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A federal court in Illinois held that an arbitration clause in an employment agreement required arbitration of disputes arising out of a promissory note that was incorporated into the employment agreement, despite the fact that the promissory note contained a “Consent to Jurisdiction” clause.
In Harmonic Investment Management, Inc. v. Casals, No. 06 C 2825, 2006 WL 3341202 (N.D. Ill. Nov. 17, 2006), Casals moved to compel arbitration of a dispute with Harmonic pursuant to an arbitration clause in an employment agreement between Casals and Harmonic. The arbitration clause applied to all disputes relating to or arising out of the agreement.
In opposing the motion, Harmonic conceded that claims arising out of the employment agreement were subject to arbitration but argued that claims arising out of a promissory note held by Casals were not subject to arbitration because the promissory note contained a “Consent to Jurisdiction” clause providing that all litigation in connection with the note should be brought in state or federal court in Illinois.
The Court ordered arbitration of the dispute over the promissory note. As the Court observed, the language of both the employment agreement and the promissory note indicated that the documents were executed together, and the employment agreement expressly incorporated the promissory note.
Additionally, the Consent to Jurisdiction clause only referred to litigation. As such, the employment agreement and the promissory note did not contain conflicting provisions because the Consent to Jurisdiction clause merely stated that litigation would occur in Illinois if the parties decided to litigate a dispute.
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