Falls v. 1CI, Inc.

JAMES P. SALMON (Retired, Specially Assigned), J. This case requires us to examine the breadth of an arbitration agreement and to consider whether the agreement to arbitrate was unconscionable. At the beginning of 2009, Anthony Falls (“Falls”) was an employee of 1CI, Inc., a wholly owned subsidiary of Cape Fox Corporation (“Cape Fox”). At all times when Falls was employed as the CEO of 1CI, he worked out of the lCI’s ⁶⁴⁶ Gaithersburg, Maryland office. 1CI is a Delaware Corporation. Cape Fox is an Alaskan Native Corporation and serves as a holding company for several subsidiary corporations.

The principal office of Cape Fox is located in Saxman, Alaska. 1 On January 1, 2009, Falls signed an employment agreement (the “Agreement”) with 1CI. The Agreement provided that Falls would serve as Chief Executive Officer (“CEO”) of 1CI and would be paid $120,000 annually. In addition, under the Agreement, Falls was entitled to an incentive bonus equal to “40% of the sum total of [lCI’s] profits before taxes but after payment of’ compensation to Falls. The Agreement provided that “[a]ny dispute, claim, or controversy arising out of or relating to this Agreement shall be settled by arbitration by a single arbitrator.” In the event that the parties could not mutually agree on an arbitrator, an arbitrator would be selected from a list provided by the Seattle Washington office of JAMS (Judicial Arbitration & Mediation Services, Inc.).

Also, the parties agreed that the arbitration hearing would take place in Seattle, Washington, that arbitration fees would be divided 50-50 between the parties and, that the law of Alaska would govern the resolution of all disputes. In addition, according to the Agreement, the decision of the arbitrator would be “final, binding, and non appealable.” Lastly, the Agreement provided that if any court of competent jurisdiction were to hold that any provision of the Agreement was “invalid, unenforceable, or void” the remaining provisions would remain “in full force and effect.” Falls’s employment with 1CI was terminated in January 2010. Approximately six months later, Falls filed suit in the Circuit Court for Montgomery County against 1CI and Cape Fox. In his one count complaint, Falls alleged: 1) that the defendants were employers within the meaning of the Maryland Wage Payment and Collection Law as codified in Mary ⁶⁴⁷ land Code (2008 Repl.

Volume), Labor & Employment Article [“LE”], Section 3-501 through 3-509 (hereinafter “the MWPCL”); 2) that his employers had failed to pay him the 40% bonus he was entitled to under the Agreement; 3) that the defendants had no legitimate reason for not paying him his bonus; and 4) as of December 31, 2009, he was owed a bonus “in excess of $400,000.” Invoking Section 3-507.1 of the MWPCL, Falls asked the court to award him treble damages [i.e. three times the amount of the bonus due] plus attorney’s fees and costs. 1CI filed a “motion to dismiss [the Complaint] and/or to compel arbitration,” which Falls opposed. Cape Fox filed a separate motion to dismiss the complaint based on its assertion that the Circuit Court for Montgomery County did not have personal jurisdiction over it. The Circuit Court, after considering Falls’s opposition, denied Cape Fox’s motion to dismiss insofar as the motion was based on the allegation of no personal jurisdiction. The Court, however, ordered that Falls submit his claims against both 1CI and Cape Fox to arbitration.

The judge further ordered that the complaint filed against both defendants be dismissed. 2 Falls filed a timely appeal from the trial judges decision to order arbitration. 3 He presents four questions for our review: 1. Did the circuit court err in compelling arbitration where Mr. Falls asserted a statutory claim for wages under the Maryland Wage Payment and Collection Law? ⁶⁴⁸ 2. Did the circuit court err in compelling arbitration in Seattle, Washington, a forum with no connection to any of the litigants or any interest in enforcing the Maryland Wage Payment and Collection Law? 3. Did the circuit court err in compelling arbitration under the factual circumstances presented, where the arbitration agreement would mandate fee-splitting between the employer and the appellee? 4.

Did the circuit court err in compelling arbitration under the factual circumstances presented, where the arbitration agreement provides that the decision would not be judicially appealable? I. Background. Up until the summer of 2008, Falls was the sole owner and CEO of 1CI. Cape Fox bought 1CI from Falls in August 2008.

As part of the purchase agreement, Falls was hired as an employee by Cape Fox to continue to manage and operate 1CI. At the time of the negotiations for the purchase of his company, according to a Declaration later signed by Falls, Cape Fox promised him that he would be entitled to receive incentive compensation, over and above his salary, for acting as Id’s CEO. Falls began performing work for both the defendants in the fall of 2008. The Agreement, which was signed in January 2009, was presented to Falls by counsel for Cape Fox and it was Falls’s “understanding” that Cape Fox’s counsel drafted the agreement.

All of Falls’s discussions regarding the employment contract were with Cape Fox’s counsel. Falls was not represented by an attorney when he negotiated the Agreement. At the beginning of the Agreement, the following “recital” is found: A. 1CI is an Alaska Native Corporation—owned Delaware Corporation, owned by Cape Fox Corporation, the ANCSA Village Corporation for the Native Village of Saxman. 1CI ⁶⁴⁹ is organized under the laws of the State of Delaware, and is a participant in the SBA 8a business development program!.] According to the Agreement, 1CI was formed as a for profit corporation to provide construction related services “as a commercial and Government contractor.” Paragraph 10(a) of the Agreement stated: Governing Law. This Agreement shall be governed by and construed according to the laws of the State of Alaska.

The arbitration clause in the Agreement that the trial judge enforced was set forth in paragraph 10b, which reads as follows: Arbitration. Any dispute, claim or controversy arising out of or relating to this Agreement shall be settled by arbitration by a single arbitrator. The parties will attempt to agree on a single arbitrator. If they are unable to do so, the arbitration will be referred to the Seattle, Washington office of Judicial Arbitration & Mediation Services, Inc. (JAMS).

That office will provide a list and resumes of available arbitrators, numbering one or more than there are parties. Each party may then strike one name, leaving the remaining as the arbitrator. If more than one name remains, the designated arbitrator shall be selected by the JAMS administrator. Each party shall have the right to conduct discovery proceedings in the manner and within the scope provided for in the Federal Rules of Civil Procedure.

The arbitrator shall be authorized to issue subpoenas for the purpose of requiring attendance of witnesses at depositions. At least twenty days before the arbitration, the parties shall exchange lists of all witnesses (including experts) and copies of all exhibits they intend to use at the arbitration. The arbitration shall take place in Seattle, Washington. The arbitration shall take place no later than 90 days after the service of the notice of intent to arbitrate, unless extended by mutual agreement.

The arbitrator shall have the authority and power to proceed ex parte in the event that either party shall fail, after reasonable notice, to ⁶⁵⁰ attend the arbitration. The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable and within the scope of this Agreement, except that the arbitrator shall have no authority to grant injunctive relief, orders for specific performance or punitive or exemplary damages. The arbitrator shall determine which is the prevailing party and shall determine and include in the award that party’s reasonable attorney fees, costs and expert witness expenses as provided in Section 10c. Each party shall share equally in payment of the costs and fees of the arbitrator.

The award rendered by arbitration shall be final, binding and nonappealable. Judgment upon the award may be entered in any court of competent jurisdiction in the United States. (Emphasis added). Paragraph 10c of the Agreement provided: Attorney’s fees.

In the event any suit or arbitration proceeding is instituted by one party against the other arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable attorney’s fees and expenses of litigation or arbitration.

II

Statutory Background. Falls contends that under the Agreement, he did not consent to arbitration of his right to a bonus under the MWPCL. To decide whether Falls is correct, it is useful to review two statutes and the manner in which those statutes have been interpreted, i.e., the Federal Arbitration Act (“the FAA”), which is set forth at 9 U.S.C., § 1 et. seq., and the Maryland Uniform Arbitration Act (“the MUAA”), found in Maryland Code (1974, 2002 Repl. Volume”) § 3-201 et seq. of the Courts and Judicial Proceedings Article. 4 ⁶⁵¹ In Walther v. Sovereign Bank, 386 Md. 412 , 872 A.2d 735 (2005), the Court said: The FAA applies to nearly all arbitration agreements, and, like all federal law, it preempts inconsistent state law.

See Southland Corp. v. Keating, 465 U.S. 1, 16 , 104 S.Ct. 852, 861 , 79 L.Ed.2d 1 (1984) (United States Supreme Court stating that, “[i]n creating a substantive rule applicable in state as well as federal courts, Congress intended to foreclose state legislative attempts to undercut the enforceability of arbitration agreements”) (footnote omitted). Section 2 of the FAA, which the United States Supreme Court has made clear state courts are also bound to recognize and enforce, see Southland, 465 U.S. at 14-15 , 104 S.Ct. at 860-861 , provides that a “written provision ... to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon any grounds at law or in equity for the revocation of any contract.” 9 U.S.C. § 2 . In enforcing § 2 of the FAA, however, state courts are not bound by the federal procedural provisions of the FAA, which are found in §§ 3 and 4 of the FAA, but may generally apply their own procedures. See Southland, 465 U.S. at 16 n. 10, 104 S.Ct. at 861 n. 10 (stating that, “[i]n holding that the [FAA] preempts a state law that withdraws the power to enforce arbitration agreements, we do not hold that §§ 3 and 4 of the [FAA] apply to proceedings in State courts”) (alterations added).

Therefore, in enforcing § 2 of the FAA, we must look to the pertinent Maryland law relating to arbitration agreements to decide whether the circuit court properly ordered petitioners to arbitrate their claims against Sovereign Bank in light of petitioners’ assertion that the arbitration agreement itself is invalid in that it is unconscionable and therefore unenforceable. The Maryland Uniform Arbitration Act (“MUAA”) is set forth in Md.Code (1974, 2002 RepLVol.) §§ 3-201 et seq. of ⁶⁵² the Courts and Judicial Proceedings Article and was purposefully meant to mirror the language of the FAA. In nearly identical language to that found in § 2 of the FAA, the MUAA provides that a “unitten agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy arising between the parties in the future is valid and enforceable, and is irrevocable, except upon grounds that exist at law or in equity for the revocation of a contract.” Section 3-206(a) of the Courts and Judicial Proceedings Article. As we stated in Holmes v. Coverall North America, 336 Md. 534 , 649 A.2d 365 (1994): “The Maryland Arbitration Act has been called the ‘State analogue ... to the Federal Arbitration Act.’ See Regina v. Envirmech, 80 Md.App. 662, 667 , 565 A.2d 693, 696 (1989).

The same policy favoring enforcement of arbitration agreements is present in both our own and the federal acts. Compare Moses H. Cone Memorial Hospital v. Mercury Const. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 941 , 74 L.Ed.2d 765, 785 (1983) (noting the ‘liberal federal policy favoring arbitration agreements’) with Gold Coast Mall, 298 Md. at 103, 468 A.2d at 95 (noting the ‘legislative policy favoring enforcement of executory agreements to arbitrate’). We therefore rely on decisions interpreting the Federal Arbitration Act in reaching our decision.” Holmes, 336 Md. at 541 , 649 A.2d at 368 .

Judge Battaglia, for the Court, most recently explained arbitrations favored status in Cheek v. United Healthcare of the Mid-Atlantic, Inc., 378 Md. 139 , 835 A.2d 656 (2003); “We have described arbitration as ‘the process whereby parties voluntarily agree to substitute a private tribunal for the public tribunal otherwise available to them.’ Gold Coast Mall, Inc. v. Larmar Corp., 298 Md. 96, 103 , 468 A.2d 91, 95 (1983); see also Charles J. Frank, Inc. v. Associated Jewish Charities of Baltimore, Inc., 294 Md. 443, 448 , 450 A.2d 1304, 1306 (1982). The Maryland Uniform Arbitration Act ... ‘expresses the legislative policy favoring enforcement of agreements to arbitrate.’ Allstate Ins. Co. v. Stinebaugh, ⁶⁵³ 374 Md. 631, 641 , 824 A.2d 87, 93 (2003). See also Holmes v. Coverall North America, Inc., 336 Md. 534, 546 , 649 A.2d 365, 371 (1994) (observing that the Arbitration Act embodies ‘the legislative intent to favor arbitration’); Crown Oil & Wax Co. of Delaware, Inc. v. Glen Constr.

Co. of Virginia, Inc., 320 Md. 546, 558 , 578 A.2d 1184, 1189 (1990) (‘Maryland courts have consistently stated that the [Arbitration Act] embodies a legislative policy favoring the enforcement of executory agreements to arbitrate.’); Gold Coast Mall, Inc., 298 Md. at 103 , 468 A.2d at 95 ; Charles J. Frank, Inc., 298 [294] Md. at 448, 450 A.2d at 1306 .” Cheek, 378 Md. at 146 , 835 A.2d at 660 . This public policy favoring such agreements is understandable, as arbitration agreements are generally a less expensive and more expeditious means of settling litigation and relieving docket congestion. The favorable status which arbitration agreements a,re afforded in Maryland has been made explicitly evident by the Legislature in the enactment of the MUAA. Id. at 423-25, 872 A.2d 735 .

(Emphasis added).

III

Did the parties agree to arbitrate the MWPCL claim? A. The Breadth of the Agreement. Mindful of the fact that Maryland’s public policy favors arbitration of disputes, we analyze Falls’s contention that the Agreement did not compel him to arbitrate the issue mentioned in his complaint. 5 ⁶⁵⁴ The MWPCL governs the manner in which Maryland employers pay their employees and provides remedies for an employer’s failure to pay an employee all wages owed to him. Barufaldi v. Ocean City, 196 Md.App. 1, 27 , 7 A.3d 643 (2010). “Wage” is defined in the MWPCL as “all compensation that is due to an employee for employment” and includes bonuses, commissions, fringe benefits, and “any other remuneration promised for service.” Labor and Employment Article [“LE”] § 3-501(c).

If a court finds that the employer withheld wages from an employee in violation of the MWPCL and not as a result of a bona fide dispute, the court may award the employee an amount not exceeding three times the wage, along with reasonable attorneys’ fees and other costs. LE § 3-507.1(b). The bonus mentioned in Falls’s Complaint is a “wage” as defined in Labor and Employment Article § 3-501(c). Falls argues that the arbitration clause contained in the Agreement is “irrelevant” because only “statutory claims are asserted in his complaint.” We disagree with Falls in this regard.

There are many cases interpreting the Federal Arbitration Act, which demonstrate that, depending on the language used in the contract, an agreement to arbitrate can include statutory claims. This was made clear in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 , 111 S.Ct. 1647 , 114 L.Ed.2d 26 (1991). The Gilmer Court said: It is by now clear that statutory claims may be the subject of an arbitration agreement, enforceable pursuant to the FAA. Indeed, in recent years we have held enforceable arbitration agreements relating to claims arising under the Sherman Act, 15 U.S.C. §§ 1-7 ; § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b); the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq.; and § 12(2) of the Securities Act of 1933, 15 U.S.C. § 771 (2).

See Mitsubi ⁶⁵⁵ shi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 , 105 S.Ct. 3346 , 87 L.Ed.2d 444 (1985); Shearson/American Express Inc. v. McMahon, 482 U.S. 220 , 107 S.Ct. 2332 , 96 L.Ed.2d 185 (1987); Rodriguez de Quijas v. Shear-son/American Express, Inc., 490 U.S. 477 , 109 S.Ct. 1917 , 104 L.Ed.2d 526 (1989). In these cases we recognized that “by agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum.” Mitsubishi, 473 U.S. at 628 [ 105 S.Ct. 3346 ]. Although all statutory claims may not be appropriate for arbitration, having made the bargain to arbitrate, the party should be held to it unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.” Ibid. In this regard, we note that the burden is on Gilmer to show that Congress intended to preclude a waiver of a judicial forum for ADEA claims.

See McMahon, 482 U.S. at 277 [227, 107 S.Ct. 2332 ], If such an intention exists, it will be discoverable in the text of the ADEA [Age Discrimination in Employment Act of 1967], its legislative history, or an “inherent conflict” between arbitration and the ADEA’s underlying purposes. See ibid. Throughout such an inquiry, it should be kept in mind that ‘questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration.’ Moses H. Cone, supra [460 U.S.] at 24 [ 103 S.Ct. 927 ]. (Emphasis added).

See also CompuCredit Corp. v. Greenwood, 565 U.S. -, -, 132 S.Ct. 665, 667 , 181 L.Ed.2d 586 (2012). (If a federal statute is silent on whether claims under it can proceed in an arbitration forum, the FAA requires the arbitration agreement to be enforced according to its terms). As already indicated, the parties agreed that “[a]ny dispute, claim, or controversy arising out of or relating to this agreement shall be settled by arbitration.... ” The United States Court of Appeals for the Fourth Circuit has characterized similar formulations as “broad arbitration clauses capable of ⁶⁵⁶ an expansive reach.” American Recovery Corporation v. Computerized Thermal Imaging, Inc., 96 F.3d 88 , 93 (4th Cir.1996). In American Recovery, the agreement obligated the parties to arbitrate any dispute that “arose out of or related to” the consulting agreement.

Id. Because plaintiffs claim “significantly related to the consulting agreement,” arbitration was compelled. Id. In Prima Paint Corp. v. Flood & Conklin Mfg.

Co., 388 U.S. 395, 398 , 87 S.Ct. 1801 , 18 L.Ed.2d 1270 (1967), the Supreme Court characterized as “broad” a clause that required arbitration of “[a]ny controversy or claim arising out of or relating to this Agreement.” See also J.J. Ryan & Sons v. Rhone Poulenc Textile, S.A., 863 F.2d 315 , 321 (4th Cir.1988) (same). The arbitration clause here at issue is much broader than clauses found in many contracts. In fact, the “arising out of or relating to” language found in the Agreement is the formulation recommended by the American Arbitration Association. See Mediterranean Enterprises, Inc. v. Ssangyong, 708 F.2d 1458 , 1464 (9th Cir.1983).

Even aside from the fact that the arbitration language in this case is broad, precedent from Federal Courts, interpreting the FAA, have uniformly held that even ambiguous arbitration clauses must be interpreted in favor of arbitration. In the case of Moses H. Cone Memorial Hospital v. Mercury Construction Corporation, 460 U.S. 1, 24-25 , 103 S.Ct. 927 , 74 L.Ed.2d 765 (1983), the Court announced its “healthy regard for the federal policy favoring arbitration” and went on to say that the Federal Arbitration Act “establishes that, as a matter of federal law, any doubts concerning the scope of arbitration issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” More recently, the Fourth Circuit reiterated in American Recovery Corporation, supra, that “ ‘the heavy presumption of arbitrability requires that when the scope of the arbitration clause is open to question, a court must decide the question in favor of arbitration.’ ” 96 F.3d at 92 (quoting Peoples Sec. Life Ins. Co. v. Monumental Life Insurance Co., 867 F.2d 809, 812 (4th Cir.1989). See also Bank Julius Baer ⁶⁵⁷ & Co., Ltd. v. Waxfield, Ltd. 424 F.3d 278, 284 (2d Cir.2005), (Broadly worded arbitration agreement creates a presumption of arbitrability that is only overcome if the Agreement is not susceptible to an interpretation that covers the dispute.) The Fourth Circuit case of Adkins v. Labor Ready, Inc., 303 F.3d 496 (4th Cir.2002) is instructive.

The plaintiffs in Adkins were employees of a temporary employment agency that provided manual day labor to companies. Id. at 499 . The plaintiffs contended that they were statutorily entitled to payment for waiting time at their employer’s dispatch office, travel time between that office and the assigned work place, and time spent undergoing training. Id.

The plaintiffs filed suit in federal court alleging that the procedures adopted by their employer violated the Federal Fair Labor Standards Act (“FLSA”) and the West Virginia minimum wage and maximum hour standards for employees. Id. The employees had agreed to arbitrate “any disputes arising out of [their] employment, including any claims of discrimination, harassment or wrongful termination that [they] believe [they] have against” their employer, together with an agreement to arbitrate “all other employment related issues.... ” Id. at 500 . The plaintiffs argued that either the statutory text the Fair Labor Standard Act directly conflicted with the FAA’s pro-arbitration policy Id. at 506 . 6 The plaintiffs made a similar argument concerning their statutory claim under West Virginia law.

Id. Both claims were rejected by the Fourth Circuit. Id. at 506-507 . The Adkins Court concluded that the plaintiffs’ “claims amount to little more than an attempt to undermine repeated pronouncements by Congress and the Supreme Court that federal law incorporates a liberal policy favoring arbitration agreements.

A refusal on our part to heed these pronouncements would be a dereliction of our duty under law.” Id.See also Holmes v. Coverall North America, Inc. 336 Md. ⁶⁵⁸ 534, 541 , 649 A.2d 365 (1994). (We rely on federal cases interpreting the FAA in determining whether a dispute is arbitrable.) In the case sub judice, Falls stresses that in his one count complaint he did not allege a breach of contract, but instead alleged a violation of a statute, ie. the MWPCL. That distinction makes no difference, so long as the arbitration agreement is broad enough to encompass statutory claims. See Gilmer, supra, 500 U.S. at 25-26 , 111 S.Ct. 1647 .

The phrase “[ajrising out of or relating to” has been said to include within its ambit “every dispute between the parties having a significant relationship to the contract regardless of the label attached to a dispute.” Wachovia Bank, N.A. v. Schmidt, 445 F.3d 762, 767 (4th Cir.2006). See also Long v. Silver, supra, 248 F.3d at 316-17 (same). Here, the broad language of the Agreement made it clear that Falls’s claim for a bonus must be submitted to arbitration. After all, if the Agreement had not existed, Falls clearly would have had no right to receive a bonus.

In other words, Falls’s right to receive an incentive bonus arose directly out of the Agreement and, as previously stated, Falls and 1CI agreed to submit to a single arbitrator any “dispute, claim, or controversy arising out of or relating to” the Agreement. We therefore hold that the “controversy” as to whether appellant was entitled to a bonus and the amount of that bonus must be arbitrated in accordance with paragraph 10b of the Agreement. In support of his position that the agreement to arbitrate did not encompass claims made under the MWPCL, Falls cites three unreported opinions by Maryland federal district court judges. None of these opinions constitutes persuasive authority, however, because the opinions are unreported: See Kendall v. Howard County, 204 Md.App. 440, 445, n. 1 , 41 A.3d 727 (2012), cert. granted 427 Md. 606 , 50 A.3d 606 (2012).

In Kendall we said: Under Rule 32.1(a) of the Federal Rules of Appellate Procedure, after January 1, 2007, a United States Court of ⁶⁵⁹ Appeals may not prohibit a party from citing an unpublished opinion of a federal court for its persuasive value or any other reason. However, it is the policy of this Court in its opinions not to cite for persuasive value any unreported federal or state court opinion. In this case, our policy is not implicated because we have cited the two unreported federal case opinions only to impart the history of this case. But even if all the decisions appellant relies upon were reported, none of them is apposite because the opinions deal with forum selection clauses—not arbitration clauses.

Falls argues, citing Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 483 , 109 S.Ct. 1917 , 104 L.Ed.2d 526 (1989), which quotes Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 , 94 S.Ct. 2449 , 41 L.Ed.2d 270 (1974), that arbitration agreements are “in effect, a specialized kind of forum-selection clauses.” While it is true that arbitration clauses are a specialized kind of forum selection clause, cases interpreting the scope of forum-selection clauses are not persuasive when interpreting an agreement to arbitrate. This was explained in Spring Hope Rockwool, Inc. v. Industrial Clean Air, Inc., 504 F.Supp. 1385, 1389 (E.D.N.C.1981) where the Court said: Plaintiff seeks to rely on The Bremen v. Zapata Off-Shore Company, 407 U.S. 1 , 92 S.Ct. 1907 , 32 L.Ed.2d 513 (1972). In The Bremen , however, the Supreme Court addressed a contractual provision which chose a forum for litigation, not for arbitration. While the two types of provisions are quite similar and while courts enforce both in the absence of extraordinary circumstances, an arbitration provision has the additional force of the Congressional imprimatur found in Section 2 of the Arbitration Act.

Under Section 2, the arbitration provision must be enforced unless the party seeking to avoid arbitration can prove that the arbitration clause itself was voidable for fraud, coercion, or “swch grounds as exist at law or in equity for the revocation of any contract.” In Sam Reisfeld & Son Import Company v. S.A. Eteco, 530 F.2d 679 (5th Cir.1976), plaintiff sought to avoid arbitration in the forum chosen in a contractual provi ⁶⁶⁰ sion by arguing that under The Bremen , the forum was unreasonable. The Fifth Circuit held that plaintiffs “attack falters on its initial premise that The Bremen unreasonableness test is applicable to arbitration clauses. Rather, we agree with the district court that the enforceability of the arbitration clause at issue is governed exclusively by the explicit provisions of the Federal Arbitration Act.” (emphasis added). For the reasons stated above, we hold that: 1) the mere fact that Falls’s complaint raises a statutory claim under the MWPCL, rather than a breach of contract claim, does not support Falls’s assertion that arbitration should have been denied; and 2) in this case, paragraph 10b of the agreement was broad enough to encompass the claim asserted by Falls in his one-count Complaint.

B. Other arguments as to the scope of paragraph 10B. Falls also asserts: [T]he clause in this case mandates that Alaska law [shall] apply, which triggers the same policy concerns present in Schultz [v. All-Fund, Inc.—one of the unreported cases relied upon by appellant] because Alaska’s remedies for wage payment violations fall short of the protections Maryland provides its citizens. As discussed above, Maryland’s wage payment law provides for up to treble damages. By contrast, Alaska’s wage payment law only provides for up to double damages.

See AS § 23.10.110. Mr. Falls, like the plaintiff in Schultz, stands to lose his Maryland statutory claim and remedies if the arbitration clause is enforced and Appellees are allowed to shirk their obligations under Maryland law. In short, ... the arbitration clause is inapplicable and should not be enforced. There is no merit in this argument.

For starters, the arbitration clause [paragraph 10b in the Agreement] does not mention choice of law. The provision of the Agreement dealing with what law should be applied is set forth in paragraph 10a. Therefore, whether the subject case were to ⁶⁶¹ be tried by a Maryland court or an arbitrator in Seattle, the choice of law provision set forth in paragraph 10a would have to be addressed. In other words, the fact that the contract containing an arbitration clause also contained separate choice of law provisions has nothing whatsoever to do with whether the agreement to arbitrate should be enforced as written.

Restatement (Second) of Conflicts of Law, § 187 provides: § 187 Law of the State Chosen by the Parties (1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue. (2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties choice, or (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties. (3) In the absence of a contrary indication of intention, the reference is to the local law of the state of the chosen law. Under Alaska law, when issues of conflict of law arise, Alaska courts apply the provisions of Restatement (Second) of Conflicts of Law.

See Palmer G. Lewis Co., Inc. v. ARCO Chemical Company, 904 P.2d 1221, 1227 (Alaska, 1995) (when choice of law issues arise, Alaska generally looks to the Restatement (Second) of Conflicts)). Maryland does likewise. See Jackson v. Pasadena Receivables, 398 Md. 611, 617 , 921 ⁶⁶² A.2d 799 (2007) (applying Restatement (Second), § 187(1) and (2). In this case, the issue of what law governs Falls’s substantive rights, when § 187 of Restatement (Second) Conflicts of law is applied, will probably turn on the issue of whether application of Alaskan law would be contrary to a fundamental policy of Maryland. 7 Recently, the Fourth Circuit Court of Appeals, in Kunda v. C.R. Bard, Inc., 671 F.3d 464 (4th Cir.2011) made an attempt to forecast how a Maryland appellate court would rule if it were confronted with the issue of whether the rights enunciated in the MWPCL constituted a fundamental policy of Maryland.

The Kunda Court opined that the rights set forth in the MWPCL do not embody a fundamental policy of Maryland. Id. By contrast, the Supreme Judicial Court of Massachusetts, in a somewhat similar case, ruled that the Massachusetts Wage Act did embody a fundamental policy of Massachusetts law, and therefore the forum selected by the parties to try the case (New York State) would apply Massachusetts law. Melia v. Zenhire, Inc., 462 Mass. 164 , 967 N.E.2d 580, 594-95 (2012).

We will not, however, decide the issue of whether the rights enunciated