Doty v. Dolgencorp, Inc. et al
MEMORANDUM AND ORDER re: 5 MOTION to Compel Arbitration and Stay Pending Action filed by Defendant Dolgencorp, LLC, Defendant Dolgencorp, Inc. Motion is GRANTED. IT IS FURTHER ORDERED that the Clerk of Court shall administratively close this matter. The parties shall notify the Court of the resolution of the arbitration proceedings in a timely manner. Further Court action in this matter will be determined after such notice. Signed by District Judge Rodney W. Sippel on 5/2/16. (CAR)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
DOLGENCORP, INC. and
No. 4:15 CV 1931 RWS
MEMORANDUM AND ORDER
This matter is before me on defendant Dolgencorp LLC (“Dollar General”)’s motion to
compel arbitration and to stay this action. Plaintiff Sandra Doty brings this suit alleging a wage
and hour violation against Dollar General, her former employer. Dollar General seeks to enforce
the Dollar General Employee Arbitration Agreement (“Arbitration Agreement”) that Doty and
Dollar General entered into when she was their employee. Doty opposes the motion, arguing
that the Arbitration Agreement is invalid and should not be enforced. The question of whether
Arbitration Agreement is valid, however, has been delegated to the arbitrator. As a result, I will
compel arbitration and stay this action pending arbitration.
The Federal Arbitration Act (FAA), 9 U.S.C. § 1, “establishes a liberal federal policy
favoring arbitration.” Torres v. Simpatico, Inc., 781 F.3d 963, 968 (8th Cir. 2015) (quoting
AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1748 (2011)). “[T]he FAA limits a district
court's initial role in any challenge to an arbitration agreement to deciding whether ‘the making
of the agreement for arbitration or the failure to comply therewith’ is at issue.” MedCam, Inc. v.
MCNC, 414 F.3d 972, 974 (8th Cir. 2005) (quoting 9 U.S.C. § 4). The United States Court of
Appeals for the Eighth Circuit “has refined this inquiry to asking (1) whether the agreement for
arbitration was validly made and (2) whether the arbitration agreement applies to the dispute at
hand, i.e., whether the dispute falls within the scope of the arbitration agreement.” Id.; see also
Torres, 781 F.3d at 968-69. An arbitration agreement’s scope is interpreted literally, with any
doubts resolved in favor of arbitration. MedCam, 414 F.3d at 975. A district court should
compel arbitration “unless it may be said with positive assurance that the arbitration clause is not
susceptible of an interpretation that covers the asserted dispute.” Id. (internal quotations
“Because ‘arbitration is a matter of contract,’ whether an arbitration provision is valid is a
matter of state contract law, and an arbitration provision may be ‘invalidated by generally
applicable contract defenses, such as fraud, duress, or unconscionability, but not by defenses that
apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate
is at issue.’” Torres, 781 F.3d at 968-69 (quoting AT&T Mobility, 131 S.Ct. at 1745–46)
(internal quotations omitted)).
Under Missouri law, “arbitration agreements are tested through a lens of ordinary statelaw principles that govern contracts, and consideration is given to whether the arbitration
agreement is improper in light of generally applicable contract defenses . . . . such as fraud,
duress, or unconscionability.” Robinson v. Title Lenders, Inc., 364 S.W.3d 505, 515 (Mo. 2012).
The contract defense of unconscionability is used to “guard against one-sided contracts,
oppression and unfair surprise.” Brewer v. Mo. Title Loans, 364 S.W.3d 486, 492-93 (Mo.
2012). “If a valid and enforceable arbitration agreement exists under state-law contract
principles, any dispute that falls within the scope of that agreement must be submitted to
arbitration.” Torres, 781 F.3d at 968-69 (citing Faber v. Menard, 367 F.3d 1048, 1052 (8th Cir.
2004)). “[N]o state-law rule that is ‘an obstacle to the accomplishment of the FAA's objectives’
should be applied to invalidate an arbitration agreement.” Robinson, 364 S.W.3d at 515 (quoting
AT&T Mobility, 131 S.Ct. at 1748).
When arbitration is compelled, “[t]he FAA generally requires a federal district court to
stay an action pending an arbitration, rather than to dismiss it.” Green v. SuperShuttle Intern.,
Inc., 653 F.3d 766, 769 (8th Cir. 2011) (citing 9 U.S.C. § 3).
There is no dispute that Doty signed the Arbitration Agreement, nor is there any claim
that she opted out of the agreement. It is also undisputed that Doty’s claims fall within the scope
of the Arbitration Agreement. Rather, the disagreement at issue here is about the validity of the
Arbitration Agreement itself.
The Arbitration Agreement is governed by the Federal Arbitration Act (“FAA”), 9 U.S.C.
§ 1-4, and expressly incorporates the American Arbitration Association: Employment Rules and
Mediation Procedures (“AAA Rules”). Arbitration Agreement [#5-1] at 2. The Arbitration
Agreement requires the parties to arbitrate any dispute “arising out of or related to” Doty’s
employment with Dollar General. Id.
The Arbitration Agreement states, in relevant part:
You agree that, with the exception of certain excluded claims described below,
any legal claims or disputes that you may have against Dollar General, its parent
and subsidiary corporations, employees, officers and directors arising out of your
employment with Dollar General or termination of employment with Dollar
General (“Covered Claim” or “Covered Claims”) will be addressed in the manner
described in this Agreement. You also understand that any Covered Claims that
Dollar General may have against you related to your employment will be
addressed in the manner described in this Agreement.
The procedures in this Agreement will be the exclusive means of resolving
Covered Claims relating to or arising out of your employment or termination of
employment with Dollar General, whether brought by you or Dollar General. This
includes, but is not limited to, claims alleging violations of wage and hour laws,
state and federal laws prohibiting discrimination, harassment, and retaliation,
claims for defamation, tort claims, and claims alleging violation of any other state
or federal laws, except claims that are prohibited by law from being decided in
arbitration, and those claims specifically excluded in the paragraph below.
You have the opportunity to opt out of this Agreement, meaning that you will not
be bound by its terms. If you opt out, Dollar General will not be bound by the
terms of this Agreement either. To opt out, you must expressly notify Dollar
General of your intention to opt out by filling out and submitting electronically
the “Arbitration Opt Out Form” linked on DGme within 30 days of the day you
access the Agreement on DGme.
Arbitration Agreement [#5-1] at 1-3.
Doty argues that the Arbitration Agreement is invalid for lack of consideration because
at-will employment does not constitute consideration under Missouri Law. She also argues that
a bilateral contract does not otherwise exist because the parties do not have mirror obligations
under the Agreement, the practical effect of the class action waiver only limits employee rights,
the language of the Arbitration Agreement is generally focused on claims brought by employees,
and Doty was not given a meaningful opportunity to opt-out from the Arbitration Agreement.
As an initial matter, Dollar General argues that the arbitrator, not the district court, should
decide the threshold question of the validity of the Arbitration Agreement because the
Agreement expressly incorporates the AAA Rules, which grant the arbitrator the sole authority to
rule on the validity of the Arbitration Agreement.1 Specifically, Rule 6.a of the AAA
Employment Arbitration Rules and Mediation Procedures states, “The arbitrator shall have the
power to rule on his or her own jurisdiction, including any objections with respect to the
existence, scope or validity of the arbitration agreement.” Dollar General finds support in Green
Dollar General also argues that the Arbitration Agreement is valid, but because I conclude that the
parties have delegated validity review to the arbitrator, I will not address this argument.
v. SuperShuttle Int'l, Inc., 653 F.3d 766 (8th Cir. 2011), in which the United States Court of
Appeals for the Eighth Circuit held that by incorporating the AAA's Rules in an arbitration
agreement, parties clearly and unmistakably agree to allow the arbitrator to determine threshold
questions of arbitrability. Id. at 769.
Doty contends that I must first determine the threshold issue of validity. Doty relies on
Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 71, 130 S. Ct. 2772, 2778, 177 L. Ed. 2d 403
(2010), for the proposition that a district court must decide whether an arbitration agreement is
enforceable “before ordering compliance with [the] agreement.” Doty also notes that the
Arbitration Agreement here expressly states that “claims concerning the scope or enforceability
of [the Arbitration Agreement]” are not claims covered by the Agreement. [#5-1].
Both of Doty’s arguments fail. First, Doty conflates the distinct but related terms
“validity” and “enforceability.” Challenges to the validity of a contract go to whether a valid
contract was formed in the first place, such as whether there was offer and acceptance,
consideration, or a meeting of the minds. See Baker v. Bristol Care, Inc., 450 S.W.3d 770, 774
(Mo. 2014) (essential elements of any contract, including one for arbitration, are “offer,
acceptance, and bargained for consideration”) (internal citation omitted). In contrast, challenges
to the enforceability of a contract argue that, although a contract might have been validly formed,
its terms are so unconscionable, because of fraud or duress, for example, that it should not be
enforced. See id. at 774; see also Dotson v. Dillard's, Inc., 472 S.W.3d 599, 607 (Mo. Ct. App.
2015), as modified (Sept. 1, 2015), reh'g and/or transfer denied (Sept. 1, 2015), transfer denied
(Oct. 27, 2015).
Here, Doty argues the Arbitration Agreement is invalid because there is a lack of
consideration and mutuality of obligations. These are challenges to the validity of the
Arbitration Agreement itself – not the enforceability of the agreement. As a result, the fact that
the Arbitration Agreement states that “claims concerning the scope or enforceability of [the
Arbitration Agreement]” are not claims covered by the Agreement is not relevant to the
challenges brought here.
Second, Doty misreads Rent-A-Center. In Rent-A-Center, the Court held “If a party
challenges the validity under § 2 of the precise agreement to arbitrate at issue, the federal court
must consider the challenge before ordering compliance with that agreement under § 4.” Rent-ACtr., W., Inc., 561 U.S. at 71. The Court limited its holding, however, by explaining that courts
will only “intervene” when “the basis of [the] challenge [is] directed specifically to the
agreement to arbitrate,” as opposed to challenges that apply to the contract as a whole. Id. The
Court further clarified that, even where, as here, the underlying contract itself is an arbitration
agreement, the application of the rule remains the same, such that only challenges to delegationtype provisions specifically will be reviewed by the courts. Id. at 72 n.3. As a result, the Court
concluded, “unless [plaintiff] challenged the delegation provision specifically, we must treat it as
valid under § 2, and must enforce it under §§ 3 and 4, leaving any challenge to the validity of the
Agreement as a whole for the arbitrator.” Id. at 72.2
The Missouri Court of Appeals for the Western District recently applied the Rent-A-Center holding to a
case with similar facts to those here in Dotson v. Dillard's, Inc., 472 S.W.3d 599, 604 (Mo. Ct. App.
“[T]he question of arbitrability—whether a[n] ... agreement creates a duty for the parties
to arbitrate the particular grievance—is undeniably an issue for judicial determination[,]
[u]nless the parties clearly and unmistakably provide otherwise ...” AT & T Techs., Inc. v.
Commc'ns Workers of Am., 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986)
(emphasis added). “An agreement to arbitrate a gateway issue [such as arbitrability] is
simply an additional, antecedent agreement the party seeking arbitration asks the ... court
to enforce, and the FAA operates on this additional arbitration agreement just as it does
on any other.” Rent–A–Center, 561 U.S. at 70, 130 S.Ct. 2772. Thus, “we look to the
[a]greement to see if the parties affirmatively addressed the question of who decides
arbitrability.” Sadler v. Green Tree Servicing, LLC, 466 F.3d 623, 625 (8th Cir.2006).
“[A]n arbitration agreement need not recite verbatim that the ‘parties agree to arbitrate
arbitrability’ in order to manifest ‘clear and unmistakable’ agreement.” Houston Refining,
Here, like in Rent-A-Center, Doty’s challenges are to the validity of the Arbitration
Agreement as a whole, and as a result must be decided by the arbitrator. Doty argues that at-will
employment does not constitute consideration for an arbitration agreement under Missouri Law.
She also argues that a bilateral contract does not otherwise exist because the parties do not have
mirror obligations, the practical effect of the class action waiver only limits employee rights, the
language of the Arbitration Agreement is generally focused on claims brought by employees, and
Doty was not given a meaningful opportunity to opt-out from the Arbitration Agreement.
Noticeably absent is any challenge directed specifically to the delegation provision of the
agreement, incorporated by the parties’ adoption of the AAA Rules, which delegates to the
arbitrator the authority to resolve threshold questions of arbitrability, including claims about the
“validity of the arbitration agreement.” See [#5-1]; AAA Rule 6.a. Doty’s challenges go to the
validity of the Arbitration Agreement as a whole, not the delegation provision itself. As a result,
I “must treat [the Arbitration Agreement] as valid under § 2, and must enforce it under §§ 3 and
4, leaving any challenge to the validity of the Agreement as a whole for the arbitrator.” Id. at
2779; see also Dotson v. Dillard's, Inc., 472 S.W.3d 599 (Mo. Ct. App. 2015).
By incorporating the Rules of the AAA in the Arbitration Agreement, the parties clearly
and unmistakably agreed to allow the arbitrator to determine threshold questions of arbitrability,
including challenges to the validity of the Arbitration Agreement. Additionally, there is no
dispute that Doty’s wage and hour claims fall within the scope of the Arbitration Agreement.
L.P. v. United Steel, Paper and Forestry, Rubber, Mfg., 765 F.3d 396, 410 n.28 (5th
Cir.2014). Rather, “[a] delegation provision that gives an arbitrator the authority to
resolve disputes relating to the ‘enforceability,’ ‘validity,’ or ‘applicability’ of an
arbitration agreement constitutes clear and unmistakable evidence that the parties
intended to arbitrate arbitrability.” W.L. Doggett LLC v. Paychex, Inc., 92 F.Supp.3d 593,
597 (S.D.Tex.2015) (collecting cases).
Under these circumstances, I must enforce the parties’ bargained-for Arbitration Agreement and
compel arbitration of Doty’s claims. As a result, I will grant Dollar General’s motion to compel
arbitration and will stay this action pending arbitration. See Green v. SuperShuttle Intern., Inc.,
653 F.3d 766, 769 (8th Cir. 2011) (citing 9 U.S.C. § 3) (“The FAA generally requires a federal
district court to stay an action pending an arbitration, rather than to dismiss it.”).
IT IS HEREBY ORDERED that Defendant Dollar General’s Motion to Compel
Arbitration and Stay this Action # is GRANTED.
IT IS FURTHER ORDERED that the Clerk of Court shall administratively close this
matter. The parties shall notify the Court of the resolution of the arbitration proceedings in a
timely manner. Further Court action in this matter will be determined after such notice.
RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE
Dated this 2nd day of May, 2016.
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