McLeod v. Gen. Mills, Inc.
| Decision Date | 11 May 2017 |
| Docket Number | No. 15-3540,15-3540 |
| Parties | Elizabeth MCLEOD; Heidi O'Sullivan; Sherri Slocum; Ivette Harper; Robert West; Kevin Stemwell; Stephen Miller; Peggy Maxe; Karalyn Littlefield; Colleen Friedrichs; Arlene Hornilla; Marilyn Epp ; Dwight Sevaldson; Ann Carlson; Michael Baehr ; Gabriele Bauer; Mark Davis; Susanne Dehnke; Frank Delaney; Paula Freeman-Brown; Barbara Fuglie; Richard Fugile; Christopher Gunn; Michelle Laurence; Robert Morris; Vicki Nellen-Jungers; Heidi Neumann; Greg Norman; Michelle Racepla; Susan Ryan; Timothy Schroeder ; Diane Sundquist; Greg Zimprich, for and on behalf of themselves and other persons similarly situated, Plaintiffs–Appellees v. GENERAL MILLS, INC., Defendant–Appellant Equal Employment Advisory Council; Chamber of Commerce of the United States, Amici on Behalf of Appellant(s) AARP; Equal Employment Opportunity Commission, Amici on Behalf of Appellee(s) |
| Court | U.S. Court of Appeals — Eighth Circuit |
Craig Andrew Brandt, Brent C. Snyder, Stephen J. Snyder, Snyder & Brandt, Minneapolis, MN, for Plaintiffs–Appellees.
Susan Fitzke, Marko Joseph Mrkonich, Kathryn Wilson, Littler & Mendelson, Jeffrey Justman, Aaron Daniel Van Oort, Faegre & Baker, Minneapolis, MN, Keith C. Hult, Littler & Mendelson, Chicago, IL, for Defendant–Appellant.
Ann Elizabeth Reesman, McGuiness & Williams, Rae T. Vann, Norris & Tysse, Washington, DC, for Equal Employment Advisory Council, Amicus on Behalf of Appellant(s).
Warren Postman, Kathryn L. Comerford Todd, U.S. Chamber of Commerce, Washington, DC, for Chamber of Commerce of the United States, Amicus on Behalf of Appellant(s).
Daniel Benjamin Kohrman, Senior Attorney, Laurie A. McCann, William Alvarado Rivera, Dara S. Smith, AARP Foundation Litigation, Washington, DC, for
AARP, AARP Foundation, Amicus on Behalf of Appellee(s).
Anne Warren King, Barbara L. Sloan, Equal Employment Opportunity Commission, Washington, DC, for Equal Employment Opportunity Commission, Amicus on Behalf of Appellee(s).
Before BENTON and SHEPHERD, Circuit Judges, and STRAND, District Judge.1
The Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, permits waivers of ADEA rights and claims—but only if they are "knowing and voluntary" as defined by statute. 29 U.S.C. § 626(f)(1) . In a waiver dispute, "the party asserting the validity of a waiver shall have the burden of proving in a court of competent jurisdiction that a waiver was knowing and voluntary." § 626(f)(3) . Here, General Mills, Inc., terminated employees and offered them benefits in exchange for releasing all ADEA claims and arbitrating release-related disputes. Thirty-three employees who signed releases request a declaratory judgment that the releases were not "knowing and voluntary." They also bring collective and individual ADEA claims. General Mills moved to compel arbitration, and the district court denied that motion. Having jurisdiction under 9 U.S.C. § 16(a)(1)(B), this court reverses and remands.
In June 2012, General Mills announced it was terminating about 850 employees. General Mills offered them severance packages in exchange for signing release agreements. By the agreements' terms, employees release General Mills from all claims relating to their terminations—including, specifically, ADEA claims. The agreements also state that claims covered by the agreements will be individually arbitrated:
[I]n the event there is any dispute or claim arising out of or relating to the above release of claims, including, without limitation, any dispute about the validity or enforceability of the release or the assertion of any claim covered by the release, all such disputes or claims will be resolved exclusively through a final and binding arbitration on an individual basis and not in any form of class, collective, or representative proceeding.
Thirty-three former General Mills employees who signed agreements sued General Mills under the ADEA. They allege, first, that their ADEA claim waivers were not "knowing and voluntary" as defined by § 626(f)(1) and related regulations, and request a declaratory judgment that the agreements do not waive their ADEA rights. They also allege that the terminations discriminated on the basis of age, and bring disparate-treatment and disparate-impact claims, both collectively and individually. General Mills moved to dismiss and compel arbitration on an individual basis. The district court denied the motion.
"This court reviews a determination concerning the arbitrability of a dispute de novo ." Owen v. Bristol Care, Inc. , 702 F.3d 1050, 1052 (8th Cir. 2013). The Federal Arbitration Act "requires courts to enforce agreements to arbitrate according to their terms ... unless the FAA's mandate has been ‘overridden by a contrary congressional command.’ "
CompuCredit Corp. v. Greenwood , 565 U.S. 95, 132 S.Ct. 665, 669, 181 L.Ed.2d 586 (2012) (citation omitted), quoting Shearson/American Express Inc. v. McMahon , 482 U.S. 220, 226, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987). "[I]f a dispute presents multiple claims, some arbitrable and some not, the former must be sent to arbitration even if this will lead to piecemeal litigation." KPMG LLP v. Cocchi , 565 U.S. 18, 132 S.Ct. 23, 24, 181 L.Ed.2d 323 (2011) (per curiam).
Plaintiffs assert, for the first time on appeal, that the agreements do not cover their ADEA claims. They argue that the agreement to arbitrate applies only to claims "relating to" the release of claims, and their substantive ADEA claims are not related to the release of claims. They are wrong. The agreements' "relating to" sentence shows the parties' intent to arbitrate both disputes about the release and substantive ADEA claims. The arbitration provision applies to "any ... claim ... relating to the above release of claims, including ... the assertion of any claim covered by the release." The agreements explicitly state that a claim "relates to" the release of claims if it asserts a claim covered by the agreements. ADEA claims are covered by the agreements. Absent a contrary congressional command, General Mills can compel employees who signed the agreements to arbitrate their ADEA claims.
The parties disagree whether there is a "contrary congressional command" overriding the FAA's mandate to enforce their agreements to arbitrate (1) substantive ADEA claims and (2) disputes about the validity of the former employees' waivers.
No "contrary congressional command" overrides the FAA's mandate to enforce the parties' agreements to arbitrate substantive ADEA claims. The former employees invoke § 626(f) ; they do not allege that the agreements are invalid on any other statutory or common law basis. Section 626(f)(1) provides, "An individual may not waive any right or claim under this chapter unless the waiver is knowing and voluntary," and lists a number of minimum requirements. See § 626(f)(1)(A)-(H) . Section 626(f)(3) describes how to prove a waiver:
In any dispute that may arise over whether any of the requirements, conditions, and circumstances set forth in [§ 626(f)(1)-(2) ] have been met, the party asserting the validity of a waiver shall have the burden of proving in a court of competent jurisdiction that a waiver was knowing and voluntary....
The former employees' logic is this: First, by moving to compel arbitration of their claims, General Mills is "asserting the validity of a waiver," forcing them to forego their "right" to a jury trial and their "right" to proceed by class action. Second, if General Mills wants to assert the validity of that waiver, it "shall" (which they read as "must") do so "in a court of competent jurisdiction" (which they read as "not in arbitration").
The logic fails at step one. In asking the court to compel arbitration of the former employees' claims, General Mills is not asserting the validity of a "waiver." In § 626(f), "waiver" refers narrowly to waiver of substantive ADEA rights or claims—not, as the former employees argue, the "right" to a jury trial or the "right" to proceed in a class action.
This issue is largely controlled by 14 Penn Plaza LLC v. Pyett , 556 U.S. 247, 129 S.Ct. 1456, 173 L.Ed.2d 398 (2009).
There, the Supreme Court addressed the meaning of "rights or claims" under § 626(f)(1)(C), which prohibits waiver of "rights or claims that may arise after the date the waiver is executed." The Court held that an agreement to bring future claims in arbitration was not a waiver of "rights or claims": "The decision to resolve ADEA claims by way of arbitration instead of litigation does not waive the statutory right to be free from workplace age discrimination; it waives only the right to seek relief from a court in the first instance." 14 Penn Plaza , 556 U.S. at 265-66, 129 S.Ct. 1456. See also id. at 259, 129 S.Ct. 1456 (). 14 Penn Plaza thus interprets one of § 626(f)(1)'s references to "right[s] or claim[s]" to mean substantive rights to be free from age discrimination, not procedural "rights" to pursue age discrimination claims in court.
Here, the specific "rights" the former employees cite are not "rights" under § 626(f)(1). The former employees say that § 626(c)(2) gives them a "right" to a jury trial on ADEA claims. But 14 Penn Plaza forecloses categorizing a jury trial as a § 626(f)(1)"right." Since no "rights or claims" are waived by agreeing to bring claims in arbitration, a jury trial is not a § 626(f)(1)"right."
The former employees and amicus AARP try to distinguish 14 Penn Plaza by noting that it involved a pre-dispute agreement rather than a release of already-accrued claims. They argue that "rights or claims" under § 626(f)(1)(C) has a different meaning than "right or claim" under § 626(f)(1). This argument ignores the structure of § 626(f)(1). The two "right[s] or claim[s]" phrases appear in consecutive sentences,...
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