Stein v. Burt-Kuni One, LLC
| Decision Date | 28 September 2005 |
| Docket Number | No. Civ.A.04CV1117WDMMJW.,Civ.A.04CV1117WDMMJW. |
| Citation | 396 F.Supp.2d 1211 |
| Parties | Mark A. STEIN, Plaintiff, v. BURT-KUNI ONE, LLC, d/b/a Burt-Kuni Honda, Defendant. |
| Court | U.S. District Court — District of Colorado |
Susan J. Eckert, Santarella & Eckert, LLC, Littleton, CO, for Plaintiff.
Robert Brian Daniel, Ritsema and Lyon, P.C., Denver, CO, for Defendant.
ORDER ON MOTION TO DISMISS AND/OR TO COMPEL ARBITRATION
This case is before me on the motion to dismiss or to compel arbitration, filed by defendant Burt-Kuni One, LLC (Burt-Kuni). Plaintiff Mark Stein opposes the motion, arguing that there is no valid arbitration agreement between the parties. I have reviewed the parties' written arguments and conclude that oral argument is not required. For the reasons that follow, the motion will be denied.
Stein was employed as a sales consultant for Burt-Kuni from September 2002 until his termination in August 2003. He alleges that he was subjected to sexual harassment during his employment by the General Sales Manager, that he was discriminated against in the terms and conditions of his employment on the basis of his gender, and that he was suspended and terminated in retaliation for engaging in protected conduct. In his complaint brought pursuant to Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e-1-2000e-17, and Colorado law, Stein asserts claims for gender discrimination and harassment, retaliation and wrongful discharge, and unpaid compensation under state law.
A motion to compel arbitration under the Federal Arbitration Act is governed by a standard similar to that governing motions for summary judgment. SmartText Corp. v. Interland, Inc., 296 F.Supp.2d 1257, 1262 (D.Kan.2003). Thus, in this case, Defendants must present evidence sufficient to demonstrate an enforceable arbitration agreement. Id. at 1263. If this is shown, the burden shifts to Feldman to raise a genuine issue of material fact as to the making of the agreement, using evidence comparable to that identified in Fed.R.Civ.P. 56. Id. If Feldman demonstrates a genuine issue of material fact, then a trial on the existence of the arbitration agreement is required. 9 U.S.C. § 4; Avedon Eng'g, Inc. v. Seatex, 126 F.3d 1279, 1283 (10th Cir.1997).
Burt-Kuni moves to dismiss Stein's complaint for lack of jurisdiction or, in the alternative, to compel arbitration of his claims pursuant to the Federal Arbitration Act, 9 U.S.C. § 3.1 It emphasizes the general federal policy favoring arbitration of disputes.
The presumption in favor of arbitration disappears, however, "when the parties dispute the existence of a valid arbitration agreement." Dumais v. American Golf Corp., 299 F.3d 1216, 1220 (10th Cir.2002). "The existence of an agreement to arbitrate is a threshold matter which must be established before the FAA can be invoked." Avedon Eng'g, Inc. v. Seatex, 126 F.3d 1279, 1287 (10th Cir.1997). The Tenth Circuit relies on state law principles of contract formation to determine whether parties have agreed to arbitrate an issue or claim. Id.
Colorado applies principles governing contract formation to determine whether parties have agreed to submit a claim to arbitration. Allen v. Pacheco, 71 P.3d 375, 378 (Colo.2003). Thus, I must construe the language of any arbitration agreement to give effect to the parties' intent as determined from the plain language of the agreement. Id. I "will enforce the agreement as written unless there is an ambiguity in the language; courts should neither rewrite the agreement nor limit its effect by a strained construction." Id. As with any agreement, I must give an arbitration agreement effect based on the plain and ordinary meaning of its terms. A term is ambiguous only if a "disputed provision is reasonably susceptible on its face to more than one interpretation." Id. Unlike the general rule that ambiguities in a contract must be construed against the drafter, ambiguities in an arbitration agreement must be construed in favor of arbitration:
If ambiguities are found in the arbitration agreement, we must afford the parties a presumption in favor of arbitration and resolve doubts about the scope of the arbitration clause in favor of arbitration. More specifically, we must compel arbitration unless we can say "with positive assurance" that the arbitration clause is not susceptible of any interpretation that encompasses the subject matter of the dispute. Moreover, a `broad or unrestricted' arbitration clause makes the strong presumption favoring arbitration apply with even greater force.
Id. at 378. See also id. at n. 3.
Burt-Kuni relies on two documents to support its claim that Stein has agreed to resolve his claims in binding arbitration. First, it points to a Hiring Policy statement that Stein signed as part of his application for employment. This Hiring Policy provides:
Binding Arbitration — The Company utilizes a system of alternative dispute resolution that involves binding arbitration, in part, because of the benefits (such as reduced expense and increased efficiency) that private binding arbitration can provide both the Company and employees. Agreeing to binding arbitration is a condition of application and employment with the Company.
Motion to Dismiss, Exhibit A.
The second document is the Employee Handbook. This document contains a paragraph referring to arbitration of employment disputes and generally describing arbitrable claims.2 The paragraph does not state that the arbitration is binding, but it does notify the employee that, by "opting" to arbitrate Title VII claims, he or she would waive a jury trial. Exhibit B, at 16. The Handbook also contains an "Alternative Dispute Resolution Agreement." Exhibit B, at 52-53. This portion of the Handbook permits an employee to opt out of arbitrating Title VII claims and contains a signature block for an employee to acknowledge agreement to the terms set forth. Id. at 53.
Burt-Kuni argues Stein is obligated to arbitrate his claims because he signed the Hiring Policy and acknowledged he was aware of the Handbook.3
Stein opposes arbitration of his claims. In his response, he argues that the arbitration provisions in the Handbook are illusory because Burt-Kuni reserved the right to alter the its terms. The Handbook provides: Exhibit B, at 3, ¶ 3. Similarly, the acknowledgment page of the Handbook states "the handbook is not an express or implied contract of employment" and "the information contained in it can be changed at the sole discretion of management." Id. ().
As stated above, the presumption in favor of arbitration does not apply where the parties dispute the existence of a valid arbitration agreement. Dumais v. American Golf Corp., 299 F.3d at 1220.
Stein relies on the Tenth Circuit's opinion in Dumais, where it held that "an arbitration agreement allowing one party the unfettered right to alter the arbitration agreement's existence or its scope is illusory." In Dumais, the court was confronted with an employee handbook containing conflicting provisions, one of which permitted the employer to alter the arbitration agreement and one of which did not. The Tenth Circuit resolved the ambiguity against the employer, interpreting the handbook to allow the employer to alter the arbitration provision at will. Given this interpretation, it then agreed with other circuits that the power to unilaterally modify the provision rendered the arbitration agreement illusory.
In its reply brief, Burt-Kuni attempts to distinguish Dumais on the ground that it involved conflicting handbook provisions. This was not the basis for the holding that the arbitration agreement was illusory, however. Although it concedes that its Handbook permits it to unilaterally change the terms and conditions, it contends that the Alternative Dispute Resolution Agreement attached to the Handbook contains no such provisions and, inferentially, should not be rejected as illusory. Burt-Kuni maintains that the Handbook and the ADR Agreement are not "one seamless document, with one set of rules governing both." However, the copy of the Handbook provided by Burt-Kuni is not separate from the ADR Agreement; both are included in Exhibit B to the Motion to Dismiss. Moreover, the ADR Agreement, as provided to the court, bears consecutive page numbers to the Handbook: although the acknowledgment page following page 50 is unnumbered, the ADR Agreement begins on page 51.
I agree with Stein that the arbitration provisions in the Handbook, including the ADR Agreement, are illusory and...
To continue reading
Request your trial
-
Peleg v. Neiman Marcus Grp., Inc.
...v. Swift Transp. Corp. (W.D.Tex.2008) 547 F.Supp.2d 699, 703–704, affd. mem. (5th Cir.2009) 319 Fed.Appx. 333; Stein v. Burt–Kuni One, LLC (D.Colo.2005) 396 F.Supp.2d 1211, 1215; Phox v. Atriums Management Co., Inc. (D.Kan.2002) 230 F.Supp.2d 1279, 1282–1283; Snow v. BE & K Const. Co. (D.Me......
-
Levine v. Vitamin Cottage Nat. Food Mkts.
...raise a genuine issue of material fact as to the making of the agreement, using evidence comparable to that identified in Fed.R.Civ.P. 56.” Id. In its Motion, Defendant argues that that the arbitration agreements signed by the opt-in plaintiffs require them to submit their claims to binding......
-
Let's Go Aero, Inc. v. Cequent Performance Prods., Inc.
...have agreed to arbitrate by applying “a standard similar to that governing motions for summary judgment.” Stein v. Burt–Kuni One, LLC, 396 F.Supp.2d 1211, 1213 (D.Colo.2005) (citation omitted); see also Goodwin v. H.M. Brown Assocs., Inc., Case No. 10–CV–01205–PAB–MEH, 2011 WL 820025, at *3......
-
Morris v. Milgard Mfg. Inc.
...DRP. In this respect I agree with plaintiff that the facts of this case parallel those addressed by the court in Stein v. Burt-Kuni One, LLC, 396 F.Supp.2d 1211 (D. Colo. 2005). There, the court found that the description of the company's arbitration policy contained in the defendant's Hiri......