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Roxanne Felling v. Hobby Lobby

April 19, 2005



Plaintiff Roxanne Felling filed this action against her former employer, Defendant Hobby Lobby Stores, Inc. ("Hobby Lobby"),*fn1 alleging that Hobby Lobby engaged in unlawful employment practices in violation of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., as well as the common law tort of outrage.

This action is before the court on Hobby Lobby's Motion to Dismiss, or Alternatively to Compel Arbitration and Stay Proceedings (Doc. 12) pursuant to Fed. R. Civ. P. 12(b)(1). Hobby Lobby contends that Plaintiff, while employed for Hobby Lobby, signed a written agreement to resolve all disputes related to her employment through arbitration. For the following reasons, the court grants Hobby Lobby's motion to compel arbitration and to stay the litigation pending arbitration.

I. Factual Background

In February 1997, Plaintiff began working for Hobby Lobby at its Shawnee, Kansas store. On June 2, 2000, Plaintiff signed a document titled "Memorandum to Employees Regarding Arbitration of All Claims Relating to Employment Relations or Termination" (hereinafter "memorandum"). That memorandum, in relevant part, provides:

Effective March 4, 1998, Hobby Lobby adopted arbitration procedures for the resolution of all employment-related disputes between employees and the Company with the exception of Workers' Compensation and Unemployment Compensation matters. All covered disputes are to be submitted to an experienced independent arbitrator for decision . . . . The decision of the arbitrator will be final and binding.

It is important for you to know that you will not be waiving any substantive legal rights under this arbitration procedure. The procedure simply provides that any substantive legal rights you may have will be resolved in arbitration rather than in court.

Every effort has been made to assure your access to a copy of the Company's arbitration procedures as adopted by the American Arbitration Association. . . .

Please review these procedures carefully. You are required to sign an acknowledgment form indicating your agreement and receipt. Every individual who works for the Company must have signed and returned this acknowledgment to be eligible for employment and continued employment with the Company. Further, your employment or continued employment after the date of your receipt will constitute your acceptance of this agreement to arbitrate and the Company's arbitration procedures. The Company hereby binds itself to this agreement to arbitrate and the Company's arbitration procedures.*fn2 After signing the agreement, Plaintiff continued to work for Hobby Lobby until September 2003.

II. Discussion

Under the Federal Arbitration Act, 9 U.S.C. §§ 1-16, the court has the authority to stay litigation pending arbitration:

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement.

9 U.S.C. § 3.

The Federal Arbitration Act "evinces a strong federal policy in favor of arbitration." ARW Exploration Corp. v. Aguirre, 45 F.3d 1455, 1462 (10th Cir. 1995) (citing Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220, 226 (1987)). If an agreement contains an arbitration clause, "a presumption of arbitrability arises . . ." Id. (citing AT&T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643, 650 (1986)). The presumption may be overcome only if "it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute." United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960). Where the language is broad and the agreement contains no express provision excluding an asserted dispute from arbitration, "only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail . . . ." Id. at 585. However, "the presumption of arbitrability falls away when the dispute . . . is whether the parties have a valid and enforceable agreement in the first place." Phox v. Atriums Mgmt. Co., 230 F. Supp. 2d 1279, 1281 (D. Kan. 2002) (citations omitted).

Hobby Lobby bears the initial burden of establishing that it has a valid arbitration agreement. SmartText Corp. v. Interland, Inc., 296 F. Supp. 2d 1257, 1262-63 (D. Kan. 2003) (citations omitted); Phox, 230 F. Supp. 2d at 1282. Once Hobby Lobby has met this burden, Plaintiff must demonstrate that a genuine issue of fact remains for trial. SmartText Corp., 296 F. Supp. 2d at 1263; Phox, 230 F. Supp. 2d at 1282. "Just as in summary judgment proceedings, a party cannot avoid compelled arbitration by generally denying the facts upon which the right to arbitration rests . . . ." Tinder v. Pinkerton Sec., 305 F.3d 728, 735 (7th Cir. 2002). When ruling on the enforceability of an agreement to arbitrate, ...

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