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Termini v. Group 1 Automotive, Inc.

United States District Court, D. Kansas

October 25, 2019

SALVATORE TERMINI, Plaintiff,
v.
GROUP 1 AUTOMOTIVE INC. and GPI KS-SH, INC., Defendants.

          MEMORDANDUM AND ORDER

          KATHRYN H. VRATIL, United States District Judge.

         Salvatore Termini filed suit against his former employer, Group 1 Automotive Inc. and GPI KS-SH, Inc. d/b/a Shawnee Mission Hyundai, alleging that defendants retaliated against him by terminating his employment after he filed a worker's compensation claim. This matter comes before the Court on Plaintiff's Motion To Compel Arbitration (Doc. #28) filed August 20, 2019. For reasons set forth below, the Court sustains plaintiff's motion.

         Factual Background

         Defendants employed plaintiff from June 15, 2018 to November 15, 2018. Defendants' Response In Opposition To Plaintiff's Motion To Compel Arbitration (Doc. #31) filed September 3, 2019 at 1. On June 13, 2018 plaintiff signed an employee handbook which contains an arbitration provision pursuant to the Federal Arbitration Act (“FAA”). Employee Acknowledgment And Agreement (“Arbitration Agreement”), attached as Exh. A to Defendants' Response (Doc. #31). On March 12, 2019, plaintiff filed a complaint for retaliatory discharge in state court and defendants timely removed the action to this Court pursuant to diversity jurisdiction under 28 U.S.C. § 1332. Notice of Removal (Doc. #1) filed April 19, 2019.

         On June 24, 2019, defendants produced their Initial Disclosures under Fed.R.Civ.P. 26. Defendants' Response (Doc. #31) at 3. Although plaintiff signed the Arbitration Agreement during his employment, he asserts that he was not aware of the agreement until after he reviewed defendants' initial disclosures. See Plaintiff's Reply To Defendants' Response To Plaintiff's Motion To Compel Arbitration (Doc. #33) filed September 17, 2019 at 16. On June 26, 2019, plaintiff emailed defendants and asked if there was “any reason we should not stop everything and arbitrate this matter.” 6.27.2019 Email, attached as Exh. C to Defendants' Response (Doc. #31). On June 27, 2019, the parties held a conference call to discuss the Arbitration Agreement. See Defendants' Response (Doc. #31) at 3. The parties dispute the substance and outcome of the conference call. Plaintiff asserts that the parties discussed jurisdictional issues related to the arbitration provision. See Plaintiff's Reply (Doc. #33) at 6-8. Defendants assert that the parties made an oral contract agreeing not to enforce the arbitration provision. See Defendants' Response (Doc. #31) at 3-4. As evidence, defendants provide a follow-up email sent to plaintiff on June 27, 2019, which summarizes defendants' interpretation of the conference call:

[T]his will confirm our conversation earlier today. Defendants have no objection to proceeding with this case in federal court . . . and agree to waive any objection that they might have to doing so as a function of the Arbitration Agreements that Mr. Termini previously signed. We further agree that we will not, at some later point in time, seek to enforce the provisions of the Arbitration Agreement. As a result, I believe that the parties now are in agreement that there is no impediment to proceeding with our pending case in the District of Kansas.

6.27.2019 Email, attached as Exh. C to Defendants' Response (Doc. #31). Plaintiff never responded to this email. See Defendants' Response (Doc. #31) at 4; Plaintiff's Reply (Doc. # 33) at 6.

         On August 20, 2019, plaintiff filed this motion seeking enforcement of the Arbitration Agreement. Plaintiff's Motion (Doc. #28). Defendants do not dispute the validity of the Arbitration Agreement; rather, they dispute whether the agreement is enforceable. Defendants urge the Court not to enforce the Arbitration Agreement because plaintiff (1) made an oral agreement not to enforce the Arbitration Agreement; (2) explicitly waived his right to arbitration during the conference call on June 27, 2019; and (3) implicitly waived his right to arbitration through his conduct surrounding this litigation. Plaintiff denies the existence of an agreement not to enforce arbitration and claims that defendants have not met their burden to show that he waived his right to arbitration. For reasons stated below, the Court sustains plaintiff's motion to compel arbitration.

         Legal Standard

         Federal policy favors arbitration agreements and requires the Court to rigorously enforce them. Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220, 226 (1987) (citing Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221 (1985)); see also Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119, 122-23 (2001) (arbitration agreements in employment contracts generally enforceable). Normally, on a motion to compel arbitration under the FAA, the Court applies a strong presumption in favor of arbitration. ARW Exploration Corp. v. Aguirre, 45 F.3d 1455, 1462 (10th Cir. 1995) (FAA evinces strong federal policy in favor of arbitration); see Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983) (court should resolve any doubts concerning scope of arbitrable issues in favor of arbitration).

         The question of arbitrability - whether the parties agreed to arbitrate a particular dispute - is an issue for judicial determination. AT & T Techs., Inc. v. Comm'n Workers of Am., 475 U.S. 643, 649 (1986). The enforceability of an arbitration agreement “is simply a matter of contract between the parties; [arbitration] is a way to resolve those disputes - but only those disputes - that the parties have agreed to submit to arbitration.” Id.; see also PaineWebber Inc. v. Elahi, 87 F.3d 589, 594-95 (1st Cir. 1996) (arbitration is matter of contract law). Generally, state law principles of contract formation govern whether an enforceable arbitration agreement exists. Hardin v. First Cash Fin. Servs., Inc., 465 F.3d 470, 475 (10th Cir. 2006).

         The party seeking to compel arbitration bears the initial burden to present evidence that demonstrates an enforceable agreement to arbitrate. SmartText Corp. v. Interland, Inc., 296 F.Supp.2d 1257, 1263 (D. Kan. 2003). Once this burden is met, the party opposing arbitration must show a genuine issue of material fact as to the validity or enforceability of the agreement. See id. Essentially, this creates a summary-judgment-like standard which the Court applies in deciding whether to compel arbitration. See Clutts v. Dillard's, Inc., 484 F.Supp.2d 1222, 1223-24 (D. Kan. 2007) (courts of appeals have uniformly applied summary-judgment-like standard to motions to compel arbitration under FAA).

         Analysis

         Here, the record contains sufficient evidence of an enforceable agreement to arbitrate. The Arbitration Agreement states that the parties will arbitrate any dispute which arises out of plaintiff's termination. See Arbitration Agreement, attached as Exh. A to Defendants' Response (Doc #31). This satisfies plaintiff's obligation under the first step of the burden-shifting framework. Defendants present three arguments why the Court should not enforce the Arbitration Agreement: (1) plaintiff orally agreed not to enforce the Arbitration Agreement; (2) plaintiff explicitly waived his right to arbitration by agreeing not to arbitrate; and (3) plaintiff implicitly waived his right to arbitration through conduct in litigation.

         I. Whether Plaintiff Contractually Agreed Not To Enforce The Arbitration Agreement

         Defendants assert that during their conference call on June 27, 2019, the parties contractually agreed not to enforce the Arbitration Agreement. As noted, the Court typically applies a strong presumption in favor of arbitration on a motion to compel arbitration under the FAA. ARW, 45 F.3d at 1462 (FAA evinces strong federal policy in favor of arbitration). The Court applies state contract law to determine whether an arbitration agreement is enforceable. See Howsam v. Dean Witter Reynolds, Inc., 537 ...


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