Kelly v. K12 Inc.

• Court: Court of Appeals for the Tenth Circuit
• Decided: May 10, 2021
• Docket: 20-7046
• Status: Unpublished

Opinion

FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit

FOR THE TENTH CIRCUIT May 10, 2021 _________________________________ Christopher M. Wolpert Clerk of Court EDDIE M. KELLY,

Plaintiff - Appellant,

v. No. 20-7046 (D.C. No. 6:17-CV-00453-RAW) K12 INC.; OKLAHOMA VIRTUAL (E.D. Okla.) CHARTER ACADEMY; AUDRA PLUMMER; NICOLE ELLISON,

Defendants - Appellees. _________________________________

ORDER AND JUDGMENT* _________________________________

Before MORITZ, BALDOCK, and KELLY, Circuit Judges. _________________________________

Plaintiff Eddie M. Kelly sued her former employer and others for

discrimination, and the district court granted her employer’s motion to compel

arbitration. The arbitrator granted summary judgment against Kelly, and the district

* After examining the briefs and appellate record, this panel has determined unanimously to honor the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. court confirmed the award and dismissed Kelly’s claims against all the defendants.

Exercising jurisdiction under 28 U.S.C. § 1291,1 we affirm.

I. BACKGROUND

Kelly was employed by K12 Inc. as a reading teacher at Oklahoma Virtual

Charter Academy (OVCA),2 a public charter school. K12 provided services to

OVCA, including providing teachers like Kelly. Kelly’s employment with K12 was

subject to an arbitration agreement that required arbitration of all disputes “arising

from or relating to [Kelly’s] employment or the termination of [her] employment.”

R. at 42. The agreement further provided it was governed by the Federal Arbitration

Act (FAA) and Virginia law.

K12 terminated Kelly’s employment in March 2016, and she filed a lawsuit

alleging civil rights violations against K12, OVCA, and two of Kelly’s supervisors,

Audra Plummer and Nicole Ellison. The district court granted K12’s motion to

compel arbitration, and Kelly proceeded to arbitration only against K12. The

arbitrator granted summary judgment in K12’s favor and dismissed Kelly’s claims

with prejudice.

1 We issued an order instructing Kelly and Defendant Oklahoma Skynet (d/b/a Oklahoma Virtual Charter Academy) to address whether the district court’s order was final as to all parties and claims. See 28 U.S.C. § 1291 (granting courts of appeal jurisdiction “of appeals from all final decisions”). We conclude that the order was final, and we therefore have jurisdiction to address this appeal. 2 OVCA is a trade name used by Oklahoma Skynet, which answered Kelly’s claims against OVCA. Because the district court used the trade name to refer to this defendant, we will do the same. 2 K12 then moved the district court to confirm the award and dismiss Kelly’s

lawsuit. Kelly opposed the motion, and sought to amend her claims against OVCA,

Plummer, and Ellison. Plummer and Ellison moved to dismiss Kelly’s claims against

them on the merits and also argued the claims against them were foreclosed by the

arbitrator’s decision.

The district court found no grounds to vacate, modify, or correct the

arbitrator’s decision, and therefore confirmed the arbitration award. The district

court also held the arbitration agreement applied to the claims against the remaining

defendants and dismissed them as well. This appeal followed.

II. DISCUSSION

A. Arbitration Award

“Our review of the [arbitrator’s] decision under the FAA is strictly limited;

this highly deferential standard has been described as among the narrowest known to

the law.” Bowen v. Amoco Pipeline Co., 254 F.3d 925, 932 (10th Cir. 2001) (internal

quotation marks omitted). A court may grant a motion to vacate an arbitration award

only under very limited circumstances, including violation of public policy. Denver

& Rio Grande W. R.R. v. Union Pac. R.R., 119 F.3d 847, 849 (10th Cir. 1997).

Kelly asserts the district court erred in confirming the arbitration award for

two reasons. First, she contends the award violated public policy based on her

allegation that K12 uses uncertified staff, thus impacting special education students.

It is unclear, however, how this allegation connects to the arbitrator’s grant of

summary judgment. The public policy exception applies “where the terms of the

3 arbitration contract . . . violate public policy or where the award requires parties

undertake some action in violation of public policy.” Bowles Fin. Group, Inc. v.

Stifel, Nicolaus & Co., 22 F.3d 1010, 1012 n. 1 (10th Cir. 1994). Kelly makes no

such allegation here and therefore has not shown that the public policy exception

applies here.

Second, Kelly claims there was no valid contract because after the arbitration

she found a second version of the arbitration agreement, suggesting that K12 secretly

attempted to alter the agreement. But this alleged second version was never

presented to the district court and is not part of the record on appeal. Although Kelly

has attempted to supplement the record pursuant to Fed. App. R. 10(e), that rule

“does not grant a license to build a new record” by supplementing the record on

appeal with documents that were not before the district court. United States v.

Kennedy, 225 F.3d 1187, 1191 (10th Cir. 2000) (internal quotations marks omitted).

The district court did not err in finding there was a valid arbitration agreement.

In sum, we hold the district court correctly upheld the arbitrator’s grant of

summary judgment against Kelly.

B. Nonsignatories to Arbitration Agreement

A nonsignatory to an arbitration agreement can enforce an arbitration clause

under the doctrine of equitable estoppel. See Thomson-CSF, S.A. v. Am. Arbitration

Ass’n, 64 F.3d 773, 778 (2d Cir. 1995). Under this theory, a signatory may be

required to arbitrate with a nonsignatory when the signatory alleges substantially

interdependent and concerted misconduct by both the nonsignatory and the signatory

4 to the contract. See, e.g., MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 947-48

(11th Cir. 1999). Here, Kelly’s claims against OVCA, Plummer, and Ellison were

not merely interdependent, but based on the exact same operative facts as her claims

against K12. It was therefore appropriate to require Kelly to arbitrate with the

non-signatories to the arbitration agreement, and we affirm their dismissal on that

ground.

III. CONCLUSION

For the foregoing reasons, we affirm the judgment of the district court. We

deny Kelly’s motion to supplement the record.

Entered for the Court

Paul J. Kelly, Jr. Circuit Judge