Spikener v. Olive Garden Holdings, LLC

Filing 9

MEMORANDUM OPINION & ORDER: In consideration of dft's Motion to Dismiss and Compel Plaintiff to Participate in Arbitration 6 , it is ORDERED that this matter is set for Evidentiary Hearing on 6/29/2018 at 3:00 PM in LEXINGTON before Judge Danny C. Reeves. Signed by Judge Danny C. Reeves on 5/18/2018.(GLD)cc: COR,D

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
(at Lexington)
MAJESTY SPIKENER,

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Plaintiff,
V.
OLIVE GARDEN HOLDINGS, LLC,
doing business as Olive Garden
Restaurant,
Defendant.
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Civil Action No. 5: 18-188-DCR

MEMORANDUM OPINION
AND ORDER

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This matter is pending for consideration of the defendant’s motion to dismiss and
compel the plaintiff to participate in arbitration. [Record No. 6] For the reasons that follow,
the Court will hold an evidentiary hearing before ruling on the relief requested.
I.
Plaintiff Majesty Spikener (“plaintiff” or “Spikener”) worked as a waitress at the
defendant’s Olive Garden Restaurant in Lexington, Kentucky, for about four months
beginning in November 2016. [Record No. 1-1, ¶ 7] Spikener alleges that she was subjected
to a racially hostile work environment and ultimately was terminated because she reported the
situation to the defendant’s upper management. Id. Spikener filed suit in Fayette Circuit Court
in February 2018, asserting claims against Defendant Olive Garden Holdings, LLC
(“defendant” or “Olive Garden”) under the Kentucky Civil Rights Act, Ky. Rev. Stat. 344.010,
et seq. The defendant removed the matter to this Court based on diversity jurisdiction. It filed
a motion to dismiss and compel arbitration on April 4, 2018.
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II.
Spikener reports that she visited the defendant’s Olive Garden restaurant in Lexington,
Kentucky on October 22, 2016. [Record No. 7-1, p. 1] Her friend Josh Barcomb was working
there as a manager. According to Spikener, he asked her to apply for a waitress position. Id.
Spikener wrote her personal information and work history on a sheet of paper and gave it to
Barcomb, who went to his office and submitted an online job application on her behalf. Id. at
p. 2. The employment application included the following statement:
I understand that the Darden Companies, including Olive Garden . . . have in
place a Dispute Resolution Process (DRP), and I further acknowledge and agree
that if I am offered and accept employment, any dispute between me and any of
the Darden Companies relating in my employment and/or my separation from
employment, shall be submitted within one (1) year of the day which I learned
of the event and shall be resolved pursuant to the terms and conditions of the
DRP.
[Record No. 6-2, p. 7]

“Accept,” appears beside this clause in Spikener’s completed

application.
Spikener received a telephone message several days later advising that she had been
hired but needed to attend orientation in the beginning of November. [Record No. 7-1, p. 2]
She attended orientation in early November 2016, where two managers and several other
“soon-to-be-employees” were present. Id. Spikener contends that an alternative dispute
resolution agreement was never mentioned during her training, orientation, or employment and
that she never signed such an agreement. Id. However, Sean Nealey, a former manager of
Olive Garden’s Lexington restaurant, reports that he conducted the employee orientation that
Plaintiff Spikener attended. [Record No. 8-3] Nealey states that he specifically discussed the
DRP program, including the mandatory arbitration required of all employees. He reported that

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Spikener did not make any objections or raise concerns regarding the DRP and that she signed
the DRP acknowledgement. Id.
The defendant has been unable to locate portions of Spikener’s personnel file, including
the signed DRP acknowledgement, which provides as follows:
This agreement contains the requirements, obligations, procedures, and benefits
of the Dispute Resolution Process (DRP). I acknowledge that I have received
and/or have had the opportunity to read this arbitration agreement. I
understand that this arbitration agreement requires that disputes that
involve the matters subject to the agreement be submitted to mediation or
arbitration pursuant to the arbitration agreement rather than to a judge or
jury in court. I agree as a condition of my employment, to submit any eligible
disputes I may have to the DRP and to abide by the provisions outlined in the
DRP. I understand this includes, for example, claims under state and federal
laws relating to harassment or discrimination, as well as other employmentrelated claims as defined by the DRP. Finally, I understand that the Company
is equally bound to all of the provisions of the DRP.
[Record No. 6-2, pp. 3, 20 (emphasis in original)]
Melissa Ingalsbe, Director of Dispute Resolution and Human Resources, provided a
declaration based on her review of company files, including Spikener’s personnel records.
[Record No. 6-2] Ingalsbe reported that Darden Restaurants, Inc., which operates Olive
Garden, maintains a dispute resolution process that has been in place since at least 2005, and
it applies to all employees. Id. at p. 2. Ingalsbe further reported that, as part of the hiring and
orientation process, each employee is provided with a DRP book and asked to sign an
acknowledgement.

While the defendant was unable to locate Spikener’s signed DRP

acknowledgment form, Ingalsbe stated that Spikener would not have been permitted to work
at the restaurant had she declined to agree to the DRP and sign the form. Id. at p. 3.
Jefe D. Gabat also provided a declaration stating that he was the general manager of
the Lexington Olive Garden during Spikener’s employment.
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[Record No. 8-5]

Gabat

indicated that he reviewed the personnel files for all seven employees who completed
orientation on November 7, 2016, including Spikener. According to Gabat, Spikener’s file
was the only one that did not contain a signed DRP acknowledgment. Gabat confirmed that
no employee is permitted to begin employment if he or she does not sign the DRP
acknowledgement.

Id.

Gabat also reported that a poster with DRP information was

prominently displayed in an employee area in the restaurant.
III.
The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16, “embodies [a] national policy
favoring arbitration and places arbitration agreements on equal footing with all other
contracts.” Richmond Health Facilities v. Nichols, 811 F.3d 192, 195 (6th Cir. 2016). The
Act provides that written agreements to arbitrate disputes arising out of contracts or
transactions “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at
law or in equity for the revocation of any contract.” 9 U.S.C. § 2. While doubts as to the
parties’ intentions are resolved in favor of arbitration, Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, 473 U.S. 614, 626 (1985), the “FAA was not enacted to force parties to
arbitrate in the absence of an agreement.” Floss v. Ryan’s Family Steak Houses, Inc., 211 F.3d
306, 315 (6th Cir. 2000) (quoting Avedon Engineering, Inc. v. Seatex, 126 F.3d 1279, 1286
(10th Cir. 1997)). The principal issue here is whether a valid agreement to arbitrate exists.
The defendant contends as a threshold matter that an arbitrator, rather than the Court,
must decide whether there is an enforceable agreement to arbitrate. [Record No. 6-1. pp. 6-7]
This argument is misplaced. Spikener challenges the validity of the arbitration agreement
itself, so the court must consider that challenge before ordering compliance with the
agreement. Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 66, (2010). Further, the
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defendant relies solely on a portion of the employee DRP booklet which provides: “The
arbitrator will resolve any issue/dispute arising out of or relating to the interpretation or
application of the DRP or its rules, including without limitation, any arbitration rules or
procedures or manner in which the arbitration proceeding will be conducted.” [Record No. 62, p. 16] This clause is too narrow to support the defendant’s position in any event, as it does
not encompass disputes involving the formation of the agreement. See Rent-A-Center, 561
U.S. at 66.
The Court engages in a limited review to determine whether the plaintiff’s claims are
arbitrable. See Mitsubishi Motors Corp., 473 U.S. at 626; Stout v. J.D. Byrider, 228 F.3d 709,
714 (6th Cir. 2000). This requires that it determine whether “a valid agreement to arbitrate
exists between the parties” and whether “the specific dispute falls within the substantive scope
of the agreement.” Richmond Health Facilities, 811 F.3d at 195. Spikener does not appear to
dispute the second prong, as the DRP acknowledgement specifically covers state law claims
of harassment and discrimination. The Court approaches factual questions as it would at the
summary judgment stage. See Great Earth Cos. v. Simons, 288 F.3d 878, 889 (6th Cir. 2002);
Yaroma v. Cashcall, Inc., 130 F. Supp.3d 1055, 1062 (E.D. Ky. 2015).
Kentucky law guides the Court’s inquiry regarding contract formation. A contract is
enforceable only if both parties agree to be bound by it. Braxton v. O’Charley’s Rest. Props.,
LLC, 1 F. Supp. 3d 722, 726 (W.D. Ky. 2014) (citing David Roth’s Sons, Inc. v. Wright &
Taylor, Inc., 343 S.W.2d 389, 391 (Ky. 1961)). Such an agreement typically is manifested
when both parties sign the contract. Section 2 of the FAA requires that arbitration agreements
be in writing, but unsigned agreements to arbitrate may be enforced when the parties have
manifested acceptance of the contract through their actions. See Seawright v. Am. Gen. Fin.
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Servs., Inc., 507 F.3d 967 (6th Cir. 2007) (“[A]rbitration agreements under the FAA need to
be written, but not necessarily signed.”); Braxton, 1 F. Supp. 3d at 725; Polly v. Affiliated
Computer Servs., Inc., No. 10-135, 2011 WL 93715, at *2 (E.D. Ky. Jan. 11, 2011). However,
an employee must have actual knowledge of the existence of an arbitration agreement before
it is enforceable. Sprowls v. Oakwood Mobile Homes, Inc., No. 3: 99-CV-756-H, 2000 WL
33975578, *4 (W.D. Ky. May 12, 2000).
Spikener is adamant that she did not sign the DRP agreement or have any knowledge
of it. The defendant contends that this assertion is untrue. It asserts that Spikener did review
and sign the agreement, and that she also manifested acceptance of the contract through her
actions. Specifically, it points to Spikener’s acceptance of the term in her online employment
application and subsequent acceptance of employment. However, Spikener contends that she
did not personally complete the online application and knew nothing about the DRP provision.
The record does not include testimony from Barcomb, the Olive Garden employee whom
Spikener contends completed the application on her behalf.
Olive Garden has filed what it alleges are previous employment applications that
Spikener submitted to another Darden restaurant in 2012 and 2014. [Record No. 8-1, 8-2]
Each includes acceptance of the DRP acknowledgement. While these applications may tend
to show that Spikener was aware of the existence of the DRP, Spikener has not had an
opportunity to respond these filings.
The defendant also suggests that Spikener manifested assent to the DRP by continuing
to work in the restaurant where a “DRP program poster” was prominently displayed. [Record
No. 8-5, p. 2] Manager Gabat reports that the defendant posted information about “DRP
panelists” and made copies of the employee handbook available at all times. Gabat claims that
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all of this information was visible to employees during their work shifts and displayed
prominently in areas where employees “had to walk and congregate.” Id. This information
was provided for the first time in the defendant’s reply and, accordingly, further factual
development is needed.
IV.
Viewing the evidence in the light most favorable to Spikener as the non-moving party,
it is unclear whether she had actual notice of the DRP and manifested her assent to it. The
Court may not simply choose between the parties’ competing affidavits regarding these issues.
Accordingly, an evidentiary hearing is necessary pursuant to 9 U.S.C. § 4. Therefore, based
on the foregoing, it is hereby
ORDERED that this matter shall be assigned for an evidentiary hearing on Friday,
June 29, 2018, beginning at the hour of 3:00 p.m., at the United States Courthouse in
Lexington, Kentucky.
This 18th day of May, 2018.

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