STATE ex rel. JESSE NEWBERRY, Relator,
The HONORABLE STEVE JACKSON, Respondent. STATE ex rel. BECKY LOWRANCE, Relator,
The HONORABLE STEVE JACKSON, Respondent.
ORIGINAL PROCEEDING IN PROHIBITION
Patricia Breckenridge, Judge.
Newberry and Becky Lowrance each seek a permanent writ of
prohibition preventing the circuit court from enforcing its
January 2018 orders sustaining motions to compel arbitration
and stay proceedings filed by Dolgencorp, LLC, d/b/a Dollar
General. Mr. Newberry and Ms. Lowrance assert the circuit
court improperly sustained Dollar General's motions to
compel arbitration because Dollar General failed to meet its
burden to show consideration supported either the employee
arbitration agreements or the provisions delegating threshold
issues of arbitrability to the arbitrator. This Court issued
a preliminary writ in each case.
Court holds the arbitration agreement in each case includes a
delegation clause providing that the arbitrator decides
issues of formation - namely, whether there was consideration
for the arbitration agreements. Because Mr. Newberry and Ms.
Lowrance do not raise challenges specific to the delegation
provisions, the circuit court properly sustained Dollar
General's motions to compel arbitration, stayed the
cases, and ordered the parties to arbitrate the question of
whether consideration existed. The preliminary writs are
and Procedural Background
August 2014, Dollar General began prompting its employees
each time they logged into their computers to electronically
sign a document titled "Dollar General Employee
Arbitration Agreement." The agreement requires Dollar
General and its employees to settle "Covered
Claims," including discrimination and retaliation, in
arbitration. It indicates all arbitrations are to be
conducted in accordance with the American Arbitration
Association ("AAA") Employment Arbitration Rules,
"except as superseded by the terms of this
[a]greement." As incorporated, AAA Employment
Arbitration Rule 6.a provides arbitrators "shall have
the power to rule on [their] own jurisdiction, including any
objections with respect to the existence, scope or validity
of the arbitration agreement." The agreement itself,
however, supersedes the AAA rule by stating claims regarding
the "scope or enforceability" of the agreement are
not considered arbitrable "Covered Claims."
agreement further contains language permitting Dollar General
employees to "opt out" of the agreement, provided
the employees complete and submit an "Arbitration Opt
Out Form" within 30 days of accessing the agreement. On
the other hand, the agreement advises that if employees take
no action within 30 days of the initial notice, the agreement
automatically goes into effect. Ms. Lowrance, an at-will
employee of nine years at the time, and Mr. Newberry, an
at-will employee of 15 years at the time, testified they
asked the district manager about the consequences of failing
to sign the agreement. The manager informed them they would
likely be discharged if they did not sign. Fearing loss of
employment, Mr. Newberry and Ms. Lowrance electronically
signed their agreements in August 2014. No Dollar General
representatives signed the agreements.
Newberry was discharged in June 2016, and Ms. Lowrance was
discharged in October 2016. Both timely filed charges of
discrimination with the Missouri Human Rights Commission and
received notices of right to sue. In July 2017, Mr. Newberry
timely filed a petition against Dollar General asserting sex,
age, and disability discrimination, along with retaliation
for voicing his opposition to the discrimination, against
Dolgencorp and the supervisors who oversaw the discrimination
and retaliation. In November 2017, Ms. Lowrance timely filed
a separate petition raising the same claims against the same
General filed motions to compel Mr. Newberry and Ms. Lowrance
to submit their claims to arbitration and stay further
proceedings. In their suggestions opposing Dollar
General's motions to compel, Mr. Newberry and Ms.
Lowrance argued there was no consideration for the
arbitration agreements. They further claimed to
"specifically challenge" the delegation
provisions by asserting they are unconscionable and there is
no "clear and unmistakable evidence" of the
parties' intent to incorporate them. During the hearing
about Dollar General's motions to compel arbitration, Mr.
Newberry and Ms. Lowrance testified they signed the
agreements with knowledge they would be bound to arbitrate
covered claims, read the documents before they signed them,
read the "opt out" provisions, but did not
necessarily "understand" the documents.
January 2018, the circuit court sustained Dollar
General's motions to compel arbitration and stay
proceedings, finding "no reason the principles of
[State ex rel. Pinkerton v. Fahnestock, 531 S.W.3d
36 (Mo. banc 2016), ] regarding a 'delegation clause'
should not apply to a case with individuals the same as a
'commercial case.'" The court alternatively held
the arbitration agreements were valid, executed by the
parties, not unconscionable on their face, and supported by
consideration in the form of mutuality of enforcement and
continued at-will employment.
Newberry and Ms. Lowrance filed petitions for a writ of
mandamus or prohibition in the court of appeals, which denied
their writ petitions. Mr. Newberry and Ms. Lowrance
subsequently petitioned this Court for a writ of mandamus or
prohibition compelling the circuit court to rescind its
orders for arbitration and prohibiting the circuit court from
requiring them to submit their claims to arbitration. This
Court issued its preliminary writ of prohibition in each case
in May 2018. Mo. Const. art. V, sec. 4.1.
Court has authority to "issue and determine original
remedial writs." Id. Writs of mandamus or
prohibition are proper methods to dispute whether a motion to
compel arbitration was improperly sustained. State ex
rel. Hewitt v. Kerr, 461 S.W.3d 798, 805 (Mo. banc
2015); see also State ex rel. Union Pac. R.R. Co. v.
David, 331 S.W.3d 666, 666 (Mo. banc 2011). The Court
reviews de novo the legal issue of whether a valid,
enforceable delegation clause exists within an arbitration
agreement. See Union Pac., 331 S.W.3d at 667.
Specific Challenge to Delegation Provisions
Newberry and Ms. Lowrance each seek a permanent writ of
prohibition from this Court requiring the circuit court to
rescind its January 2018 orders compelling arbitration and
staying the court proceedings. They assert Dollar General
failed to show consideration supported their agreements to
arbitrate, including the severed delegation clauses.
Specifically, they assert consideration is required for a
delegation clause to come into effect as a contract. They
claim, when a defense of lack of consideration is raised, the
party seeking to ...