Brown v. GoJet Airlines, LLC

• Docket Number: SC99961
• Decision Date: 07 November 2023
• Parties: HAMPTON S. BROWN, ET AL., Respondent, v. GOJET AIRLINES, LLC, Appellant.
• Court: Missouri Supreme Court

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HAMPTON S. BROWN, ET AL., Respondent,
v.
GOJET AIRLINES, LLC, Appellant.

No. SC99961

Supreme Court of Missouri, En Banc

November 7, 2023

APPEAL FROM THE CIRCUIT COURT OF ST. LOUIS COUNTY The Honorable John N. Borbonus, Judge.

ROBIN RANSOM, JUDGE.

GoJet Airlines, LLC, (GoJet) appeals the circuit court's judgment overruling its motion to compel arbitration in a breach of contract action filed by Hampton Brown (Brown). This Court has jurisdiction. Mo. Const. art. V, sec. 10. Because the parties' agreement is governed by the Missouri Uniform Arbitration Agreement (MUAA) and contains a delegation provision delegating threshold issues to an arbitrator Brown failed to challenge, the circuit court erred in refusing to compel arbitration. The circuit court's order overruling GoJet's motion to compel arbitration is vacated, and the case is remanded to compel arbitration.

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Background

GoJet is a limited liability company organized in Delaware with headquarters in Bridgeton, Missouri. Brown is a resident of Austria. In November 2019, Brown applied online to work for GoJet as a pilot. The application included an arbitration agreement providing the parties agreed to arbitrate "any and all claims, disputes, or controversies" related to Brown's employment. The arbitration agreement includes a delegation provision providing the arbitrator "shall have exclusive authority to resolve any dispute relating to the formation, enforceability, applicability, or interpretation of this Agreement[.]" In addition, the arbitration agreement provides that the parties are subject to the Federal Arbitration Act (FAA) and that the agreement "shall be enforceable and interpreted in accordance with the FAA."

GoJet hired Brown as a pilot in January 2021, and the parties entered into a bonus agreement outlining the schedule of bonuses Brown would receive during his employment. In his first year, Brown would receive $46,000 in bonuses, including $10,000 after successful completion of training, $10,000 after six months of employment, and $26,000 after one year of employment. The bonus agreement also provided a schedule of bonuses Brown would receive in his second and third year of employment. On April 15, 2021, GoJet terminated Brown's employment.

In November 2021, Brown filed a class action suit alleging GoJet breached the bonus agreement by failing to issue bonuses to him and other employees as provided by the agreement. GoJet moved to compel arbitration and stay proceedings under section 435.355,^[1]

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arguing the parties entered into a mutually binding and enforceable arbitration agreement requiring them to arbitrate this dispute. Brown opposed the motion and argued he could not be subject to arbitration because: (1) the FAA exempts from its application workers engaged in interstate commerce such as himself, rendering the arbitration agreement unenforceable against him under the FAA such that the MUAA applies, (2) the arbitration agreement did not include the statutory notice provision required by section 435.460,^[2] such that the arbitration agreement is also unenforceable under the MUAA, and (3) the arbitration agreement lacks consideration. In its reply, GoJet argued the parties unmistakably intended in their arbitration agreement to delegate these threshold issues of arbitrability to an arbitrator. The circuit court overruled GoJet's motion to compel arbitration, finding the arbitration agreement did not include the statutory notice provision required by section 435.460. GoJet appeals.

Analysis

On appeal, GoJet challenges the circuit court's order overruling its motion to compel arbitration. In addition to responding to GoJet's arguments, Brown presents two questions this Court must address first, as they implicate threshold issues a court must determine before compelling arbitration: (1) whether GoJet factually proved the existence of the arbitration agreement, and (2) whether, in the event the FAA does not apply to the parties'

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agreement due to an exemption, a court may compel arbitration under the MUAA when the agreement is silent on its application.

Brown Waived His Argument That the Arbitration Agreement Does Not Exist

This Court has held a court must first determine whether an agreement to arbitrate exists before it may compel arbitration. Theroff v. Dollar Tree Stores, Inc., 591 S.W.3d 432, 436-37 (Mo. banc 2020). The party seeking to compel arbitration has the burden of proving the existence of an arbitration agreement by competent evidence. Brown v. Chipotle Servs., LLC, 645 S.W.3d 518, 523-24 (Mo. App. 2022). Brown contends GoJet failed to show the existence of an arbitration agreement because the evidence attached to GoJet's motion to compel consisted of (1) an unsworn declaration by a GoJet executive declaring that Brown signed the arbitration agreement, and (2) the arbitration agreement, which included the delegation provision and was signed by Brown. Brown argues the declaration and attached arbitration agreement were not properly authenticated or introduced at an evidentiary hearing and, therefore, GoJet failed to factually prove the existence of the arbitration agreement.

This Court, however, has rejected such an argument when the party opposing arbitration fails to contest the existence of the arbitration agreement in the circuit court and proceeds as if the agreement exists. See Bridgecrest Acceptance Corp. v. Donaldson, 648 S.W.3d 745, 751 (Mo. banc 2022) (refusing to entertain the respondents' argument that an arbitration agreement did not exist because they "conceded the existence of an arbitration agreement in circuit court and opposed the motions to compel for 'purely legal' reasons, rather than factual ones"). Similarly here, Brown conceded the existence of the agreement

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during the hearing on GoJet's motion to compel and argued against the agreement only on the bases that it lacked the required statutory notice, mutuality, and consideration. Accordingly, this Court reviews only the purely legal issues raised in connection with GoJet's motion to compel arbitration.^[3] Id.

The MUAA Governs the Parties' Agreement

Brown argues arbitration may not be compelled against him. He contends the FAA exempts from its application workers engaged in interstate commerce such as himself, making the arbitration agreement "unenforceable" against him. He further asserts that, because the arbitration agreement provides for the application of the FAA and is silent about the MUAA's application, the MUAA may not "kick in" to allow a court to compel arbitration.

The arbitration agreement provides...