Unreported / Non-Citable
Background
Plaintiff Alan Miegel entered into a settlement agreement with his former employer, PayFactors Group LLC, on January 22, 2018, resolving disputes over commissions, confidentiality obligations, and phantom equity. Defendant Jeff Laliberte signed the agreement solely in his official capacity as CEO of PayFactors and was not a party to it. The agreement contained an arbitration clause requiring disputes to be resolved by arbitration in San Francisco, California, as well as mutual release and nondisparagement provisions extending to PayFactors’ officers, directors, and employees.
In December 2025, Miegel filed a JAMS arbitration demand against PayScale (PayFactors’ successor) and Laliberte individually, alleging that Laliberte made defamatory statements to a background investigator in April 2025 that interfered with Miegel’s Series A fundraising. Laliberte objected to arbitration, asserting he was not bound by the agreement. Miegel then filed this petition in federal court to compel arbitration under the Federal Arbitration Act, arguing Laliberte was bound as a third-party beneficiary, by equitable estoppel, or as an agent of PayFactors. Laliberte moved to dismiss for lack of personal jurisdiction under Rule 12(b)(2), submitting a declaration that he is a Massachusetts resident with no significant ties to California and never understood the settlement agreement to bind him personally.
The Court’s Holding
The court granted Laliberte’s motion to dismiss for lack of personal jurisdiction and dismissed the case without prejudice, declining to reach the motion to compel arbitration. Applying California contract law to determine whether the nonsignatory Laliberte was bound by the arbitration provision, the court rejected all three theories. First, on third-party beneficiary grounds, the court held that while the release and nondisparagement provisions referenced officers and employees generally, nothing in the agreement indicated they were specifically intended to benefit Laliberte personally, and there was no evidence he accepted any benefit under the agreement. Second, equitable estoppel did not apply because Laliberte had not sought to enforce the agreement, asserted claims under it, or knowingly obtained direct benefits from it.
Third, the agency doctrine did not bind Laliberte because he was not seeking to enforce the arbitration agreement or asserting claims under the settlement agreement, distinguishing cases where nonsignatory agents sued on contracts containing arbitration clauses. The court emphasized that Keller Construction Co. v. Kashani turned on the unique statutory framework governing general partners and limited partnerships, which does not extend to corporate CEOs. Because Laliberte did not consent to the arbitration provision, he did not consent to personal jurisdiction in California.
Key Takeaways
- A nonsignatory corporate officer who signs a settlement agreement solely in an official capacity is not bound by its arbitration clause merely because the agreement contains release or nondisparagement provisions that generically reference officers and employees.
- Under California law, a third-party beneficiary may enforce an arbitration agreement against a signatory, but cannot be compelled to arbitrate unless they have actually accepted a benefit under the agreement.
- Equitable estoppel requires the nonsignatory to have sought enforcement of the contract, asserted claims requiring reference to it, or knowingly obtained direct benefits from it—none of which occurred here.
- The agency theory for compelling arbitration of a nonsignatory applies when the agent seeks to enforce the agreement or asserts claims under it, not when the signatory seeks to compel the agent to arbitrate.
- Consent to personal jurisdiction via a forum-selection clause in an arbitration agreement requires the party to be bound by that agreement in the first place.
Why It Matters
This decision reinforces the principle that arbitration is a matter of consent and that nonsignatories—particularly corporate officers acting in their official capacity—cannot be compelled to arbitrate based on incidental benefits flowing from a contract they did not sign. The court carefully distinguished between the ability of a nonsignatory to enforce an arbitration clause (which California law permits for intended third-party beneficiaries) and the ability to compel a nonsignatory to arbitrate (which requires affirmative acceptance of benefits).
The ruling also clarifies that equitable estoppel and agency theories require the nonsignatory to have taken some affirmative step to invoke the contract, and that generic release and nondisparagement language extending to officers and employees does not, without more, manifest intent to bind those individuals to arbitration. The dismissal without prejudice leaves open the possibility that Miegel could seek to compel arbitration in the future if Laliberte affirmatively invokes the settlement agreement’s protections.