15-1.)
Plaintiff signed agreements containing arbitration provisions on February 26 and 28, 2008
in connection with his application for and acceptance of employment with Collabera. (See
Declaration of Mike Chirico (“Chirico Decl.”), Ex. A-D, ECF Nos. 11-2, 11-3.) Pursuant to the
arbitration provisions, Plaintiff agreed to settle “any dispute [arising] out of or relating to [the
employment] Agreement,” “all work-related controversies between [him] and the Company,”
“and any and all disputes arising in connection with [his] employment with Collabera” through
arbitration. (Chirico Decl. §§] 7-10, Ex. A-D.) Further, the Consultant Employee Handbook
(“Manual”) states that, “[t]he sole and exclusive method to resolve any claim is arbitration” and
that “[e]ach party waives the right to a jury trial and the right to file a lawsuit in court.” (Chirico
Decl., Ex. B.) Plaintiff signed a document agreeing to abide by the Manual, which stated, “I
acknowledge that I have received and reviewed the [Manual], including the DISCLAIMER on the
previous page. I agree to abide by the policies stated in [the Manual], including the Arbitration
Policy on page 13.” Ud)

In response to Plaintiff's Complaint, Collabera filed the Motion to Compel Arbitration and
Stay Litigation presently before the Court.
I. LEGAL STANDARD
“Because arbitration is a matter of contract, before compelling arbitration pursuant to the
[FAA], a court must determine that (1) a valid agreement to arbitrate exists, and (2) the particular
dispute falls within the scope of the agreement.” Madlinger v. Midland Credit Mgemt., No. 19-
21183, 2020 WL 7640918, at *2 (D.N.J. Dec. 23, 2020) (quoting Kirleis v. Dickie, McCamey &
Chilcote, P.C., 560 F.3d 156, 160 (3d Cir. 2009)). “The FAA declares that ‘[a] written provision
any... contract... to settle by arbitration .. . shall be valid, irrevocable, and enforceable, save
upon such grounds as exist at law or in equity for the revocation of any contract.’” Preziosi v.
JetSmarter, Inc., No. 19-13627, 2020 WL 978637, at *2 (D.N.J. Feb. 28, 2020) (quoting 9 U.S.C.
§ 2). “Whe[n] there is a contract between the parties that provides for arbitration, there is an
‘emphatic federal policy in favor of arbitral dispute resolution.’” Hoover v. Sears Holding Co.,
No. 16-4520, 2017 WL 2577572, at *1 (D.N.J. June 14, 2017) (quoting Mitsubishi Motors Corp.
v. Soler Chrysler—Plymouth, Inc., 473 U.S. 614, 631 (1985)). As such, “as a matter of federal law,
any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration[.]”
Preziosi, 2020 WL 978637, at *2 (citations omitted).
The Third Circuit has enumerated a standard for district courts to apply when deciding a
motion to compel arbitration and stay litigation. The Third Circuit explained:
[When it is apparent, based on the face of [the] complaint[ ] and documents relied
upon in the complaint, that certain of a party’s claims are subject to an enforceable
arbitration clause, a motion to compel arbitration should be considered under a Rule
12(b)(6) standard without discovery’s delay... . But if the complaint and its
supporting documents are unclear regarding the agreement to arbitrate, or if the
plaintiff has responded to a motion to compel arbitration with additional facts
sufficient to place the agreement to arbitrate in issue, then the parties should be

entitled to discovery on the question of arbitrability before a court entertains further
briefing on [the] question.
Preziosi, 2020 WL 978637, at *2 (quoting Guidotti v. Legal Helpers Debt Resolution, LLC, 716
F.3d 764, 776 (3d Cir, 2013)).!
Hl. DISCUSSION
Plaintiff opposes Collabera’s Motion on two prongs. First, Plaintiff contends the arbitration
provisions at issue violate New Jersey law and are unenforceable because the provisions do not
express clear and unmistakable language that establishes a waiver of the constitutional right to a
jury trial. (Pl.’s Opp’n Br. 1.) Second, Plaintiff argues the claims asserted against Collabera fall
outside the scope of the arbitration provisions because the claims arise out of Collabera’s data
breach and the conduct that facilitated and exacerbated it. (Pl.’s Opp’n Br. 4.) Plaintiff,
accordingly, asserts that his claims do not arise out of or relate to the employment agreement, are
not work-related controversies, and do not arise in connection with Plaintiff's employment with
Collabera. (Pl.’s Opp’n Br. 4.) Plaintiff further contends that the Court should permit discovery
and schedule an evidentiary hearing to determine the purpose of Collabera’s continued retention
of Plaintiff's records after his employment concluded because Collabera cannot compel arbitration

' One of the arbitration clauses at issue in the present matter provides, in relevant part, that disputes would
be resolved via “final and binding arbitration . . . pursuant to the Model Employment Arbitration Procedures
of the American Arbitration Association (“AAA’).” (Chirico Decl. J 8, Ex. B.) In Richardson v. Coverall,
the Third Circuit stated, “[w]hile ‘virtually every circuit to have considered the issue has determined that
incorporation of the [AAA] arbitration rules constitutes clear and unmistakable evidence that the parties
agreed to arbitrate arbitrability,’ we need not determine whether such a rule always applies.” 811 F. App’x
100, 103 n.2 Gd Cir. 2020) (quoting Chesapeake Appalachia, LEC v. Scout Petrol, LLC, 809 F.3d 746,
763-64 (3d Cir. 2016) (alterations in original) (quoting Oracle Am., Inc. v. Myriad Grp. A.G., 724 F.3d
1069, 1074 (9th Cir. 2013)).) The Third Circuit also stated, “[e]ven where an agreement incorporates the
AAA Rules, a contract might still otherwise muddy the clarity of the parties’ intent to delegate.” /d.
Defendant in the present matter did not argue that the parties intended to delegate the issue of arbitrability.
The Court, therefore, does not address that issue here.

without evidencing that this purpose was in connection with Plaintiff's employment. (P1.’s Opp’n
Br, 10.)
Collabera contends that the arbitration provisions do express clear and unmistakable
language that establish a waiver of the constitutional right to a jury trial. (Det’s Reply Br. 5-6.)
Alternatively, Collabera argues that in the event the express language is not clear and
unmistakable, the FAA prohibits Plaintiff from claiming the provisions are unenforceable—by
arguing he did not understand the implication or meaning of the provisions—because such a
defense does not qualify at law or in equity for the revocation of any contract. (Def.’s Reply Br.
9.) Moreover, Collabera contends that Plaintiffs claims inherently fall within the scope of the
arbitration provisions because the very subject of the claims—Plaintiff’s personal and financial
information—only came into Collabera’s possession and protection because of Plaintiffs
employment at Collabera. (Def.’s Reply Br. 12.) Lastly, Collabera asserts that Plaintiff's request
for discovery is baseless and should be rejected because Plaintiff presents no factual predicate or
clear articulation to indicate discovery would lead to evidence concerning the enforceability of the
arbitration provisions, (Def.’s Reply Br. 14-15.) The Court will address the parties’ arguments, in
turn.
A. The arbitration provisions are valid and enforceable because they express
clear and unmistakable language establishing a waiver of the constitutional
right to a jury trial.
“An arbitration agreement, as a waiver of rights, must be clear and unambiguous.” Tharpe
v. Securitas Sec. Servs., USA, 2021 WL 717362, at *3 (D.N.J. Feb. 24, 2021) (citing Skuse v.
Pfizer, Inc., 236 A.3d 939, 950 (N.J. 2020)). Arbitration provisions do not require a prescribed set
of words and the specific location of clear and unmistakable arbitration language within an
agreement is immaterial so long as the employee understands that “arbitration is a waiver of the
right to bring suit in a judicial forum.” See Atalese vy. U.S. Legal Servs. Grp., 99 A.3d 306, 314

(N.J. 2014). A signed waiver can be accomplished by an acknowledgement form that is separate
from the underlying agreement. Skuse, 236 A.3d at 955; see also Leodori v. CIGNA Corp., 814
A.2d at 1107-08 (N.J. 2003). Moreover, “[t]he acknowledgment form need not recite [the
arbitration] policy verbatim so long as the form refers specifically to arbitration in a manner
indicating an employee’s assent, and the policy is described more fully in... another document
known to the employee.” Skuse, 236 A.3d at 955 (quoting Leodori, at 814 A.2d at 1107-08); see
also Tharpe, 2021 WL 717362, at *3. To be enforceable, an arbitration provision must “explain in
some minimal way that arbitration is a substitute for a[n employee’s] right to pursue relief in a
court of law[.]” Morgan v. Sanford Brown Inst., 137 A.3d 1168, 1171 (N.J. 2016).
Here, by requiring Plaintiff to sign a separate provision stating that (1) he received and
reviewed the Manual, and (2) thereby agreed to abide by the arbitration policy stated within the
Manual, Collabera at least in a minimal way explained that arbitration was a substitute to the right
to bring suit in a judicial forum. (Chirico Decl., Ex. B.) Additionally, despite Plaintiff’ s contentions
that the arbitration provisions he signed did not expressly state a waiver of the constitutional right
to a jury trial, Plaintiff nonetheless indicated an understanding of the meaning and implication of
the term “arbitration” by acknowledging review of, and agreeing to abide by, the Manual. In so
doing, Plaintiff indicated an understanding that the agreement’s additional arbitration provisions
waived his right to bring suit in a judicial forum.’

Plaintiff also argues the provision that “[t]he losing party will pay all reasonable attorneys’ fees incurred
by the prevailing party” (Chirico Decl. 8, Ex. B) is unconscionable (PI.’s Opp’n Br. 9-10). The Court
does not find Dare v. Freefall Adventures, Inc. and Warren Distributing Co. v. InBev USA, LLC, the cases
cited by Plaintiff, analogous or persuasive. Here, Plaintiff has failed to cite any relevant authority for the
proposition that a provision requiring the losing party to pay reasonable attorneys’ fees renders an
arbitration clause unconscionable. In Delta Funding Corp. v. Harris, the New Jersey Supreme Court found
that to the extent a provision in a contract would prevent a plaintiff from recovering discretionary fees and
costs under the relevant statute, the contract was unconscionable. 912 A.2d 104, 114 (NJ. 2006). In
Alexander y. Anthony Int'l, L.P., the Third Circuit found an arbitration provision unconscionable where the
employee could not recover his attorney’s fees and the losing party was required to “bear the costs of the

B. Plaintiff's claims against Collabera fall within the scope of the arbitration
provisions.
Plaintiff's contention that his claims in the present matter are not in connection with or
relationship to the employment agreement and fall outside the scope of the arbitration provisions
is not persuasive because Plaintiff provided Collabera the alleged exposed information with the
specific purpose of attaining employment with Collabera. The Third Circuit and New Jersey courts
have interpreted the terms “arising out of’ and “relating to” broadly, “indicative of an ‘extremely
broad’ agreement to arbitrate any dispute relating in any way to the contract.” In re Remicade
(Direct Purchaser) Antitrust Litig., 938 F.3d 515, 523 Gd Cir. 2019) (quoting Curtis v. Cellco
P’ship, 992 A.2d 795, 802 (N.J. Super. Ct. App. Div. 2010)); see also Griswold v. Coventry First
LLC, 762 F.3d 264, 267-68 (3d Cir. 2014) (finding that a provision encompassing “[a]ll disputes
and controversies of every kind. . . arising out of or in connection with this Agreement” should be
construed broadly).
Plaintiff and Collabera construe diverging arguments from Varela v. Lamps Plus, Inc., No.
16-577, 2016 WL 9110161, at *1 (C.D. Cal. July 7, 2016), aff'd, 701 F. App’x 670 (9th Cir, 2017),
rev'd on other grounds, 139 S. Ct. 1407 (2019). In Varela, the court found an enforceable
arbitration provision where the parties agreed to arbitrate “all claims that may hereinafter arise in
connection with ... employment.” Jd. at *2, *4. The Varela plaintiff was a current employee of the
company at the time his personal information was exposed to a data breach, and subsequently
raised claims in connection with that incursion. Jd. The employee’s personal information was
retained by the employer in an employment file for the purposes of obtaining employment and

arbitrator’s fees and expenses.” 341 F.3d 256, 267-68 (3d Cir. 2003). Plaintiff here raises no similar
arguments and presents no facts that would warrant discovery regarding the issue. Unlike the provisions
cited above, the provision here does not prevent Plaintiff from recovering under the relevant statute. The
Court, accordingly, finds that the attorneys’ fees provision does not render the arbitration provisions
unenforceable.

maintaining employment records. /d. The Varela court reasoned that the employee’s claims were
in connection with employment since the employer retained the personal information only for the
purpose of obtaining employment and maintaining employment records. Jd.
Plaintiff contends that this Court should stray from the Varela holding because the Varela
employee was employed by the company at the time his personal information was exposed, and
the provisions applied to “all claims or controversies” in connection with employment. Varela,
701 F. App’x at 671. Here, Plaintiff was not employed by Collabera at the time of the data breach.
Plaintiff attempts to bolster an unpersuasive argument with this factual distinction by asserting that
Collabera’s retention of Plaintiff's information was in connection with a purpose other than
employment. (Pl.’s Opp’n Br. 8.) Plaintiff further contends that the provisions at issue do not
purport to cover all claims against Collabera, unlike in Varela, and argues that because the claims
here do not arise out of employment, they are not covered by the arbitration provisions in question,
(See id. at 8-9.) Plaintiffs contention is misguided because the provision here is analogous in
scope to the provision in Varela, and the distinction between past and current employment does
not sever the connection between employment and a company’s retention of an employee’s
personal information. Plaintiff's attempt to distinguish the current employment in Varela from his
past employment with Collabera, therefore, is not persuasive, because Plaintiff fails to bolster that
distinction with additional facts that suggest Collabera’s retention of past employee information is
not in connection with employment. Significantly, both here and in Varela, the information was
retained in connection with employment, and the distinction between current and past employment
is, accordingly, immaterial.

C. Plaintiff's claims are subject to the arbitration provisions and Plaintiff is not
entitled to discovery.
The Supreme Court has emphasized that the “overarching purpose of the FAA . . . is to
ensure the enforcement of arbitration agreements according to their terms so as to facilitate
streamlined proceedings.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011).
According to the Third Circuit, ifthe complaint or its supporting documents do not clearly establish
an enforceable arbitration agreement, “or if the plaintiff has responded to a motion to compel
arbitration with additional facts sufficient to place the agreement to arbitrate in issue, then ‘the
parties should be entitled to discovery on the question of arbitrability before a court entertains
further briefing on [the] question.’” Guidotti, 716 F.3d at 776 (quoting Somerset Consulting, LLC
v. United Capital Lenders, LLC, 832 F. Supp. 2d 474, 482 (E.D. Pa. 2011)).
The parties are not entitled to limited discovery here. Plaintiff's claims, based on the
complaint, attack Collabera’s alleged negligent protection of Plaintiff's personal and financial
information that Collabera obtained in connection with Plaintiff's employment. Plaintiff has not
responded with any additional facts sufficient to place the agreement to arbitrate at issue. (ECF
No. 15.) As stated, the fact that Plaintiff was not employed by Collabera at the time of the
ransomware attack is immaterial to the scope of the arbitration provisions because Collabera’s
obtainment and protection of Plaintiff's information related to and arose out of Plaintiffs
employment with Collabera: Plaintiff signed the arbitration provisions and provided Collabera
with the personal information with the purpose of obtaining employment with Collabera.
Moreover, Plaintiff's assertion that disputed issues of fact exist regarding the relationship of the
ransomware attack to the arbitration provisions is not persuasive because Plaintiff makes no more
than a “naked assertion” that Collabera’s continued retention of Plaintiffs information is not in
connection with Plaintiff's employment. Guidotti, 716 F.3d at 778 (citing Par—Knit Mills, Inc. v.

Stockbridge Fabrics Co., 636 F.2d 51, 55 (3d Cir. 1980) (“[A] naked assertion .. . by a party toa
contract that it did not intend to be bound by the terms thereof is insufficient to place in issue ‘the
making of the arbitration agreement’ for [the] purposes of the FAA.”)).
Plaintiff has neither persuasively asserted that the arbitration provisions are invalid nor
meritoriously contended that the claims fall outside the arbitration provisions. Here, the Court
finds that the arbitration provisions are clear, enforceable, and not in issue. In addition, Plaintiff
fails to persuasively articulate that his lack of current employment with Collabera at the time of
the data breach suggests that there is no connection between the employment and Collabera’s
retention of Plaintiff's personal and financial information. Accordingly, because Plaintiff did not
raise additional facts sufficient to place the arbitration agreement in issue, he is not entitled to
discovery to determine the reason for Collabera’s continued retention of his information.
IV. CONCLUSION
For the foregoing reasons, the Court grants Collabera’s Motion to Compel Arbitration and
Stay Litigation and denies Plaintiff's request for discovery.

s/ Michael A. Shipp
MICHAEL A. SHIPP
UNITED STATES DISTRICT JUDGE

10

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10271333. Public record. Not legal advice.