Robert Kay v. the Minacs Group (usa), Inc.

NOT RECOMMENDED FOR PUBLICATION
File Name: 14a0693n.06
No. 13-1974
UNITED STATES COURTS OF APPEALS
FOR THE SIXTH CIRCUIT
ROBERT KAY,
Plaintiff-Appellant,
v.
THE MINACS GROUP (USA), INC.,
Defendant-Appellee.
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ON APPEAL FROM THE
UNITED STATES DISTRICT
COURT FOR THE EASTERN
DISTRICT OF MICHIGAN
OPINION
BEFORE: MERRITT, COOK, and STRANCH, Circuit Judges
JANE BRANSTETTER STRANCH, Circuit Judge: Based on an arbitration provision
in an employee handbook, the district court dismissed Robert Kay’s age discrimination suit and
ordered Kay and his employer to arbitrate the issue. The arbitration agreement, assuming it is
even valid and enforceable, does not apply to Kay’s claims. We REVERSE the district court.
I. FACTS & PROCEDURAL HISTORY
In 2011, The Minacs Group fired Robert Kay, who was sixty years old, and hired
someone much younger to replace him. Kay sued, alleging age discrimination under the Age
Discrimination in Employment Act (ADEA) and Michigan’s Elliot Larsen Civil Rights Act
(ELCRA). Kay had originally worked for the Phoenix Group, which hired him in 1995, but in
2001 Minacs purchased Phoenix’s assets; nevertheless, paragraph 10 of Kay’s complaint stated
that he “began working for defendant in 1995.” Minacs moved to dismiss the complaint and

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compel arbitration pursuant to the “Receipt of Policies and Procedures” issued by Phoenix and
signed by Kay in 1995. Minacs did not submit the Policies and Procedures document itself—just
the Receipt. The district court construed paragraph 10 as a judicial admission that Phoenix and
Minacs were the same employer and concluded that the Receipt was therefore still operative
despite the change in ownership. The court found that the Receipt required Kay to arbitrate his
age discrimination claim and dismissed the case and compelled arbitration. Kay moved for
reconsideration, requesting permission to amend his complaint and offering evidence that he had
been fired by Phoenix and then hired by Minacs and also that Minacs’s own employee policies
superseded the Receipt. The district court denied Kay’s motion. Kay appealed, arguing that the
arbitration provision in the Phoenix Receipt does not cover his claims and that the court erred in
construing Paragraph 10 of his complaint as a judicial admission that Phoenix and Minacs were
functionally the same entity.
This appeal exists largely because of troubling litigation behavior by Minacs. Minacs
provided the court with the Phoenix Receipt but not Phoenix’s Policies and Procedures handbook
even though the Receipt’s arbitration provision applies only to claims “arising out of or relating
to these Policies and Procedures.” Due to Minacs’s omission, we have no idea what the Phoenix
handbook covers and so have no idea what kind of claims the arbitration clause covers. Minacs,
moreover, must have had copies of its own receipt and handbook, which suggests that Minacs
would have known that the Phoenix receipt had been superseded by its own and that Kay’s
claims were not subject to arbitration. This crucial information should have been a part of the
record.

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II. STANDARD OF REVIEW
We review a district court’s decision to compel arbitration de novo, “but with a thumb”—
or at least a pinkie—“on the scale in favor of arbitration.” Solvay Pharm., Inc. v. Duramed
Pharm., Inc., 442 F.3d 471, 478 (6th Cir. 2006). The question of whether there was an
enforceable agreement to arbitrate is reviewed de novo according to state contract law. Tillman
v. Macy’s, Inc., 735 F.3d 453, 456 (6th Cir. 2013); Floss v. Ryan’s Family Steak Houses, Inc.,
211 F.3d 306, 314 (6th Cir. 2000). A district court’s decision to treat a party’s statement as a
judicial admission is reviewed for abuse of discretion: the decision stands unless the panel is
“firmly convinced that a mistake has been made.” MacDonald v. Gen. Motors. Corp., 110 F.3d
337, 340 (6th Cir. 1997). A denial of a motion to reconsider is also reviewed for abuse of
discretion. Nat’l Ecological Found. v. Alexander, 496 F.3d 466, 476 (6th Cir. 2007).
III. ANALYSIS
A. Construing the Receipt
The Federal Arbitration Act directs a court to stay litigation and refer an issue to
arbitration once it determines that there is (1) an “agreement in writing for such arbitration” and
(2) that the issue in question “is referable to arbitration under such agreement.” 9 U.S.C. § 3.
The threshold question, then, is “whether the dispute is arbitrable, meaning that a valid
agreement to arbitrate exists between the parties and that the specific dispute falls within the
substantive scope of the agreement.” Mazera v. Varsity Ford Mgmt. Servs., LLC, 565 F.3d 997,
1001 (6th Cir. 2009) (quoting Landis v. Pinnacle Eye Care, LLC, 537 F.3d 559, 561 (6th Cir.
2008)). Both parts of this question—whether there was an “agreement” to arbitrate and whether
an issue falls within the scope of that agreement (“is referable,” to use the Arbitration Act’s
wording)—are primarily governed by state contract law. Hergenreder v. Bickford Senior Living

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Grp., LLC, 656 F.3d 411, 416–17 (6th Cir. 2011). We say “primarily” because the Arbitration
Act preempts any state law rule “singling out arbitration provisions for suspect status,” Doctor’s
Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996), and thus requires courts to “place
arbitration agreements on an equal footing with other contracts and enforce them according to
their terms,” AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1745 (2011) (citation
omitted). But with that caveat thus made, whether Kay and Phoenix had an “agreement” to
arbitrate is really a question of contract formation and whether Kay’s civil rights claims are
within the scope of that agreement is a question of contract construction, both of which are
governed by Michigan law.
We assume for argument’s sake that Kay and Phoenix had agreed to arbitrate some
disputes; the question is whether they had agreed to arbitrate this kind of dispute—a civil rights
claim. The relevant portion of the Receipt provides:
I also acknowledge that any and all controversies or claims arising out of, or
relating to these Policies and Procedures shall be resolved by submitting the
dispute to arbitration . . . .
Note that “Policies and Procedures” are capitalized in this sentence, which indicates that the
arbitration provision only applies to claims connected to the employee handbook titled “Policies
and Procedures” rather than all of Phoenix’s policies and procedures. In other places, the Receipt
mentions “policies and procedures” with no capitalization when referring to something other
than the handbook itself. The Receipt, moreover, appears to be itself part of the Policies and
Procedures handbook. Note the header to the Receipt:

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On its face, then, the scope of the arbitration provision is easy to discern: Kay and
Phoenix agreed to arbitrate only those disputes that arise from or relate to whatever is in the
Policies and Procedures handbook. Minacs did not put the rest of the handbook into the record,
so we have no way of knowing whether civil rights claims are covered by the handbook.
Arbitration provisions, like any other provision, must be interpreted in the context of the whole
contract. See Huffman v. Hilltop Cos., LLC, 747 F.3d 391, 397–98 (6th Cir. 2014); see also
Heurtebise v. Reliable Bus. Computers, Inc., 550 N.W.2d 243, 246–47 (Mich. 1996).
Given Minacs’s omission, we construe the provision literally and conclude that the
arbitration provision does not cover Kay’s civil rights claims because there is no contract
language indicating that his claims arise from or relate to the employee handbook. Further,
Kay’s complaint does not allege a “policy or procedure,” it alleges age discrimination on the part
of Kay’s immediate supervisor. The provision is certainly not “ambiguous” as we normally
understand the word: “Contract language is ambiguous if it ‘is capable of more than one meaning
when viewed objectively by a reasonably intelligent person who has examined the context of the
entire integrated agreement . . . .’” Preferred RX, Inc. v. Am. Prescription Plan, Inc., 46 F.3d
535, 543 (6th Cir. 1995) (quoting Walk–In Medical Ctrs., Inc. v. Breuer Capital Corp., 818 F.2d
260, 263 (2d Cir. 1987)) (emphasis added). Rather, the provision is “ambiguous” because
Minacs chose not to provide the court with the portion of the contract that would clear up the
“ambiguity.” Remarkably, Minacs argues that the presumption of arbitrability compels the court
to resolve this “ambiguity” in favor of arbitration. Presumptions and canons of construction do
not relieve a party of its responsibility to provide the court with the entire contract at issue and do
not supplant a lawyer’s duty of candor owed to the court.

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B. The Judicial Admission
In order to ensure that the case will proceed properly on remand, we pause to address the
court’s ruling that Kay had made a judicial admission. Paragraph 10 of Kay’s complaint states:
“Plaintiff began working for defendant in 1995 as an assistant controller.” The district court read
this sentence to mean that “Plaintiff admits in his Complaint that Phoenix and Defendant [i.e.,
Minacs] are the same. This is a judicial admission that Phoenix and Defendant have substantial
similarities of operation and continuity, thus the arbitration agreement is binding on the parties.”
We disagree.
“[U]nder federal law, stipulations and admissions in the pleadings are generally binding
on the parties and the Court. Not only are such admissions and stipulations binding before the
trial court, but they are binding on appeal as well.” Ferguson v. Neighborhood Hous. Servs.,
780 F.2d 549, 551 (6th Cir. 1986) (citation omitted). “Factual assertions in pleadings . . . , unless
amended, are considered judicial admissions conclusively binding on the party who made them.”
Am. Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224, 226 (9th Cir. 1988); see also Barnes v.
Owens-Corning Fiberglas Corp., 201 F.3d 815, 829 (6th Cir. 2000) (quoting Lacelaw, 861 F.2d
at 226). However, a statement must be “deliberate, clear and unambiguous” and “‘expressly
concede . . . an alleged fact’” in order to be treated as a judicial admission. MacDonald v. Gen.
Motors Corp., 110 F.3d 337, 340 (6th Cir. 1997) (quoting United States v. Belculfine, 527 F.2d
941, 944 (1st Cir. 1975)).
The requirements for a judicial admission are not satisfied by the record. Even under a
deferential standard of review, “Plaintiff began working for Defendant in 1995 as an assistant
controller,” is not sufficiently deliberate or clear to qualify as an express concession that
“Phoenix and [Minacs] are the same.” The briefing and record before the district court made

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clear that Kay did not work for Minacs in 1995, that he worked for Phoenix, that Phoenix and
Minacs are not “the same” as a matter of fact, and Kay that did not intend to concede this “fact.”
The court abused its discretion when it treated Paragraph 10 of Kay’s complaint as a judicial
admission. See MacDonald, 110 F.3d at 340.
IV. CONCLUSION
Kay’s claims are not arbitrable under the terms of the Receipt and Kay is therefore
entitled to pursue his case in federal court. We REVERSE the district court’s order compelling
arbitration and dismissing the case, and REMAND the case for further proceedings on Kay’s
civil rights claims.

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COOK, Circuit Judge, concurring separately. I concur with the majority’s decision to
reverse the judgment of the district court and remand for further proceedings on a single, narrow
ground: Minacs fails to show that the Receipt entitles it to dismissal.
In granting Minacs’s motion to dismiss, the district court relied on the Receipt’s
seemingly broad language—“any and all controversies or claims arising out of, or relating to”—
without grappling with the next phrase, “these Policies and Procedures.” As the majority notes,
this phrase limits the scope of the arbitration provision to those disputes arising from or relating
to Phoenix’s 1995 Policies and Procedures handbook. And though we have previously construed
arbitration clauses to apply broadly to employment disputes, we have done so only when the
provisions included broader language than the Receipt’s language here. See, e.g., Morrison v.
Circuit City Stores, Inc., 317 F.3d 646, 654 (6th Cir. 2003) (arbitration provision covering “any
legal dispute relating to [employee’s] employment with Circuit City, including all state and
federal statutory claims, contract claims, and tort claims (emphasis added)); EEOC v. Frank’s
Nursery & Crafts, Inc., 177 F.3d 448, 452 (6th Cir. 1998) (arbitration provision covering “any
claim . . . relative to [employee’s] employment or termination of employment (including but not
limited to any claim for any tort, discrimination, breach of contract, violation of public policy or
statutory claim)” (emphasis added)).
Here, Minacs labeled the Receipt a “stand-alone” document and provided no evidence
that Kay’s discrimination claim “aris[es] out of or relat[es] to [the Phoenix] Policies and
Procedures.” On this record, the district court erred in concluding that Kay’s dispute falls within
the scope of the arbitration provision. I therefore concur with the majority’s decision to reverse
the district court’s judgment and remand for further proceedings.

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