SEAN F. COX, District Judge.
Plaintiff filed this suit against his former employer, alleging that Defendant terminated his employment due to his military obligations with the National Guard, in violation of state and federal statutes. The matter is currently before the Court on Defendant's Motion to Dismiss and Compel Arbitration. The parties have fully briefed the issues and the Court ordered supplemental briefing by the parties, which has been completed. The Court concludes that oral argument is not necessary and ORDERS that the motion will be decided without oral argument. As explained below, the Court shall GRANT the motion seeking to compel arbitration because: 1) there is a valid agreement to arbitrate and this employment dispute is within its broad scope; and 2) Plaintiff knowingly and voluntarily waived his right to a jury trial under federal law.
Plaintiff Michael Garnick filed this action against his former employer, Defendant Interstate Batteries, Inc., on June 22, 2017. Plaintiff alleges that he was an employee of Defendant while also serving as a "member of the Uniformed Services, specifically the Army National Guard." (Compl. at 3). Plaintiff alleges that Defendant wrongfully terminated his employment due to his military obligations, in violation of federal and state statutes. Plaintiff asserts the following claims: "Count I — Denial of Reemployment, Retention in Employment, or Any Benefit of Employment in Violation of 38 U.S.C. § 4311(a)"; "Count II — Uniformed Services Discrimination in Violation of 38 U.S.C. § 4311(b);" "Count III — Denial of Reemployment Rights of Persons Who Serve in the Uniformed Services in Violation of 38 U.S.C. § 4312;" and "Count IV — Violations of the Military Leave; Reemployment Protection Act 133 of 1955 MCL 32.271 et seq."
The parties stipulated that Defendant could have until August 25, 2017 to respond to the complaint. (D.E. No. 7).
This Court's practice guidelines pertaining to motion practice provide, consistent with Fed. R. Civ. P. 56 (c) and (e), that:
https://www.mied.uscourts.gov.
On August 25, 2017, Defendant filed a "Motion to Dismiss and Compel Arbitration, based upon an alleged agreement to arbitrate. (D.E. No. 8).
After that motion had been briefed by the parties, this Court issued an order for supplemental briefing, wherein the Court explained and ordered as follows:
(D.E. No. 15) (bolding in original; italics added for emphasis).
In compliance with the Court's Order, on January 31, 2018, Defendant filed: 1) a supplemental brief (D.E. No. 18); and 2) a separate statement of material facts not in dispute, in compliance with this Court's practice guidelines, along with supporting exhibits. (D.E. No. 17).
On February 21, 2018, Plaintiff filed a supplemental brief. (D.E. No. 19). Plaintiff did not, however, file a counter-statement of disputed facts, as ordered by the Court.
Plaintiff initially sought a position with Defendant in Taylor, Michigan but he was not selected for that job. (D.E. No. 21-2 at Pg ID 545). Based on his qualifications, however, he was contacted about a job opening in Dallas, Texas and Plaintiff expressed interest in that position. (Id.). On February 26, 2015, Defendant flew Plaintiff to Texas to interview for the position, tour the area, and make sure he was interested in moving to Texas. (Id.)
Plaintiff formally applied for employment with Defendant on March 12, 2015, by submitting an employment application on the company's online electronic application system. (D.E. No. 17-2 at ¶ 7; D.E. 17-3; D.E. No. 8-4). Plaintiff's application of employment contained the following:
(D.E. No. 17-3 at Pg ID 272) (bolding added for emphasis). Plaintiff acknowledged and agreed to that provision on March 12, 2015, at 2:26 p.m., with an electronic signature, when he checked an online box on his application of employment for submission to Interstate. (D.E. No. 17-3 at 273).
At the time that he applied to Defendant for employment, Plaintiff indicated that he had graduated high school. Plaintiff further indicated that, although he had not yet received a degree, he had attended Eastern Michigan University for five years, studying communications. Plaintiff also identified that he had the following special skills and qualifications: "P&L, Microsoft office, Team Building, Lean, 6Sigma, Logistics Management." (D.E. No. 17-3 at Pg ID 269).
Plaintiff's application indicated that Plaintiff had worked for Ferguson Enterprises from June of 2014 until February of 2015 as the "Shipping Manager," where he managed outbound operations for a hub facility and earned a salary of $53,000.00 per year. Plaintiff further indicated that, from April of 2007 to February of 2015, he was a "Section Chief" with the Michigan Army National Guard, where he "directed firing battery training and operations." (Id. at Pg ID 270; see also D.E. No. 17-4).
On or about March 11, 2015, Defendant offered Plaintiff the position of Assistant Market General Manager for Defendant's Dallas, Texas warehouse, starting on March 30, 2015, for an annual salary of $60,000, a company vehicle, and a relocation stipend. (D.E. No. 17-5).
Plaintiff accepted the offer of employment on March 11, 2015. (Id.). On March 30, 2015, Plaintiff reported to work in Dallas, Texas.
At that time, Robert Addis was the Market General Manager at Defendant's warehouse in Dallas, Texas. (Id.). (D.E. No. 17-6). Defendant's Dallas warehouse did not have a Human Resources Representative onsite. Thus, Addis's job responsibilities as Market General Manager included managing the onboarding process of new hires at the warehouse in Dallas. (Id.). Addis's Declaration further states:
(D.E. No. 17-6) (italics added for emphasis).
On March 30, 2015, Plaintiff signed a "Team Member Policy and Procedure Receipt," (D.E. No. 17-7), acknowledging receipt of Defendant's policies and procedures, including its "Dispute Resolution Program." That form signed by Plaintiff further states, in pertinent part:
(D.E. No. 17-7) (italics added for emphasis). Mr. Addis witnessed Plaintiff's signature of that form. (Id.).
It is undisputed that Defendant's "Dispute Resolution Program" policy contains the following provision:
(D.E. No. 17-8 at Pg ID 289-90). Defendant's Dispute Resolution Program "involves mediation and biding arbitration held by the American Arbitration Association (AAA), a neutral and objective third party." (Id. at Pg ID 289). Defendant's Dispute Resolution Program policy explains that "[a]rbitration is a process in which a dispute is presented to a neutral third party, the arbitrator, for a final and binding decision. The arbitrator makes this decision after both sides present their arguments at the arbitration hearing. There is no jury." (Id. at Pg ID 292).
Defendant's Dispute Resolution Program policy is maintained in the ordinary course of business on the company's internal intranet web site at all times and is accessible by clicking on the Resources tab and then the Policies tab. (D.E. No. 17-6 at Pg ID 283).
In addition, Defendant's Team Playbook advises that the "Dispute Resolution Program is a separate and distinct document pertaining to your employment with the Company." (D.E. No. 17-9 at Pg ID 296). It further states:
(Id. at Pg ID 297) (bolding, underlining and blue hyper-link in original).
On or about January 17, 2016, Plaintiff was promoted to Market General Manager I and transferred to Defendant's facility in Taylor, Michigan. (D.E. No. 17-2 at Pg ID 266).
On June 22, 2017, Plaintiff filed this action against Defendant in federal court.
Defendant's motion asks this Court to compel Plaintiff to arbitrate the claims he has asserted against it in this action. This motion involves both a validity challenge to the arbitration agreement and a challenge by Plaintiff as to whether he knowingly and voluntarily waived his right to a jury trial under federal law.
When a motion to compel arbitration is filed, the court must determine whether the dispute is arbitrable, meaning that a valid agreement to arbitrate exists between the parties and that the dispute at issue falls within the scope of that agreement. Mazera v. Varsity Ford Mgmt. Svs, LLC, 565 F.3d 997, 1001 (6th Cir. 2009). "It is settled authority that doubt regarding the applicability of an arbitration clause should be resolved in favor of arbitration." Stout v. J.D. Byrider, 228 F.3d 709, 715 (6th Cir. 2000).
In determining whether the parties have made a valid arbitration agreement, state law governs generally applicable contract defenses, such as fraud, duress, unconscionability, lack of mutual assent, etc.. Great Earth, supra, at 889. In other words, because arbitration agreements are fundamentally contracts, the court reviews the enforceability of an arbitration agreement according to the applicable state law of contract formation. Hergenreder v. Bickford Senior Living Group, LLC, 656 F.3d 411, 416 (6th Cir. 2011).
Here, following the supplemental briefing ordered by this Court, the parties now agree that Texas law governs. (See D.E. Nos. 18 at Pg ID 319; D.E. No. 19 at Pg ID 479 & 481).
An agreement's validity is "in issue" when "the party opposing arbitration . . . show[s] a genuine issue of material fact as to the validity of the agreement to arbitrate." Great Earth Cos. v. Simons, 288 F.3d 878, 889 (6th Cir. 2002). "The required showing mirrors that required to withstand summary judgment in a civil suit." Great Earth, 288 F.3d at 889. Thus, the court views "all facts and inferences drawn therefrom in the light most favorable" to the party opposing arbitration and "determine[s] whether the evidence presented is such that a reasonable finder of fact could conclude that no valid agreement to arbitrate exists." Id. Thus, where, as here, a party opposing a motion to compel arbitration argues there is no agreement to arbitrate and asserts some state-law contractual argument as to why no agreement exists, the Court applies a summary judgment-type standard.
Here, Plaintiff challenges the arbitrability of his claims on validity grounds, asserting that there is no enforceable agreement to arbitrate.
Under Texas law, the elements of an enforceable contract are: 1) offer; 2) acceptance; 3) mutual assent or a meeting of the minds; 4) consent to the terms; 5) execution and delivery of the contract with an intent it become mutual and binding; and 6) consideration. Wilmot v. Boutknight, 466 S.W.3d 219, 229 (Tex. Ct. App. 2015); Coleman v. Reich, 417 S.W.3d 488, 491 (Tex. Ct. App. 2013).
In challenging the arbitration agreement here, Plaintiff claims that there was no mutual assent or meeting of the minds and no consideration. (D.E. No. 19 at Pg ID 470 & 471).
Plaintiff first asserts that the Court should find there was no meeting of the minds here, based on Fyyan v. McNutt, 266 Mich. 406 (1934) and Monroe Bank & Tr. v. Jessco Homes of Ohio, LLC, 652 F.Supp.2d 834, 838 (E.D. Mich. 2009), because Defendant engaged in "high pressure tactics," such as moving him from Texas to Michigan and promising him a company vehicle, and not providing him an opportunity to take his onboarding documents home to review.
This argument fails. First, the cases that Plaintiff relies on do not involve Texas law, nor do they involve analogous facts or circumstances. Second, in respond to Defendant's properlysupported statement of material facts, Plaintiff chose not to respond. Plaintiff has not offered sufficient admissible evidence to support his assertions of high pressure tactics that would create an issue of fact as to whether there was mutual assent.
Next, Plaintiff claims there is no valid agreement to arbitrate because there was no mutuality of obligation or consideration. Plaintiff asserts that a contract is unenforceable if one party is bound to perform but the other is not. (D.E. No. 19 at Pg ID 481). Plaintiff claims that, although Plaintiff agreed to waive his rights to jury trial and arbitrate disputes, Defendant did not commit or obligate itself to do anything. (D.E. No. 19 at 482). Thus, Plaintiff argues that there is no enforceable agreement to arbitrate for lack of mutual obligation.
The Court rejects Plaintiff's argument. As Defendant explains in its brief, there is no lack of mutuality of obligation here under the case law provided by the Sixth Circuit:
(D.E. No. 18 at Pg 32).
Moreover, "Texas courts have consistently held that arbitration agreements presented on the day of or after hire, and containing binding reciprocal promises to arbitrate, are not illusory." (D.E. No. 21 at Pg ID 540). See IFMG Secs., Inc. v. Sewell, 2011 WL 5515528 (Tex. App. 2011) ("The Texas Supreme Court has held that such reciprocal obligations to arbitrate are sufficient consideration to support a valid contract.") (Citing J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 228 (Tex. 2003)); see also In re 24R, Inc., 324 S.W.3d 564 (Tex. 2010) ("Mutual agreement to arbitrate claims provides sufficient consideration to support an arbitration agreement."); Nabors Drilling USA, LP v. Carpenter, 198 S.W.3d 240, 248-49 (Tex. App. 2006); In re Kellogg Brown & Root, 80 S.W.3d 611 (Tex. App. 2002); In re Alamo Lumber Co., 23 S.W.3d 577 (Tex. App. 2000).
Accordingly, the Court concludes there is a valid agreement to arbitrate and this employment dispute is within its very broad scope.
As Defendant acknowledges, "[e]ven if the arbitration agreement is valid, its enforceability may turn on whether the plaintiff knowingly waived his right to litigate claims in court. Cunningham v. Henry Ford Health System, No. 2:17-cv-11015, 2017 WL 5564599, at *2 (E.D. Mich. Nov. 20, 2017)." (Def.'s Supp. Br., D.E. at 18 at Pg ID 324). That is, even if a court finds that a valid agreement to arbitrate exists under state law, the plaintiff still cannot be compelled to arbitrate the claims if the plaintiff can show, under federal law, that he or she did not knowingly and voluntarily waive their Constitutional right to a jury trial. See, e.g., Hergenreder, 656 F.3d at 420-21; Walker, 400 F.3d at 381-83.
The question of right to jury trial is governed by federal and not state law. Hergenreder, supra. The court looks to the "Morrison factors" of: 1) the plaintiff's experience, background, and education; 2) the amount of time the plaintiff had to consider whether to sign the waiver, including whether the employee had an opportunity to consult with a lawyer; 3) the clarity of the waiver; 4) consideration for the waiver; as well as 5) the totality of the circumstances. Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 668 (6th Cir. 2003).
Defendant contends that, applying these factors, Plaintiff has failed to make a sufficient evidentiary showing to create an issue of material fact as to whether Plaintiff executed a knowingly and voluntary waiver. The Court agrees.
First, Plaintiff's experience, background, and education were sufficient to understand the waiver at issue here, which was stated in understandable terms. At the time that he applied for employment, Plaintiff was a high school graduate. In addition, although he had not yet received a college degree, Plaintiff had taken five years of college courses at Eastern Michigan University. Plaintiff also identified that he had the following special skills and qualifications: "P&L, Microsoft office, Team Building, Lean, 6Sigma, Logistics Management." (D.E. No. 17-3 at Pg ID 269). Thus, Plaintiff was computer literate and had experience with specialized programs and applications. Plaintiff also had significant work experience, in both the private sector, and in the military. In the private sector, Plaintiff had previously worked as the Shipping Manager for a hub facility, earning a salary of $53,000.00 per year. And Plaintiff had also served a "Section Chief" with the Michigan Army National Guard, where he directed firing battery training and operations. Nothing about Plaintiff's experience, education, or background suggests that he was incapable of understanding the language in the relevant documents.
Second, the admissible evidence presented to this Court appears to indicate that Plaintiff had sufficient time to consider the waiver. Mr. Addis's Declaration indicates that new employees are placed in a break room to review their onboarding documents and that Plaintiff did not ask Mr. Addis for additional time to review any of the documents provided.
Third, the waiver of the right to a jury trial in Defendant's Dispute Resolution Program policy is clear:
(D.E. No. 17-8 at Pg ID 289 & 292) (capitalization and bolding in original).
Fourth, there was sufficient consideration for the waiver under federal law, as the "Sixth Circuit has recognized that "continued employment is sufficient consideration for a waiver." Tillman v. Macy's, Inc., 735 F.3d 453, 462 (6th Cir. 2013) (citing Hergenreder v. Bickford Senior Living Group, LLC, 656 F.3d 411, 421 (6th Cir. 2011)).
In the totality of the circumstances, based on the evidence presented to the Court, Plaintiff is an educated and experienced managerial-level employee who received the relevant documents, that were written in clear, understandable terms, Plaintiff acknowledged receipt of those documents, and thus knowingly and voluntarily waived his right to a jury trial. As such, the arbitration agreement is enforceable.
For the reasons set forth below,
