United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER COMPELLING
HORN BOOM, UNITED STATES DISTRICT COURT JUDGE
Plaintiff Jim Seeds began working as a jeweler at a repair
shop in Louisville, Kentucky operated by Defendant Sterling
Jewelers, Inc. (“Sterling”), he signed many
“onboarding” documents. One of these documents
was an agreement to arbitrate any claims he had against
Sterling that arose out of his employment there pursuant to
the company's RESOLVE Program Alternative Dispute
Resolution Arbitration Agreement. Seeds does not dispute that
he signed this document. He argues, however, that this
agreement cannot be enforced against him because it is both
procedurally and substantively unconscionable. Because the
Court finds that the Arbitration Agreement here was neither,
the Court grants the defendant's Renewed Motion to Stay
Proceedings and Compel Arbitration, but denies
defendant's Renewed Motion to Dismiss without prejudice.
[R. 11] The plaintiff shall pursue his claims in arbitration
in a manner consistent with the terms of the parties'
Sterling is an American specialty jewelry company which
operates retail jewelry stores throughout the country under
various brands including Jared the Galleria of Jewelry. [R.
11-2, at p. 2; Aff. J. Broadhead, at ¶ 2.] Seeds was
employed as a jeweler at the repair shop in the Jared the
Galleria of Jewelry in Louisville, Kentucky, from April 2014
through March 2016. Id. at ¶ 6; [R. 1, at
¶¶ 11; 20]
requires its employees to resolve any “pre-employment,
employment, or postemployment dispute, claim, or
controversy” through its “RESOLVE” Program.
The RESOLVE Program is a multi-step alternative dispute
resolution program for Sterling employees, with the final
step being binding arbitration for all employees. [R. 11-1,
at p. 3] After being introduced to the RESOLVE Program,
employees are also asked to sign an Arbitration Agreement
(the “RESOLVE Agreement” or “Arbitration
Agreement”). [R. 11-1, pp. 2-3; 11-2, at ¶ 5; Ex.
B.] This RESOLVE Agreement again outlines the steps in the
RESOLVE Program before asking employees to sign. Id.
When Seeds began his employment, he digitally acknowledged
receipt of and agreed to the RESOLVE Program as part of his
hiring process. Id.
relevant part, Seeds agreed:
to utilize the Sterling RESOLVE Program to pursue any
pre-employment, employment or postemployment dispute, claim,
or controversy (collectively called “claim”)
against Sterling Jewelers Inc., . . . regarding any alleged
unlawful act regarding [Seeds'] application for
employment, employment or the termination of [Seeds']
employment which could have otherwise been brought before an
appropriate court including, but not limited to, claims under
. . . the Age Discrimination in Employment Act, . . . [or]
any state anti-discrimination statutes [.]
Id.; see also [R. 11-2, at ¶ 5; Ex. B]
Seeds agreed to these terms the day he was hired. [R. 11-1,
at pp. 3-4, R. 11-2, at p. 18]
signing the Arbitration Agreement and acknowledging its terms
(including the multi-step alternative dispute resolution
process), Seeds failed to pursue his claims through RESOLVE.
[R. 11-1, at p. 4, R. 11-3, at ¶ 4] Instead, Seeds filed
his Complaint in this Court on November 28, 2017. [R. 1] In
his Complaint, Seeds alleges he was subjected to age
discrimination in violation of the Age Discrimination in
Employment Act (“ADEA”), 29 U.S.C. §§
621. et. seq., and the Kentucky Civil Rights Act
(“KCRA”), KRS § 344.040. Id. at
¶¶ 21-23; 26-27. Seeds' main allegations
against Sterling arose when Seeds sought a managerial
position within the company. According to Seeds, the company
responded instead with a series of overly-harsh disciplinary
actions that ultimately led to his termination. Id.
at ¶¶ 10-20. According to his Complaint, younger
employees were not subjected to the same disciplinary action
for committing the same infractions. Id.
after the Complaint was filed, Sterling moved to dismiss the
action for failure to state a claim, or in the alternative,
to stay proceedings and compel arbitration. [R. 4] A few
weeks after this motion was filed, Seeds' counsel filed a
Motion to Withdraw. [R. 5] The Court granted the Motion to
Withdraw and denied Sterling's Motion to Dismiss without
prejudice, allowing Seeds sixty (60) days to retain new
counsel. [R. 7] Seeds did not hire new counsel, deciding
instead to proceed in this matter pro se. Sterling
re-filed its Motion to Dismiss or Compel Arbitration on April
27, 2018. [R. 11] Seeds filed a timely
response. [R. 12] In his response, Seeds admits to
signing the Arbitration Agreement at issue, but argues that
it should not be enforced because it is both substantially
and procedurally unconscionable. Id. at pp. 1-3.
Circuit, “[i]n order to show that the validity of the
agreement is ‘in issue,' the party opposing
arbitration must show a genuine issue of material fact as to
the validity of the agreement to arbitrate, ” a showing
that mirrors the summary judgment standard. Great Earth
Cos. v. Simons, 288 F.3d 878, 889 (6th Cir. 2002).
Therefore, district courts in Kentucky evaluate a motion to
compel arbitration as one for summary judgment under
Fed.R.Civ.P. 56(c). See Freeman v. Easy Mobile Labs,
Inc., No. 1:16-CV-00018-GNS, 2016 WL 4479545, at *1
(W.D. Ky. Aug. 24, 2016) (citing Arnold v. Rent-a-Center,
Inc., No. 11-18-JBC, 2011 WL 1810145, at *2 (E.D. Ky.
May 12, 2011) (“This court will treat the motion to
compel arbitration as one for summary judgment ....”));
Weddle Enters., Inc. v. Treviicos-Soletanche, J.V.,
No. 1:14CV-00061-JHM, 2014 WL 5242904, at *2 (W.D. Ky. Oct.
15, 2014) (“A motion to dismiss based on the existence
of a valid arbitration agreement is not evaluated under the
usual Fed.R.Civ.P. 12(b)(6) standard. Instead, courts apply
the standard applicable to motions for summary
judgment.”) (internal citation omitted) (citation
omitted). “In order to show that the validity of the
agreement is in issue, the party opposing arbitration must
show a genuine issue of material fact as to the validity of
the agreement to arbitrate.” Great Earth Cos.,
288 F.3d at 889. (internal quotation marks omitted) (citation