Vest v. Cracker Barrel Old Country Store, Inc.

• Decision Date: 21 August 2018
• Docket Number: Case No. 18-00262-CV-W-ODS
• Citation: 371 F.Supp.3d 593
• Parties: Cynthia VEST, o/b/o herself and all others similarly situated, Plaintiff, v. CRACKER BARREL OLD COUNTRY STORE, INC., Defendant.
• Court: U.S. District Court — Western District of Missouri

371 F.Supp.3d 593

Cynthia VEST, o/b/o herself and all others similarly situated, Plaintiff,

v.CRACKER BARREL OLD COUNTRY STORE, INC., Defendant.

Case No. 18-00262-CV-W-ODS

United States District Court, W.D. Missouri, Western Division.

Signed August 21, 2018

Eric L. Dirks, John F. Doyle, Williams Dirks Dameron LLC, Gina Chiala, Slough Connealy Irwin & Madden, LLC, Kansas City, MO, Michael A. Hodgson, The Hodgson Law Firm LLC, Lee's Summit, MO, for Plaintiff.

James M. Coleman, Constangy, Brooks, Smith & Prophete LLP, Fairfax, VA, Heather M. Lake, Constangy, Brooks, Smith & Prophete LLP, Kansas City, MO, for Defendant.

ORDER (1) GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION, (2) COMPELLING ARBITRATION, AND (3) STAYING CASE PENDING COMPLETION OF ARBITRATION

ORTRIE D. SMITH, SENIOR JUDGE

Pending is Defendant's motion to compel arbitration. Doc. # 7. For the following reasons, the Court grants the motion, compels arbitration, and stays the matter pending completion of arbitration.

I. BACKGROUND¹

Defendant employed Plaintiff as a server at its Independence, Missouri location from March 31, 2014, to July 17, 2017. Plaintiff's petition alleges Defendant violated the Fair Labor Standards Act ("FLSA") and Missouri's Minimum Wage Law ("MMWL") by failing to pay employees minimum wage. Plaintiff seeks certification of an FLSA collective action, and two class actions pursuant to Missouri Rule of Civil Procedure 52.08. Plaintiff also brings a claim for unjust enrichment/quantum meruit. After removing the matter from the Circuit Court of Jackson County, Missouri (Doc. # 1), Defendant filed its motion to compel arbitration.²

Defendant moves to compel arbitration based on an Alternative Dispute Resolution Agreement ("arbitration agreement") allegedly agreed to by Plaintiff on July 9, 2015. Defendant maintains an online training system, Cracker Barrel University, in which one module entitled "ADR Sign-off" prompts employees to review and accept an arbitration agreement. After accessing the ADR module with a unique identification number and password, the employee is presented with Defendant's arbitration agreement. After an opportunity to read and review the arbitration agreement, the employee is presented with a prompt stating: "[p]lease close this document and mark ‘complete’ to signify you have read, understood and will comply with the agreement." Upon closing the document, the employee is presented with a screen prompting the employee to click "Mark Complete." After an employee does so, Defendant's system records the date and time the employee completed the module.

The arbitration agreement is typical of those between an employee and employer. Doc. # 8-2. The opening preamble states the parties exchange mutual promises as contained in the agreement, identifies an agreement to use informal conciliation and confidential binding arbitration, and provides the agreement is governed by the Federal Arbitration Act. The agreement lists the types of disputes covered, and identifies disputes not covered, such as complaints to administrative agencies. Informal conciliation procedures are detailed, and arbitration is identified as the exclusive forum to resolve disputes not settled in conciliation. The agreement identifies rules governing the arbitration proceeding, as well as the timing and location of an arbitration hearing. The parties can elect to have legal representation, and states Defendant will forgo legal counsel if the employee does not seek counsel. The agreement details applicable limits on discovery processes, and the use of witnesses and exhibits at the arbitration hearing. The agreement permits an arbiter to award relief to either party to the extent the party is entitled to such relief by law. As discussed in detail below, the agreement provides fees and costs associated with judicial actions. Finally, the agreement waives the ability to bring class and collective actions in court or arbitration, and waives the right to a jury trial.

Here, Defendant's records indicate Plaintiff completed the ADR Sign-off module at 9:49 p.m. on July 9, 2015. Defendant cites Plaintiff's completion of the module and agreement to arbitrate claims as the basis for its pending motion. Plaintiff states she was directed to complete many different trainings in Defendant's online system, and she understood all materials in the system to be informative and "not anything I had a choice in." Doc. # 25-1, ¶ 4. Additionally, Plaintiff asserts she was not asked to consent or agree to an agreement or contract in Defendant's online system, and did not consent or agree to any agreement or contract in the system. Defendant disagrees, arguing Plaintiff entered a valid contract to arbitrate claims asserted in this matter, and seeks to compel her to arbitrate her claims.

II. DISCUSSION

Under the Federal Arbitration Act ("FAA"), a court's role is "limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute." Pro Tech Indus. v. URS Corp. , 377 F.3d 868, 871 (8th Cir. 2004) ; see also Int'l Bhd. of Elec. Workers v. Hope Elec. Corp. , 380 F.3d 1084, 1098-99 (8th Cir. 2004). Absent an enforceable agreement to arbitrate a particular dispute, neither party can compel arbitration of that dispute. See Bank of Am., N.A. v. UMB Fin. Servs., Inc. , 618 F.3d 906, 911 (8th Cir. 2010) (quoting Berkley v. Dillard's Inc. , 450 F.3d 775, 777 (8th Cir. 2006) ); Granite Rock Co. v. Int'l Bhd. of Teamsters , 561 U.S. 287, 299-300, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010). The FAA establishes "a liberal federal policy favoring arbitration agreements." Epic Sys. Corp. v. Lewis , ––– U.S. ––––, 138 S.Ct. 1612, 1621, 200 L.Ed.2d 889 (2018) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) ).

State law is applied to determine if a binding agreement exists. Arthur Andersen LLP v. Carlisle , 556 U.S. 624, 629-31, 129 S.Ct. 1896, 173 L.Ed.2d 832 (2009) ; Bank of Am. , 618 F.3d at 911. Under Missouri law, the party seeking to compel arbitration bears the burden to prove a valid and enforceable arbitration agreement exists. LoRoad, LLC v. Glob. Expedition Vehicles, LLC , 787 F.3d 923, 927 (8th Cir. 2015) (citing Baier v. Darden Rests. , 420 S.W.3d 733, 737 (Mo. Ct. App. 2014) ). A valid contract under Missouri law requires offer, acceptance, and bargained for consideration. Baker v. Bristol Care, Inc. , 450 S.W.3d 770, 774 (Mo. banc 2014).

A. Contract Formation

In April 2017, United States Magistrate Judge John Bodenhausen reviewed the exact arbitration agreement at issue, and granted Defendant's motion to compel arbitration. Franklin v. Cracker Barrel Old Country Store , No. 17 CV 00289 JMB, 2017 WL 7691757 (E.D. Mo. Apr. 12, 2017).³ Plaintiff argues that opinion is not persuasive authority because Franklin did not make the same arguments asserted by Plaintiff. However, Plaintiff's arguments related to offer and acceptance elements were thoroughly discussed and rejected in Franklin . See , id. , at *3-4 (finding the arbitration agreement's terms "make it clear" Defendant was manifesting a willingness to enter into the agreement, and finding it "equally clear" an employee would understand the agreement to be binding upon acceptance).

The Court agrees with the analysis of offer and acceptance in Franklin. The arbitration agreement was presented in Defendant's online training system in a module specifically entitled "ADR Sign-Off." In multiple ways, the terms of the agreement indicate Defendant's desire to enter an agreement. The document is titled "Cracker Barrel Alternative Dispute Resolution Agreement." The term "I agree" appears no fewer than seven times in the document, and a box at the end of the document instructed Plaintiff to "close this document and mark ‘complete’ to signify you have read, understood and will comply with the agreement." And Defendant's online training system indicates Plaintiff marked "complete" after opening the module, thereby indicating her acceptance. Moreover, the final page of the document is signed by Defendant's representative below the word "AGREED."

Plaintiff maintains the noncontractual and nonbinding manner in which the arbitration agreement was presented should override the Franklin analysis. Plaintiff seems to suggest an employee must proceed through a variety of training modules and policies, including an employee handbook, before finally arriving at the ADR module. On the contrary, Defendant states there are several modules, but links to each module appears on the "Welcome" main menu accessed immediately after an employee logs into the system. The evidence does not show Plaintiff must methodically click through the entirety, or even a portion, of Defendant's handbook and other training materials.⁴

Plaintiff further argues a contract was not formed because there is no way to verify she read the agreement or understood marking complete would signal her agreement to arbitrate, and the arbitration agreement could not be signed electronically or by hand. "Under Missouri law, ‘a person who has an opportunity to read a document but signs it without doing so is held to have knowledge of the document's contents, absent a showing of fraud.’ " Franklin , 2017 WL 7691757, at *6 (quoting Midwest Printing, Inc. v. AM Int'l, Inc. , 108 F.3d 168, 170 (8th Cir. 1997) ). Here, Plaintiff is held to have knowledge of the arbitration agreement's contents because she was given the opportunity to review the agreement, and there is no suggestion of fraud. That Plaintiff "completed" English and Spanish language versions, or spent zero hours and zero minutes in the module,⁵ is not legally significant given that she was afforded the opportunity to review the arbitration agreement before marking it complete. Relatedly, Plaintiff's inability to physically or electronically sign the document does not disclaim contract formation. See Frank...