                  United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 18-1235
                         ___________________________

Jennifer Shockley, individually, and on behalf of all other similarly situated persons

                         lllllllllllllllllllllPlaintiff - Appellee

                                            v.

                     PrimeLending, a PlainsCapital Company

                       lllllllllllllllllllllDefendant - Appellant
                                       ____________

                      Appeal from United States District Court
                 for the Western District of Missouri - Kansas City
                                  ____________

                           Submitted: February 12, 2019
                               Filed: July 15, 2019
                                  ____________

Before SMITH, Chief Judge, BENTON and STRAS, Circuit Judges.
                              ____________

SMITH, Chief Judge.

      PrimeLending, a PlainsCapital Company, appeals from the district court’s1
denial of its motion to compel arbitration against Jennifer Shockley. Shockley sued
PrimeLending, alleging a violation of the Fair Labor Standards Act (FLSA). The

      1
       The Honorable Dean Whipple, United States District Judge for the Western
District of Missouri.
district court denied the motion to compel arbitration because there was no agreement
to arbitrate between Shockley and PrimeLending. The district court held that the
arbitration provision contained in the PrimeLending Handbook Addendum
(“Handbook”), and the delegation provision therein, were not enforceable contracts.
We agree with the district court that Shockley and PrimeLending never entered into
a contract relating to either provision. Therefore, we affirm the denial of
PrimeLending’s motion to compel arbitration.

                                  I. Background
      Shockley2 was employed by PrimeLending from June 2016 to July 2017.
PrimeLending maintained a computer network accessible by its employees, which
contained employment-related information, such as its new hire policies and
Handbook. In August 2016, Shockley accessed this section of PrimeLending’s
network by using a computer mouse to click and open various company documents,
including the Handbook. Clicking on the Handbook in the system automatically
generated an acknowledgment of review. That same click would have generated a
pop-up window containing a hyperlink to open the full text of the Handbook.
Shockley does not recall reviewing the Handbook, and there is no evidence that she
ever opened or reviewed the Handbook’s full text. As part of her required annual
policy review, Shockley completed the same process in the computer network again
in February 2017.

     The Handbook contains two important provisions relevant to this case: the
“Dispute Resolution/Arbitration Clause” (“arbitration provision”) and the “Control
of Decisions” provision (“delegation provision”), which is a subpart within the




      2
       Shockley filed suit individually and on behalf of others similarly situated to
her. No collective action has been certified, so we refer only to Shockley in this
appeal.

                                         -2-
arbitration provision. The arbitration provision specifically includes FLSA disputes
as subject to arbitration. In pertinent part, the arbitration provision states:

       If the dispute cannot be settled through negotiation, you and the
       Company agree to attempt in good faith to resolve the covered dispute
       exclusively through final and binding arbitration in accordance with the
       terms, conditions and procedures of this Arbitration Clause.

       For all Covered Disputes, both you and the Company waive their right
       to trial by jury or before a judge in a court of law, including the right to
       initiate a class, collective, representative or private attorney general
       action. All Covered Disputes will be settled by binding arbitration, on
       an individual basis, pursuant to the Federal Arbitration Act as
       administered by JAMS, a third party alternative dispute resolution
       provider.

Def.’s Reply Suggestion in Support of Its Mot. to Compel Individual Arbitration, Ex.
B, at 10, Shockley v. PrimeLending, No. 4:17-cv-00763 (W.D. Mo., Dec. 11, 2017),
ECF No. 18-1.

       The delegation provision in full reads:

       The Arbitrator, and not any federal, state, or local court or agency, shall
       have exclusive authority to resolve any claim relating to the
       interpretation, applicability, enforceability or formation of this Clause
       including, but not limited to, any claim that all or any part of this Clause
       is void or voidable.

Id. at 11.

       Shockley sued PrimeLending in September 2017 for violating the FLSA,
alleging she was not paid for all earned wages and overtime pay. PrimeLending
moved the district court to compel arbitration.

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       The district court acknowledged that “[c]ourts must give full effect to valid
delegation provisions.” Shockley v. PrimeLending, No. 4:17-cv-00763, 2018 WL
7506169, at *1 (W.D. Mo., Jan. 12, 2018). The court also noted that a party seeking
to compel arbitration and enforce any part of an arbitration agreement, including a
delegation provision, must prove an arbitration agreement was validly formed under
state contract law. The district court found that the parties did not form an enforceable
agreement to arbitrate their disputes. Consequently, the court declined to interpret the
arbitration and delegation provisions contained in the Handbook. Specifically, the
district court decided that furnishing an employee a Handbook that could be modified
unilaterally by PrimeLending did not constitute an offer; secondly, the court
determined that even if it was an offer, merely reviewing a Handbook does not
constitute acceptance. Relying on Nebraska Machinery Co. v. Cargotec Solutions,
LLC, 762 F.3d 737 (8th Cir. 2014), the district court reasoned that Shockley should
not be “compelled to proceed to arbitration in order to prove that she never agreed to
arbitrate claims in the first place.” Shockley, 2018 WL 7506169, at *3. The district
court denied PrimeLending’s motion to compel arbitration based on the absence of
an agreement to arbitrate. PrimeLending appeals that decision.

                                     II. Discussion
        Our review of the district court’s denial of PrimeLending’s motion to compel
arbitration is de novo. See McNamara v. Yellow Transp., Inc., 570 F.3d 950, 954 (8th
Cir. 2009). Arbitration agreements are favored by federal law and will be enforced
as long as a valid agreement exists “and the dispute falls within the scope of that
agreement.” Berkley v. Dillard’s, Inc., 450 F.3d 775, 777 (8th Cir. 2006) (internal
quotation omitted). Arbitration is a matter of contract law, and favored status
notwithstanding, parties cannot be compelled to arbitrate unless they have
contractually agreed to be bound by arbitration. See Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79, 83 (2002). The primary inquiry, therefore, is to determine
whether the parties formed a valid contract that binds them to arbitrate their dispute.
As the party seeking to compel arbitration, PrimeLending carries the burden to prove

                                          -4-
a valid and enforceable agreement. See Jackson v. Higher Educ. Loan Auth. of Mo.,
497 S.W.3d 283, 287 (Mo. Ct. App. 2016).

       Missouri law governs this case. See Baker v. Bristol Care, Inc., 450 S.W.3d
770, 774 (Mo. 2014) (en banc). Missouri law requires (1) an offer, (2) acceptance,
and (3) consideration to form a valid and enforceable contract. Id. An offer is made
when the offeree—the person receiving the offer—would “reasonably believe that an
offer has been made.” Jackson, 497 S.W.3d at 288 (internal quotation omitted). A
valid offer does not require the use of any specific terms of art. See id. The use of
typical contractual terms can be helpful to discern intent. Id. at 289. A valid offer will
include the ability to accept through some affirmative words or action. See id. at 290.
An acceptance is present when the offeree signifies assent to the terms of the offer in
a “positive and unambiguous” manner. Katz v. Anheuser-Busch, Inc., 347 S.W.3d
533, 545 (Mo. Ct. App. 2011) (quoting Kunzie v. Jack-In-The-Box, Inc., 330 S.W.3d
476, 484 (Mo. Ct. App. 2010)). Together, offer and acceptance constitute mutual
assent. See Guidry v. Charter Commc’ns, Inc., 269 S.W.3d 520, 528 (Mo. Ct. App.
2008). Third, an agreement must have an exchange of consideration: a promise to do
something or refrain from doing something, or the transfer of something of value to
the other party. Baker, 450 S.W.3d at 774.

       When parties contract to arbitrate future disputes, they may choose to
incorporate a delegation provision, which is “an agreement to arbitrate threshold
issues concerning the arbitration agreement.” Soars v. Easter Seals Midwest, 563
S.W.3d 111, 114 (Mo. 2018) (en banc) (quoting Rent-A-Center, West, Inc. v. Jackson,
561 U.S. 63, 68 (2010)). The delegation provision places “gateway questions of
arbitrability” into the hands of an arbitrator. Jackson, 561 U.S. at 68–69 (internal
quotations omitted). These gateway questions may include determining the validity
of the arbitration agreement itself. Id. at 69. “An agreement to arbitrate a gateway
issue is simply an additional, antecedent agreement the party seeking arbitration” is
asking the court to enforce. Id. at 70. “[A] delegation provision is an additional,

                                           -5-
severable agreement to arbitrate threshold issues that is valid and enforceable unless
a specific challenge is levied against the delegation provision.” State ex rel. Pinkerton
v. Fahnestock, 531 S.W.3d 36, 50 (Mo. 2017) (en banc).

       As a severable and presumably valid provision of a contract, a delegation
provision must be specifically challenged. See Soars, 563 S.W.3d at 114. In essence,
just as an arbitration agreement can be a standalone contract within an employment
agreement, a delegation provision “is simply an additional, antecedent agreement”
within an arbitration agreement. Id. (internal quotation omitted). If not challenged
directly, we presume the delegation provision is valid, and, as a result, antecedent
questions such as an arbitration contract’s validity will go to the arbitrator. Pinkerton,
531 S.W.3d at 50.

                                 A. Delegation Provision
       The delegation provision contained in PrimeLending’s Handbook is crucial.
If the delegation provision is invalid, PrimeLending’s claim to compel arbitration of
the arbitrability issues fails. The record makes it “resoundingly clear” that Shockley
challenged the delegation provision. Esser v. Anheuser-Busch, LLC, 567 S.W.3d 644,
650 (Mo. Ct. App. 2018) (finding a challenge to a delegation provision that mirrored
a challenge to an arbitration provision was adequate because the two provisions were
part of same document and presented in the same manner). Shockley’s brief in
opposition to the motion to compel arbitration attacked the validity of the delegation
provision. Her amended brief clarified that both the delegation and arbitration
provisions were separately challenged as invalid under Missouri contract law.
Shockley challenged the contractual formation of the delegation provision by name;
the law requires no more.

      Because this delegation provision is “simply an additional, antecedent
agreement” that operates like any other contract, Jackson, 561 U.S. at 70, we apply
the same state-law contract principles to the delegation provision as we do to

                                           -6-
arbitration agreements generally. If we find that the delegation provision is a valid
contract under Missouri law—having offer, acceptance, and bargained-for
consideration—then our inquiry is at an end, and all other questions must go to an
arbitrator. Id. Conversely, if the delegation provision is not a valid contract because
it lacks any of the three requisite elements, we may further review the challenged
arbitration agreement’s validity. Id.

       The district court determined that Shockley never received an offer or accepted
an offer through the Handbook review. Assuming for the sake of this discussion only
that the delegation provision, as provided, constituted an offer, we focus on whether
Shockley accepted that offer. “Acceptance of an offer is a manifestation of assent to
the terms thereof made by the offeree in a manner invited or required by the offer.”
Jackson, 497 S.W.3d at 289 (quoting Restatement (Second) of Contracts § 50). “A
meeting of minds occurs when there is a definite offer and an unequivocal
acceptance.” Guidry, 269 S.W.3d at 528. In determining whether a “positive and
unambiguous” acceptance has been effective, “[t]he critical question . . . ‘is whether
the signals sent by [Shockley] to [PrimeLending] objectively manifest [Shockley’s]
intent to be presently bound.’” Kunzie, 330 S.W.3d at 484 (quoting 2 Williston on
Contracts § 6.10 (4th ed. 2007)).

       In Missouri, “mere continuation of employment [does not] manifest[] the
necessary assent to [the] terms of arbitration.” Id. (citing Bailey v. Fed. Nat’l. Mortg.
Ass’n., 209 F.3d 740, 747 (D.C. Cir. 2003) (holding an employee “signaled nothing
when he remained in the employ of [his employer] following the issuance of the
arbitration policy” (alteration added in Kunzie))). “[S]ilence generally cannot be
translated into acceptance.” Katz, 347 S.W.3d at 545. But, continued employment
may constitute acceptance where the employer's document clearly states that
continued employment constitutes acceptance, and the employer informs all
employees that continued employment constitutes acceptance. See Berkley v.



                                          -7-
Dillard’s Inc., 450 F.3d 775, 777 (8th Cir. 2006). This is not, however, what
happened here.

      Shockley was presented with two opportunities to review PrimeLending’s
Handbook through an optional hyperlink on the company network. The initial review
was not conditioned on her offer of employment. Shockley does not remember
reviewing the Handbook, nor does the record establish she actually reviewed the
Handbook. Both times, when Shockley opened the internal system containing the
Handbook, she was advised that by entering into the system she thereby
acknowledged her review of these materials.

       In this case, PrimeLending at best can show that Shockley acknowledged the
existence of the delegation provision. Thus, she was aware of the terms of
PrimeLending’s purported contract offer. “We are aware of no legal authority holding
that an employee’s general knowledge or awareness of the existence of a contract
constitutes the positive and unambiguous unequivocal acceptance required under
Missouri law.” Katz, 347 S.W.3d at 545 (internal quotations omitted). Shockley may
have reviewed the delegation clause, but on these facts, it is entirely possible that she
never even saw it. Even assuming the delegation provision, as presented, constitutes
an offer, Shockley’s document review, and the subsequent system-generated
acknowledgment, does not create an unequivocal acceptance; therefore, no contract
was created.

       Applying Missouri contract law, we conclude Shockley’s mere review of the
subject materials did not constitute an acceptance on her part. Without an acceptance,
no contract was formed as to the delegation provision. An acknowledgment of a
review of offered terms alone does not evince an intent to accept those terms. See
Jackson, 497 S.W.3d at 290. Because a valid contract cannot lack any one element,
the failure to find acceptance is dispositive.



                                          -8-
       We hold that the delegation clause is invalid. An arbitration agreement lacking
a valid delegation clause leaves the remaining arbitration agreement, as a whole, open
to review for validity. We now turn to that question.

                               B. Arbitration Provision
       We need not engage in an in-depth review of the arbitration provision. The
arbitration provision is a standalone and independent contract from the delegation
provision. See Soars, 563 S.W.3d at 114. Its validity requires the same proof of the
elements of a valid contract as the delegation provision. Id. The terms of the
arbitration provision are presented in the Handbook by the same hyperlink
mechanism. It thus suffers from the same fatal flaw as the delegation provision and
thus fails for the very same reasons. The absence of proof of unequivocal acceptance
of an agreement to arbitrate renders the provision unenforceable. Shockley did no
more to accept the arbitration provision than she did to accept the delegation
provision. Therefore, we determine that the arbitration provision was not a validly
formed contract due to a lack of acceptance.

                                   III. Conclusion
      The decision of the district court is affirmed. Shockley did not contract with
PrimeLending to arbitrate any disputes between them, nor was a contract formed to
delegate this decision to an arbitrator; therefore, PrimeLending cannot compel
Shockley into arbitration.
                       ______________________________




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