United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER
Rebecca Grady Jennings, District Judge.
General Electric Company (“GE” or the
“Company”) moves to compel arbitration
(“Motion”) [DE 24]. Plaintiffs, Kevin Sadler
(“Sadler”), Jude Edelen (“Edelen”),
and Michael Krimm (“Krimm”)(collectively
“Plaintiffs”) responded [DE 30] and GE replied
[DE 34]. The matter is ripe for adjudication. For the reasons
below, the Court will DENY the Motion as to Krimm and Sadler,
GRANT the Motion as to Edelen [DE 24], and GRANT
Plaintiffs’ request for an evidentiary hearing [DE 30].
worked GE’s appliance division before GE’s sale
of that division to Haier U.S. Appliance Solutions, Inc. [DE
30 at 169; DE 24-1 at 103]. Plaintiffs allege that when GE
sold the division, they were told that they were not within
the class of employees permitted to transfer to another
division of GE. [DE 24-1 at 103–04]. However,
Plaintiffs allege that they were later told that they were
eligible to transfer to another division. [Id. at
104]. Plaintiffs filed a Complaint claiming promissory
estoppel and fraudulent misrepresentations. [Id. at
103–04]. Defendant now moves to compel arbitration
pursuant to an arbitration clause that Defendant alleges each
plaintiff agreed to. [Id. at 104]. The arbitration
clause is contained in a policy known as Solutions, An
Alternative Dispute Resolution Procedure
(“Solutions” or the “Agreement”) and
applied to both GE and all employees not represented by a
labor union (“covered employees”). [Id.
at 104]. The arbitration clause contains a provision stating
that “Covered Employees and the Company are not allowed
to litigate a Covered Claim in any court, ” except for
preliminary injunctions or temporary restraining orders.
[Id. at 105]. Under the agreement, parties must
follow the procedure laid out in Solutions, which includes
arbitration, and mutually binds both GE and the covered
employees. [DE 24-2 at 150].
argue that the arbitration agreement is invalid because there
is insufficient consideration to support the agreement. [DE
30 at 198–201]. Plaintiffs also claim that
“Plaintiff Sadler and Plaintiff Krimm unequivocally
deny signing or being advised about the Solutions policy and
the record does not sufficiently evidence facts to the
contrary.” [Id. at 202]. GE’s motion
only included an executed Solutions Acknowledgement signature
page from Edelen. [DE 24-3 at 175]. GE asserts that Sadler
and Krimm continued to work at GE after Solutions was
implemented in 2009, which “served as their
acknowledgement of Solutions.” [DE 24-1 at 1–5].
enacted the United States Arbitration Act of 1925
(“Federal Arbitration Act” or “FAA”),
9 U.S.C. §§ 1–16, and federal and Kentucky
law favors enforcing arbitration agreements. See Whalen
v. Lord & Moses, LLC, No. 09-CV-0192-JBC, 2009 WL
3766327, at *1 (E.D. Ky. Nov. 10, 2009). The FAA’s
purpose was to put arbitration agreements “upon the
same footing as other contracts.” Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991).
4 of the FAA provides that a party may petition a court to
compel arbitration. FAA § 4. Upon such a petition, the
Court “shall hear the parties, and upon being satisfied
that the making of the agreement for arbitration or the
failure to comply therewith is not in issue, the court shall
make an order directing the parties to proceed to arbitration
in accordance with the terms of the agreement.”
Id. Yet “[i]f the making of the arbitration
agreement . . . be in issue, the court shall proceed
summarily to the trial thereof.” Id. Thus, the
Court first “must engage in a limited review to
determine whether the dispute is arbitrable.” Masco
Corp. v. Zurich Am. Ins. Co., 382 F.3d 624, 627 (6th
Cir. 2004) (quoting Javitch v. First Union Sec.,
Inc., 315 F.3d 619, 624 (6th Cir. 2003)).
determining whether the dispute is arbitrable, the Court
first looks to whether the parties formed a valid arbitration
agreement. See Braxton v. O’Charleys Rest.
Properties, LLC, 1 F.Supp.3d 722, 725 (W.D. Ky. 2014)
(“Such review, the Sixth Circuit advises, requires the
Court to determine first whether a valid agreement to
arbitrate exists between the parties, and second whether the
specific dispute falls within the substantive scope of the
agreement.) (internal citations and quotations 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, ” and the necessary showing
“mirrors that required to withstand summary judgment in
a civil suit.” Great Earth Companies, Inc. v.
Simons, 288 F.3d 878, 889 (6th Cir. 2002) (quoting
Doctor’s Assocs., Inc. v. Distajo, 107 F.3d 126,
129–30 (2d Cir.), cert. denied, 522 U.S. 948, 118 S.Ct.
365, 139 L.Ed.2d 284 (1997)).
moves to compel arbitration and stay this lawsuit pending
arbitration. [DE 24-1 at 103]. Neither party disputes that
Plaintiffs’ claims fall within the substantive scope of
the arbitration agreement. Thus, to enforce the arbitration
agreement, the Court need only determine whether a valid
agreement exists. Kentucky law applies to interpreting the
formation of an arbitration agreement. See Seawright v.
Am. Gen. Fin. Servs., Inc., 507 F.3d 967, 972 (6th Cir.
2007) (“Because arbitration agreements are
fundamentally contracts, we review the enforceability of an
arbitration agreement according to the applicable state law
of contract formation.”); see also Gray v. Midland
Funding, LLC, No. 5:16-CV-00036-TBR, 2017 WL 1293995, at
*5 n.3 (W.D. Ky. Apr. 4, 2017).
Arbitration Agreement is Supported by Sufficient
Plaintiffs argue that the arbitration agreement is not valid
because it was not supported by consideration. [DE 30 at
198–202]. Plaintiffs claim that under Kentucky law
their continued employment is not adequate consideration, and
there was no other consideration to support the arbitration
agreement. [Id. at 198–99 citing Charles
T. Creech, Inc. v. Brown, 433 S.W.3d 345 (Ky. 2014)]. GE
urges the Court to follow an unpublished Western District of
Kentucky opinion, which held that continued employment be can
adequate consideration in arbitration agreements, and
Creech’s holding was limited to non-competition
agreements. [DE 34 at 210 citing Aldrich v. University of
Phoenix, Inc., 3:15-CV-00578-JHM, 2016 U.S. Dist. LEXIS
27591, *24-26 (W.D. Ky. Mar. 4, 2016) (finding that continued
employment was adequate consideration to support arbitration
Court, however, need not decide whether continued employment
constitutes adequate consideration in this case because the
arbitration agreement binds both parties. The Supreme Court
of Kentucky has found that “that an exchange of
promises ‘to submit equally to arbitration’
constitutes adequate consideration to sustain an arbitration
clause.” Grimes v. GHSW Enterprises, LLC, 556
S.W.3d 576, 581 (Ky. 2018) (citing Energy Home v.
Peay,406 S.W.3d 828, 835 (Ky. 2013)). Solutions binds
both covered employees and GE and requires both parties to
submit to arbitration. [DE 24-2 at 150 (“Covered
Employees and the Company are not allowed to litigate a
Covered Claim in any court.”) (emphasis added)]. As a