Green v. Broker Solutions,Inc. et al
MEMORANDUM AND ORDER...IT IS HEREBY ORDERED that Defendants' Motion to Compel Arbitration and Stay Proceedings (ECF No. 9 ) is GRANTED. IT IS FURTHER ORDERED that this case is STAYED until the arbitration process is completed. The parties shal l notify the Court of the completion of the arbitration process or any other development that would affect the stay in this case. IT IS FINALLY ORDERED that the Clerk of the Court shall administratively close this matter. (Terminate Case). Signed by District Judge Ronnie L. White on 6/16/2017. (NEB)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
BROKER SOLUTIONS, INC. ,
d/b/a NEW AMERICAN FUNDING, et al. ,
No. 4:17CV844 RLW
MEMORANDUM AND ORDER
This matter is before the Court on Defendants' Motion to Compel Arbitration and Stay
Proceedings (ECF No. 9). The motion is fully briefed and ready for disposition.
Plaintiff filed a lawsuit in the Circuit Court of St. Louis Count, alleging that during her
employment, Defendants subjected her to unlawful acts of retaliation and discrimination based
on her gender, age, and disability in violation of the Missouri Human Rights Act, Mo. Rev. Stat.
§§ 213.010, et seq. Defendants removed the case to federal court based on diversity of
citizenship. According to the Petition, Plaintiff was employed by Defendant New American
Funding ("NAF") first as a branch manager and then as an area manager. (Pet.
if 10, ECF No.
Plaintiff alleges that she was diagnosed with colon cancer and had to take leave for treatment and
Upon returning to work, Plaintiff contends that she began to suffer
harassment, humiliation, and bullying by her supervisor, Defendant John Reed ("Reed"), a Vice
President at NAF, including demands for her private medical records to confirm her cancer.
(Pet. iii! 13-15) Plaintiff further asserts that Reed and other NAF representatives threatened to
terminate her employment if Plaintiff did not accept lower compensation and higher performance
goals. Plaintiff claims that, as a result of the alleged discrimination, harassment, and retaliation
on the basis of gender, age, and disability, she felt forced to resign from her position at NAF,
resulting in a constructive discharge. (Pet.
Defendants have moved to stay the case and send the dispute to arbitration based on a
Loan Originator Employment Agreement ("Agreement") executed by Plaintiff as the Loan
Originator ("LO") and NAF as the Company. (Defs. ' Ex. A, ECF No. 9-1) The Agreement
provides, " [i]t is the intent of Company and LO that every dispute, claim or controversy arising
out of or relating to LO' s employment with Company . .. including, without limitation, disputes
regarding the termination of that employment, be resolved by binding arbitration." (Defs. ' Ex. A
p. 8) The Agreement further provides that the arbitration shall be arbitrated before the American
Arbitration Association ("AAA"). (Id.) Additionally, the Agreement states, "[i]n consideration
of the benefits provided to LO under this agreement, LO further agrees to the terms of the
Mutual Arbitrtion Agreement attached as Exhibit C to this Agreement." (Id.) (emphasis in
The terms of the Mutual Arbitration Agreement ("MMA") contained in Exhibit C provide
that the parties "agree to arbitrate before a neutral arbitrator any and all existing or future
disputes or claims between Employee and Employer, that arise out of or relate to Employee's ...
employment or separation from employment with Employer .... " (Defs.' Ex. A p. 18) Such
claims include, inter alia, claims for fraud; breach of contract; wrongful termination;
constructive discharge; tort; and discrimination, harassment or retaliation, on the basis of age,
sex, disability or any other unlawful basis under federal, state, or common law. (Id.) The
governing law provides that the parties agree to arbitrate under the FAA and that, to the extent
not inconsistent with the FAA, the Agreement "shall be governed by the law of the state where
Employee works or worked at the time the arbitrable dispute or claim arose." (Defs.' Ex. A p.
Plaintiff opposes sending the matter to arbitration, arguing that Defendant Reed lacks
standing to compel arbitration. Additionally, Plaintiff argues that the Agreement is not
supported by adequate consideration and that the Agreement is unconscionable.
The Federal Arbitration Act, 9 U.S.C. §§ 1, et seq., '"establishes a liberal federal policy
favoring arbitration agreements."' MA. Mortenson Co. v. Saunders Concrete Co., Inc., 676 F.3d
1153, 1156 (8th Cir. 2012) (quoting Lenz v. Yellow Transp. , Inc., 431F.3d348, 351 (8th Cir.
2005)). "[w]hen deciding whether to compel arbitration, a court asks whether a valid agreement
to arbitrate exists, and if so, whether the dispute falls within the scope of that agreement."
Newspaper Guild ofSt. Louis, Local 36047 v. St. Louis Post Dispatch, LLC, 641F.3d263, 266
(8th Cir. 2011) (citation omitted). "The Supreme Court has repeatedly noted that the Federal
Arbitration Act was designed to combat longstanding hostility to arbitration by establishing 'a
liberal federal policy favoring arbitration agreements."' Bob Schultz Motors, Inc. v. Kawasaki
Motors Corp., US.A., 334 F.3d 721, 725 (8th Cir. 2003) (quoting Moses H Cone Mem 'l Hosp. v.
Mercury Constr. Corp., 460 U.S . 1, 24 (1983)). Under the FAA, any doubts regarding the scope
of arbitrable issues should be resolved in favor of arbitration. Lyster v. Ryan's Family Steak
Houses, Inc., 239 F.3d 943, 945 (8th Cir. 2001) (citation omitted). This liberal policy includes
employment-related claims. Id. at 947.
Upon thorough consideration of the motion to compel and the related memoranda by the
parties, the Court finds that the parties should be compelled to arbitrate Plaintiffs claims against
the Defendant. With regard to Plaintiffs assertion that Defendant Reed lacks standing, the
Eighth Circuit Court of Appeals has held that under the FAA, a nonsignatory may compel a
signatory to arbitrate where the relationship between the two parties is sufficiently close to
permit such enforcement. Finnie v. H & R Block Fin. Advisors, Inc., 307 Fed. App' x 19, 21 (8th
Cir. 2009) (finding that plaintiffs former supervisor could compel arbitration under the FAA
where plaintiff asserted claims of racial discrimination, harassment, and retaliation). Here,
Defendant Reed was Plaintiffs supervisor at NAF. The MAA specifically includes "claims
involving any current or former officer, director, shareholder, agent or employee of Employer ..
. ." (Defs.' Ex. A p. 18) Thus, the Court finds that Defendant Reed may enforce the arbitration
Agreement under these circumstances.
The Court also finds that the Agreement is a bilateral contract providing adequate
consideration under Missouri law. "A mutual promise between an employee and an employer to
arbitrate employment disputes is valid consideration to create an enforceable bilateral contract."
Humphries v. SSM Health Care Corp., No. 4:17CV786 RLW, 2017 WL 1246699, at *2 (E.D.
Mo. Apr. 5, 2017) (citing Jiminez v. Cintas Corp., 475 S.W.3d 679, 685-86 (Mo. Ct. App.
2015)). Plaintiff argues, however, that the Agreement is lacks mutuality of obligation because it
compels arbitration for those claims that employees would most likely bring against Defendants
but exempts from arbitration claims that Defendant would most likely bring against its
employees. Plaintiff also contends that the Agreement is unilateral because it can be modified in
writing by the CEO of Employer and Employee.
"A contract that purports to exchange mutual promises will be construed as lacking legal
consideration if one party retains the right to ' unilaterally divest itself of an obligation to perform
the promise initially made."' Jimenez, 475 S.W.3d at 686 (quoting Frye v. Speedway Chevrolet
Cadillac, 321 S.W.3d 429, 442 (Mo. Ct. App. 2010)). Courts determine whether an agreement
provides mutual obligation by looking at the language of the agreement, reading the terms of the
contract as a whole, and giving each term its plain, ordinary, and usual meaning to decide the
intent of the parties. Id. (citations omitted).
Here, Plaintiff points specifically to the "Claims not Covered by the Agreement" in the
MAA. (Defs. ' Ex. A p. 19) Plaintiff argues that this section exempts Defendants from
arbitrating claims that Defendants are most likely to bring against employees such as claims
involving temporary or preliminary injunctive relief related to misuse of intellectual property,
theft of trade secrets, violation of non-compete provisions, or breach of duty of loyalty.
However, Plaintiff misreads the Agreement. The MAA provides that claims not covered by the
agreement include claims for workers ' compensation, unemployment insurance, or state or
federal disability insurance; claims for benefits under an ERISA plan; "claims for temporary or
preliminary injunctive relief ... in aid of arbitration or to maintain the status quo pending
arbitration, in a court of competent jurisdiction with applicable law;" and any other dispute
expressly excluded from arbitration by statute. (Defs. ' Ex. A p. 19) Included in covered claims
are claims for fraud, promissory estoppel, fraudulent inducement of contract, or breach of
contract, as well as unfair business practices "and any other tort or tort-like causes of action
relating to or arising from the employment relationship or the formation or termination thereof."
Contrary to Plaintiffs position, the MAA mutually covers claims that both the employee
and the employer could raise, including discrimination claims brought by the employee, and
contract, tort, or tort-like claims brought by the employer. The only claims for temporary or
preliminary injunctive relief not covered by the MAA pertain solely to arbitration. Thus, the
Court finds that the Agreement is supported by adequate consideration. See, e.g. State ex rel.
Hewitt v. Kerr, 461 S.W. 3d 798, 809 (Mo. 2015) (finding arbitration clause was supported by
valid consideration where both the employee and employer signed the employment contract, and
were both bound by the promise to arbitrate disputes).
In addition, the MAA belies Plaintiffs claim that Defendants may unilaterally modify the
Agreement. In the Agreement signed by Plaintiff, both she and Defendant NAF agreed that the
Agreement may be modified "only in a writing expressly referencing this Agreement and
Employee by full name, and signed by the Chief Executive Officer of Employer and Employee."
(Defs. ' Ex. A p. 22) Plaintiff asserts that the CEO is the CEO of both the Employer and
Employee and thus only the CEO ' s signature is required to modify the Agreement. Giving the
terms their plain meaning, the Court finds that the MAA may only be modified by in writing and
signed by both the CEO of the Employer and Plaintiff, as the Employee. Thus, because the
arbitration Agreement contains a mutual promise to arbitrate and is binding on both sides, with
no party retaining the unilateral ability to avoid its contractual obligations, the Court finds that
the Agreement contains valid consideration to compel the Plaintiff to arbitrate her claims.
Colton v. Hibbett Sporting Goods, Inc., No. 2: 16-cv-04002-NKL, 2016 WL 3248578, at *2
(W.D. Mo. June 13, 2016).
Last, Plaintiff argues that the Agreement is unconscionable because it was drafted by
Defendants; is a standardized contract that covers most of the employees ofNAF; was presented
to employees on a "take-it-or-leave-it" basis with no opportunity to negotiate; was a condition of
employment; and presented the false choice to employees of giving up their right to trial by jury
or giving up their jobs. Plaintiff asserts that the disparity in bargaining power between Plaintiff
and Defendants, as well as the harsh one-sidedness, renders the MAA unconscionable. The
"Under Missouri law, ' [u]conscionability has two aspects: procedural unconscionability
and substantive unconscionability.' ... 'Procedural unconscionability deals with the formalities
of making the contract, while substantive unconscionability deals with the terms of the contract
itself."' Fallo v. High-Tech Inst., 559 F.3d 874, 878 (8th Cir. 2009) (quoting State ex rel.
Vincent v. Schneider, 194 S.W.3d 853, 858 (Mo. 2006)). Both procedural and substantive
unconscionability must be present before a contract or clause can be voided. Whitney v. Alltel
Commc 'ns, Inc., 173 S.W.3d 300, 308 (Mo. Ct. App. 2005).
Plaintiff argues that Defendants' superior bargaining power makes the MAA procedurally
unconscionable. However, Plaintiff does not contend that she was unable to read the arbitration
agreement or that Defendant coerced her to sign the agreement using high-pressure tactics.
Instead, "[a]though [NAF] may have been in a superior bargaining position, the contract terms
were clear, and a reasonable person could expect that disputes would be arbitrated." Fallo, 559
at 878; see also Humphries, 2017 WL 1246699, at *2 ("The fact that one party has a superior
bargaining position over the other party does not, standing alone, make the agreement
unconscionable."). The Court therefore finds that the MAA is not procedurally unconscionable,
and the Court need not address the substantive unconscionability question. Fallo, 559 F.3d at
For all the foregoing reasons, the Court finds that the MAA is valid and enforceable and
that Plaintiff should be compelled to arbitrate her claims pursuant to the Agreement. Thus, the
Court will stay the case and grant Defendants' motion to refer Plaintiffs claims to arbitration.
Houlihan v. Offerman & Co. , Inc., 31 F.3d 692, 695 (8th Cir. 1994) ("A federal court must stay
court proceedings and compel arbitration once it determines that the dispute falls within the
scope of a valid arbitration agreement.").
IT IS HEREBY ORDERED that Defendants' Motion to Compel Arbitration and Stay
Proceedings (ECF No. 9) is GRANTED.
IT IS FURTHER ORDERED that this case is STAYED until the arbitration process is
completed. The parties shall notify the Court of the completion of the arbitration process or any
other development that would affect the stay in this case.
IT IS FINALLY ORDERED that the Clerk of the Court shall administratively close this
Dated this 16th day of June, 2017.
RONNIE L. WHITE
UNITED STATES DISTRICT JUDGE
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