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Johnson v. Retirement Plan of General Mills, Inc.

United States District Court, S.D. Indiana, New Albany Division

August 25, 2017

DEBORAH J. JOHNSON, Plaintiff,
v.
RETIREMENT PLAN OF GENERAL MILLS, INC. AND THE BAKERY, CONFECTIONARY, TOBACCO AND GRAIN MILERS INTERNATIONAL UNION BCTGM, Defendant.

          ENTRY ON PLAINTIFF'S OBJECTION TO MAGISTRATE JUDGE'S ORDER ON MOTION TO STAY LITIGATION AND COMPEL ARBITRATION

          TANYA WALTON PRATT, JUDGE UNITED STATES DISTRICT COURT

         This matter is before the Court on Plaintiff Deborah J. Johnson's ("Johnson") Objection to Magistrate Judge's Opinion and Order (Filing No. 37) regarding the Order on Motion to Stay Litigation and Compel Arbitration (Filing No. 36) ("the Order") filed by Defendants Retirement Plan of General Mills Inc. and the Bakery, Confectionary, Tobacco and Grain Millers International Union (BCTGM) ("the Plan"). For the following reasons, the Court OVERRULES Johnson's Objection, ADOPTS the Magistrate Judge's Order, and GRANTS Defendant's Motion to Stay Litigation and Compel Arbitration.

         I. BACKGROUND

         General Mills Incorporated ("GMI") hired Johnson on April 22, 1997. As an employee, she was eligible to participate in the Plan. The Plan provides four distinct retirement benefits- normal, early, disability, and deferred. On September 14, 2015, Johnson applied for disability retirement benefits due to a medical condition. The Plan denied her request and she appealed the Plan's denial. The Plan denied Johnson's appeal.

         On August 19, 2016, Johnson sought relief in this Court against the Plan. (Filing No. 1.) In her Complaint, she alleges the Plan breached its contract with her pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 ("ERISA"), when the Plan denied her claim for disability retirement benefits. Id. On October 17, 2016, the Plan filed an Answer to the Complaint, denying liability for Johnson's claim. (Filing No. 11.) During this same time period, on September 14, 2016, GMI negotiated a plant closure agreement ("the Agreement") that provided severance benefits to eligible employees. Johnson was an eligible employee and, pursuant to the Agreement, GMI agreed to pay Johnson $20,000.00 in exchange for releasing:

GMI, its subsidiaries and affiliates..., from all causes of actions, claims, debts or other contracts and agreements... including, but not limited to, any and all claims directly or indirectly relating to [her] employment, or to [her] separation from employment.... This release includes any and all claims under federal, state, and local laws prohibiting employment discrimination, harassment or retaliation, and specifically includes, without limitation, claims arising under... [ERISA].... However, [Johnson] shall retain any and all vested benefits acknowledged by GMI as benefits to which [she is] entitled as a participant in any GMI benefit plans, and any rights that cannot by law be released by private agreement, including the right to file a complaint or charge with a governmental administrative agency....

("the Release") (Filing No. 23-1 at 1). Johnson also agreed to arbitrate "any dispute or claim arising out of or relating to the above release of claims, including without limitation, any dispute about the validity or enforceability of the release or the assertion of any claim covered by the release" ("the Arbitration Clause"). Id. On October 28, 2016, Johnson signed the Release "knowingly, voluntarily and without reliance upon any statements made by or on behalf of GMI except those in [the] release agreement or the other written information provided to [her] in connection with [the] release agreement." Id. at 2.

         That same day, Johnson's counsel emailed the Plan administrator, inquiring whether the Release would impact her pending breach of contract claim. (Filing No. 37 at 3.) On October 31, 2016, the Plan responded that it would look into the inquiry and get back to Johnson's counsel. Id. at 4. The following day, on November 1, 2016, Johnson's counsel replied that "unless informed otherwise, [Johnson is] proceeding with the understanding the severance release will not impact [her] claims in this case." Id. The Plan did not reply.

         On November 30, 2016, the Plan moved for leave to amend its Answer to add affirmative defenses and a counterclaim based on the Release. (Filing No. 15.) On December 21, 2016, the Court granted the Plan's request (Filing No. 21), and the Plan filed its First Amended Answer and Counterclaim on December 22, 2016. (Filing No. 24.) Thereafter, on January 6, 2017, the Plan filed a Motion to Stay Litigation and Compel Arbitration pursuant to the Release. (Filing No. 27.) On February 14, 2017, Johnson responded in opposition to the Plan's request to arbitrate, arguing: 1) the Arbitration Clause is unenforceable because it lacks consideration; 2) the Plan is not an intended beneficiary of the Arbitration Clause; 3) Johnson's claim against the Plan is not subject to the Release; and 4) the Plan forfeited its right to enforce the Arbitration Clause when it failed to respond to the November 1, 2016 email and actively litigated the breach of contract claim prior to filing its request to compel arbitration. (Filing No. 32.)

         On March 29, 2017, the Magistrate Judge granted the Plan's request to compel arbitration, concluding the Release required Johnson to arbitrate her claim. (Filing No. 36.) Johnson objects to the Magistrate Judge's Order. (Filing No. 37.)

         II. LEGAL STANDARD

         A district court may refer a non-dispositive pretrial motion to a magistrate judge under Federal Rule of Civil Procedure 72(a). Rule 72(a) provides:

When a pretrial matter not dispositive of a party's claim or defense is referred to a magistrate judge to hear and decide, the magistrate judge must promptly conduct the required proceedings and, when appropriate, issue a written order stating the decision. A party may serve and file objections to the order within 14 days after being served with a copy. A party may not assign as error a defect in the order not timely objected to. The district judge in the case must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law.

Fed. R. Civ. P. 72(a). After reviewing objections to a magistrate judge's order, the district court will modify or set aside the order only if it is clearly erroneous or contrary to law. The clear error standard is highly deferential, permitting reversal only when the district court "is left with the definite and firm conviction that a mistake has been made." W ...


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