Case Name: TERMINIX INTERNATIONAL CO., LLC, Terminix International Co., LP, Employer's Unity, Inc., Service Master Terminix International Co., LP, Mike Steed, and Larry Pruitt v. Mandy TRIVITT and Josh Trivitt
Court: Arkansas Court of Appeals
Jurisdiction: Arkansas
Decision Date: 2008-12-10
Citations: 104 Ark. App. 122
Docket Number: CA 08-233
Parties: TERMINIX INTERNATIONAL CO., LLC, Terminix International Co., LP, Employer’s Unity, Inc., Service Master Terminix International Co., LP, Mike Steed, and Larry Pruitt v. Mandy TRIVITT and Josh Trivitt
Judges: Pittman, C.J., and Bird, Glover, Marshall, and Hunt, JJ., agree.
Reporter: Arkansas Appellate Reports
Volume: 104
Pages: 122–133

Head Matter:
TERMINIX INTERNATIONAL CO., LLC, Terminix International Co., LP, Employer’s Unity, Inc., Service Master Terminix International Co., LP, Mike Steed, and Larry Pruitt v. Mandy TRIVITT and Josh Trivitt
CA 08-233
289 S.W.3d 485
Court of Appeals of Arkansas
Opinion delivered December 10, 2008
Marshall & Owens, A Professional Association, by: W. Lance Owens; and Weintraub, Stock & Grisham, P.C., by: James H. Stock, Jr., for appellants.
Stewart K. Lambert, for appellees.

Opinion:
Sarah J. Heffley, Judge.
Appellants Terminix International Company and others (Terminix) bring this appeal from an order denying their motion to compel arbitration of tort claims brought against them by appellees Mandy Trivitt, a former Terminix employee, and Josh Trivitt, her husband. For reversal, Terminix argues that the trial court erred in ruling that the question of arbitration was controlled by the Arkansas Uniform Arbitration Act (AUAA) rather than the Federal Arbitration Act (FAA). We find merit in this argument and reverse and remand.
On November 18, 2004, Ms. Trivitt filed suit against Terminix asserting claims of defamation and outrage and seeking both compensatory and punitive damages. Trivitt's husband, Josh, joined in the complaint to assert a loss of consortium. As the factual predicate for these claims, Trivitt alleged that she held the position of Office Supervisor at Terminix's local office in Sharp County when in November of 2003 Mike Steed, the district manager, accused her of stealing office monies. Trivitt maintained that Steed communicated the accusation to persons in the local office and others in the regional office, both verbally and in writing. She alleged that Steed later suspended her and ultimately fired her based on the theft of office monies. Trivitt further alleged that the accusation was false and that no evidence was ever produced proving that she stole any money. She added that Terminix filed a police report that resulted in no charges being brought against her.
Terminix responded with a motion to compel arbitration in accordance with the terms of an employment agreement and arbitration agreement entered into by the parties. Terminix attached both agreements, which were signed by Trivitt in November 2001, as an exhibit to the motion. The employment agreement contained the following provision:
Agreement to Mediate and Arbitrate. The Employer and Employee agree that, to the fullest extent permitted by law, any and all disputes will be submitted to mediation upon terms mutually agreeable to both parties. In the event the parties do not resolve such controversies through mediation, then the Employer and Employee agree that, to the fullest extent permitted by law, any and all controversies between them will be submitted for resolution to binding arbitration in accordance with the attached Arbitration Agreement, which is incorporated herein by reference. The parties understand and agree that in the event mediation is unsuccessful, then arbitration will be the exclusive forum for resolving disputes arising out of the employment relationship and the termination of such relationship. The Employee and Employer expressly waive their entitlement, if any, to have controversies between them decided by a court or jury.
The arbitration agreement provided in pertinent part:
Arbitrable Claims. The parties understand that, except as otherwise provided by law, this Agreement applies to all claims, including, but by no means limited to, claims for breaches of contract (express or implied), discrimination, torts, and/or claims based upon any federal, state, or local ordinance, statute, regulation, constitutional provision, or any other law.
Governing Law. This Agreement will be governed and construed in accordance with the Federal Arbitration Act.
Terminix also included the affidavit of Bill Young, its vice president of human resources. He asserted that Terminix is a national termite and pest control company engaged in interstate commerce with branch offices throughout the United States, including the State of Arkansas. He stated that the corporate office is located in Memphis, Tennessee, and that payroll checks for employees were issued from the corporate office and that employee benefits were also administered through that office. He also averred that its service technicians apply chemicals and other products that come from outside the State of Arkansas.
In its brief and at the hearing, Terminix argued that the FAA applied because the parties chose it as the governing law in the agreement and because of the interstate character of its business. Trivitt argued primarily that the AUAA applied and that Arkansas law prohibits arbitration of tort matters and employer-employee disputes, as reflected by Ark. Code Ann. § 16-108-201(b)(2) (Repl. 2006). The trial court denied the motion to compel, ruling that the AUAA was the controlling law and thus Trivitt's tort claims of defamation and outrage were not arbitrable. Terminix appeals this determination, contending that the trial court erred by not applying the FAA to compel arbitration.
At the outset we note that an order denying a motion to compel arbitration is an immediately appealable order. Ark. R. App. P.-Civil 2(a)(12). We review the trial court's order denying a motion to compel de novo on the record. Advance America Servicing of Arkansas, Inc. v. McGinnis, 375 Ark. 24, 289 S.W.3d 37 (2008). In a de novo review, we review the evidence and the law without deference to the trial court's rulings. Wyatt v. Giles, 95 Ark. App. 204, 235 S.W.3d 522 (2006).
We observe that Congress enacted the FAA in 1925 as a response to hostility of American courts to enforce arbitration agreements. Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001). Section 2 of the FAA provides:
A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such contract, transaction, or refusal, shall be 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. With the enactment of section 2, Congress declared a national policy favoring arbitration and withdrew the power of states to require a judicial forum for the resolution of claims that the contracting parties agreed to resolve by arbitration. Southland Corp. v. Keating, 465 U.S. 1 (1984). The Act, which rests on Congress' authority under the Commerce Clause, supplies not simply a procedural framework applicable in federal courts; it also calls for the application, in state as well as federal courts, of federal substantive law regarding arbitration. Preston v. Ferrer, 128 S. Ct. 978, 169 L.Ed.2d 917 (2008). The primary purpose of the FAA is to ensure that private agreements to arbitrate are enforced according to their terms. Volt Information Sciences, Inc. v. Leland Stanford Junior University, 489 U.S. 468 (1989). To this end, the Supreme Court recognizes that parties are generally free to structure their arbitration agreements as they see fit. Id.
Arbitration is a matter of contract between parties. Lehman Properties v. BB & B Construction Co., 81 Ark. App. 104, 98 S.W.3d 470 (2003). In addressing whether a party has entered into an agreement to arbitrate under the FAA, courts are to apply state-law principles, giving due regard to the federal policy favoring arbitration. A.G. Edwards & Sons, Inc. v. Myrick, 88 Ark. App. 125, 195 S.W.3d 388 (2004). The same rules of construction and interpretation apply to arbitration agreements as apply to agreements generally, thus we will seek to give effect to the intent of the parties as evidenced by the arbitration agreement itself. E-Z Cash Advance, Inc. v. Harris, 347 Ark. 132, 60 S.W.3d 436 (2001). When contracting parties express their intention in a written instrument in clear and unambiguous language, it is the court's duty to construe the writing in accordance with the plain meaning of the language employed. Artman v. Hoy, 370 Ark. 131, 257 S.W.3d 864 (2007).
The arbitration agreement at issue plainly states that it is to be governed under the FAA and not Arkansas law. We have held that, where the parties designate in the arbitration agreement which arbitration statute they wish to have control, the court should apply their choice. Pest Management, Inc. v. Langer, 96 Ark. App. 220, 240 S.W.3d 149 (2006). As in our decision in Langer, we hold that the trial court erred by not honoring the parties' choice-of-law provision in the agreement.
Even without the choice-of-law provision, we would still hold that the FAA applies to the arbitration agreement. The FAA applies to contracts evidencing a transaction "involving commerce." The Supreme Court has interpreted the term "involving commerce" in the FAA as the functional equivalent of the more familiar term "affecting commerce" — words of art that ordinarily signal the broadest permissible exercise of Congress' Commerce Clause power. Citizens Bank v. Alafabco, Inc., 539 U.S. 52 (2003) (citing Allied-Bruce Terminix Companies v. Dobson, 513 U.S. 265 (1995)). In Allied-Bruce, the Supreme Court read the FAA's language "as insisting that the 'transaction' in fact 'in-volv[e]' interstate commerce, even if the parties did not contemplate an interstate commerce connection." Allied-Bruce, 513 U.S. at 281. Based in part on the Allied-Bruce interpretation of the term "involving commerce" as an expression of Congressional intent to regulate to the full extent of its commerce powers, the Court has held that employment contracts, except those of transportation workers, come within the purview of the FAA. Circuit City Stores, Inc. v. Adams, supra.
Flere, there is no dispute that the contract involved interstate commerce. In fact, Trivitt has chosen to ignore this aspect of the case in her brief, and she does not deny the interstate character of Terminix's business. Based on Bill Young's affidavit, the record shows that Terminix is a national concern that engages in interstate commerce. The chemicals and products used by its service technicians are shipped across state lines. Its headquarters are in Memphis, and it has branch offices throughout the United States. Trivitt was employed as an office supervisor at its branch in Sharp County. Her payroll checks were processed and issued out of the corporate office in Memphis, and her employee benefits were administered from the Memphis office as well. The connection with interstate commerce is evident. See, e.g., Baer v. Terminix International Co., 975 F.Supp. 1272 (D. Kan. 1997).
The next question we decide is whether this dispute falls within the terms of the arbitration agreement. The FAA establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. Moses H. Cone Memorial Hospital v. Mercury Construction Co.,460 U.S. 1 (1983). It is generally held that arbitration agreements will not be construed within the strict letter of the agreement but will include subjects within the spirit of the agreement. E-Z Cash Advance, Inc. v. Harris, supra. Here, the employment agreement mandates binding arbitration in accordance with the arbitration agreement, providing that "arbitration will be the exclusive forum for resolving disputes arising out of the employment relationship and the termination of such relationship." The arbitration agreement provides that arbitrable claims include "all claims, including, but by no means limited to, claims for . . . torts . . . ." Trivitt's complaint is grounded in the torts of defamation and outrage based on alleged mistreatment that she endured while employed at Terminix. These tort claims thus grew out of the employment relationship and are subject to arbitration according to the terms of the agreement.
In conclusion, the FAA is controlling in this case because the parties chose it to be the governing law and because of the connection with interstate commerce. Although the claims would not be arbitrable under Arkansas law, the FAA preempts state laws that require a judicial forum for the resolution of claims that the contracting parties agree to resolve by arbitration. Allied-Bruce Terminix Co. v. Dobson, supra; Volt Information Sciences, Inc. v. Leland Stanford Junior University, supra; Southland Corp. v. Keating, supra. See also Lehman Properties v. BB & B Construction Co., supra (holding that the FAA applies, not the AUAA, when interstate commerce is involved). Because the trial court applied the AUAA instead of the FAA, we reverse and remand for proceedings consistent with this opinion.
We note that Terminix makes the argument that Josh Trivitt's claim for loss of consortium is also subject to arbitration. The trial court did not rule on this matter, so we decline to address it. IGF Ins. Co. v. Hat Creek Partnership, 349 Ark. 133, 76 S.W.3d 859 (2002).
Reversed and remanded.
Pittman, C.J., and Bird, Glover, Marshall, and Hunt, JJ., agree.
Hart, Gladwin, and Baker, JJ., dissent.
In Pest Management, Inc. v. Langer, 369 Ark. 52, 250 S.W.3d 550 (2007), the supreme court upheld our decision that the FAA applied on a related ground without expressing an opinion on our conclusion concerning the choice-of-law provision in the contract.