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Frazier v. Papa John's USA, Inc.

United States District Court, E.D. Missouri, Eastern Division

September 17, 2019

MICHAEL L. FRAZIER, JR., Plaintiff,
v.
PAPA JOHN'S USA, INC. and PAPA JOHN'S INTERNATIONAL, INC. Defendants.

          MEMORANDUM AND ORDER

          CATHERINE D. PERRY, UNITED STATES DISTRICT JUDGE

         Plaintiff Michael Frazier is a former employee of Defendant Papa John's USA, Inc. (PJUSA), a wholly-owned subsidiary of Papa John's International, Inc. Frazier brings this suit alleging that PJUSA managers racially discriminated against him by repeatedly denying him promotions, paying him less than other similarly-situated employees, denying him vacation pay, and retaliating against him for raising complaints about an employee's job performance.

         On May 16, 2017, Frazier electronically signed an arbitration agreement in which he agreed to submit any claims relating to his employment with PJUSA to binding arbitration. Pending before the Court is PJUSA's motion to enforce the arbitration agreement, compel the parties to arbitration, and dismiss Frazier's claims, or in the alternative, stay proceedings pending completion of the arbitration. Frazier opposes the motion, asserting that the agreement is contractually invalid under Missouri law. After careful consideration, I conclude that the determination of the validity of the arbitration agreement has been delegated to an arbitrator, and as all of Frazier's claims in this case are encompassed by the agreement, I will grant PJUSA's motion to compel arbitration and stay the case.

         Background

         PJUSA owns and operates several Papa John's stores in the St. Louis area. PJUSA employed Frazier during three different periods: 1) March 22, 2006 through December 30, 2006; 2) April 3, 2015 through November 16, 2015; and 3) May 16, 2017 through November 14, 2017. Frazier held the position of Shift Manager during each period of employment. On May 16, 2017, the day he began his third stint of employment, Frazier electronically signed an “E-Signature Disclosures & Consent” agreement (Consent Form) which stated that he agreed to “electronically access, receive, review, sign, and authenticate” PJUSA materials. ECF 12-1. On May 16, 2017, Frazier also electronically signed the Arbitration Agreement at issue. ECF 10-1 at pg. 5.[1] The Agreement states, in part:

The Parties agree to resolve any and all claims, disputes, or controversies arising out of or relating to your employment with Papa Johns (“Covered Claims”), exclusively by final and binding arbitration to be administered by a neutral dispute resolution agency agreed upon by the Parties at the time of the dispute.

Id. at 1. The agreement specifies that Covered Claims includes “claims for . . . discrimination or harassment on the basis of race . . . unlawful retaliation . . . and any violation of any federal, state, or other governmental law, statute, regulation, or ordinance.” Id. at 2. Additionally, the agreement contains a delegation provision which states: “The Arbitrator shall have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability, or formation of this Agreement, including any contention that this Agreement is void or unenforceable.” Id. at 3.

         Legal Standards

         The Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 et seq., establishes “a liberal federal policy favoring arbitration.” Torres v. Simpatico, Inc., 781 F.3d 963, 968 (8th Cir. 2015) (quoting AT&T Mobility, LLC v. Concepcion, 563 U.S. 333, 339 (2011)). “[T]he FAA limits a district court's initial role in any challenge to an arbitration agreement to deciding whether the ‘making of the agreement for arbitration or the failure to comply therewith' is at issue.” Medcam, Inc. v. MCMC, 414 F.3d 972, 974 (8th Cir. 2005) (quoting 9 U.S.C. § 4). In other words, when ruling on a motion to compel arbitration, the Court's analysis is limited to “1) whether the agreement for arbitration was validly made and 2) whether the arbitration agreement applies to the dispute at hand, i.e., whether the dispute falls within the scope of the arbitration agreement.” Id.; see also Newspaper Guild of St. Louis, Local 36047, TNG-CWA v. St. Louis Post Dispatch, LLC, 641 F.3d 263, 266 (8th Cir. 2011).

         Missouri contract law applies “to determine whether the parties have entered a valid agreement to arbitrate.” Baker v. Bristol Care, Inc., 450 S.W.3d 770, 774 (Mo. 2014) (citing State ex rel. Vincent v. Schneider, 194 S.W.3d 853, 856 (Mo. banc 2006)). “Missouri law requires 1) an offer, 2) acceptance, and 3) consideration to form a valid and enforceable contract.” Shockley v. PrimeLending, 929 F.3d 1012, 1017 (8th Cir. 2019). The party seeking to compel arbitration bears the burden of proving the arbitration agreement is valid and enforceable. Whitworth v. McBride & Son Homes, Inc., 344 S.W.3d 730, 737 (Mo.Ct.App. W.D. 2011).

         Arbitration agreements often contain delegation provisions like the disputed provision here. A delegation provision is “an agreement to arbitrate threshold issues concerning the arbitration agreement.” Shockley, 929 F.3d. at 1018 (citing Soars v. Easter Seals Midwest, 563 S.W.3d 111, 114 (Mo. banc 2018)). Delegation provisions commit “gateway questions of arbitrability” to the deliberation of an arbitrator. Id. (citing Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 68 (2010)). “These gateway questions may include determining the validity of the arbitration agreement itself.” Id. The party seeking to compel arbitration must prove there is “clear and unmistakable evidence” that the parties intend to arbitrate questions of arbitrability. Soars, 563 S.W.3d at 114 (citing Rent-A-Ctr., 561 U.S. at 69 n.1 (2010)). On the other hand, a party attacking the validity of a delegation provision must specifically challenge the delegation provision by name, separate and apart from a challenge to the validity of the entire arbitration agreement. Shockley, 929 F.3d at 1018.

         Like an arbitration agreement, “a delegation provision giving an arbitrator the power to decide threshold issues of arbitrability ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'” Id. (citing 9 U.S.C. § 2). In other words, a delegation provision is to be analyzed as “simply an additional, antecedent agreement that operates like any other contract, ” and must be independently supported by the requisite contractual elements-“offer, acceptance, and bargained-for consideration.” Shockley, 929 F.3d at 1018. Because this initial question of arbitrability is in dispute, Shockley sets forth the inquiry I must make:

If we find that the delegation provision is a valid contract under Missouri law-having offer, acceptance, and bargained-for consideration-then our inquiry is at an end, and all other questions must go to an arbitrator. Conversely, if the delegation provision is not a valid contract because it lacks any of the three requisite ...

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