Lyster v. Ryan's, No. 00-1887

• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)
• Writing for the Court: JOHN B. JONES
• Citation: 239 F.3d 943
• Parties: (8th Cir. 2001) Kathy Lyster, Appellee, v. Ryan's Family Steak Houses, Inc., Appellant. . Submitted:
• Decision Date: 08 January 2001
• Docket Number: No. 00-1887

Page 943

239 F.3d 943 (8th Cir. 2001) Kathy Lyster, Appellee,
v.
Ryan's Family Steak Houses, Inc., Appellant. No. 00-1887. United States Court of Appeals, FOR THE EIGHTH CIRCUIT. Submitted: January 8, 2001.
Filed: February 8, 2001.

Appeal from the United States District Court for the Western District of Missouri

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Before WOLLMAN, Chief Judge, BYE, Circuit Judge, and JONES ¹ , District Judge.

JOHN B. JONES, District Judge.

Kathy Lyster filed this action alleging unlawful sexual harassment against her former employer, Ryan's Family Steak Houses, Inc. Lyster signed an arbitration agreement relating to her employment with Steak House. Steak House appeals from the district court's denial of its petition to compel arbitration and motion to dismiss, or alternatively, to stay the proceedings. The district court held Lyster's arbitration agreement did not require arbitration of claims that were filed after the termination of the arbitration agreement. We reverse.

I. BACKGROUND

Lyster applied for employment with Steak House on March 5, 1998. At the time Lyster submitted her application, she signed a Job Application Agreement to Arbitration of Employment-Related Disputes ("Agreement") with Employment Dispute Services, Inc. ("EDSI") which provided that Lyster would submit any employment-related dispute with Steak House to arbitration. Steak House was named as a third-party beneficiary of the Agreement. Lyster submitted her claim

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of sexual harassment to the Equal Employment Opportunity Commission ("EEOC") and the Missouri Commission on Human Rights ("MCHR") and received a right-to-sue letter.

The district court concluded under the Agreement Lyster was required to arbitrate her claim only if she filed her claim with the EEOC and the MCHR before she was terminated. If Lyster was terminated prior to filing her claim, the district court concluded the Agreement would be unenforceable because the Agreement terminated when her employment with Steak House ended. Because Steak House did not provide sufficient information to the district court regarding the timing of Lyster's termination in relation to the filing of her claim with the EEOC and the MCHR, the district court denied Steak House's petition to compel arbitration and motion to dismiss, or alternatively, to stay the proceedings.

Steak House appeals on the grounds that the Agreement requires Lyster's employment-related claims against it be arbitrated even if the Agreement has terminated since the date of the claim. Lyster contends the Agreement specifically excluded all EEOC matters from arbitration and Lyster did not agree to arbitrate her Title VII claims. Lyster further asserts her claim and cause of action for sexual harassment did not accrue until EEOC gave a right to sue, which occurred after the Agreement. terminated. Finally, Lyster argues the Agreement is an unconscionable adhesion contract.

II. DECISION

Where the district court has determined the arbitrability of a dispute based on contract interpretation, we review the decision de novo. PCS Nitrogen Fertilizer, L.P. v. Christy Refractories, L.L.C., 225 F.3d 974, 978 (8 th Cir. 2000). If the district court's order concerning arbitrability is based on factual findings, we review such findings for clear error. Id. The order denying Steak House's petition to compel arbitration and motion to dismiss, or alternatively, to stay the proceedings is based solely on contract interpretation and, therefore, we review the district court's decision de novo.

A dispute must be submitted to arbitration if there is a valid agreement to arbitrate and the dispute falls within the scope of that agreement. Telectronics Pacing Systems, Inc. v. Guidant Corp., 143 F.3d 428, 433 (8 th Cir. 1998); Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (holding the Federal Arbitration Act mandates that courts shall direct parties to arbitration on issues to which a valid arbitration agreement has been signed). The Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., declares a "liberal federal policy favoring arbitration agreements." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983) (citing 9 U.S.C. 2). The FAA 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." Id.; see Barker v. Golf U.S.A., Inc., 154 F.3d 788, 793 (8 th Cir. 1998), cert. denied, 525 U.S. 1068 (1999). Generally, "there is a presumption of arbitrability in the sense that '[a]n order to arbitrate the particular grievance 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.'" AT & T Tech., Inc. v. Communications Workers of Am., 475 U.S. 643, 650 (1986) (quoting Steelworkers v. Warrior & Gulf Navigation.-4- Co., 363...