Becker v. Creative Circle, LLC

• Decision Date: 21 April 2022
• Docket Number: 4:21CV1166 RLW
• Parties: MAGGIE E. BECKER, Plaintiff, v. CREATIVE CIRCLE, LLC, Defendant.
• Court: U.S. District Court — Eastern District of Missouri

MAGGIE E. BECKER, Plaintiff, v. CREATIVE CIRCLE, LLC, Defendant.

No. 4:21CV1166 RLW

United States District Court, E.D. Missouri

April 21, 2022

MEMORANDUM AND ORDER

RONNIE L. WHITE, UNITED STATES DISTRICT JUDGE

This matter is before the court on Defendant's Motion to Dismiss or, in the Alternative, Stay Action and Compel Arbitration (“Motion to Dismiss”; ECF No. 4) and Plaintiff's Motion to Convert Defendant's Motion to Dismiss or, Alternatively, Motion to Stay [Docs. 4-5] to a Motion for Summary Judgment (“Motion to Convert”; ECF No. 15). This matter is fully briefed and ready for disposition. The Court grants Defendant's request to stay this action and compel arbitration and denies Plaintiff's Motion to Convert Defendant's Motion to Dismiss or Alternatively, Motion to Stay.

I. Background

On June 21, 2016, Plaintiff Maggie E. Becker (“Plaintiff”)^[1] signed the Dispute Resolution Agreement (“the Arbitration Agreement”), which included a mutual agreement with her employer, Defendant Creative Circle, LLC (“Defendant”), to arbitrate any disputes. (ECF No. 5-2).

Plaintiff was terminated on or around July 1, 2020. (Complaint, ¶ 14). On November 11, 2020, Plaintiff filed a Charge of Discrimination with the Equal Employment Opportunity Commission (“EEOC”). In her Charge of Discrimination, Plaintiff alleged disability discrimination and harassment under 42 U.S.C. §§ 2000e, et seq., against Defendant, her former employer. (Complaint, ECF No. 1, ¶¶ 3-4). Plaintiff filed her Complaint in federal court on September 28, 2021.

II. Plaintiff's Motion to Convert Defendant's Motion to Dismiss or, Alternatively, Motion to Stay

As an initial matter, the Court addresses Plaintiff's Motion to Convert Defendant's Motion to Dismiss or, Alternatively, Motion to Stay [Docs. 4-5] to a Motion for Summary Judgment. In her Motion to Convert, Plaintiff argues that “Defendant's motion contains an affidavit and agreement that are outside the pleadings filed in this case.” (ECF No. 16, ¶ 2). Because Defendant relies on matters outside the Complaint, Plaintiff asserts that the Court should convert Defendant's Motion to Dismiss into a motion for summary judgment. (ECF No. 16, ¶¶ 1, 4); see Fed. R. Civ. P. 12(d) (“If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.”).

In support of its Motion to Dismiss, Defendant submitted matters outside the pleadings, such as the Arbitration Policy, which the Complaint neither mentions nor attaches, and which the Court must consider in resolving the Motion to Dismiss. “This forecloses the possibility of dismissal under Rule 12(b)(6) unless the Court converts the motion to one for summary judgment under Rule 56.” Heath v. Travelers Companies, Inc., No. CIV.08-6055(JRT/JJG), 2009 WL 1921661, at *3 (D. Minn. July 1, 2009) (citing Fed.R.Civ.P. 12(d)). In response, Defendant argues, without citation, that converting Defendant's Motion to Dismiss to a motion for summary judgment “would be antithetical to the public policy supporting arbitration” and there would “simply be no utility in converting Defendant's Motion to one for summary judgment.” (ECF No. 20 at 1).

Following the precedent in Heath, the Court “opts not to convert the motion … because Defendant has made a perfectly acceptable alternate request for relief: to compel arbitration and stay the case under the [Federal Arbitration Act].” 2009 WL 1921661, at *3. “In this procedural context, the Court is free to consider materials beyond the pleadings.” Id. “When the Court is considering a motion to compel arbitration, ‘the Court is free to consider materials beyond the pleadings' without converting the motion to one for summary judgment under Rule 56.” Brondyke v. Bridgepoint Educ., Inc., 985 F.Supp.2d 1079, 1089-90 (S.D. Iowa 2013) (quoting Heath, 2009 WL 1921661, at *3). Therefore, the Court denies Plaintiff's Motion to Convert and denies the Motion to Dismiss, in part. The Court will consider the Motion to Dismiss only to the extent Defendant requests a stay and for the Court to compel arbitration.

III. Defendant's Motion to Dismiss or, In the Alternative, Stay Action and Compel Arbitration

A. Standard of Review

“The Federal Arbitration Act reflects an emphatic federal policy in favor of arbitral dispute resolution.” KPMG LLP v. Cocchi, 565 U.S. 18, 21 (2011) (per curiam) (citation and internal quotation marks omitted). “This policy, as contained within the Act, requires courts to enforce the bargain of the parties to arbitrate, and cannot possibly require the disregard of state law permitting arbitration by or against nonparties to the written arbitration agreement.” Id. (internal citations and quotation marks omitted). “The Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Bank of Am., N.A. v. UMB Fin. Servs., Inc., 618 F.3d 906, 911 (8th Cir. 2010) (citation and internal quotation marks omitted). “The scope of an arbitration agreement is given a liberal interpretation, with any doubts resolved in favor of arbitration.” MedCam, Inc. v. MCNC, 414 F.3d 972, 975 (8th Cir. 2005). Further, “[a]n order compelling arbitration ‘should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'” Id. (quoting Lyster v. Ryan's Family Steak Houses, Inc., 239 F.3d 943, 945 (8th Cir. 2001)). “[C]ourts must examine a complaint with care to assess whether any individual claim must be arbitrated. The failure to do so is subject to immediate review.” KPMG LLP v. Cocchi, 565 U.S. 18, 22 (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); Indus. Wire Prod., Inc. v. Costco Wholesale Corp., 576 F.3d 516, 520 (8th Cir. 2009). “[O]ur 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. (emphasis in original). “A court must grant a motion to compel arbitration if a valid arbitration clause exists which encompasses the dispute between the parties.” 3M Co. v. Amtex Sec., Inc., 542 F.3d 1193, 1198 (8th Cir. 2008) (citing 9 U.S.C. § 4; MedCam, Inc. v. MCNC, 414 F.3d 972, 974 (8th Cir. 2005)).

B. Consideration

Plaintiff argues that the Court should not grant Defendant's Motion to Stay Action Compel Arbitration because the Arbitration Agreement is not supported by consideration. (ECF No. 14, ¶¶ 7-12). Plaintiff claims that the Arbitration Agreement was optional because it was not “a mandatory condition of employment” with Defendant. (ECF No. 14, ¶ 8 (citing ECF No. 5-2 at 3)). Further, Plaintiff claims no consideration was exchanged, except that Defendant “potentially saves in terms of attorney's fees and court costs.” (ECF No. 14, ¶ 9). Plaintiff further notes the Arbitration Agreement contains a “Class Action Waiver, ” which is a “unilaterally imposed condition barring employee from participating in a class action.” (ECF No. 14, ¶ 10).

State law is applied to determine if a binding agreement exists. Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 629-31 (2009); Bank of Am., N.A., 618 F.3d at 911. Under Missouri law, the party seeking to compel arbitration bears the burden to prove a valid and enforceable arbitration agreement exists. LoRoad, LLC v. Glob. Expedition Vehicles, LLC, 787 F.3d 923, 927 (8th Cir. 2015) (citing Baier v. Darden Rests., 420 S.W.3d 733, 737 (Mo.Ct.App. 2014)). A valid contract under Missouri law requires offer, acceptance, and bargained for consideration. Baker v. Bristol Care, Inc., 450 S.W.3d 770, 774 (Mo. banc 2014); Vest v. Cracker Barrel Old Country Store, Inc., 371 F.Supp.3d 593, 598 (W.D. Mo. 2018).

The Court holds that the Arbitration Agreement is enforceable because it contains a mutual obligation to arbitrate. See ECF No. 5-2, ¶ 12 (“This Agreement is entered into for good and valuable consideration, the receipts and sufficiency of which is hereby acknowledged including, without limitation that, the promises by the Company and by me to arbitrate differences, rather than litigate them before courts or other bodies, provide consideration for each other.”). “If a contract contains mutual promises imposing a legal duty or liability on each party as a promise to the other party, the contract is a bilateral contract with sufficient consideration.” Vest, 371 F.Supp.3d at 599 (citing Sniezek v. Kan. City Chiefs Football Club, 402 S.W.3d 580, 583 (Mo.Ct.App. 2013)). Thus, the Court holds that the parties' mutual promise to arbitrate claims per the Arbitration Agreement's terms is sufficient consideration for a valid contract. Vest, 371 F.Supp.3d at 600-01; Dickson v. Gospel for ASIA, Inc., 902 F.3d 831, 834 (8th Cir. 2018) (“Consideration may take the form of a reciprocated promise to arbitrate or, when an arbitration clause is part of a larger, underlying contract, undertakings in the remainder of the contract may serve as consideration for the arbitration clause.”); Lee v. Burlington Coat Factory of...