Walls v. Kelly Services, Inc.

Background

Melissa Walls alleged that she began working at McNeilus Truck and Manufacturing, Inc. in April 2017 as a temporary worker employed by Kelly Services, Inc. On May 16, 2017, a coworker closed a truck hood on Walls’ back, causing a disk herniation. Her doctor later imposed work restrictions, including limits on lifting, carrying, and reaching. Walls alleged that she reported unsafe working conditions and that she was being asked to work beyond her restrictions. Kelly later told her that McNeilus no longer needed her position, although Walls alleged that another Kelly employee immediately filled it.

Walls’ complaint asserted four claims: retaliatory discharge under Minnesota workers’ compensation law, failure to offer continued employment under that law, Minnesota Occupational Safety and Health Act discrimination, and retaliation under the Minnesota Whistleblower Act. She sued Kelly and McNeilus.

Arbitration Agreement

Kelly required applicants for temporary employment to complete hiring documents through its electronic registration system. The system required applicants to use unique login credentials and complete an electronic signature for each document. The record showed that Kelly emailed Walls an invitation to the system on March 7, 2017, and that she logged in, completed the required documents, and electronically signed an agreement titled “Dispute Resolution and Mutual Agreement to Binding Arbitration.”

The agreement required Walls and Kelly to use binding arbitration instead of court for covered claims involving Kelly, its related or affiliated companies, and current or former employees of those entities. Covered claims included employment-related statutory and common-law claims, including retaliation. The agreement excluded, among other matters, claims for employee benefits under Kelly’s ERISA plans, workers’ compensation claims, unemployment compensation claims, unfair competition claims, and solicitation claims. The agreement also incorporated American Arbitration Association rules and included a Michigan choice-of-law provision.

Court’s Analysis

The court applied the Federal Arbitration Act, which generally makes written arbitration provisions involving interstate commerce enforceable. It considered whether the agreement was validly made and whether it covered Walls’ claims.

The court concluded that the agreement was valid. Kelly made an offer by presenting the agreement through the electronic registration process, Walls accepted by signing it electronically, and the parties exchanged consideration: Walls agreed to arbitrate, while Kelly provided employment and agreed to be bound by the arbitrator’s decision. The court also noted that Walls had not asserted a basis for refusing enforcement, such as fraud, coercion, or an unfair contract term. It found that the agreement was clearly titled, written in plain English and bold text, and available for review before signing.

The court concluded that Walls’ claims against Kelly fell within the agreement’s broad coverage of employment-related claims. Although the agreement excluded workers’ compensation benefit claims, the court found that Walls was not seeking workers’ compensation benefits; instead, she alleged retaliation for seeking those benefits and failure to continue employing her.

McNeilus had not signed the arbitration agreement and was not expressly named in it. The court nevertheless ruled that McNeilus could enforce the agreement because Walls alleged that Kelly and McNeilus were joint employers, asserted interdependent claims against both defendants without distinguishing between them, and treated McNeilus as a third-party beneficiary of the employment agreement between Kelly and Walls.

Disposition

The court held that all of Walls’ allegations were covered by the arbitration agreement and had to be submitted to final, binding arbitration. Because no claims remained for the court to decide, it exercised its discretion to dismiss the case rather than keep it stayed while arbitration proceeded.

The court granted Defendants’ Motion to Compel Arbitration and Dismiss Plaintiff’s Complaint and dismissed the matter without prejudice. The order was signed by United States District Judge Michael J. Davis.