567 S.W.3d 644
Mo. Ct. App.2018Background
- Esser, employed by Anheuser-Busch (A-B) since 1983, sued A-B in 2017 alleging age discrimination under the Missouri Human Rights Act.
- A-B maintained a Dispute Resolution Program (DRP) first issued in 1997 and revised in 2004; the 2004 DRP was mailed to employees and stated continued employment after a date "means both you and the company have agreed" to the DRP.
- The 2004 DRP contained a delegation clause providing that an arbitrator has "exclusive authority" to decide questions of applicability, enforceability, or formation of the DRP (i.e., arbitrability).
- Esser never signed or expressly acknowledged the DRP; he filed an affidavit saying he did not recall receiving, reading, or agreeing to the DRP or delegation clause.
- A-B moved to compel arbitration and argued the delegation clause required an arbitrator to decide arbitrability; Esser specifically challenged the delegation clause and argued no acceptance or consideration existed.
- The trial court denied A-B’s motion (finding A-B failed to show clear and unmistakable evidence of Esser’s acceptance of the delegation clause); the denial was appealed and affirmed.
Issues
| Issue | Esser's Argument | A-B's Argument | Held |
|---|---|---|---|
| Whether the DRP's delegation clause requires an arbitrator to decide arbitrability | Esser specifically challenged the delegation clause, arguing he never accepted it and it lacks consideration | The delegation clause is severable and, absent a specific challenge, delegates arbitrability to arbitrator | Court held Esser did specifically challenge the delegation clause, so the court must decide validity; delegation not enforced because A-B failed to show clear and unmistakable assent |
| Whether Esser manifested clear and unmistakable assent to delegate arbitrability | No — Esser attested he never received, read, signed, or agreed to the DRP or delegation clause | Continued employment and company mailing/notice sufficed to show assent | Court held there was not clear and unmistakable evidence of Esser’s acceptance; silence/continued employment insufficient |
| Whether offer, acceptance, and meeting of the minds existed for the DRP/delegation clause | No meeting of the minds; no positive, unambiguous acceptance | Mailing and notice plus continued employment satisfied contract formation | Court held formation elements were not shown by A-B; precedent requires more than unilateral notice and continued work |
| Whether sufficient consideration supported the DRP/delegation clause | No — A-B reserved unilateral right to modify/discontinue the DRP, making promises illusory | Mutual promises to arbitrate (as presented) were adequate consideration | Court held A-B’s unilateral amendment power rendered the promise illusory and therefore insufficient consideration |
Key Cases Cited
- State ex rel. Pinkerton v. Fahnestock, 531 S.W.3d 36 (Mo. banc 2017) (delegation clauses are severable and enforceable unless specifically challenged; courts require clear and unmistakable evidence of delegation)
- Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (U.S. 2010) (parties may delegate arbitrability to arbitrator; delegation must be clearly and unmistakably agreed to)
- Jimenez v. Cintas Corp., 475 S.W.3d 679 (Mo. App. E.D. 2015) (Missouri applies ordinary contract principles — offer, acceptance, consideration — to arbitration agreements)
- Bowers v. Asbury St. Louis Lex, LLC, 478 S.W.3d 423 (Mo. App. E.D. 2015) (unilateral reservation to amend arbitration agreement can render promise to arbitrate illusory)
- Katz v. Anheuser-Busch, Inc., 347 S.W.3d 533 (Mo. App. E.D. 2011) (continued employment/ silence insufficient to establish positive and unambiguous acceptance of employer arbitration term)
- Baker v. Bristol Care, Inc., 450 S.W.3d 770 (Mo. banc 2014) (unilateral authority to amend arbitration agreement makes promise illusory and undermines consideration)