Ampler Burgers Ohio v. Bishop

902 S.E.2d 818

AMPLER BURGERS OHIO LLC d/b/a Burger King, Lesley McLaughlin, Sheila Spaulding, and Teresa Stephens, Defendants Below, Petitioners,

v.Kenna BISHOP, Plaintiff Below, Respondent.

No. 23-49

Supreme Court of Appeals of West Virginia.

Submitted: February 21, 2024

Filed: June 12, 2024

Syllabus by the Court

1. "When an appeal from an order denying a motion to dismiss and to compel arbitration is properly before this Court, our review is de novo." Syllabus Point 1, West Virginia CVS Pharmacy, LLC v. McDowell Pharmacy, Inc., 238 W. Va. 465, 796 S.E.2d 574 (2017).

2. "Under the Federal Arbitration Act, 9 U.S.C. § 2, a written provision to settle by arbitration a controversy arising out of a contract that evidences a transaction affecting interstate commerce is valid, irrevocable, and enforceable, unless the provision is found to be invalid, revocable or unenforceable upon a ground that exists at law or in equity for the revocation of any contract." Syllabus Point 6, Brown ex rel. Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011), overruled in part on other grounds by Marmet Health Care Center, Inc. v. Brown, 565 U.S. 530, 132 S.Ct. 1201, 182 L.Ed.2d 42 (2012).

3. "Nothing in the Federal Arbitration Act, 9 U.S.C. § 2, overrides normal rules of contract interpretation. Generally applicable contract defenses—such as laches, estoppel, waiver, fraud, duress, or unconscionability— may be applied to invalidate an arbitration agreement." Syllabus Point 9, Brown ex rel. Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011), overruled in part on other grounds by Marmet Health Care Center, Inc. v. Brown, 565 U.S. 530, 132 S.Ct. 1201, 182 L.Ed.2d 42 (2012).

4. "A valid written instrument which expresses the intent of the parties in plain and unambiguous language is not subject to judicial construction or interpretation but will be applied and enforced according to such intent." Syllabus Point 1, Cotiga Development Co. v. United Fuel Gas Co., 147 W. Va. 484, 128 S.E.2d 626 (1962).

5. "It is not the right or province of a court to alter, pervert or destroy the clear meaning and intent of the parties as expressed in unambiguous language in their written contract or to make a new or different contract for them." Syllabus Point 3, Cotiga Development Co. v. United Fuel Gas Co., 147 W. Va. 484, 128 S.E.2d 626 (1962).

6. "A contract term is unenforceable if it is both procedurally and substantively unconscionable. However, both need not be present to the same degree. Courts should apply a ‘sliding scale’ in making this determination: the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the clause is unenforceable, and vice versa." Syllabus Point 20, Brown ex rel. Brawn v. Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011), overruled in part on other grounds by Marmet Health Care Center, Inc. v. Brown, 565 U.S. 530, 132 S.Ct. 1201, 182 L.Ed.2d 42 (2012).

7. "The right to arbitration, like any other contract right, can be waived. To establish waiver of a contractual right to arbitrate, the party asserting waiver must show that the waiving party knew of the right to arbitrate and either expressly waived the right, or, based on the totality of the circumstances, acted inconsistently with the right to arbitrate through acts or language. There is no requirement that the party asserting waiver show prejudice or detrimental reliance." Syllabus Point 6, Parsons v. Halliburton Energy Services, Inc., 237 W. Va. 138, 785 S.E.2d 844 (2016).

Appeal from the Circuit Court of Kanawha County, The Honorable Tera L. Salango, Judge, Case Number: 21-C-820

Larry J. Rector, Esquire, Amy M. Smith, Esquire, Steptoe & Johnson PLLC, Bridgeport, West Virginia, Gregory W. Guevara, Esquire, Admitted Pro Hac Vice, Tyler J. Moorhead, Equire, Admitted Pro Hac Vice, Rose, McKinney & Evans, LLP, Indianapolis, Indiana, Counsel for Petitioners

Rodney A. Smith, Esquire, M. Alex Urban, Esquire, Rod Smith Law PLLC, Charleston, West Virginia, Counsel for Respondent

Armstead, Chief Justice:

Ampler Burgers Ohio LLC d/b/a Burger King, Lesley McLaughlin ("McLaughlin"), Sheila Spaulding ("Spaulding"), and Teresa Stephens ("Stephens")¹ (collectively, "Petitioners") appeal the order of the Circuit Court of Kanawha County denying their motion to compel arbitration of the claims alleged by Kenna Bishop ("Respondent") in her complaint,² all arising from her employment at the Elkview, West Virginia Burger King franchise. In its order denying the motion to compel, the circuit court found five independent reasons why arbitration could not be compelled: (1) Petitioner Ampler Burgers Ohio LLC is not a party to the arbitration agreement; (2) the arbitration agreement is unenforceable because it lacks mutual consideration; (3) the parties’ dispute is not subject to the arbitration agreement; (4) the arbitration agreement is procedurally and substantively unconscionable; and, (5) Petitioners waived their right to arbitration.

After review, we find that the circuit court erred in denying Petitioners’ motion to compel arbitration, and we reverse and remand for further proceedings consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

On March 23, 2021, Respondent began working at the Burger King location in Elkview, West Virginia. As a part of her hiring process, Respondent was presented with and signed a "Dispute Resolution and Arbitration Policy." ("Arbitration Agreement" or "Agreement"). The terms of the Arbitration Agreement required "all disputes relating to or arising out of an employee’s employment with the Company or the termination of employment [be arbitrated]." Additionally, the Arbitration Agreement further detailed that all "claims for wrongful termination of employment, breach of contract, employment discrimination, harassment or retaliation under … any state or local discrimination laws, tort claims, or any other legal claims and causes of action recognized by local, state or federal law or regulations" were also to be arbitrated.

The named parties to the Arbitration Agreement were Respondent and Ampler Burgers LLC, who is not a party to the civil action. In fact, Respondent was not employed by Ampler Burgers LLC but by Petitioner Ampler Burgers Ohio LLC. Ampler Burgers LLC and Ampler Burgers Ohio LLC are affiliated companies who share the same employee handbook and the same Arbitration Agreement. The individual Petitioners are all employees of Ampler Burgers Ohio LLC. By its plain terms, the Arbitration Agreement applies to "any such claim or dispute against [Ampler Burgers LLC] or any affiliated entities, and each of their employees, officers, directors or agents…. "

On September 15, 2021, Respondent filed suit in the Circuit Court of Kanawha County, naming an incorrect party, Ampler Restaurant Group, as a defendant. In that complaint, Respondent alleged that Falls touched her improperly, openly spoke about his sexual activity with young women, and showed pictures of himself engaged in sexual activity with young women to McLaughlin, who, was shift manager. McLaughlin, in turn, informed Respondent that everyone, including employees and management, were aware of Falls’ online presence. It was further alleged that Falls’ proclivity toward deviant sexual behavior had created a hostile work environment, where other employees openly spoke of their sexual wants and desires, including speculation about the sexual prowess of patrons of the restaurant. Respondent further averred that not only was McLaughlin aware of Falls’ activities, but that Spaulding, the restaurant’s general manager, and Stephens, the regional manager, were also aware but did nothing to protect Respondent.

From those facts, Respondent alleged ten separate violations of the WVHRA. These include allegations of (1) a hostile work environment /sexual harassment against Ampler Burgers Ohio LLC, Falls, Spaulding, McLaughlin, and Stephens, (2) aiding and abetting a hostile work environment against Spaulding, McLaughlin, and Stephens, (3) retaliation by Ampler Burgers Ohio LLC, Falls, Spaulding, McLaughlin, and Stephens against Respondent, and (4) constructive discharge of Respondent by Ampler Burgers Ohio LLC, Falls, Spaulding, McLaughlin, and Stephens creating a hostile work environment.

After filing of the complaint, counsel for Petitioners and counsel for Respondent agreed to extend the time to answer the complaint and to answer discovery requests served upon Petitioners with the complaint. In its answer, filed on January 5, 2022, Petitioners identified Ampler Burgers Ohio LLC as the proper party to the action. Petitioners also asserted an affirmative defense in its answer: "[Respondent’s] purported claims against [Petitioners] are or may be governed by a mandatory arbitration provision."

For nearly ten months, until November 9, 2022, Petitioners and Respondent proceeded with the civil action. This activity included serving and answering discovery requests, agreeing to a protective order for transcripts generated in a parallel proceeding, agreeing to substitute Ampler Burgers Ohio LLC as a party for Ampler Burgers LLC, participating in a scheduling conference, filing of fact witness disclosures, and exchanging letters regarding alleged deficiencies in discovery. On November 9, 2022, Petitioners filed their Motion to Dismiss or Stay and Compel Arbitration.

Following briefing and a hearing, the circuit court denied the motion, in total, making specific findings of fact and conclusions of law. The circuit court found that none of the Petitioners were signatories to the Arbitration Agreement and that they could not enforce it. Similarly, the circuit court found that there was no mutual consideration for the Arbitration Agreement because Respondent did not accept employment with the signatory to the agreement, Ampler Burgers LLC, but was instead employed by ...