Petco Animal Supplies Stores, Inc. v. Jenna Kate Fields ( 2023 )

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NOT TO BE PUBLISHED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
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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.
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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.
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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.
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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.
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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.
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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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