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AT&T Mobility Services LLC v. Payne

United States District Court, W.D. Kentucky, Louisville

February 16, 2018



          Charles R. Simpson III, Senior Judge.

         This matter is before the court on motion of Plaintiff, AT&T Mobility Services LLC (“AT&T”), moving the court to compel arbitration of state court claims pending in the Jefferson County, Kentucky Circuit Court in Payne v. AT&T Mobility LLC., et al., Case No: 17-CI-000706, and for a preliminary injunction enjoining the state court proceedings. For the reasons stated, the Plaintiff's motion will be GRANTED.

         I. BACKGROUND

         The Defendant, Brandy Payne (“Payne”), was employed by AT&T Mobility Services LLC (“AT&T”) at all times relevant to this action. (DN 1, ¶¶ 7-15.) AT&T alleges that on March 15, 2013, AT&T sent Payne an email to her unique employee email address titled “Action Required: Management Arbitration Agreement.” (DN 1, Knight Decl.) According to AT&T, the email advised Payne that the agreement would apply to all future claims between Payne and the Company if she did not affirmatively “opt-out” of the agreement within 60 days. (Id. at Exh. 2.) The email provided a link to the web page containing the text of the entire Arbitration Agreement (“Agreement”), which then provided a link to the site where the user could electronically register to opt out of the Agreement. (Id. at Exh. 1, Exh. 2.)

         AT&T alleges that it sent additional emails to Payne at her employee email address, identical to the email sent on March 15, on March 30, 2013, April 14, 2013, April 29, 2013, and May 14, 2013. (Id.) AT&T further testifies that Payne never opted out of the Agreement and that it has no reason to believe the emails were not delivered to her employee email address. (DN 1, Knight Decl.) Payne was continuously employed by AT&T until her separation with the company on January 4, 2015.

         In February of 2017, Payne filed a Complaint in Jefferson Circuit Court, Kentucky (“State Court Action”) against AT&T alleging sexual harassment, hostile work environment, and retaliation. (DN 1, Exh. A.) The State Court Action remains pending in Jefferson Circuit Court.

         AT&T then filed a Complaint in this court on October 24, 2017, seeking an order compelling the arbitration of Payne's claims against AT&T pursuant to the Federal Arbitration Act and for an injunction prohibiting Payne from pursuing the State Court Action while the parties arbitrate. (DN 1.) AT&T simultaneously filed a Motion to Compel Arbitration and Motion for Preliminary Injunction (“Motion to Compel”). (DN 4.)

         Rather than file a response to AT&T's Motion to Compel, Payne filed a motion seeking leave to conduct arbitration-related discovery prior to filing a response to the Plaintiff's Motion to Compel. (DN 13.) Therein, Payne requested limited discovery to establish that “she did not receive Plaintiff's alleged offer to enter into an agreement to arbitrate.” (Id.) This court denied Payne's motion for leave to conduct arbitration-related discovery and allowed Payne seven days from the entry of the order to respond to AT&T's Motion to Compel. (DN 18.) Payne having failed to respond within the seven day period afforded by the court, AT&T's Motion is ripe for review.


         The Federal Arbitration Act (FAA) makes agreements to arbitrate “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. The FAA further requires courts to stay litigation of claims pending arbitration of those claims “in accordance with the terms of the agreement” and requires courts to compel arbitration of such claims upon the motion of either party to the agreement. Id. at §§ 3-4.

         The Agreement at issue in this case expressly states that it is “governed by the Federal Arbitration Act, 9 U.S.C. § 1 and following, and evidences a transaction involving commerce.” (DN 1, Knight Decl., Exh. 2.) Before compelling arbitration, however, a court must first determine whether “a valid agreement to arbitrate exists between the parties and… the specific dispute falls within the substantive scope of that agreement.” Tillman v. Macy's, Inc., 735 F.3d 453, 456 (6th Cir. 2013) (quoting Javitch v. First Union Secs., Inc., 315 F.3d 619, 624 (6th Cir. 2003)).

         a. The Validity of the Agreement

         Kentucky contract law controls in this case. Under Kentucky law, a valid contract consists of “offer and acceptance, full and complete terms, and consideration.” Commonwealth v. Morseman, 379 S.W.3d 144, 149 (Ky. 2012). AT&T contends, and the court agrees, that the facts evidence a valid contract under Kentucky law. AT&T states that the five emails sent to Payne concerning the Agreement “plainly constituted offers to enter into an agreement to arbitrate future claims. Those emails specifically laid out the material provisions of the Agreement… and specified a method and deadline for acceptance.” (DN 4, 7.) AT&T properly supported these assertions and Payne did not respond. Therefore, AT&T extended a valid offer to Payne to enter into an agreement.

         Further, AT&T has provided sufficient evidence for the court to conclude that Payne accepted its offer to enter into an agreement to arbitrate future claims. Under Kentucky law, continuing employment may constitute assent to be bound by the terms of an agreement. See Parts Depot, Inc. v. Beiswenger, 170 S.W.3d 354, 362 (Ky. 2005) (“An express personnel policy can become a binding contract once it is accepted by the employee through his continuing to work when he is not required to do so.”) (internal citation omitted). The Sixth Circuit has likewise found that continuing employment may constitute assent to enter into a binding contract to arbitrate future claims under the FAA. See Tillman, 735 F.3d at 461 (“[B]ecause [the plaintiff] accepted the offer by continuing her employment with ...

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