Katz v. Anheuser–busch Inc.

• Decision Date: 14 June 2011
• Docket Number: No. ED 95493.,ED 95493.
• Parties: Francine I. KATZ, Respondent,v.ANHEUSER–BUSCH, INC., et al., Appellant.
• Court: Missouri Court of Appeals

347 S.W.3d 533

112 Fair Empl.Prac.Cas. (BNA) 929

161 Lab.Cas. P 61,157

Francine I. KATZ, Respondent,

v.ANHEUSER–BUSCH, INC., et al., Appellant.

No. ED 95493.

Missouri Court of Appeals, Eastern District, Division Four.

June 14, 2011.Motion for Rehearing and/or Transfer to

Supreme Court Denied July 26, 2011.

Application for Transfer Denied

Oct. 4, 2011.

Gerard T. Carmody, Kelley F. Farrell, Edwin C. Ernst, Carmody MacDonald P.C., St. Louis, MO, for Appellant.John D. Lynn, Mary Anne Sedey, Sedey Harper, P.C., St. Louis, MO, for Respondent.KURT S. ODENWALD, Presiding Judge.

Introduction

Anheuser–Busch, Inc. (A–B) appeals from the trial court's judgment denying its Motion to Dismiss, or in the Alternative, to Stay the Proceedings and Compel Arbitration in an employment discrimination suit filed by Francine Katz (Katz). A–B claims that the trial court erred in finding that two separate arbitration agreements are not enforceable against Katz, and further argues that an arbitrator, not the trial court, should have ruled on the arbitrability of the agreements. A–B also claims the trial court lacked jurisdiction to consider Katz's subsequent motion to stay arbitration proceedings, and erred in granting said motion. Finding no trial court error, we affirm.

Background

Katz began her employment with A–B in the legal department in 1988. As Katz advanced throughout her career, she was promoted to Vice President of Corporate Communications and appointed to A–B's Strategy Committee in 2002. Katz was named Vice President of Communications and Consumer Affairs in 2004. Effective November 18, 2008, InBev S.A./N.V. (InBev) acquired A–B. Katz resigned her position effective December 31, 2008.

In October 2009, Katz filed a petition against A–B in the Circuit Court of the City of St. Louis alleging gender-based employment discrimination in violation of the Missouri Human Rights Act. In response to Katz's petition, A–B filed a Motion to Dismiss, or in the Alternative, to Stay the Proceedings and Compel Arbitration (Motion to Compel Arbitration). A–B initially claimed that Katz was required to arbitrate her claim against A–B under its Dispute Resolution Program (DRP) and later argued that A–B's Mutual Agreement to Arbitrate Claims (MAAC) also mandated arbitration of Katz's claim.¹

A. Arbitration Agreements1. Dispute Resolution Program (DRP)

A–B implemented the DRP in 1997. A revised program became effective on April 1, 2004, and applies to “all salaried and non-union hourly employees.” The written policy contains the heading “SPECIAL NOTICE TO EMPLOYEES” and states that the policy is a binding agreement between the employee and A–B for the resolution of employment disputes. The DRP expressly states that:

By continuing your employment with Anheuser–Busch Companies, Inc. or any of its subsidiary companies (“Company”), you and the Company are agreeing as a condition of your employment to submit all covered claims to the Anheuser–Busch Dispute Resolution Program (“DRP”), to waive all rights to a trial before a jury on such claims, and to accept an arbitrator's decision as the final, binding and exclusive determination of all covered claims. Employment discrimination and harassment claims based on, for example, age, race, sex, religion, national origin, veteran status, citizenship, disability, or other characteristics protected by applicable laws, are covered by the agreement. Katz did not sign any document agreeing to the terms of the DRP.

The DRP also contains a “delegation clause” which provides that the “Arbitrator shall have exclusive authority to resolve any dispute relating to the applicability, enforceability or formation of the DRP, including any claim that all or part of the DRP is invalid or unenforceable.” A–B did not raise this clause or argue its effect in its Motion to Compel Arbitration, or in any other pleadings filed by A–B with said motion.

2. Mutual Agreement to Arbitrate Claims (MAAC)

Katz signed and entered into the MAAC with A–B on July 19, 2000. A–B avers Katz must arbitrate her claims not only under the DRP, but also pursuant to the express terms of the MAAC. Like the DRP, the MAAC provides for the arbitration of disputes between an employee and A–B “in order to establish and gain the benefits of a speedy, impartial, final and binding dispute-resolution procedure.” The MAAC states that:

[T]he Company and Employee hereby consent to the resolution by binding arbitration of all claims or controversies between them ... arising out of Employee's employment by the Company (or its termination) ... The claims covered by this Agreement include, but are not limited to, claims for ... discrimination or harassment (including, but not limited to claims based on, race, color, sex, religion, national origin, age, marital status, or disability) ...

The MAAC provides that the requirement to arbitrate will “survive the termination of [the employee's] employment” with A–B. However, a “change in control” provision contained within the MAAC specifically notes the following:

In the event of the occurrence of [a change in control] ... the parties agree that this Agreement shall terminate and shall have no binding effect on either party as of the date of the [change in control].

The parties do not dispute that a “change in control” occurred when InBev acquired A–B on November 18, 2008.

The MAAC, like the DRP, also contains a “delegation clause,” stating that,

The arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to this Agreement, including but not limited to any claim that all or part of this Agreement is void or voidable.

The MAAC further provides that,

The arbitrator shall have the authority to resolve any dispute relating to the applicability or enforceability of this Agreement, to entertain a motion to dismiss and/or a motion for summary judgment and shall apply the standards governing such motions under the Federal Rules of Civil Procedure.

As with the DRP, A–B did not raise or argue the MAAC's delegation clause before the trial court in any pre-judgment motion or pleading.

B. Trial Court Ruling

The parties completed briefing on A–B's Motion to Compel Arbitration in April 2010. The trial court conducted oral argument on the issues in May 2010, and issued its order denying A–B's Motion to Compel Arbitration on August 23, 2010. ² The trial court found that by its own terms, the MAAC terminated upon a “change in control” of the corporation, which occurred when In–Bev acquired A–B on November 18, 2008, and therefore, was no longer binding on Katz. The trial court rejected A–B's argument that Nolde Bros. v. Local No. 358, Bakery & Confectionery Workers Union, AFL–CIO, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977), was dispositive with respect to the MAAC and that Katz's obligation to arbitrate continued despite the termination of the agreement. With regard to the DRP, the trial court found that under Kunzie v. Jack–in–the–Box, Inc., 330 S.W.3d 476 (Mo.App. E.D.2010), Katz's continued employment with A–B did not constitute an adequate acceptance by Katz of the terms of the DRP. The trial court further held that even if Katz were found to have accepted the terms of the DRP, the agreement nevertheless lacked legal consideration. The trial court found that Katz could not be compelled to arbitrate her claim under either the MAAC or DRP, and denied A–B's Motion to Compel Arbitration.

A–B filed its notice of appeal from that judgment to this Court in September 2010.

C. Arbitration Proceedings

After A–B filed its notice of appeal, Katz commenced arbitration proceedings under the MAAC and DRP as a precautionary measure, but requested an immediate stay of any arbitration proceedings from the trial court. A–B opposed Katz's motion to stay the arbitration proceedings, arguing first that A–B's appeal to this Court from the trial court's denial of its Motion to Compel Arbitration divested the trial court of jurisdiction to hear Katz's motion to stay the arbitration proceedings. Second, A–B argued that following the Supreme Court's recent decision in Rent–A–Center, West, Inc. v. Jackson, ––– U.S. ––––, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010), the decision to stay an arbitration proceeding rested not with the trial court, but exclusively with an arbitrator pursuant to the MAAC's delegation clause.

The trial court granted Katz's motion to stay the arbitration proceedings, citing Section 435.355.2, which grants the trial court power to stay arbitration proceedings. The trial court noted that an order staying the arbitration proceedings was necessary to preserve the status quo of the parties and that Rent–A–Center did not require the trial court to allow an arbitrator to determine whether an arbitration agreement existed between A–B and Katz.

A–B also filed a notice of appeal to this Court from that judgment. The appeals were thereafter consolidated. This appeal follows.

Points on Appeal

A–B presents four points on appeal. In its first point, A–B avers that the trial court erred in denying A–B's Motion to Compel Arbitration because the MAAC and DRP each contain delegation clauses granting an arbitrator the exclusive authority to determine whether a claim is arbitrable. A–B argues that the presence of such clauses precluded the trial court from ruling on the validity of the arbitration agreements and mandates enforcement of the arbitration agreements under the Federal Arbitration Act.

In its second point on appeal, A–B claims that even if the trial court was authorized to determine the arbitrability of the MAAC, the trial court erred in denying A–B's Motion to Compel Arbitration because Katz remained obligated to arbitrate her employment related claims against A–B even though the MAAC terminated upon the change in control. A–B posits that because a majority of the material facts relating to Katz's claims occurred before the MAAC termination, Katz remained...