Robert Kay filed an age discrimination suit against his former employer, The Minacs Group. Minacs responded with a motion to compel arbitration. In support of its motion, the employer tendered a "Receipt of Policies and Procedures" signed previously by Kay for a previous employer that had been acquired by Minacs, which by its terms applied only to claims "arising out of or relating to these Policies and Procedures." The district court ordered Kay to arbitrate his age discrimination claim. But the Sixth Circuit reversed in Kay v. The Minacs Group, No 13-1974 (September 5, 2014).
The Sixth Circuit was critical of the employer's litigation tactics:
This appeal exists largely because of troubling litigation behavior by Minacs. Minacs provided the court with the [previous employer's] Receipt but not [the previous employer'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 [previous employer's] 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own receipt and handbook, which suggests that Minacs would have known that the [previous employer's] receipt had been superseded by its own and that Kay's claims were not subject to arbitration.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.
This omission – an omission that included the actual language defining the scope of the alleged arbitration agreement – doomed the employer's effort to compel arbitration, as the Sixth Circuit explained:
On its face, then, the scope of the arbitration provision is easy to discern: Kay and [the previous employer] agreed to arbitrate only those disputes that arise from or relate to whatever is in the Policies and Procedures handbook. Minacs did not put the rest of the handbook into the record, so we have no way of knowing whether civil rights claims are covered by the handbook. Arbitration provisions, like any other provision, must be interpreted in the context of the whole contract.
Given Minacs's omission, we construe the provision literally and conclude that the arbitration provision does not cover Kay's civil rights claims because there is no contract language indicating that his claims arise from or relate to the employee handbook. Further, Kay's complaint does not allege a "policy or procedure," it alleges age discrimination on the part of Kay's immediate supervisor.
The Sixth Circuit pointedly rejected the employer's argument that the record's ambiguity regarding the scope of the arbitration agreement weighed in favor of arbitration:
Remarkably, Minacs argues that the presumption of arbitrability compels the court to resolve this "ambiguity" in favor of arbitration. Presumptions and canons of construction do not relieve a party of its responsibility to provide the court with the entire contract at issue and do not supplant a lawyer's duty of candor to the court.
The Sixth Circuit reversed the district court's order compelling arbitration and remanded "the case for further proceedings on Kay's civil rights claims." One wonders whether the terms of this remand precludes Minacs from again moving to compel arbitration and submitting on this second g0-round the handbook that it previously failed to file in the record. Kay would appear to have an argument that Minacs has forfeited its right to do so. Or it may be, as the Sixth Circuit suspected, that the actual handbook does not support the employer's motion to compel arbitration. We'll see.
The Sixth Circuit's opinion was authored by Circuit Judge Jane Stranch and joined by Circuit Judge Deborah Cook and Senior Circuit Judge Gilbert Merritt.
Robert L. Abell
www.RobertAbellLaw.com
