On July 20, the U.S. Court of Appeals for the Sixth Circuit dealt a major setback to Papa John’s effort to enforce an arbitration agreement with its employee, Andrew Bazemore. In Bazemore v. Papa John’s, U.S.A., 74 F.4th 795 (6th Cir. 2023), the Sixth Circuit reversed the U.S. District Court for the Western District of Kentucky’s decision to dismiss the federal action and send the case to arbitration. The Sixth Circuit determined that there was a genuine issue of material fact regarding whether there was an enforceable arbitration agreement.

Similar to the pre-employment conditions of other employers, Papa John’s employees were required to execute various agreements in connection with the commencement of their employment. Bazemore, a delivery driver for a Papa John’s store in Louisville, Kentucky, seemingly signed an arbitration agreement as part of his pre-employment paperwork. This agreement was signed electronically through the use of a software program called e-Forms. Bazemore filed a lawsuit in the District Court for the Western District of Kentucky, alleging that he had been paid below minimum wage in violation of both federal and state wage laws. Papa John’s moved the district court to compel arbitration of his claims.

Both the district court and the Sixth Circuit began their analysis by affirming that the Federal Arbitration Act requires district courts to compel arbitration of claims covered by a valid arbitration agreement. The party seeking arbitration must prove that the agreement exists. If a genuine issue of material fact exists as to whether there is an agreement, the court “shall proceed summarily to the trial thereof.”  9 U.S.C. § 4.

The parties agreed that Kentucky law governed the question of whether Bazemore entered into an arbitration agreement with Papa John’s. Kentucky law requires that each party to an agreement assent to it by “an intentional manifestation of such assent.” An electronic signature can suffice but only when “made by the action of the person the signature purports to represent,” which is itself a question of fact. Friedmann v. Jefferson County Board of Education, 647 S.W.3d 181, 189-90 (Ky. 2022).

In moving to compel arbitration, Papa John’s presented evidence in the form of a declaration from its Senior Director of People Services Brandi Greene. Greene stated that Papa John’s requires all new employees to sign an arbitration agreement as a condition of employment, and that Bazemore had signed the agreement electronically. He had used his user ID and a password, scrolled through the entire agreement, and then checked a box in order to sign. Papa John’s records reflected that Bazemore had followed this process to sign the agreement.

Bazemore submitted his own declaration in opposition, swearing that he “had never seen” the agreement and “had never heard about it.” He stated, among other things, that his login credentials “were clearly made up of demographic information” available from his application, and that he had seen his manager log in for him and other deliver driver “to complete training materials” for them. In addition to submitting his declaration, Bazemore asked for targeted discovery concerning whether he had actually signed the agreement.

After reviewing the evidence, the district court found that Bazemore’s testimony that he had never seen the agreement amounted to “a convenient lapse in memory[.]” The district court denied Bazemore’s request for targeted discovery and granted defendants’ motion to compel arbitration. 

Bazemore appealed, and the Sixth Circuit reviewed the decision de novo. The Sixth Circuit noted that Papa John’s, the party attempting to enforce the arbitration agreement, bore the ultimate burden to establish the agreement’s existence; this was apparently contrary to what the district court concluded. Additionally, the Sixth Circuit noted that “Civil Rule 56 contains no requirement for magic words” regarding whether Bazemore had not signed the agreement. The Sixth Circuit deemed Bazemore’s testimony sufficient to create a genuine issue as to whether he signed the arbitration agreement and held that the record showed that “[a] reasonable factfinder could plainly infer that that, if Bazemore had not seen the agreement, he had not signed it either.”

The Sixth Circuit addressed an additional argument that was raised for the first time on appeal by Papa John’s. Papa John’s argued that Bazemore assented to the terms of the arbitration agreement by “continuing to work for the company after learning about the putative agreement through [the lawsuit].” The Sixth Circuit dispensed with this argument, calling it “meritless” and noting that, pursuant to Kentucky law, the “conduct of a party is not effective as a manifestation of his assent” unless the party has “reason to know that the other party may infer from his conduct that he assents.” The court further noted that Bazemore “had no reason to think that his continued employment could indicate that he has agreed to arbitrate his claims – given that he was, at the same time, arguing in court that he never agreed to arbitration.”

The Sixth Circuit determined that there was a genuine issue of fact. Therefore, it accordingly reversed the district court’s judgment and remanded the case for further proceedings. 

Rowan Leathers and Liesel Carmen-Burks are members of the Labor & Employment Litigation Group at Butler Snow LLP. Rowan concentrates his practice in the areas of advising and representing employers in a broad spectrum of employment-related matters. Liesel has a background in litigation and arbitration matters in the areas of labor and employment and civil rights, on both the plaintiff and defense side.