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Wussow v. Bruker Corp.

United States District Court, W.D. Wisconsin

June 28, 2017


          OPINION & ORDER

          WILLIAM M. CONLEY District Judge.

         Plaintiff Michael C. Wussow filed this action for employment discrimination and retaliation, claiming that defendants violated the Sarbanes-Oxley Act, 18 U.S.C. § 1514A, and the Dodd-Frank Act, 15 U.S.C. § 78u-6, by retaliating against him for engaging in protected whistleblowing activity. In response, defendants filed a motion to compel arbitration of plaintiff's Dodd-Frank claim, while staying all proceedings in this court pending the outcome of that arbitration. (Dkt. #10.) Wussow opposes that motion, contending that both claims (or at least his Sarbanes-Oxley claim) must be allowed to proceed in this court.

         What would seem a straightforward case for arbitration based on the parties' written agreement is complicated by an amendment to the whistleblower protections under Sarbanes-Oxley passed as part of the Dodd-Frank Act, which proscribes employer retaliation and expressly states that “[n]o predispute arbitration agreement shall be valid or enforceable, if the agreement requires arbitration of a dispute arising under this section.” 18 U.S.C. § 1514A(e)(2). In their opening brief, defendants readily acknowledged that this statutory exemption means the arbitration agreement between Bruker and Wussow cannot be enforced with respect to his Sarbanes-Oxley or “SOX” claim. (See Defs. Op. Br. (dkt. #11) at 5 (acknowledging that “Plaintiff's SOX claim is statutorily excluded from arbitration”).) Ironically enough, as defendants point out, a similar cause of action for whistleblower retaliation under Dodd-Frank (15 U.S.C. § 78u-6(h)(1)) includes no express anti-arbitration provision. Nevertheless, Wussow refused to submit even his Dodd-Frank claim to arbitration, instead pressing for resolution of both claims in this court. For this reason, defendants frame the issue now before the court as: (a) whether the court must direct the Dodd-Frank claim to arbitration consistent with the parties' written agreement; and if so, (b) whether the court should stay proceedings on the related SOX claim pending that arbitration. The answer to the first question is almost certainly “yes, ” but given plaintiff's refusal to drop his claim under Dodd-Frank, the answer to the second question is far less clear given arguably inconsistent directions by Congress and the likelihood that whichever claim is decided first is likely to have a largely preclusive, if not definitive, effect on the other.

         Moreover, the second question posed appears to be a matter of first impression for this circuit. Deferring to the greater weight of authority from other circuits, the court holds that Wussow's Dodd-Frank claim is arbitrable and, therefore, must be submitted to binding arbitration consistent with the express provision of the parties' employment agreement and mandatory arbitration clause. While the court may in its discretion and normally would stay all proceedings in this court pending the outcome of that arbitration, doing so here would frustrate Congress's express intent with respect to plaintiff's claim under Sarbanes-Oxley. Accordingly, the court will refer the Dodd-Frank claim to arbitration while proceeding with the Sarbanes-Oxley claim in this court under the current, and if necessary, an expedited schedule.


         A motion to compel arbitration is reviewed in a manner similar to one for summary judgment: the court considers all evidence in the record and draws all reasonable inferences in the light most favorable to the non-moving party. Tinder v. Pinkerton Sec., 305 F.3d 728, 735 (7th Cir. 2002); Scheurer v. Fromm Family Foods LLC, No. 15-CV-770-JDP, 2016 WL 4398548, at *1 (W.D. Wis. Aug. 18, 2016). Although “[a] district court must promptly compel arbitration once it is satisfied that the parties agreed to arbitrate, ” Tinder, 305 F.3d at 735 (citing 9 U.S.C. § 4), the party moving to compel arbitration must demonstrate that any applicable agreement requires the parties to arbitrate the claims that plaintiff has brought in this case. Scheurer, 2016 WL 4398548, at *1.

         A. Employment

         Defendant Bruker Nano, Inc., is a wholly-owned subsidiary of defendant Bruker Corporation. (Unless otherwise indicated, both defendant entities are referred to collectively in this opinion as “Bruker.”) The individual defendants, Michael Szulczewski and Stephen Minne, were at relevant times management-level employees at Bruker Nano with direct supervisory responsibilities over plaintiff Michael Wussow. Wussow was hired by Bruker Nano in January 2014 to serve as a director of product line management.

         On or about January 24, 2014, Wussow and Bruker executed an “Employee Patent, Confidentiality and Arbitration Agreement.” (Dkt. #13, at ¶2.) That agreement included the following arbitration provision:

         8. Arbitration and Equitable Relief

8.1 Arbitration
In consideration of my employment with the Company, its promise to arbitrate all employment related disputes and my receipt of the compensation, pay raises and other benefits paid to me by the Company, at present and in the future, I agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from my employment with the Company or the termination of my employment with the Company, including any breach of this agreement, shall be subject to binding arbitration. Disputes which I agree to arbitrate, and thereby agree to waive any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964 the Older Workers Benefit Protection Act, claims of harassment, discrimination or wrongful termination and any statutory claims. I further understand that this agreement to arbitrate also applies to any disputes that the Company may have with me.
8.2 Procedure

I agree that any arbitration will be administered by the American Arbitration Association (“AAA”) or another mutually acceptable arbitration administrator. I agree that the arbitrator shall have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication and motions to dismiss and demurrers, prior to any arbitration hearing. I also agree that the arbitrator shall have the power to award any remedies, including attorneys' fees and costs, available under applicable law. I understand the Company will pay for any administrative or hearing fees charged by the arbitrator or administrator except that I shall pay the first $200.00 of any filing fees associated with any arbitration I initiate. I agree that the decision of the arbitrator shall be in writing.

8.3 Administrative ReliefI understand that this agreement does not prohibit me from pursuing an administrative claim with a local, state or federal administrative body such as the National Labor Relations Board or the Equal Employment Opportunity Commission. This agreement does, however, preclude me from pursuing court action regarding any such claim.

(Dkt. #14, at 5-6).

         B. Protected Conduct and Termination

         From January 2014, Wussow was employed by Bruker for approximately 16 months. During that period, he allegedly discovered that defendants and other Bruker employees were engaging in improper and possibly fraudulent revenue recognition practices that potentially violated company policy, SEC rules, and federal law. In response, Wussow claims to have “repeatedly and explicitly urged his fellow employees not to engage in this misconduct and reported it to his superiors, refusing to participate in it himself and strenuously opposing and objecting to it.” (Dkt. #1, at ¶ 24.)

         Even though defendants allegedly refused to stop or investigate the practices in question, and affirmatively dismissed or minimized his concerns, Wussow continued to press his concerns by opposing those practices and reporting them to his supervisors and other senior Bruker employees. Because of this “protected conduct, ” Wussow alleges, “defendants discriminated and retaliated against him . . . by berating him for his reports, stripping him of critical job functions in order to isolate him from further ...

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