Department of Labor: 06 00018

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Case 1:06-cv-00018-RWR Document 20 Filed 03/31/2007 Page 1 of 9 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA _________________________ ) ) ) Plaintiff, ) ) v. ) ) FANNIE MAE CORPORATION, ) ) Defendant. ) _________________________) MAXWELL J. KIMPSON, Civil Action No. 06-18 (RWR) MEMORANDUM OPINION AND ORDER Plaintiff Maxwell J. Kimpson brought this action alleging that he was wrongfully terminated in violation of the whistleblower provisions of the Sarbanes-Oxley Act. Defendan
  UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA  _________________________ ) MAXWELL J. KIMPSON,))Plaintiff,))v.)Civil Action No. 06-18 (RWR))FANNIE MAE CORPORATION,))Defendant.) _________________________) MEMORANDUM OPINION AND ORDER  Plaintiff Maxwell J. Kimpson brought this action allegingthat he was wrongfully terminated in violation of thewhistleblower provisions of the Sarbanes-Oxley Act. DefendantFannie Mae Corporation (“Fannie Mae”) filed a motion to compelarbitration and dismiss the complaint, or in the alternative, tostay the proceedings stating that the parties entered into avalid agreement to arbitrate Kimpson’s wrongful discharge claim.Because the parties’ employment contract requires arbitration ofKimpson’s claim, the parties will be directed to engage inarbitration and this action will be stayed pending itscompletion.BACKGROUNDKimpson was employed by Fannie Mae as a Contract/ProcurementSpecialist. His employment contract stated, in part, that allemployees with claims covered by the dispute resolution policy Case 1:06-cv-00018-RWR Document 20 Filed 03/31/2007 Page 1 of 9  - 2 -must “arbitrate the claim under this Policy before bringing suiton it in court. . . . The Policy applies to all claims that anemployee might make against Fannie Mae (and its directors,officers, agents, or employees, in their representativecapacities) involving a legally-protected right, that directly orindirectly relate to his . . . employment or the termination ofthat employment, even if the claim is based on facts andcircumstances that occurred before the effective date of thepolicy.” (Def.’s Mot. to Compel, Ex. 1, Attach. A at 1.)Throughout Kimpson’s employment, he frequently complained to hissupervisors about his department’s contract and accountingpractices and the lack of formal policies to ensure review offraudulent activities. Kimpson claims that while asserting thesecomplaints, the corporation attracted a great deal of negativemedia attention and “[i]n an attempt to avoid culpability for thefraudulent, wasteful, and abusive practices criticized byMr. Kimpson, [his] supervisors conspired to fire him.” (Compl.¶ 8.) Following Kimpson’s termination, the Office of FederalHousing Enterprise Oversight’s audit findings and an internalaudit revealed that Fannie Mae had engaged in the improperconduct that Kimpson had alleged. (Id.)Kimpson filed the instant complaint alleging wrongfultermination in violation of the whistleblower provisions of the Case 1:06-cv-00018-RWR Document 20 Filed 03/31/2007 Page 2 of 9  - 3 -“No company with a class of securities registered under 1 section 12 of the Securities Exchange Act of 1934 (15 U.S.C. §78l), or that is required to file reports under section 15(d) ofthe Securities Exchange Act of 1934 (15 U.S.C. § 780(d)), or anyofficer, employee, contractor, subcontractor, or agent of suchcompany, may discharge, demote, suspend, threaten, harass, or inany other manner discriminate against an employee in the termsand conditions of employment because of any lawful act done bythe employee . . . to provide information, cause information tobe provided, or otherwise assist in an investigation regardingany conduct which the employee reasonably believes constitutes aviolation of sections 1341, 1343, 1344, or 1348, any rule orregulation of the Securities and Exchange Commission.” 18 U.S.C.§ 1514(a).Sarbanes-Oxley Act. Fannie Mae moved to dismiss and compel 1 arbitration, stating that plaintiff agreed in a binding writtenagreement to engage in non-binding arbitration of his claimsbefore initiating a court action. Kimpson insists that he neveragreed to arbitrate claims related to Sarbanes-Oxley given thatthe statute did not exist at the time that Fannie Mae enacted itsdispute resolution policy.DISCUSSIONI. MOTION TO COMPEL ARBITRATIONThe Federal Arbitration Act (“FAA”) provides that “a writtenprovision in . . . a contract . . . to settle by arbitration acontroversy thereafter arising out of such contract . . . shallbe valid, irrevocable, and enforceable, save upon any grounds asexist at law or in equity for the revocation of any contract.” 9U.S.C. § 2. Although the D.C. Circuit has not ruled on whether anon-binding arbitration agreement is covered by the FAA, it has Case 1:06-cv-00018-RWR Document 20 Filed 03/31/2007 Page 3 of 9  - 4 -noted that parties to a contract requiring arbitration of claimswould still have a right to enforcement of that contractprovision even if the contract fell outside of the FAA. Cole v.Burns Int’l Sec. Servs., 105 F.3d 1465, 1472 (D.C. Cir. 1997).See also Wolsey, LTD. v. Foodmaker, Inc., 144 F.3d 1205, 1209(9th Cir. 1998) (“In light of the strong presumption in favor ofarbitrability . . ., we hold that arbitration need not be bindingin order to fall within the scope of the Federal ArbitrationAct.”); but see Dluhos v. Strasberg, 321 F.3d 365, 371 (3rd Cir.2003) (holding that a non-binding dispute resolution policy didnot constitute “arbitration” under the FAA).“[A]ny doubts concerning the scope of arbitrable issuesshould be resolved in favor of arbitration[.]” Mitsubishi MotorsCorp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985).However, an individual cannot be required to submit toarbitration any dispute which he has not agreed to arbitrate,United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S.574, 582 (1960), and the question “whether the parties havesubmitted a particular dispute to arbitration, i.e., ‘ question of arbitrability  ,’ is ‘an issue for judicial determination unlessthe parties clearly and unmistakably prove otherwise.’” Howsamv. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002) (quotingAT&T Techs. v. Commc’ns Workers, 475 U.S. 643, 649 (1986))(emphasis in srcinal). Generally, whether arbitration should be Case 1:06-cv-00018-RWR Document 20 Filed 03/31/2007 Page 4 of 9
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