Court Opinion

ID: 9392542
Source: CourtListenerOpinion
Date Created: 2023-05-05 14:05:45.194934+00
Date Added: 2024-06-11T17:18:46.545879
License: Public Domain

RENDERED: APRIL 28, 2023; 10:00 A.M.
                         NOT TO BE PUBLISHED

                 Commonwealth of Kentucky
                           Court of Appeals

                              NO. 2022-CA-0476-MR

PETCO ANIMAL SUPPLIES STORES,
INC.; MICHAEL BRUCE; AND
SHAWNA NEWSOME                                                    APPELLANTS

                  APPEAL FROM PIKE CIRCUIT COURT
v.              HONORABLE HOWARD KEITH HALL, JUDGE
                       ACTION NO. 21-CI-00742

JENNA KATE FIELDS                                                     APPELLEE

                                     OPINION
                                    REVERSING

                                   ** ** ** ** **

BEFORE: CETRULO, DIXON, AND EASTON, JUDGES.

DIXON, JUDGE: Petco Animal Supplies Stores, Inc.; Michael Bruce; and

Shawna Newsome appeal from the order denying their motion to compel

arbitration entered by the Pike Circuit Court on April 11, 2022. Following review

of the record, briefs, and law, we reverse.
                FACTS AND PROCEDURAL BACKGROUND

            Jenna Kate Fields was employed by Petco Animal Supplies Stores,

Inc., (Petco) from 2012 through 2021. In 2013, Petco employee Michael Bruce

allegedly began making sexual advances toward Fields. Fields reported this

behavior to two Petco store managers, including Shawna Newsome, as well as

anonymously to a “hotline.”

            In 2021, Petco sent Fields a Mutual Agreement to Arbitrate. This was

part of a mandatory arbitration program implemented for all employees when

Petco became a publicly traded entity. Employees were provided with this

document and others by a software program, Workday, which Fields had utilized

in the past. Company records were produced showing that Fields electronically

executed this agreement and other documents on February 18, 2021.

            In April 2021, Fields was suspended for theft, and after an

investigation, was terminated.

            Fields sued Petco, Newsome, and Bruce for sexual harassment,

discrimination, and retaliation; wrongful termination; extreme and outrageous

conduct; negligent retention; and hostile work environment. Defendants moved

the trial court to compel arbitration, but the motion was denied. This appeal

followed.

                                        -2-
                                 STANDARD OF REVIEW

                An order denying a motion to compel arbitration is appealable under

KRS1 417.220(1). Conseco Fin. Servicing Corp. v. Wilder, 47 S.W.3d 335, 340

(Ky. App. 2001). On review,

                we defer to the trial court’s factual findings, upsetting
                them only if clearly erroneous or if unsupported by
                substantial evidence, but we review without deference
                the trial court’s identification and application of legal
                principles. Apparently the trial court made no factual
                findings in this case, but based its ruling solely on the
                application of certain principles of contract law to the
                arbitration clause . . . . Our review, accordingly, is de
                novo.

Id.

                                         ANALYSIS

                On appeal, Appellants argue the trial court erred by applying the

Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021

(the “Act”)2 to the case herein. The Act provides:

                Notwithstanding any other provision of this title, at the
                election of the person alleging conduct constituting a
                sexual harassment dispute or sexual assault dispute, . . .
                no predispute arbitration agreement or predispute joint-
                action waiver shall be valid or enforceable with respect to
                a case which is filed under Federal, Tribal, or State law

1
    Kentucky Revised Statutes.
2
    9 United States Code Annotated (U.S.C.A.) §§ 401, 402.

                                              -3-
                and relates to the sexual assault dispute or the sexual
                harassment dispute.

9 U.S.C.A. § 402(a). It further states, “This Act, and the amendments made by this

Act, shall apply with respect to any dispute or claim that arises or accrues on or

after the date of enactment of this Act.” The Act was enacted and became effective

March 3, 2022. Therefore, by its terms, the Act is inapplicable to the claims

herein, which arose in or prior to 2021.

                Appellants next argue the Federal Arbitration Act (FAA)3 and

Kentucky Uniform Arbitration Act (KUAA)4 apply to the arbitration agreement

and, therefore, the trial court erred in not enforcing it. When “confronted with a

motion to compel arbitration, the task of the trial court is simply to decide under

ordinary contract law whether the asserted arbitration agreement actually exists

between the parties and, if so, whether it applies to the claim raised in the

complaint.” Stanton Health Facilities, LP v. Fletcher, 454 S.W.3d 312, 315 (Ky.

App. 2015) (internal quotation marks and citation omitted).

                “The fundamental elements of a valid contract are offer and

acceptance, full and complete terms, and consideration.” Energy Home, Div. of

Southern Energy Homes, Inc. v. Peay, 406 S.W.3d 828, 834 (Ky. 2013) (internal

3
    9 U.S.C.A. § 2.
4
    KRS 417.045 et seq.

                                            -4-
quotation marks and citation omitted). Petco’s offer was continued employment in

exchange for executing the agreement, Fields accepted the offer electronically, the

full and complete terms are documented in the agreement, and the consideration

was a promise to submit claims to arbitration. (“[A]n exchange of promises ‘to

submit equally to arbitration’ constitutes adequate consideration[.]” Grimes v.

GHSW Enters., LLC, 556 S.W.3d 576, 581 (Ky. 2018)).

               One “seeking to enforce an agreement has the burden of establishing

its existence, but once prima facie evidence of the agreement has been presented,

the burden shifts to the party seeking to avoid the agreement. The party seeking to

avoid the arbitration agreement has a heavy burden.” Louisville Peterbilt, Inc. v.

Cox, 132 S.W.3d 850, 857 (Ky. 2004) (citations omitted). Here, since Appellants

presented sufficient evidence of the agreement, the burden shifted to Fields to

avoid it. The trial court made no factual findings, instead relying upon the

inapplicable federal law. On this record, Fields did not satisfy her burden.

               Fields challenges her electronic signature. Under Kentucky’s

Uniform Electronic Transactions Act5 an “‘[e]lectronic signature’ means an

electronic sound, symbol, or process attached to or logically associated with a

record and executed or adopted by a person with the intent to sign the record[.]”

KRS 369.102(8). Fields’ signature statement reads:

5
    KRS 369.101 to 369.120.

                                         -5-
             By electronically clicking “Accept,” I acknowledge that I
             received a copy of the Mutual Agreement to Arbitrate
             and understand that I am agreeing to arbitrate
             employment-related claims and waive my right to have
             such claims decided by a judge or jury in federal or state
             court. I further acknowledge and agree to the use of this
             electronic method as my signature to demonstrate my
             acknowledgement.

Even so, a signature is not required for an enforceable arbitration agreement.

(“[U]nder Kentucky law, a party can be bound to a contract, even in the absence of

a signature, when her actions indicate acceptance of the contract’s terms.” Braxton

v. O’Charley’s Rest. Props., LLC, 1 F. Supp. 3d 722, 727 (W.D. Ky. 2014);

“Under the circumstances, her assent could properly be inferred from the fact that

she continued in the employment after the provision took effect.” Spears v.

Carhartt, Inc., 215 S.W.3d 1, 9 (Ky. 2006)). Here, Fields assented to the

arbitration agreement through her electronic signature and continued employment.

             Fields further claims no one went over the agreement with her.

However, it is well-established, “one who signs a contract is presumed to know its

contents[.]” Clark v. Brewer, 329 S.W.2d 384, 386 (Ky. 1959). As previously

discussed, Fields signed the agreement; therefore, she is bound by its terms.

Accordingly, Fields failed to overcome the heavy burden of avoiding the

arbitration agreement, and the trial court erred in denying Appellants’ motion to

compel arbitration.

                                         -6-
                               CONCLUSION

           Therefore, and for the foregoing reasons, the order of the Pike Circuit

Court is REVERSED.

           ALL CONCUR.

BRIEFS FOR APPELLANTS:                  BRIEF FOR APPELLEE:

Faith C. Whittaker                      Nathan D. Brown
Cincinnati, Ohio                        Williamson, West Virginia

Chase M. Cunningham
Louisville, Kentucky

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