Lynn v. McKinley Ground Transport, L.L.C.

923 N.E.2d 638, 185 Ohio App. 3d 146
CourtOhio Court of Appeals
DecidedNovember 16, 2009
DocketNo. 2009CA00029
StatusPublished
Cited by1 cases

This text of 923 N.E.2d 638 (Lynn v. McKinley Ground Transport, L.L.C.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lynn v. McKinley Ground Transport, L.L.C., 923 N.E.2d 638, 185 Ohio App. 3d 146 (Ohio Ct. App. 2009).

Opinion

Farmer, Presiding Judge.

{¶ 1} On November 20, 2008, appellee, Steven Lynn, filed a complaint against his previous employer, appellant, McKinley Ground Transport, L.L.C. Appellee alleged a violation of the whistleblower statute, wrongful discharge, interference with a business/contractual relationship, intentional infliction of emotional distress, and defamation.

{¶2} On December 8, 2008, appellant filed a motion to stay proceedings pending arbitration pursuant to a dispute-resolution/arbitration agreement signed by appellee on November 29, 2007. Appellee responded, arguing that the agreement was unconscionable and therefore unenforceable. A hearing before a magistrate was held on January 22, 2009. By nunc pro tunc judgment entry filed February 11, 2009, the trial court, without the benefit of a magistrate’s decision, denied the motion for stay, finding that the agreement was unconscionable and unenforceable.

[148]*148{¶ 3} Appellant filed an appeal, and this matter is now before this court for consideration. The assignment of error is as follows:

{¶ 4} “The trial court erred as a matter of law in denying appellant’s motion to stay proceedings pending arbitration.”

{¶ 5} Appellant claims that the trial court erred in denying its motion for stay after finding that the arbitration agreement of appellee’s employment contract was unconscionable and unenforceable. We agree.

{¶ 6} Appellee argued that the subject arbitration agreement was unconscionable. Whether an arbitration, clause is unconscionable is a question of law. Ins. Co. of N. Am. v. Automatic Sprinkler Corp. (1981), 67 Ohio St.2d 91, 21 O.O.3d 58, 423 N.E.2d 151. Questions of law are reviewed de novo. Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St.3d 352, 2008-Ohio-938, 884 N.E.2d 12.

{¶ 7} The arbitration agreement at issue states the following:

{If 8} “Agreement to the terms stated in this policy and execution of this form is a condition of employment with McKinley Ground Services LLC:
{¶ 9} “In the event that a dispute or claim arises that:
{¶ 10} “concerns any aspect, part, or portion of Employee’s employment with McKinley Ground Services LLC, including, but not limited to disputes or claims of discrimination on the basis of sex, race, age, national origin, marital status, religion, or disability, including, specifically, but without limiting the generality of the foregoing, any claims under the Age Discrimination in Employment Act, as amended (the ‘ADEA’), Title VII of the Civil Rights Act of 1964, as amended, the Americans With Disabilities Act, or any state laws, rules or regulations regarding the same, any claim arising from Employee’s employment with McKinley Ground Services LLC or the performance of his or her duties with McKinley Ground Services LLC, any and all claims of wrongful or unjust discharge, sexual harassment, retaliatory discharge or breach of any contract or promise express or implied, any and all claims based on contract, tort or otherwise, and any or all claims under or relating to any and all employment compensation, employee benefits, employee severance, or employee incentive bonus plans and arrangements or
{¶ 11} “arises under the terms of McKinley Ground Services LLC’s employee handbook or other policy or procedure issued and utilized by McKinley Ground Services LLC
{¶ 12} “then Employee and McKinley Ground Services LLC agree to submit such dispute or claim to binding arbitration through and pursuant to the rules of the American Arbitration Association (AAA).!]! * *
[149]*149{¶ 13} “Employees knowingly, voluntarily and willingly agree to submit any claim or dispute described above (or any other direct or indirect claim involving or arising from Employee’s employment with McKinley Ground Services LLC) to arbitration and hereby agrees to waive and forgo and (sic) right or entitlement that Employee may have had to submit such claims to a court of law (including the possible right to have a jury hear such claims or disputes) or other tribunal or agency.”

{¶ 14} Appellee signed this agreement on November 29, 2007.

{¶ 15} The complaint in this case alleged a violation of the whistleblower statute (R.C. 4113.52) (Count 1), wrongful discharge (Count 2), interference with a business/contractual relationship (Count 3), intentional infliction of emotional distress (Count 4), and defamation (Count 5). Appellee was terminated on May 26, 2008. The actions giving rise to Counts 3 and 5 occurred between May 27 and 28, 2008, a time period that was after appellee’s employment. We therefore conclude that the allegations made in Counts 3 and 5 are not subject to the arbitration clause of the employment contract. Thus, the trial court did not err in retaining jurisdiction over Counts 3 and 5.

{¶ 16} In reviewing Count 4 vis-a-vis the statement of facts, we find that the allegations therein are relative to emotional distress during appellee’s employment. During the hearing, appellee argued that Count 4 should be resolved with Counts 3 and 5. However, this claim rests upon the issue of the conscionability of the arbitration agreement.

{¶ 17} Unconscionability rests on a two-prong analysis: substantive and procedural. Eagle v. Fred Martin Motor Co., 157 Ohio App.3d 150, 2004-Ohio-829, 809 N.E.2d 1161. Substantive unconscionability relates to the contract terms themselves and whether they are commercially reasonable. Procedural unconscionability deals with those factors relating to the ultimate bargaining positions of the contracting parties, i.e., age, education, intelligence, business acumen, and experience.

{¶ 18} In Eagle, our brethren from the Ninth District explained the following:

{¶ 19} “An unconscionable contract clause is one in which there is an absence of meaningful choice for the contracting parties, coupled with draconian contract terms unreasonably favorable to the other party. Collins v. Click Camera & Video, Inc. (1993), 86 Ohio App.3d 826, 834, 621 N.E.2d 1294. Thus, the doctrine of unconscionability consists of two separate concepts:

{¶ 20} “ ‘(1) [U]nfair and unreasonable contract terms, i.e., “substantive unconscionability,” and (2) individualized circumstances surrounding each of the parties to a contract such that no voluntary meeting of the minds was possible, i.e., [150]*150“procedural unconscionability.” * * * These two concepts create what is, in essence, a two-prong test of unconscionability. One must allege and prove a “quantum” of both prongs in order to establish that a particular contract is unconscionable.’ (Citations omitted.) [Collins v. Click Camera & Video, Inc.], 86 Ohio App.3d at 834, 621 N.E.2d 1294.” Eagle, 157 Ohio App.3d 150, 2004-Ohio-829, 809 N.E.2d 1161

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Bluebook (online)
923 N.E.2d 638, 185 Ohio App. 3d 146, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lynn-v-mckinley-ground-transport-llc-ohioctapp-2009.