Jimenez v. Cintas Corp.
| Decision Date | 13 January 2015 |
| Docket Number | No. ED101241,No. ED101015,ED101015,ED101241 |
| Parties | KATHRYN JIMENEZ, Petitioner/Respondent, v. CINTAS CORPORATION, ET AL., Respondent/Appellant. |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of the St. Louis County
Honorable Michael T. Jamison
INTRODUCTION
Cintas Corporation and its subsidiaries ("Cintas"), as well as its managers Timothy Baker and Brian Fitzsimmons, (collectively "Defendants") appeal from the trial court's order denying their motion to compel arbitration of the employment discrimination claims brought by Kathryn Jimenez. Defendants contend the trial court erred in failing to compel arbitration of Jimenez's claims pursuant to a valid agreement, because there was sufficient consideration based upon: (1) the parties' mutual promises to arbitrate disputes arising out of Jimenez's employment relationship; and (2) Cintas's offer to Jimenez of "new" or "future" at-will employment. Cintas also contends the agreement to arbitrate was part of an enforceable contract based upon an offer and acceptance, and the terms of that agreement were not unconscionable. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
In December 2011, Jimenez began working for Cintas as a Fire Service Technician. She continued in this capacity until June 2012, when Cintas terminated her employment. On July 18, 2013, Jimenez filed a petition against Defendants in the Circuit Court of St. Louis County, challenging her termination and alleging that during her employment she suffered discrimination and harassment by Baker and Fitzsimmons, who acted in their capacity as managers for Cintas.
On August 26, 2013, Defendants filed a motion to compel Jimenez to arbitrate her claims against Cintas, attaching a document entitled "Missouri Employment Agreement for Sales, Service and Marketing Personnel" ("Agreement"). The first page of the Agreement is dated December 12, 2011, and contains Jimenez's purported signature, as well as provisions invoking the Federal Arbitration Act as the law by which the agreement "will be interpreted, governed and enforced."
Section 8 of the Agreement, entitled "Exclusive Method of Resolving Disputes or Differences," states that disputes "between Employee and Employer concerning whether either party at any time violated any duty, right, law, regulation, public policy, or provision of this Agreement" that cannot be resolved in good faith, must be "resolved through impartial and confidential arbitration." Section 8 states that both Cintas and Jimenez must arbitrate any unresolved "claims for damages, as well as reasonable costs and attorney's fees, caused by [the other party's] violation of any provision of this Agreement or any law, regulation or public policy." It further provides:
The rights and claims of Employee covered by this Section 8, including the arbitration provisions below, specifically include but are not limited to all of Employee's rights or claims arising out of or in any way related to Employee's employment with Employer, such as rights or claims arising under the Age Discrimination in Employment Act, as amended, Title VII of the Civil Rights Act of 1964, as amended (including amendments contained in the Civil Rights Act of1991), the Americans With Disabilities Act, 42 U.S.C. § 1981, the Fair Labor Standards Act, the Employee Retirement Income Security Act, state anti-discrimination statutes, other state or local laws regarding employment, common law theories such as breach of express or implied contract, wrongful discharge[,] defamation, and negligent or intentional infliction of emotional distress. Excluded from the arbitration provisions below in this Section 8 are all unemployment benefit claims, workers' compensation claims, claims for a declaratory judgment or injunctive relief concerning any provision of Section 4 of this Agreement, and claims not lawfully subject to arbitration, including charges or complaints filed with an administrative agency (but not litigation connected with any such charge or complaint). (Emphasis added).
Consequently, the Agreement requires the arbitration of all claims, except those expressly excluded. It excludes from the requirement to arbitrate all: "workers' compensation claims, unemployment benefits claims, claims for a declaratory judgment or injunctive relief concerning any provision of Section 4 and claims not lawfully subject to arbitration . . . ."
Section 4 is entitled "Employee's Acknowledgement and Covenants." The Section 4 claims exempted from arbitration relate to covenants binding solely upon Jimenez, and prohibit her from disclosing confidential material and information belonging to Cintas, competing against Cintas, and soliciting Cintas's customers and employees (the "Non-Compete Provisions"). Section 4 also contains a clause stating:
Employer may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction or other injunctive relief to enforce Employee's compliance with the obligations, acknowledgments and covenants in this Section 4. Employer may also include as part of such injunction action any claims for injunctive relief under any applicable law arising from the same facts or circumstances as any threatened or actual violation of Employee's obligations, acknowledgments and covenants in this Section 4. (Emphasis added).
On October 21, 2013, Jimenez filed a response in opposition to Defendants' motion to compel arbitration. In support, she attached a sworn affidavit, stating that: (1) she does not recall reading or signing the Agreement produced by Defendants, receiving a copy of it, or reviewingits terms; and (2) she neither started nor continued her employment with the intent to be bound by its provisions.
The court held an evidentiary hearing, and denied Defendants' motion to compel arbitration. In its order, the court declined to address whether Jimenez had actually signed the Agreement, reviewed it, or received a copy of it, concluding instead that it "need not address these matters since the third element necessary to create a binding contract, bargained for consideration, is dispositive of this matter." The court stated that the parties had agreed that Jimenez was an "at-will" employee. It then concluded the agreement to arbitrate lacked consideration because, "there cannot be sufficient consideration given in an employment contract with an at-will employee such as to consummate a binding contract to arbitrate any dispute between the parties." The court further held that even if the arbitration agreement contained consideration, it was unenforceable because its terms were unconscionable. Defendants appeal.
STANDARD OF REVIEW
Whether arbitration can be compelled under the terms of an employment agreement is a question of contract law that we review de novo. State ex rel. Vincent v. Schneider, 194 S.W.3d 853, 856 (Mo. banc 2006); Morrow v. Hallmark Cards, Inc., 273 S.W.3d 15, 21 (Mo. App. W.D. 2008). Generally, "when faced with a motion to compel arbitration, we must consider three factors: first, whether a valid arbitration agreement exists; second, whether the specific dispute falls within the scope of the agreement; and third, whether the agreement is subject to revocation under applicable principles of contract law. Frye v. Speedway Chevrolet Cadillac, 321 S.W.3d 429, 434-35 (Mo. App. W.D. 2010). The party seeking to compel arbitration has the burden of proving the existence of a valid and enforceable arbitration agreement. Whitworth v. McBride & Sons Homes, Inc., 344 S.W.3d 730, 737 (Mo. App. W.D. 2011).
DISCUSSION
In their first two points, Defendants argue that the parties formed a valid arbitration agreement providing two separate types of consideration: (1) Cintas's offer of "new" or "future" at-will employment; and (2) Cintas's and Jimenez's mutual promises to arbitrate. Jimenez responds that the arbitration agreement is effectively devoid of consideration, and therefore invalid, because her employment relationship with Cintas was "at-will," and Cintas's promise to arbitrate was not mutually binding. We agree that, under Missouri law, neither Jimenez's at-will employment nor the arbitration provision provides consideration to support a contractual obligation on the part of Jimenez to arbitrate disputes with Cintas. Our disposition of these first two points is dispositive of the appeal, therefore we do not address Defendants' points three and four.1
"[A]rbitration is a matter of contract, and parties will be compelled to arbitrate their claims only if the arbitration agreement satisfies the essential elements of a valid contract." Marzette v. Anheuser-Busch, Inc., 371 S.W.3d 49, 52 (Mo. App. E.D. 2012). To resolve disputes concerning the validity of a contract, we apply the usual rules of state contract law and canons of contract interpretation. Whitworth, 344 S.W.3d at 736 (quoting Frye, 321 S.W.3d at 434-435); Schneider, 194 S.W.3d at 856. Although the Federal Arbitration Act is to be applied when enforcing a contract that invokes its provisions, "Missouri contract law applies to determine whether the parties have entered a valid agreement to arbitrate." Schneider, 194 S.W.3d at 856 ().
In Missouri, legal consideration is essential for the formation of any contract, including one for arbitration. Kunzie v. Jack-In-The-Box, Inc., 330 S.W.3d 476 (Mo. App. E.D. 2010). Consideration is created by "either a promise (to do or refrain from doing something) or the transfer or giving up of something of value to the other party." Morrow, 273 S.W.3d at 25. Where "two considerations are given for a promise, one of them being legally sufficient to support a promise and the other not sufficient, the promise is enforceable." Earl v. St. Louis Univ., 875 S.W.2d 234, 236-237 (Mo. App. E.D. 1994); Y.W. v. Nat'l Super Markets, Inc., 876 S.W.2d 785, 791 (Mo. App. E.D. 1994) (...
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