Elizabeth McLeod v. General Mills, Inc.
2017 U.S. App. LEXIS 6422
| 8th Cir. | 2017Background
- General Mills announced mass layoffs in June 2012 and offered severance packages in exchange for signed release agreements that waived all claims related to termination, including ADEA claims, and required individual arbitration (no class/collective actions).
- Thirty-three former employees signed releases, then sued under the ADEA alleging (1) the waivers were not "knowing and voluntary" under 29 U.S.C. § 626(f)(1) and seeking a declaratory judgment to that effect, and (2) substantive disparate-treatment and disparate-impact ADEA claims (collective and individual).
- General Mills moved to compel individual arbitration and to dismiss; the district court denied the motion. General Mills appealed.
- The Eighth Circuit reviewed arbitrability de novo and examined whether the Federal Arbitration Act (FAA) is overridden by a "contrary congressional command," focusing on § 626(f) of the ADEA.
- The court held (1) the arbitration clauses cover the substantive ADEA claims and thus are enforceable under the FAA, and (2) the declaratory-judgment claim that the waivers were not "knowing and voluntary" presented no Article III case or controversy as pled and must be dismissed for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitration clauses cover substantive ADEA claims | Releases only require arbitration of disputes "relating to" the release itself, not the substantive ADEA claims | The clause expressly covers "any claim relating to the release," including claims covered by the release—so substantive ADEA claims are arbitrable | Arbitrable: the clause covers substantive ADEA claims and FAA requires enforcement |
| Whether § 626(f) creates a "contrary congressional command" barring arbitration of substantive ADEA claims | § 626(f) requires waivers be "knowing and voluntary" and § 626(f)(3) requires a court to decide waiver validity, so arbitration of claims would improperly waive statutory rights/procedural rights (jury/class) | 14 Penn Plaza forecloses treating arbitration as waiver of substantive ADEA rights; jury and class-procedure are not "rights or claims" protected from waiver under § 626(f) | No contrary command: FAA governs; substantive ADEA claims may be arbitrated |
| Whether § 626(f)(3) mandates that waiver-validity disputes be adjudicated in court (not arbitration) | The statute says the party asserting validity "shall have the burden of proving in a court of competent jurisdiction," so § 626(f)(3) requires judicial, not arbitral, resolution of waiver validity | The phrase addresses proving substantive-waiver validity but does not by itself strip arbitrators of authority; however jurisdictional and case-or-controversy limits still control | Court did not decide whether § 626(f)(3) precludes arbitration of the waiver issue because declaratory-judgment claim lacked Article III ripeness; remanded without resolving that question |
| Whether declaratory-judgment claim that waivers were not "knowing and voluntary" presented an Article III case or controversy | Plaintiffs seek a declaration now that releases were not knowing/voluntary so they need not be bound by waivers | General Mills had not yet asserted waiver as a defense or sought to enforce the releases; plaintiffs’ request is hypothetical | No Article III jurisdiction: declaratory claim is speculative/hypothetical and must be dismissed; dismissal and compelled arbitration of substantive claims ordered |
Key Cases Cited
- Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir.) (de novo review of arbitrability)
- CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (U.S.) (FAA enforces arbitration agreements absent contrary congressional command)
- KPMG LLP v. Cocchi, 132 S. Ct. 23 (U.S.) (arbitrable claims must be sent to arbitration even if some claims are not)
- 14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (U.S.) (agreement to arbitrate ADEA claims does not waive substantive ADEA right)
- MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (U.S.) (standards for declaratory-judgment case or controversy)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S.) (standing and imminence requirements)
- Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165 (U.S.) (§ 216(b) collective-action authorization explained)
- In re McCormick, 812 F.3d 659 (8th Cir.) (court must independently assess Article III jurisdiction)
- Calderon v. Ashmus, 523 U.S. 740 (U.S.) (no case or controversy for declaratory relief about hypothetical future defenses)
- Coffman v. Breeze Corp., 323 U.S. 316 (U.S.) (no justiciable question where relief depends on a future defense or action)