United States District Court, N.D. Oklahoma
THERESA A. WILLIAMSON, Plaintiff,
DILLARD'S, INC., Defendant.
OPINION AND ORDER
V. EAGAN UNITED STATES DISTRICT JUDGE.
before the Court is Defendant's Special Appearance to
Present Combined Motion to Compel Arbitration, Motion to
Dismiss Action, and Alternative Motion to Stay Action and
Brief in Support (Dkt. ## 5, 7). Defendant Dillard's,
Inc. (Dillard's) argues that plaintiff's age
discrimination claims fall within the scope of an arbitration
agreement executed by the parties, and it asks the Court to
dismiss plaintiff's claims for lack of jurisdiction. In
the alternative, Dillard's asks the Court to compel
arbitration and stay this case pending the outcome of the
arbitration proceedings. Plaintiff responds that the
arbitration agreement is invalid under Oklahoma law, because
there was not sufficient consideration for the creation of a
valid contract. Dkt. # 13, at 6.
alleges that she was formerly employed by Dillard's as a
sales associate in the cosmetics department, and she was 49
years old when she was hired. Dkt. # 2, at 2. Plaintiff
claims that she was repeatedly denied promotions that went to
younger workers, and she complained to her supervisors about
alleged acts of age discrimination and harassment.
Id. at 3-5. Plaintiff claims that her supervisors
took no action in response to her complaints, and she claims
that she was constructively discharged on September 15, 2017.
Id. at 5. Plaintiff states that she filed a charge
of discrimination with the Equal Employment Opportunity
Commission (EEOC) and received a right to sue letter, and she
filed this case alleging claims under the Age Discrimination
in Employment Act, 29 U.S.C. § 621 et seq.
(ADEA), against Dillard's on August 30, 2018.
April 11, 2016, plaintiff and Dillard's had executed an
arbitration agreement stating that “[t]he parties
hereto agree that all Legal Claims that arise or accrue
either before or after an Associate's employment has
terminated, relating to or in connection with the
Associate's current or prior employment at Dillard's
including but not limited to, Legal Claims relating to breach
of fiduciary duty shall be subject to this Agreement.”
Dkt. # 5-1, at 4. The term “Legal Claims” is
defined to include claims of “[d]iscrimination or
harassment on the basis of race, sex, religion, national
origin, age, disability or other unlawful basis . . .
.” Id. There are no exceptions or exclusions
that would allow either party to litigate claims related to
plaintiff's employment by any means other than
arbitration. Dillard's and plaintiff agreed that
“[a]rbitration of such disputes is a valuable benefit,
the existence of which is a significant inducement for
Associate to accept or continue employment with
[Dillard's] and for [Dillard's] to offer employment
to Associate or continue to employ Associate.”
Id. at 15. The arbitration agreement was
electronically signed by Williamson and a representative of
has filed a motion asking the Court to enter an order
compelling the parties to arbitrate plaintiff's claims
and dismissing this case for lack of subject matter
jurisdiction. Defendant states that the Tenth Circuit has not
specifically addressed the appropriate procedure for
compelling arbitration under Fed.R.Civ.P. 12. However, the
Tenth Circuit has made a clear distinction between motions
made under Rule 12(b) and motions to compel arbitration under
the Federal Arbitation Act, 9 U.S.C. § 1 et seq. (FAA).
Conrad v. Phone Directories Co., Inc., 585 F.3d 1376
(10th Cir. 2009). In fact, a party may effectively waive
appellate review of a motion to compel arbitration by styling
the motion as a Rule 12(b) motion that is not subject to
interlocutory appeal. Id. at 1386. In a previous
case, this Court has compared the standard for reviewing a
motion to compel arbitration to the standard for motions for
summary judgment. Brennan v. Global Safety Labs,
Inc., 2008 WL 2234830 (N.D. Okla. May 29, 2008). This
decision is supported by a subsequent Tenth Circuit decision
in which the Tenth Circuit stated that the procedure for
reviewing a motion to compel arbitration when there are no
material disputes of fact “can look a lot like summary
judgment.” Howard v. Ferrellgas Partners,
L.P., 748 F.3d 975, 978 (10th Cir. 2014). “When
it's apparent from a quick look at the case that no
material disputes of fact exist it may be permissible and
efficient for a district court to decide the arbitration
question as a matter of law through motions practice and
viewing the facts in the light most favorable to the party
opposing arbitration.” Id.
Court will treat defendant's motion as a motion to compel
arbitration under the FAA. The FAA represents a strong public
policy in favor of arbitration, and states that a
“written provision in any . . . contract evidencing a
transaction involving commerce to settle by arbitration a
controversy thereafter arising out of such contract . . .
shall be valid, irrevocable, and enforceable . . . .” 9
U.S.C. § 2; Stolt-Nielsen S.A. v. Animal Feeds
Int'l Corp., 559 U.S. 662 (2010); Vaden v.
Discover Bank, 556 U.S. 49, 58 (2009). The FAA
“requires a district court to stay judicial proceedings
where a written agreement provides for the arbitration of the
dispute that is the subject of the litigation.”
Coors Brewing Co. v. Molson Breweries, 51 F.3d 1511,
1514 (10th Cir. 1995). Agreements that require arbitration of
statutory claims are generally enforceable. Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991).
“Generally, courts ‘should apply ordinary
state-law principles that govern the formation of
contracts' to determine whether a party has agreed to
arbitrate a dispute.” Hardin v. First Cash Fin.
Servs., Inc., 465 F.3d 470, 475-76 (10th Cir. 2006).
However, the consideration of state law is limited to
principles of contract law concerning the enforceability of
contracts in general, and state law cannot displace the
strong federal policy in favor of arbitration of disputes.
Nitro-Lift Technologies, LLC v. Howard, 568 U.S. 17,
20-21 (2012); Arthur Andersen LLP v. Carlisle, 556
U.S. 624, 630 (2009).
motion to compel arbitration calls for a two-step inquiry
concerning the arbitrability of the dispute: (1) whether
there is a valid arbitration agreement, and (2) whether the
particular dispute falls within the scope of that agreement.
AT & T Techs., Inc. v. Commc'ns Workers of
America, 475 U.S. 643, 649 (1986). In this case, the
parties do not dispute that plaintiff's claims under the
ADEA fall within the scope of the arbitration agreement, and
it is clear that plaintiff's claims are “Legal
Claims” subject to arbitration if the parties'
arbitration agreement is enforceable. See Dkt. # 5-1, at 4.
The sole issue raised by the parties' briefing is whether
the arbitration agreement is enforceable under Oklahoma
contract law. Plaintiff argues that the arbitration agreement
is not supported by adequate consideration because, as a
matter of state law, continued at-will employment is an
illusory promise that cannot be used as consideration for the
formation of a contract. There is language in the arbitration
agreement supporting plaintiff's argument that her
continued employment was part of the consideration for the
arbitration agreement. See Dkt. # 5-1, at 15
(“in consideration of the mutual promises contained
herein and in specific consideration of the Company agreeing
to offer employment to Associate or continue to employ
associate, the parties . . . mutually agree to become subject
to the Company's RULES OF ARBITRATION”). However,
plaintiff's continued employment was not the only
consideration offered in support of the arbitration
arbitration agreement executed by the parties does reference
plaintiff's continued employment as part of the
consideration, but the parties also agree that arbitration
itself is a valuable benefit to both parties. The arbitration
agreement states that “the parties hereto agree that
Arbitration of such disputes is a valuable benefit, the
existence of which is a significant inducement for Associate
to accept or continue employment with Company and for Company
to offer employment to Associate or continue to employ
Associate . . . .” Dkt. # 5-1, at 15. Under Oklahoma
law, “consideration exists as long as there is a
benefit to the promisor or a detriment to the
promisee.” Thompson v. Bar-S Foods, Co., 174
P.3d 567, 574 (Okla. 2007). In the context of an arbitration
agreement, an employee receives no benefit from the contract
if the employer reserves the unilateral right to alter or
amend the arbitration agreement without the consent of the
Tenth Circuit has specifically considered whether a bilateral
agreement to arbitrate constitutes sufficient consideration
to support the formation contract under Oklahoma law. In
Williams-Jackson v. Innovative Senior Care Home Health of
Edmond, LLC, 727 Fed.Appx. 965 (10th Cir. Mar. 8, 2018),
district court denied a motion to compel arbitration on the
ground that the arbitration agreement was invalid under
Oklahoma law due to lack of consideration. Id. at
968. The Tenth Circuit considered whether the plaintiff's
continued employment and mutual promises to arbitrate were
sufficient consideration to support an arbitration agreement.
Id. Existing Tenth Circuit precedent interpreting
Oklahoma law had already impliedly determined that a mutual
obligation to arbitrate disputes was not an illusory promise
as long as the employer did not have an unrestricted right to
modify the arbitration agreement to the detriment of the
employee. Id. at 969. The arbitration agreement in
Williams-Jackson was binding on both parties and did
not allow the employer to modify the agreement to cut off an
employee's claims, and the mutual promises to arbitrate
disputes were sufficient consideration for a valid contract
under Oklahoma law. Id. Williams-Jackson is an
unpublished decision, but the holding of
Williams-Jackson is consistent with decisions by
other federal appellate courts. Uszak v. AT&T
Mobility Servs LLC, 658 Fed.Appx. 758 (6th Cir. July 21,
2016); Tinder v. Pinkerton Security, 305 F.3d 728,
734 (7th Cir. 2002); Circuit City Stores, Inc. v.
Najd, 294 F.3d 1104, 1108-1109 (9th Cir. 2002);
Johnson v. Circuit City Stores, 148 F.3d 373, 378
(4th Cir. 1998).
cites authority from other jurisdictions to support her
argument that continued at-will employment is not by itself
sufficient consideration to support an arbitration agreement.
Dtk. # 13, at 6. However, the arbitration agreements at issue
in those cases were found to be invalid for reasons other
than simply the use of continued at-will employment as
consideration to support a bilateral contract. See Tenet
Healthcare Ltd. v. Cooper, 960 S.W.2d 386 (Tex. App.
1998) (mutual promises to arbitrate were illusory
consideration because language in the employee handbook
explained that the employer was not bound to litigate its
disputes against the employee in arbitration); Clark v.
United Health Group, Inc., 2018 WL 2932735 (D.N.M. June
12, 2018) (continued at-will employment, by itself, is not
sufficient consideration to create a binding contract under
New Mexico law, but noting that the arbitration agreement did
not contain binding mutual promises to arbitrate as possible
consideration for the contract). In this case, the
arbitration agreement references plaintiff's continued
employment as part of the consideration, but the arbitration
agreement clearly states that arbitration of disputes arising
out of plaintiff s employment is a valuable benefit to both
parties. This is a separate source of consideration that is
independently sufficient to create a binding contract as a
matter of Oklahoma law, and the Court finds that the
arbitration agreement is not unenforceable due to lack of
consideration. Plaintiff has not raised any other argument as
to the formation of a binding contract, and the Court finds
that the parties' arbitration agreement is a binding and
enforceable contract as a matter of Oklahoma law. The parties
do not dispute that plaintiffs claims fall within the scope
of the arbitration agreement, and plaintiff should be
compelled to resolve her claims against defendant through
IS THEREFORE ORDERED that defendant's motion to
compel arbitration (Dkt. # 5) is granted,
and all claims alleged in plaintiffs complaint shall be
submitted to arbitration pursuant to the parties'
IS FURTHER ORDERED that defendant's motion to
dismiss or alternative motion ...