Braden v. Optum RX, Inc.
| Decision Date | 15 November 2021 |
| Docket Number | 21-cv-02046-TC-GEB |
| Parties | Jennifer Braden, Plaintiff v. Optum RX, Inc., et al., Defendants |
| Court | U.S. District Court — District of Kansas |
Plaintiff Jennifer Braden filed this action against her former employer, alleging wrongful employment practices and retaliation in violation of federal law. Defendants moved to compel arbitration and dismiss the complaint, Doc. 10, based on an arbitration agreement that Braden signed as a condition of employment. Defendants also requested oral argument, Doc 12, on the motion. Because oral argument is unnecessary, that request is denied. For the following reasons, Defendants' Motion to Compel Arbitration is granted, but the Motion to Dismiss the Complaint is denied. Instead, this suit is stayed pending arbitration.
The Federal Arbitration Act, 9 U.S.C §§ 1-16, codifies “a liberal federal policy favoring arbitration agreements.” CompuCredit Corp. v. Greenwood 565 U.S. 95, 98 (2012) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). It requires courts to enforce agreements to arbitrate according to their terms. Id. For motions to compel arbitration, federal courts apply a summary-judgment-like standard: the moving party bears the burden of showing there is no genuine issue of material fact about whether the parties agreed to arbitrate their grievances. Hancock v. AT&T, 701 F.3d 1248, 1261 (10th Cir. 2012). To determine whether a genuine issue of fact exists, the Court views all evidence and draws all reasonable inferences, in the light most favorable to the nonmoving party. Cf. Allen v. Muskogee Okla., 119 F.3d 837, 839-40 (10th Cir. 1997) (summary judgment). That said, the nonmoving party cannot create a genuine factual dispute by making allegations that are purely conclusory, Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671-72, 674 (10th Cir. 1998), or unsupported by the record as a whole, Scott v. Harris, 550 U.S. 372, 378-81 (2007).
The party seeking to compel arbitration bears the burden of presenting evidence that the parties entered an agreement to arbitrate. The relevant facts are those that pertain to contract formation, and generally, courts “should apply ordinary state-law principles that govern the formation of contracts.” Hardin v. First Cash Fin. Servs., Inc., 465 F.3d 470, 475 (10th Cir. 2006) (quoting First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)).
Jennifer Braden has a medical condition that requires frequent leave from work. According to her former employer UnitedHealth Group, [1] Braden exhausted her allotted leave time, causing her to accumulate unexcused absences. These absences led to her termination. Braden disputes UnitedHealth's calculation of her absences and allotted leave time.
Since 1995, Braden has suffered from teratoma tumors and undergone several surgeries to remove them. As a result, she regularly experiences severe migraines. Doc. 1 at ¶ 29. From July 2012 to January 2019, Braden worked for UnitedHealth. She began as a customer service representative and later advanced to a pharmacy technician. Id. at ¶¶ 22-23. During that time, because of her condition, she required frequent medical leave from work. See Id. at ¶¶ 30-32. UnitedHealth provided this leave under the Family Medical Leave Act (FMLA) and under the Americans with Disabilities Act (ADA). Id. at ¶¶ 30-31.
This leave arrangement worked fine until March 2018, when Braden's disability caused her to miss several shifts. Doc. 1 at ¶ 32. UnitedHealth counted these as unexcused absences because, according to its records, Braden had already exhausted her FMLA leave. Id. Over the following months, Braden complained about the status of her absences and unsuccessfully challenged UnitedHealth's calculation of her leave accrual. The stress of the situation caused Braden to miss even more time. Id. at ¶ 40. Ultimately, UnitedHealth terminated Braden for accumulating too many unexcused absences. Id. at ¶¶ 49-50, 52.
UnitedHealth claims that Braden entered an arbitration agreement as a condition of her employment. Doc. 11 at 6. Immediately before her hire, Braden received an offer letter along with an arbitration agreement. Id. at 4; Doc. 11-1 at 15-26. The agreement was a standalone policy that employees had to acknowledge and sign. Doc. 11 at 4. It stated that “continuation of employment with UnitedHealth Group is deemed to be acceptance of this Policy.” Doc. 11-1 at 4, 8. Braden electronically signed the agreement on July 31, 2012. Id. at 4, 13. And she continued her employment for more than six years. Doc. 1 at ¶¶ 22-23. Braden does not dispute that she signed the agreement, nor does she dispute that her continued employment constituted acceptance of the policy. See Doc. 17 at 1-2.
The policy covers most employment-related disputes, including those arising out of FMLA and ADA claims. Doc. 11-1 at 19-20. Additionally, the policy contains a clause incorporating the American Arbitration Association (AAA) Employment Dispute Resolution Rules, unless otherwise superseded by the policy. Id. at 20-21. The AAA Rules, in turn, contain a provision that assigns to an arbitrator the authority to determine arbitrability issues-including the existence, scope, and validity of the arbitration agreement. Doc. 11-2 at 18. (The incorporation clause and the AAA Rule assigning arbitrability issues to arbitration are together referred to as the “delegation provision.”) The policy also contains an amendment clause, reserving to UnitedHealth “the right to amend, modify, or terminate the Policy effective on January 1 of any year after providing at least 30 days notice” by posting on the company's intranet website. Doc. 11-1 at 25.
Braden sued Defendants for wrongful employment practices and retaliation in violation of federal law. Defendants moved to compel arbitration. The FAA governs this dispute.
1. Arbitration is a matter of contract. AT&T Techs Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648 (1986). Section 2 of the FAA states that a “written provision in . . . a contract . . . to settle by arbitration a controversy arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Thus, arbitrators derive authority to resolve disputes only from the parties' advance agreement to submit their grievances to arbitration. AT&T, 475 U.S. at 648-49. Often, those grievances spawn preliminary disputes over the validity and scope of the arbitration agreement itself (i.e., issues of “ar-bitrability”). For disputes over the scope of a valid arbitration agreement, the presumption is in favor of arbitration. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985).
Arbitrability disputes often raise yet another threshold question: who should resolve them? By default, courts should. AT&T, 475 U.S. at 649; Riley v. Mfg. Co., Inc. v. Anchor Glass Container Corp., 157 F.3d 775, 779 (10th Cir. 1998). The law treats silence or ambiguity about “who should decide arbitrability” differently from the way it treats silence or ambiguity about “whether a particular merits-related dispute is arbitrable because it is within the scope of a valid arbitration agreement.” First Options, 514 U.S. at 944-45. This is because “doing so might . . . force unwilling parties to arbitrate a matter they reasonably would have thought a judge, not an arbitrator, would decide.” Riley, 157 F.3d at 779-80 (quoting First Options, 514 U.S. at 945). Still, parties may expressly agree to delegate arbitrability questions to an arbitrator. Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 68-70 (). They must do so with “clear and unmistakable evidence” of their intent. First Options, 514 U.S. at 944. Finally, if a court is the “who” that gets to decide, it “has no business weighing the merits” of the underlying grievance when determining whether the parties agreed to submit that grievance to arbitration. AT&T, 475 U.S. at 649-50. 2. Defendants argue that Braden agreed to arbitrate her employment claims. They also claim that any threshold arbitrability questions must be decided by an arbitrator in light of the policy's delegation provision. According to Defendants, this includes questions of scope and validity.
Braden challenges the policy's enforceability as well as who should decide that challenge. First, Braden argues that there was no valid arbitration agreement because the policy's one-sided amendment clause rendered it illusory. This clause, Braden argues, means that the agreement lacks “bilateral consideration, ” which “prevented the parties from reaching a mutual assent or meeting of the minds” on all essential terms. Doc. 17 at 4. Braden also argues that policy is unconscionable due to that same amendment clause and “extremely restrictive” limits on discovery that deny employees “a fair opportunity to present” claims. Id. at 13.
As for who decides the arbitrability issues, Braden further argues that the Court must decide them because the agreement itself does not contain a delegation provision. She claims that the incorporation of the AAA Rules was not clear and unmistakable evidence of intent to delegate, and that therefore the Court must determine arbitrability issues like validity, enforceability, and scope. And even if there was a clear and unmistakable delegation provision, Braden argues that it is unenforceable because it is illusory “for the same reason that the whole agreement is...
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