Patrick v. Altria Grp. Distribution Co., WD 81344

• Decision Date: 05 March 2019
• Docket Number: WD 81344
• Citation: 570 S.W.3d 138
• Parties: Meghann PATRICK, Respondent, v. ALTRIA GROUP DISTRIBUTION CO., et al., Appellants.
• Court: Missouri Court of Appeals

570 S.W.3d 138

Meghann PATRICK, Respondent,
v.
ALTRIA GROUP DISTRIBUTION CO., et al., Appellants.

WD 81344

Missouri Court of Appeals, Western District.

Filed: March 5, 2019

William C. Martucci, Ashley N. Harrison, Kansas City for appellant.

Christopher Lawler, Mark A. Jess, Christie Jess, John J. Ziegelmeyer, III, Kansas City and Richard L. Rollings, Jr, Camdenton for respondents.

Before Division Two: Alok Ahuja, P.J., and Thomas H. Newton and Mark D. Pfeiffer, JJ.

Alok Ahuja, Judge

Meghann Patrick is a former employee of Altria Group Distribution Company. After her employment was terminated, Patrick sued Altria and a supervisor at Altria, alleging employment-related claims under the Missouri Human Rights Act, § 213.010, RSMoet seq. The defendants moved to compel arbitration and stay the civil action. The circuit court denied the defendants' motion, and they appeal. We affirm.

Factual Background

Patrick was hired by Altria in November 2007 as a Territory Sales Manager. At the time she began her employment, Patrick agreed to a dispute resolution program which included an arbitration provision.

In February 2012, Altria distributed to employees a revised dispute resolution agreement, which superseded the earlier agreement.¹ Patrick executed the revised agreement on February 10, 2012. The agreement established a dispute resolution program which provided various options for addressing workplace disputes. The program describes four dispute resolution options: The Open Door Policy, The Company Ombudsperson, Mediation, and Arbitration. The first three dispute resolution mechanisms were optional and non-binding. By contrast, under the agreement all workplace disputes were subject to mandatory and binding arbitration.

The agreement defined a covered "dispute" to mean

570 S.W.3d 141

any legal or equitable claim, demand, dispute or controversy, whether based in tort, in contract, under statute, by common law, or alleging a violation of any legal obligation, by and between the Parties, that arises out of or relates in any way to the employment relationship between [Patrick] and [Altria] ... including claims which relate to, arise from, concern or involve in any way:

....

2. separation from employment of an Employee, whether involuntary, voluntary or "constructive", the terms and conditions of employment, the cessation of employment, wages alleged to be owed which are required to be paid pursuant to state or federal statute, and benefits (including any modification, amendment or termination of a benefit plan) or incidents of employment with [Altria];

....

4. any other matter arising out of or related in any way to the employment relationship between [Patrick] and [Altria] including, by way of example and without limitation, allegations of: discrimination or harassment based on race, sex, religion, age, marital status, pregnancy, national original or disability or other bases; unpaid wages or expenses; harassment prohibited by state or federal statute or the common law; retaliation or whistleblower claims, including workers' compensation retaliation; defamation; infliction of emotional distress; and violation(s) of any federal, state, local or other governmental constitution, statute, ordinance, regulation or common law.

The agreement excluded from the definition of a "dispute" (1) issues relating to the formation, interpretation or enforceability of the agreement; (2) any claim that the class action waiver in the agreement is void or voidable; and (3) any claim for workers' compensation benefits, state disability insurance benefits, or unemployment compensation benefits.

The agreement provided that, "[i]n the event you and [Altria] are unable to resolve, or choose not to resolve, any such legal dispute through any of the other dispute resolution options, you and [Altria] agree to arbitrate any such legal dispute under the terms of the Program rather than pursue a lawsuit."

The agreement gave Altria the power to unilaterally amend or terminate the dispute resolution program. The agreement defined a "Material Amendment" as "a change or modification of the Program that significantly changes a substantive provision relating to arbitration under the Program, such as a change in the allocation of fees and costs, the Disputes covered, or the limitations on remedies." A "Non-Material Amendment" was defined as "any change to the Program which is not a Material Amendment." The agreement provided:

1. [Altria] may make a Non-Material Amendment at any time with or without notice.

2. [Altria] may make a Material Amendment at any time, provided that:

a) no such amendment will apply to a Dispute previously submitted to arbitration under the Program; and

b) no such amendment will be effective until notice of the amendment is published to Employees in a reasonable manner, such as electronically through [Altria’s] Intranet or electronic mail system (proof of actual receipt by an Employee is not necessary).

3. [Altria] may terminate this Program at any time, provided that:

570 S.W.3d 142

a) the Program will remain in full force and effect for any Dispute previously submitted to arbitration under the Program; and

b) termination will not be effective until 30 days after notice of termination is published to Employees in a reasonable manner, such as electronically through [Altria’s] Intranet or electronic mail system (proof of actual receipt by an Employee is not necessary).

Altria terminated Patrick’s employment in March 2016. Patrick filed an administrative complaint against Altria and supervisor John Hartnett with the Missouri Human Rights Commission. Following receipt of a right to sue letter from the Commission, Patrick filed suit against Altria and Hartnett in the Circuit Court of Jackson County on July 21, 2017.² She asserted claims under the Missouri Human Rights Act for gender discrimination, sexual harassment/hostile work environment, and retaliation.

Altria filed a Motion to Compel Arbitration and Stay Action. The motion alleged that a valid and binding arbitration agreement existed between Patrick and Altria, which required Patrick to pursue her claims in arbitration. Patrick opposed the motion. She argued, among other things, that the dispute resolution agreement was not enforceable because it was not supported by adequate consideration.

The circuit court denied Altria’s motion to compel arbitration. It concluded that because Altria was given the right to unilaterally modify or terminate the dispute resolution agreement, the agreement was not supported by mutual consideration, and was therefore "invalid and unenforceable."

Altria appeals.³

Discussion

Altria argues that the circuit court erred in denying its Motion to Compel Arbitration and Stay Action because the parties were bound by a valid and enforceable arbitration agreement that was supported by adequate consideration. In response, Patrick argues, among other things, that Altria’s promises in the dispute resolution agreement were illusory and do not constitute bargained for consideration, because Altria retained the unilateral right to modify or terminate its obligations under the agreement.

The issue of "[w]hether the trial court should have granted a motion to compel arbitration is a question of law decided de novo. " Ellis v. JF Enters., LLC , 482 S.W.3d 417, 419 (Mo. 2016) (citation omitted).

When faced with a motion to compel arbitration, we must consider three factors. First, we must determine whether a valid arbitration agreement exists. Second, if a valid arbitration agreement exists, we must determine whether the specific dispute falls within the scope of the arbitration agreement. Third, if a valid arbitration contract exists, and if the subject dispute is within the scope of the arbitration provision, then we must

570 S.W.3d 143

determine whether the arbitration agreement is subject to revocation under applicable contract principles. In making these determinations, we should apply the usual rules of state contract law and canons of contract interpretation.

Frye v. Speedway Chevrolet Cadillac , 321 S.W.3d 429, 434-35 (Mo. App. W.D. 2010) (citations and internal quotation marks omitted).

"Under both the Federal Arbitration Act, 9 U.S.C. § 1 et seq. , and the Missouri Uniform Arbitration Act, chapter 435, RSMo, whether the parties entered into an enforceable arbitration agreement is a preliminary issue for the court to decide, applying Missouri law." ...