Pennington v. Frisch's Restaurants, Inc.

147 F. App'x 463
CourtCourt of Appeals for the Sixth Circuit
DecidedJune 17, 2005
Docket04-4541
StatusUnpublished
Cited by4 cases

This text of 147 F. App'x 463 (Pennington v. Frisch's Restaurants, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pennington v. Frisch's Restaurants, Inc., 147 F. App'x 463 (6th Cir. 2005).

Opinion

MARTIN, Judge.

Frisch’s Restaurants appeals the district court’s denial of its motion to compel arbitration in this case under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. For the foregoing reasons, we REVERSE the judgment of the district court.

I.

Nineteen Golden Corral employees filed the underlying collective action against their employer, Frisch’s Restaurants, and Philip Thompson, Frisch’s district manager, alleging that Frisch’s violated the Fair Labor Standards Act by incorrectly calculating their compensation. On April 1, 2004, Frisch’s filed a motion to compel arbitration pursuant to arbitration agreements allegedly signed by the employees in 2002 and/or 2003. Although Frisch’s original motion in the district court appeared to rely primarily upon the 2003 arbitration agreements, Frisch’s also argued that even if the 2003 arbitration agreements were unenforceable, arbitration should be compelled based on the 2002 arbitration agreements. Fourteen of the nineteen plaintiffs subsequently settled their disputes with Frisch’s, thus leaving the five plaintiffs in the present action (Sherri Pennington, Ellise Baumer, Mary Garrett, Abby DeVer, and Shirley Runck).

At least three of these plaintiffs (Pennington, Baumer, Garrett) signed an application for employment with Frisch’s that informed them of the company’s arbitration plan. One clause of the application read:

Frisch’s Restaurants, Inc. has an Alternate Dispute Resolution Program (ADRP) requiring Frisch’s and all of its employees to submit to FINAL AND BINDING ARBITRATION all employment-related claims or controversies for which a court could otherwise grant re *465 lief. By signing this application you knowingly and voluntarily agree that, if you are offered and accept employment with Frisch’s, you will be bound by the terms of the ADRP.

Four of the employees (Pennington, Baumer, Garrett, and DeVer) also signed an arbitration provision contained in the 2002 employee handbook. The handbook apparently included two copies of the arbitration agreement, one copy that was signed by the employee and placed in the personnel file and one copy that was to remain in the employee’s copy of the handbook. The arbitration agreement signed by each of these employees expressly acknowledges receipt of the handbook containing the terms of the arbitration plan and binds the employee to the terms of that plan. The signed agreement reads in relevant part:

I have carefully read the Arbitration Agreement contained in the Employee Guide. I UNDERSTAND THAT BY SIGNING BELOW I AGREE TO BE BOUND BY THE TERMS OF THE ARBITRATION AGREEMENT AND TO SUBMIT TO FINAL AND BINDING ARBITRATION ALL CLAIMS (INCLUDING, BUT NOT LIMITED TO, DISCRIMINATION AND CIVIL RIGHTS CLAIMS) FOR WHICH A COURT OTHERWISE WOULD BE AUTHORIZED TO GRANT RELIEF, WHICH IN ANY WAY ARISE OUT OF OR RELATE TO MY EMPLOYMENT WITH FRISCH’S OR THE TERMINATION OF MY EMPLOYMENT WITH FRISCH’S. I enter into the Arbitration Agreement in return for employment or continued employment, to the extent permitted by law, the commitment of Frisch’s to be bound by arbitration, and to gain the many benefits associated with arbitration....
I acknowledge that I have received, read, and understand the Employee Guide----

In 2003, Frisch’s adopted a revised employee handbook that also contained an arbitration agreement. The arbitration agreement in the 2003 handbook is similar to that contained in the 2002 handbook, requiring the employee “to be bound by the terms of the arbitration agreement and to submit to final and binding arbitration all claims ... which in any way arise out of or relate to [her] employment with Frisch’s.” The 2003 agreement also provides that the signing employee has “carefully read the Arbitration Agreement contained in the Employee Handbook.” While it is contested whether three of the employees (Pennington, DeVer, and Baumer) actually signed the 2003 agreement, it is undisputed that the one employee in this case who did not sign the 2002 agreement, Shirley Runck, did sign the 2003 arbitration agreement.

On November 18, 2004, the district court, applying Ohio law, denied Frisch’s motion to compel arbitration. The court concluded that all of the 2003 arbitration agreements were “unenforceable” because three of the employees (Pennington, DeVer, and Baumer) either claimed, or were suspicious, that their signatures were forged. Because “[a] forged signature does not manifest assent,” the court declined to enforce the arbitration provision of the 2003 agreements. The court also found that “[t]he manner in which the 2002 [arbitration] agreements were executed is equally problematic,” and therefore refused to enforce them as well. The court determined that the employees did not assent to the 2002 agreements because of its apparent finding that Frisch’s declined to provide the handbook when requested by the employees.

*466 II.

This Court reviews a district court’s denial of a motion to compel arbitration de novo. Fazio v. Lehman Bros., Inc., 340 F.3d 386, 392 (6th Cir.2003). It is well-settled that there is a strong presumption in favor of arbitration under the Federal Arbitration Act. Nguyen v. City of Cleveland, 312 F.3d 243, 244 (6th Cir.2002). It is uncontested that Ohio law applies to this case because the arbitration agreements were executed and performed in Ohio. See Walker v. Ryan's Family Steak Houses, Inc., 400 F.3d 370, 377 (6th Cir.2005).

The only issue presented in this appeal is whether the district court incorrectly denied Frisch’s motion to compel arbitration. Frisch’s claims that arbitration of the employees’ claims is required under the 2002 arbitration agreements as to plaintiffs Pennington, Baumer, Garrett and DeVer, and under the 2003 arbitration agreement as to plaintiff Runck. The employees argue that the arbitration agreements are unenforceable due to lack of mutual assent, because they are unconscionable, because they were executed under duress, and because the cost-sharing provisions contained in the arbitration provisions prevent the proper vindication of their statutory claims.

As noted above, the district court held that 2002 and 2003 agreements were unenforceable due to a lack of mutual assent. The court, however, did not consider the employees’ other claims regarding the enforceability of the arbitration provisions. For the following reasons, we conclude that the district court erred in refusing to enforce the arbitration provisions based on an alleged lack of mutual assent, and remand the case to the district court so that it may consider the employees’ other claims in the first instance.

A.

It is well-established that Ohio law does not permit the enforcement of a contract without mutual assent. See, e.g., Harmon v. Philip Morris, Inc., 120 Ohio App.3d 187, 697 N.E.2d 270

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147 F. App'x 463, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pennington-v-frischs-restaurants-inc-ca6-2005.