Robert Kay v. The Minacs Group (USA), Inc.

580 F. App'x 327
CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 5, 2014
Docket13-1974
StatusUnpublished
Cited by24 cases

This text of 580 F. App'x 327 (Robert Kay v. The Minacs Group (USA), 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
Robert Kay v. The Minacs Group (USA), Inc., 580 F. App'x 327 (6th Cir. 2014).

Opinions

JANE BRANSTETTER STRANCH, Circuit Judge:

Based on an arbitration provision in an employee handbook, the district court dismissed Robert Kay’s age discrimination suit and ordered Kay and his employer to arbitrate the issue. The arbitration agreement, assuming it is even valid and enforceable, does not apply to Kay’s claims. We REVERSE the district court.

I. FACTS & PROCEDURAL HISTORY

In 2011, The Minacs Group fired Robert Kay, who was sixty years old, and hired someone much younger to replace him. Kay sued, alleging age discrimination under the ■ Age Discrimination in Employment Act (ADEA) and Michigan’s Elliot Larsen Civil Rights Act (ELCRA). Kay had originally worked for the Phoenix Group, which hired him in 1995, but in 2001 Minacs purchased Phoenix’s assets; nevertheless, paragraph 10 of Kay’s complaint stated that he “began working for defendant in 1995.” Minacs moved to dismiss the complaint and compel arbitration pursuant to the “Receipt of Policies and Procedures” issued by Phoenix and signed by Kay in 1995. Minacs did not submit the Policies and Procedures document itself-just the Receipt. The district court construed paragraph 10 as a judicial ad[329]*329mission that Phoenix and Minacs were the same employer and concluded that the Receipt was therefore still operative despite the change in ownership. The court found that the Receipt required Kay to arbitrate his age discrimination claim and dismissed the case and compelled arbitration. Kay moved for reconsideration, requesting permission to amend his complaint and offering evidence that he had been fired by Phoenix and then hired by Minacs and also that Minacs’s own employee policies superseded the Receipt. The district court denied Kay’s motion. Kay appealed, arguing that the arbitration provision in the Phoenix Receipt does not cover his claims and that the court erred in construing Paragraph 10 of his complaint as a judicial admission that Phoenix and Minacs were functionally the same entity.

This appeal exists largely because of troubling litigation behavior by Minacs. Minacs provided the court with the Phoenix Receipt but not Phoenix’s Policies and Procedures handbook even though the Receipt’s arbitration provision applies only to claims “arising out of or relating to these Policies and Procedures.” Due to Minacs’s omission, we have no idea what the Phoenix handbook covers and so have no idea what kind of claims the arbitration clause covers. Minacs, moreover, must have had copies of its own receipt and handbook, which suggests that Minacs would have known that the Phoenix receipt had been superseded by its own and that Kay’s claims were not subject to arbitration. This crucial information should have been a part of the record.

II. STANDARD OF REVIEW

We review a district court’s decision to compel arbitration de novo, “but with a thumb” — or at least a pinkie — “on the scale in favor of arbitration.” Solvay Pharm., Inc. v. Duramed Pharm., Inc., 442 F.3d 471, 478 (6th Cir.2006). The question of whether there was an enforceable agreement to arbitrate is reviewed de novo according to state contract law. Tillman v. Macy’s, Inc., 735 F.3d 453, 456 (6th Cir.2013); Floss v. Ryan’s Family Steak Houses, Inc., 211 F.3d 306, 314 (6th Cir. 2000). A district court’s decision to treat a party’s statement as a judicial admission is reviewed for abuse of discretion: the decision stands unless the panel is “firmly convinced that a mistake has been made.” MacDonald v. Gen. Motors. Corp., 110 F.3d 337, 340 (6th Cir.1997). A denial of a motion to reconsider is also reviewed for abuse of discretion. Nat’l Ecological Found, v. Alexander, 496 F.3d 466, 476 (6th Cir.2007).

III. ANALYSIS

A. Construing the Receipt

The Federal Arbitration Act directs a court to stay litigation and refer an issue to arbitration once it determines that there is (1) an “agreement in writing for such arbitration” and (2) that the issue in question “is referable to arbitration under such agreement.” 9 U.S.C. § 3. The threshold question, then, is “whether the dispute is arbitrable, meaning that a valid agreement to arbitrate exists between the parties and that the specific dispute falls within the substantive scope of the agreement.” Mazera v. Varsity Ford Mgmt. Servs., LLC, 565 F.3d 997, 1001 (6th Cir.2009) (quoting Landis v. Pinnacle Eye Care, LLC, 537 F.3d 559, 561 (6th Cir.2008)). Both parts of this question — whether there was an “agreement” to arbitrate and whether an issue falls within the scope of that agreement (“is referable,” to use the Arbitration Act’s wording) — are primarily governed by state contract law. Hergenreder v. Bickford Senior Living Grp., LLC, 656 F.3d 411, 416-17 (6th Cir.2011). We say “primarily” because the Arbitra[330]*330tion Act preempts any state law rule “singling out arbitration provisions for suspect status,” Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996), and thus requires courts to “place arbitration agreements on an equal footing with other contracts and enforce them according to their terms,” AT&T Mobility LLC v. Concepcion, — U.S. -, 131 S.Ct. 1740, 1745, 179 L.Ed.2d 742 (2011) (citation omitted). But with that caveat thus made, whether Kay and Phoenix had an “agreement” to arbitrate is really a question of contract formation and whether Kay’s civil rights claims are within the scope of that agreement is a question of contract construction, both of which are governed by Michigan law.

We assume for argument’s sake that Kay and Phoenix had agreed to arbitrate some disputes; the question is whether they had agreed to arbitrate this kind of dispute — a civil rights claim. The relevant portion of the Receipt provides:

I also acknowledge that any and all controversies or claims arising out of, or relating to these Policies and Procedures shall be resolved by submitting the dispute to arbitration....

Note that “Policies and Procedures” are capitalized in this sentence, which indicates that the arbitration provision only applies to claims connected to the employee handbook titled “Policies and Procedures” rather than all of Phoenix’s policies and procedures. In other places, the Receipt mentions “policies and procedures” with no capitalization when referring to something other than the handbook itself. The Receipt, moreover, appears to be itself part of the Policies and Procedures handbook.

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580 F. App'x 327, Counsel Stack Legal Research, https://law.counselstack.com/opinion/robert-kay-v-the-minacs-group-usa-inc-ca6-2014.