Reinsurance & Arbitration Focus

The U.S. District Court for the District of Nebraska recently granted a defendant's motion to compel arbitration despite a plaintiff's claims that she had never seen or signed the employment agreement containing the arbitration clause and that the agreement did not cover certain claims and could not be invoked by a defendant who was not a party to the agreement.

Barbara Nelson worked as an assistant manager in a restaurant owned by American Blue Ribbon Holdings LLC. Julie Kunkle was Nelson's supervisor. Nelson filed a number of claims related to her employment against American Blue Ribbon Holdings and Kunkle, including a defamation claim related to purported statements Kunkle made to restaurant employees and others.

American Blue Ribbon Holdings obtained a stay with respect to Nelson's claims related to potential bankruptcy proceedings. Kunkle moved to compel arbitration, claiming that Nelson's claims were within the scope of an arbitration clause Nelson signed when she was hired by American Blue Ribbon Holdings.

The district court granted Kunkle's request despite Nelson's claims that (1) she had never signed the employment agreement in question and (2) even if she had, the arbitration clause did not cover her claims against Kunkle, who was not a signatory to the agreement with American Blue Ribbon Holdings.

First, the court rejected Nelson's "self-serving" affidavit that she had never seen nor signed the arbitration clause. The evidence established that someone had to access the agreement containing the clause via an emailed link sent to Nelson's email account, enter Nelson's email address as a username, use Nelson's zip code as the password, and subsequently enter Nelson's "address, telephone number, date of birth, Social Security number, gender, marital status, and direct deposit banking information." The evidence further established that American Blue Ribbon Holdings did not otherwise collect this information and that Nelson signed the agreement again when she started.

Second, the court concluded that Nelson's claim against Kunkle was within the scope of the arbitration agreement and that Kunkle could invoke that agreement even though she was not a signatory to it. The agreement was broad and covered, among other things, "disputes regarding the employment relationship" brought under certain employment statutes "and all other state statutory and common law claims." The fact that (1) Kunkle was an agent of American Blue Ribbon Holdings; (2) allowing Nelson to sue Kunkle for employment-related claims covered by the agreement would limit the agreement's effectiveness; and (3) many of Nelson's claims against Kunkle were synonymous or intertwined with her claims against American Blue Ribbon Holdings was sufficient for the clause to cover Nelson's defamation claim, as well as claims that Kunkle violated Nelson's rights under the Family and Medical Leave Act.

The court therefore stayed Nelson's action pending arbitration proceedings.

Nelson v. Kunkle, No. 8:19-cv-00329 (D. Neb. Mar. 20, 2020).