Brubaker v. Barrett
801 F. Supp. 2d 743
E.D. Tenn.2011Background
- Plaintiff Brubaker sued her former employer Combined Insurance and supervisor Barrett for multiple state-law claims based on alleged video-recording of her undressing at a work conference.
- ACE Group purchased Combined Insurance in 2008; arbitration language was included in ACE's Employee Handbook Supplement, with an Arbitration Form signed by Brubaker on May 2, 2008.
- The Arbitration Policy listed broad categories of claims (employment-related disputes under various statutes) and stated arbitration as the sole remedy, including pre-existing and future claims, with a prohibition on class actions.
- The Arbitration Form signed by Brubaker incorporated the Arbitration Policy and obligated submission of employment-related claims to final and binding arbitration; ACE would arbitrate its own claims as well.
- Defendants moved to compel arbitration under the FAA; Barrett, currently incarcerated, sought counsel; the court addressed enforceability, scope, and related issues, including AON’s status and potential arbitration of its claims.
- The court held the arbitration clause enforceable, stayed Brubaker's claims against Combined Insurance pending arbitration, and ordered briefing on whether AON is an ACE affiliate/subsidiary for additional arbitrability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the arbitration agreement enforceable under the FAA? | Arbitration lacks consideration and mutual assent. | Arbitration agreement is valid and supported by consideration and mutual assent. | Enforceable under FAA. |
| Was the Arbitration Agreement supported by consideration? | Agreement is illusory due to unilateral amendments. | ACE's mutual obligation to arbitrate and incorporated terms supply consideration. | Sufficient consideration; not illusory. |
| Was there mutual assent to the Arbitration Agreement? | ACE representatives did not sign the form. | Plaintiff signed; course of dealing and ongoing performance show assent by ACE. | Mutual assent established. |
| Do Brubaker's claims fall within the scope of the broad arbitration clause? | Claims against Combined Insurance are not all within arbitration. | Broad arbitration clause covers all employment-related disputes, including asserted claims. | All claims against Combined Insurance fall within scope; arbitration compelled with stay. |
| Is AON subject to arbitration as ACE affiliate/subsidiary? | AON status uncertain; may not be bound. | If AON is an ACE affiliate/subsidiary, it is within arbitration scope. | Briefing ordered to determine AON's status; unresolved at this time. |
Key Cases Cited
- Floss v. Ryan's Family Steak Houses, Inc., 211 F.3d 315 (6th Cir. 2000) (agency to arbitrate must be binding; unilateral amendment can be illusory when promises lack binding obligation)
- Howell v. Rivergate Toyota, Inc., 144 Fed.Appx. 475 (6th Cir. 2005) (reciprocity and implied good faith limit unilateral amendment to procedural changes)
- Forbes v. A.G. Edwards & Sons, Inc., 2009 WL 424146 (S.D.N.Y. 2009) (broad arbitral clause covers co-worker misconduct related to work, even if after-hours)
- Simon v. Pfizer, Inc., 398 F.3d 765 (6th Cir. 2005) (broad arbitration clause presumption; doubt resolved in favor of arbitrability)
- AT&T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643 (U.S. 1986) (court should enforce arbitration clause unless explicit exclusion or strong contrary evidence)
- First Union Real Estate Equity & Mortgage Inv. v. Crown Am. Corp., 23 F.3d 406 (6th Cir. 1994) (scope and interpretation of arbitration agreements)
- Great Earth Cos., Inc. v. Simons, 288 F.3d 878 (6th Cir. 2002) (enforceability of arbitration agreements; in-issue standard requires genuine disputes of material fact)
- Seawright v. American General Fin. Servs., Inc., 507 F.3d 967 (6th Cir. 2007) (arbitration agreements governed by state contract law for defenses like unconscionability)