Jabbour v. Brillio, LLC
- P. Castel
- 1:24-cv-02704
- U.S. District Court · Southern District of New York
- 12
In Jabbour v. Brillio, Judge Castel compelled arbitration, denied Brillio’s dismissal motion as moot, and stayed the case.
Nicolas Jabbour’s contract, good-faith-and-fair-dealing, and unjust-enrichment claims must proceed in arbitration rather than in the federal court case; Brillio, LLC’s motion to dismiss was denied as moot, and the court action was stayed.
What happened
Jabbour v. Brillio, LLC concerns claims by Nicolas Jabbour that Brillio breached agreements connected to Brillio’s purchase of Jabbour’s company and improperly prevented him from receiving an earnout payment. Jabbour sought damages for breach of contract, breach of the duty of good faith and fair dealing, and unjust enrichment.
Brillio argued that Jabbour had agreed to arbitrate disputes involving his employment, compensation, termination, and other state-law claims. Jabbour argued that his claims arose from the purchase agreement instead and were not covered by the arbitration agreement.
Judge P. Castel ruled that the parties formed a valid arbitration agreement and that Jabbour’s claims fell within its broad language. The court granted Brillio’s motion to compel arbitration, denied the motion to dismiss the amended complaint as moot, and stayed the case while arbitration proceeds.
The detailed version
- Jabbour v. Brillio, LLC · No. 1:24-cv-02704
- P. Castel
- Mar. 14, 2025
Background
Nicolas Jabbour sued Brillio, LLC, over Brillio’s purchase of Cedrus, LLC, a software development company Jabbour founded. Under the December 17, 2021 purchase agreement, Brillio agreed to pay Jabbour $78.4 million, subject to adjustments, plus a possible earnout payment of up to $8 million over two years if Cedrus met specified revenue milestones. Brillio also offered Jabbour employment as a vice president so he could work toward the earnout.
Jabbour alleged that Brillio later made the revenue milestones impossible to achieve by diverting Cedrus employees, changing Jabbour’s title and duties, and providing outdated software for tracking employee hours. He also alleged that Brillio fired him in April 2023 to prevent him from contributing to or supervising work related to the earnout. His amended complaint asserted breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment, seeking $8.3 million on each claim.
Brillio removed the case from New York state court based on diversity jurisdiction. It moved to dismiss the amended complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Alternatively, Brillio moved under the Federal Arbitration Act to require arbitration and pause the court case.
Arbitration Agreement
The court first considered arbitration. The agreement stated that disputes arising from or related to Jabbour’s employment relationship, compensation, and termination, as well as other state statutory and common-law claims, had to be resolved through binding arbitration. Jabbour electronically signed the agreement on April 25, 2022.
Applying New York contract law, the court found a valid agreement because Brillio made an employment offer conditioned on signing employment documents that included the arbitration agreement, and Jabbour accepted by signing it. The court also rejected Jabbour’s argument that the purchase agreement’s forum-selection clause displaced the arbitration agreement. The court concluded that the purchase agreement incorporated employment-related agreements, including the arbitration agreement, and that the forum-selection clause did not prohibit arbitration.
The court noted that the purchase agreement included a separate procedure involving an accounting firm for disputes about the calculation of the earnout. Because the parties had not argued that the calculation itself was erroneous, and because the court was compelling arbitration, it left Brillio’s argument about Jabbour’s failure to use that procedure for the arbitrator to decide.
Scope of the Agreement
The court held that the arbitration agreement covered Jabbour’s claims. Although the claims were also connected to the purchase agreement, the factual allegations focused on employment-related conduct, including changes to Jabbour’s duties, diversion of employees, compensation-related issues, and his termination. The agreement expressly covered disputes related to employment, compensation, and termination, along with other state common-law claims.
Disposition
The court granted Brillio’s motion to compel arbitration. It denied Brillio’s motion to dismiss the amended complaint as moot, stayed the action pending a final arbitration award, and directed the parties to notify the court within 30 days after a final award or another resolution of the claims. The Clerk was asked to terminate the motions at ECF 23 and 26.
Read the full 12-page opinion on CourtListener, the free public archive maintained by the Free Law Project.