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Morgan v. Ferrellgas, Inc.

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

January 13, 2020




         Before the Court is Defendants' Motion to Dismiss or, in the Alternative, Stay This Case and Compel Arbitration. (Doc. #14). For the reasons stated below, Defendants' motion is GRANTED in and DENIED in part.

         I. BACKGROUND

         In August 2018, Defendants Pamela Brueckmann and James Ferrell recruited Plaintiff Jacqueline Morgan to join Defendant Ferrellgas, Inc. (“Ferrellgas”) as a member of its executive team. Ferrellgas is a nationwide propane gas supplier. At all times relevant to this case, Ferrell was president, interim CEO, and chairman of Ferrellgas' board of directors, and Brueckmann was a member of Ferrellgas' board of directors. After executing an Employment Agreement on September 27, 2018, Morgan began work as the Chief Marketing and Sales Officer at Ferrellgas. She remained in that role until her termination in January 2019. Morgan submitted her claim of gender-based discrimination to the Missouri Commission on Human Rights (“MCHR”) and received a right-to-sue letter on September 16, 2019.

         On September 26, 2019, Morgan filed a petition[1] in the Circuit Court of Clay County, Missouri, against Ferrellgas, Ferrell, and Brueckmann (collectively, “Defendants”). Defendants were served on October 14, 2019, and subsequently removed the case to federal court pursuant to diversity jurisdiction on November 13, 2019. Defendants filed a motion to dismiss the case or, in the alternative, stay the case and compel arbitration. Morgan's first amended complaint raises six causes of action: (1) Count I: Gender Discrimination under the Missouri Human Rights Act (“MHRA”); (2) Count II: Retaliation (MHRA); (3) Count III: Fraudulent Misrepresentation; (4) Count IV: Fraudulent Misrepresentation by Omission; (5) Count V: Negligent Misrepresentation; and (6) Count VII: Negligence Misrepresentation by Omission.

         Morgan alleges Ferrellgas, its agents, and its employees-including Ferrell and Brueckmann-misrepresented to her the company's ongoing, internal power struggle during the recruitment process. Morgan claims those misrepresentations and omissions misled her and induced her to join Ferrellgas in the midst of a hostile takeover by members of its own executive team. Defendants argue that Morgan's claims arise from her employment with Ferrellgas and are subject to a binding arbitration provision contained in an Employment Agreement signed by Morgan. The operative provision of that Employment Agreement reads as follows:

Any dispute (whether the dispute sounds in contract, tort, or otherwise) arising out of or relating to this Agreement or its breach, or the employment relationship of the parties, except injunctive relief to preserve the status quo, shall be fully and finally settled by binding arbitration conducted expeditiously in accordance with this paragraph, the United States Arbitration Act (to the exclusion of any provisions of state law inconsistent with the Act or which would produce a different result), and the Center for Public Resources Rules for Non-Administrative Business Disputes (1989) by three independent and impartial arbitrators.

(Doc. #15-3, p. 2). Below this arbitration language is a written statement acknowledging that the Employment Agreement “contains a binding arbitration provision which may be enforced by the parties.” (Doc. #15-3, p. 2). Both Morgan and a Ferrellgas representative signed the arbitration-provision acknowledgement on September 27, 2018. Morgan does not dispute that she signed the Employment Agreement but contests its validity. Morgan additionally argues that Brueckmann and Ferrell are not signatories to the Employment Agreement and that her individual claims against them are not subject to arbitration.


         Section 2 of the Federal Arbitration Act (“FAA”) “provides that ‘[a] written provision in any . . . contract . . . to settle by arbitration a controversy thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'” Owen v. Bristol Care, Inc., 702 F.3d 1050, 1052 (8th Cir. 2013) (quoting 9 U.S.C. § 2). “The Supreme Court has stated repeatedly that this provision establishes a ‘liberal federal policy favoring arbitration agreements.'” Id. (quoting CompuCredit Corp. v. Greenwood, 565 U.S. 95, 98 (2012)). Under Section 3 of the FAA, “a party may apply to a federal court for a stay of the trial of an action ‘upon any issue referable to arbitration under an agreement in writing for such arbitration.'” Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 68 (2010) (quoting 9 U.S.C. § 3). “Under § 4, a party ‘aggrieved' by the failure of another party ‘to arbitrate under a written agreement for arbitration' may petition a federal court ‘for an order directing that such arbitration proceed in the manner provided for in such agreement.'” Id. (quoting 9 U.S.C. § 4). “The FAA establishes that as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Lyster v. Ryan's Family Steak Houses, Inc., 239 F.3d 943, 945 (8th Cir. 2001) (citations and internal quotation marks omitted).

         “When presented with a motion to compel arbitration, we ask only (1) whether there is a valid arbitration agreement and (2) whether the particular dispute falls within the terms of that agreement.” McFadden v. Van Chevrolet-Cadillac, LLC, No. 18-00395-CV-W-BP, 2018 WL 3715756, at *1 (W.D. Mo. Aug. 3, 2018) (citation omitted). As a federal district court sitting in Missouri, this Court must analyze an arbitration agreement based on Missouri state-law principles. Robinson v. EOR-ARK, LLC, 841 F.3d 781, 784 (8th Cir. 2016). “The elements required to form a valid contract in Missouri are offer, acceptance, and bargained for consideration.” Baier v. Darden Restaurants, 420 S.W.3d 733, 737 (Mo. App. W.D. 2014) (citation and internal quotation marks omitted). “The party seeking to compel arbitration bears the burden of proving the existence of a valid and enforceable arbitration agreement.” Jackson v. Higher Educ. Loan Auth. of Missouri, 497 S.W.3d 283, 287 (Mo. App. E.D. 2016) (citing Jimenez v. Cintas Corp., 475 S.W.3d 679, 683 (Mo. App. E.D. 2015)). “Generally, there is a presumption of arbitrability in the sense that an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” Lyster, 239 F.3d at 945 (internal quotation marks and citations omitted).


         A. Existence of a Valid Arbitration Agreement Against Defendant Ferrellgas

         The parties dispute the existence of a valid arbitration agreement. Defendants argue the arbitration provision at issue is a valid bilateral contract supported by consideration. Defendants contend that the parties exchanged mutual promises to arbitrate any disputes arising out of the Employment Agreement or the employment relationship between the parties, and that neither party retained the right to unilaterally modify the agreement. Morgan argues language included in the arbitration provision stating that any resulting arbitration will be conducted in accordance with the Center for Public Resources (“CPR”) Rules for Non-Administrative Business Disputes gives Ferrellgas the right to unilaterally modify the arbitration agreement, ...

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