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Northern Kentucky Area Development District v. Snyder

Court of Appeals of Kentucky

May 12, 2017

NORTHERN KENTUCKY AREA DEVELOPMENT DISTRICT APPELLANT
v.
DANIELLE SNYDER APPELLEE

         APPEAL FROM BOONE CIRCUIT COURT HONORABLE RICHARD A. BRUEGGEMANN, JUDGE ACTION NO. 14-CI-01622

          BRIEFS FOR APPELLANT: Jeffrey C. Mando Bryce C. Rhoades Covington, Kentucky.

          ORAL ARGUMENT FOR APPELLANT: Jeffrey C. Mando Covington, Kentucky.

          BRIEF FOR APPELLEE: Shane C. Sidebottom Paul J. Wischer Covington, Kentucky.

          ORAL ARGUMENT FOR APPELLEE: Shane C. Sidebottom Covington, Kentucky.

          BEFORE: KRAMER, CHIEF JUDGE; NICKELL AND THOMPSON, JUDGES.

          OPINION

          THOMPSON, JUDGE.

         Danielle Snyder filed an action in the Boone Circuit Court asserting claims under the Kentucky Whistle Blower Act and the Kentucky Wages and Hours Act after her employer, the Northern Kentucky Area Development District (NKADD), terminated her employment. NKADD filed a motion to stay the proceedings and compel arbitration based on an arbitration agreement executed by it and Snyder as a condition of Snyder's employment. The circuit court denied the motion and NKADD appealed. The issues on appeal concern the application of the Federal Arbitration Act (FAA); whether the FAA pre-empts Kentucky statutory law which prohibits arbitration as a condition of employment as applied to a public employment contract; and whether the arbitration agreement is otherwise void. We conclude NKADD did not have authority to enter into the arbitration agreement as a condition of Snyder's employment and affirm.

         NKADD is a political subdivision created pursuant to Kentucky Revised Statutes (KRS) 147A.050 et seq. Pursuant to KRS 147A.070(2)(a), it has the authority to "employ such staff members as may be required for the operations of the district [.]" The legislature also expressly conferred the power upon NKADD to "[s]ue and be sued" and to "[m]ake and enter into all contracts or agreements necessary or incidental to the performance of its duties[.]" KRS 147A.080 (2) and (4).

         NKADD is funded by taxpayers for the purpose of administering social programs in an area of Northern Kentucky comprising eight counties. It receives federal funds for various social programs including an Elder Abuse Program, a Long Term Ombudsman Program, and a National Family Caregiver Program. Additionally, through federal funds, NKADD partners with local food banks to distribute food to lower-income households and administers a small business lending fund. NKADD also provides services through its Northern Kentucky Workforce Investment Board to supply workers to businesses and participates in a regional public-private partnership working to supply businesses with employees needed to grow businesses in Kentucky, Indiana, and Ohio. In Fiscal Year 2014, federal funds totaled $4, 221, 895, nearly one-quarter of NKADD's total revenues.

         Snyder worked for NKADD as an administrative purchasing agent. In connection with her employment, on October 18, 2011, Snyder signed an arbitration agreement which provides:

This agreement applies to all legal claims or disputes which have not been or were not resolved by you and the District informally in the normal course of business. Accordingly, you and the District are required to use this Agreement to resolve employment related legal disputes. By accepting employment with the District, you will have accepted this Agreement under the Federal Arbitration Act, and it will be binding on claims relating to your employment.

         The arbitration agreement identifies the claims subject to arbitration, including:

Any and all employment claims under….the Kentucky Wages and Hours Act, KRS 337.010 et seq.; … any statutory claims relating to public employment, and any claims of employment discrimination, retaliation, … wrongful termination … claims or demands arising under … public policy, the common law, or any federal state or local statute, ordinance, regulation, or ...

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