                   IN THE SUPREME COURT OF MISSISSIPPI

                               NO. 2017-IA-00010-SCT

REBECCA KEYES

v.

DOLLAR GENERAL CORPORATION


DATE OF JUDGMENT:                        12/15/2016
TRIAL JUDGE:                             HON. STANLEY ALEX SOREY
TRIAL COURT ATTORNEYS:                   MARK K. TULLOS
                                         JAKLYN LEIGH WRIGLEY
                                         EDWARD FRANCIS HAROLD
                                         TIMOTHY M. FARRIS
COURT FROM WHICH APPEALED:               SMITH COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT:                 MARK K. TULLOS
                                         CRAIG N. ORR
ATTORNEYS FOR APPELLEE:                  EDWARD FRANCIS HAROLD
                                         JAKLYN LEIGH WRIGLEY
NATURE OF THE CASE:                      CIVIL - TORTS-OTHER THAN PERSONAL
                                         INJURY & PROPERTY DAMAGE
DISPOSITION:                             AFFIRMED IN PART; REVERSED AND
                                         REMANDED IN PART - 04/12/2018
MOTION FOR REHEARING FILED:
MANDATE ISSUED:


      EN BANC.

      RANDOLPH, PRESIDING JUSTICE, FOR THE COURT:

¶1.   Rebecca Keyes, a former employee of Dollar General, filed suit against Dollar

General Corporation; DG Mize, LLC; Dolgencorp, LLC d/b/a Dollar General Store #11775

(collectively “Dollar General”), alleging counts of malicious prosecution, infliction of

emotional distress, defamation, false imprisonment, fraud, deceit, and misrepresentation,
after Dollar General filed a criminal affidavit against Keyes in the Municipal Court of Mize,

Mississippi, causing Keyes to be arrested for embezzlement. Dollar General filed a motion

to dismiss and compel arbitration, which was granted by the Circuit Court of Smith County.

With the exception of the defamation claim, we find that the trial court erred in compelling

arbitration, for Keyes’s remaining claims are not within the scope of the arbitration

agreement. We affirm the trial court’s order as to the defamation claim and reverse its

judgment as to the remaining claims, remanding for proceedings consistent with this opinion.

         STATEMENT OF THE FACTS AND PROCEDURAL HISTORY

¶2.    The underlying facts of Keyes’s alleged embezzlement are not at all clear from the

record. In the Complaint, Keyes alleged that:

       on or about May 28, 2015, Plaintiff, Rebecca Keyes, was an employee of
       Dollar General in Mize, Smith County, Mississippi. On said date, Rebecca
       performed a cash reload to a money network card in the amount of $500.00,
       which did not go through properly. Rebecca Keyes informed her manager of
       the problem and placed the receipt on the office desk. Rebecca was told not to
       worry about the problem and that it would be fixed. On June 2, 2015, Rebecca
       Keyes was arrested for embezzlement. Thereafter, on July 16, 2015, Rebecca
       was found not guilty of the charges.

Keyes moved to have the charges dismissed for failure of a Dollar General representative to

appear and prosecute the claims. Her motion was granted. She then filed the instant lawsuit.

¶3.    Dollar General filed its Motion to Dismiss and Compel Arbitration, requesting that

all of Keyes’s claims be dismissed or alternatively stayed, and that she be compelled to

submit her claims to binding arbitration. Michael Rusie, Senior Director, Labor and

Employment Law at Dollar General Corporation, provided sworn testimony that all

employees hired by Dollar General in and after August 2014 were presented with Dollar


                                             2
General’s Employee Arbitration Agreement. Each employee had the option of consenting to

the agreement or opting out. When Keyes was hired in November 2014, she checked the box

indicating that she “agree[d] to the terms of the Agreement. I understand and acknowledge

that by checking this box, both Dollar General and I will be bound by the terms of this

Agreement.” Pertinent parts of the agreement read as follows:

      You agree that, with the exception of certain excluded claims described below,
      any legal claims or disputes that you may have against Dollar General, its
      parent and subsidiary corporations, employees, officers and directors arising
      out of your employment with Dollar General or termination of employment
      with Dollar General (“Covered Claim” or “Covered Claims”) will be
      addressed in the manner described in this Agreement. You also understand that
      any Covered Claims that Dollar General may have against you related to your
      employment will be addressed in the manner described in this Agreement.

      ...

      The procedures in this Agreement will be the exclusive means of resolving
      Covered Claims relating to or arising out of your employment or termination
      of employment with Dollar General, whether brought by you or Dollar
      General. This includes, but is not limited to, claims alleging violations of wage
      and hour laws, state and federal laws prohibiting discrimination, harassment,
      and retaliation, claims for defamation or violation of confidentiality
      obligations, claims for wrongful termination, tort claims, and claims alleging
      violation of any other state or federal laws, except claims that are prohibited
      by law from being decided in arbitration, and those claims specifically
      excluded in the paragraph below.

      Covered Claims do not include claims for unemployment insurance benefits,
      workers’ compensation benefits [workers’ compensation discrimination and
      retaliation claims are Covered Claims], whistleblower claims under the
      Sarbanes-Oxley Act, and claims for benefits under the Employee Retirement
      Income Security Act. Covered Claims also do not include claims pending in
      court as of the date this Agreement is signed by you, and claims concerning the
      scope or enforceability of this Agreement.

(Emphasis added.)



                                             3
¶4.    Keyes did not dispute the existence of the Arbitration Agreement, but she argued the

agreement was unconscionable, that Dollar General had waived its right to arbitrate by filing

criminal proceedings against Keyes, and that her claims were not covered within the scope

of the Arbitration Agreement.

¶5.    Dollar General argued that it did not file charges against Keyes; it simply “reported

something to the police. . . . It simply exercised its right to make a criminal complaint to the

police department, and the police department kind of got the ball rolling, and then the rest

is history, so to speak.” It further argued that the agreement inherently applied to civil, not

criminal matters. Dollar General admitted that it had the option of seeking recoupment of its

lost money through arbitration but did not pursue it because its goal was to bring “an

offender to justice.” Dollar General argued it did not waive arbitration because it could have

a parallel criminal claim, while pursuing claims against Keyes in civil court (or arbitration).

¶6.    The trial judge found that Keyes’s claims most likely related back to the agreement,

but his concern was whether Dollar General had waived arbitration by first filing criminal

charges in the municipal court. While the trial judge stated that he agreed with Keyes’s

argument, he likened this case to “self-help” cases, where this Court had held “taking

possession of the collateral or other similar actions [did] not waive a party’s right to

arbitration,” because self-help did not equate to judicial proceedings. See Russell v.

Performance Toyota, Inc., 826 So. 2d 719, 724 (Miss. 2002). The trial court granted Dollar

General’s motion to dismiss and compelled Keyes’s claims to be submitted to arbitration.

                             STATEMENT OF THE ISSUES



                                               4
¶7.    Keyes appealed and raised three issues, which we have consolidated and restated as

follows:

I.     WHETHER KEYES’S CLAIMS ARE “COVERED CLAIMS” WITHIN THE
       SCOPE OF THE ARBITRATION AGREEMENT.

II.    IF KEYES’S CLAIMS ARE “COVERED CLAIMS” UNDER THE
       ARBITRATION AGREEMENT, WHETHER DOLLAR GENERAL WAIVED
       ITS RIGHT TO ARBITRATE BY FILING CRIMINAL CHARGES IN
       MUNICIPAL COURT.

                               STANDARD OF REVIEW

¶8.    “A trial court’s grant or denial of a motion to compel arbitration is a question of law;

therefore, we apply a de novo standard of review on appeal.” Smith ex rel. Smith v. Captain

D’s, LLC, 963 So. 2d 1116, 1119 (Miss. 2007) (citing Howard v. Estate of Harper, 947 So.

2d 854, 856 (Miss. 2006)).

                                        ANALYSIS

¶9.    This Court exercises a strong presumption in favor of arbitration. IP Timberlands

Operating Co., Ltd. v. Denmiss Corp., 726 So. 2d 96, 104 (Miss. 1998) (citing Hutto v.

Jordan, 204 Miss. 30, 36 So. 2d 809, 812 (1948)). Such arbitration agreements must be

valid, and the disputed claims must be within the substantive scope of that agreement. Smith,

963 So. 2d at 1120. To determine the validity of an arbitration agreement under the Federal

Arbitration Act, this Court has adopted the customary, two-pronged inquiry. See East Ford,

Inc. v. Taylor, 826 So. 2d 709, 713 (Miss. 2002). The first prong considers two factors: (1)

whether a valid arbitration agreement exists, and (2) whether the parties’ dispute is within

the scope of the valid arbitration agreement. Smith, 963 So. 2d at 1119. The second prong



                                              5
asks “whether legal constraints external to the parties’ agreement foreclosed arbitration of

those claims.” East Ford, 826 So. 2d at 713 (quoting Mitsubishi Motors Corp. v. Soler

Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S. Ct. 3346, 87 L. Ed. 2d 444 (1985)). The

parties do not dispute the validity of the agreement in question. Therefore, we will look only

at the second factor of the inquiry’s first prong.

I.     WHETHER KEYES’S CLAIMS ARE “COVERED CLAIMS” WITHIN THE
       SCOPE OF THE ARBITRATION AGREEMENT.

¶10.   “Arbitration is a matter of contract and a party cannot be required to submit to

arbitration any dispute which he has not agreed so to submit.” Rogers-Dabbs Chevrolet-

Hummer, Inc. v. Blakeney, 950 So. 2d 170, 176 (Miss. 2007) (quoting EquiFirst Corp. v.

Jackson, 920 So. 2d 458, 461 (Miss. 2006)).

       In determining the scope of the arbitration agreement, “[c]ourts often
       characterize arbitration language as either broad or narrow.” MS Credit Ctr.,
       Inc. v. Horton, 926 So. 2d 167, 175 (Miss. 2006). The United States Supreme
       Court has found similar language--“any controversy or claim arising out of or
       related to”--to constitute a broad arbitration provision. Smith Barney, Inc. v.
       Henry, 775 So. 2d 722, 726 (Miss. 2001) (citing Prima Paint Corp. v. Flood
       & Conklin Mfg. Co., 388 U.S. 395, 406, 87 S. Ct. 1801, 18 L. Ed. 2d 1270
       (1967)). “Because broad arbitration language is capable of expansive reach,
       courts have held that it is only necessary that the dispute ‘touch’ matters
       covered by the contract to be arbitrable.” Horton, 926 So. 2d at 176 (internal
       quotation marks omitted). Further, “relate” means “to stand in some relation;
       to have bearing or concern; to pertain; refer; to bring into association with or
       connection with”; with “to.” Black’s Law Dictionary 892 (abr. 6th ed. 1991).

Smith, 963 So. 2d at 1121.

¶11.   The Arbitration Agreement reads that it “will be the exclusive means of resolving

Covered Claims relating to or arising out of your employment or termination of employment

with Dollar General, whether brought by you or Dollar General.” This “broad” language is


                                               6
“capable of expansive reach,” requiring only “that the dispute ‘touch’ matters covered by [the

contract].” Horton, 926 So. 2d at 176. Therefore, the claims that “touch matters” covered by

the Arbitration Agreement need only reflect the parties’ intentions and “relate to” or “connect

with” the facts alleged in Keyes’s complaint. As a result, we “focus on factual allegations in

the complaint rather than the legal causes of action asserted. If the allegations underlying

those claims ‘touch matters’ covered by the parties’ . . . agreements, then those claims must

be arbitrated, whatever the legal labels attached to them.” Wolgin v. Experian Info. Sols.,

Inc., 101 So. 3d 1160, 1166 (Miss. 2012) (quoting Scruggs v. Wyatt, 60 So. 3d 758, 766

(Miss. 2011)).

¶12.   This Court recently applied these rules to matters in similar form when we addressed

the arbitration agreements in Pedigo v. Robertson, 2017 WL 4838243 (Miss. Oct. 26, 2017),

Doe v. Hallmark Partners, LP, 227 So. 3d 1052 (Miss. 2017), and Smith, 963 So. 2d 1116.

In Smith, we held that the plaintiff’s rape-based tort claims were “unquestionably” beyond

the scope of the arbitration agreement, as they were unrelated to her employment. Id. at 1121.

¶13.   In Doe, we determined that “the parties simply did not contemplate arbitrating Jane’s

assault- and rape-based lawsuit predicated upon a tort theory of common-law negligence,

unrelated to the rights and obligations of the lease.” Doe, 227 So. 3d at 1056. Therefore, we

held that Doe’s claims did not arise under or relate to her “occupancy and leasing of the

[apartment],” and Doe was free to pursue her claims against Hallmark through litigation.

Id. at 1059-60.




                                              7
¶14.   Finally, in Pedigo, we held that “the agreement did not contemplate the possibility that

RAC would file a criminal complaint against a signatory/lessor, causing him to suffer the

pains of a criminal indictment, subsequent imprisonment, and eventual release without

prosecution.” Pedigo, 2017 WL 4838243, at *4. Similar to today’s case, Pedigo filed a suit

against Rent-A-Center, Inc., alleging claims of malicious prosecution, false imprisonment,

and intentional infliction of emotional distress. Id. at *1. Pedigo made a rental-purchase of

a television, and his rental-purchase agreement contained an arbitration clause. Id. Pedigo

failed to make his payments and then pawned the television. Id. The store’s manager filed

a complaint with the police, and Pedigo was arrested. Id. He was then indicted and

incarcerated, but the felony charge later was retired by the State. Id. Pedigo filed a civil

action against Rent-A-Center, and the store moved to dismiss and compel arbitration. Id.

¶15.   This Court found Pedigo’s claims to be beyond the scope of the arbitration agreement.

Id. at *4.

       Here, the agreement did not contemplate the possibility that RAC would file
       a criminal complaint against a signatory/lessor, causing him to suffer the pains
       of a criminal indictment, subsequent imprisonment, and eventual release
       without prosecution. The CAA provisions are sufficiently broad, and the
       agreement shows the intent and mutual agreement by the parties to arbitrate all
       civil matters related to the lease of the television; though, notably absent from
       the CAA is the parties’ agreement to arbitrate civil matters related to a
       potential criminal indictment. We reiterate that “a party cannot be required to
       submit to arbitration any dispute which he has not agreed so to submit.”
       Blakeney, 950 So. 2d at 176. Therefore, we cannot require Pedigo to arbitrate
       civil claims related to the criminal complaint.

Id.




                                              8
¶16.   Today’s question of scope is whether Keyes’s claims of malicious prosecution,

infliction of emotional distress, defamation, false imprisonment, fraud, deceit, and

misrepresentation “relate[s] to or arise[s] out of [Keyes’s] employment or termination of

employment with Dollar General,” so as to subject her claims to arbitration.

¶17.   Dollar General argues the issues “touch upon” Keyes’s employment, as she alleges

her employer falsely accused her of stealing a $500 gift card, but the transaction was caused

by a register error.

       Thus, Plaintiff’s claims will necessarily involve significant testimony about her
       duties as an employee with regard to gift cards, other employees’ duties as they
       regard the gift card, the systems through which Dollar General concluded she
       had stolen the gift card, her interview as an employee with Dollar General’s
       Loss Prevention Department regarding the gift card, and the reasons behind
       her termination.

¶18.   While Dollar General argues that the Arbitration Agreement “defined covered claims

very broadly to include any matter on any claim or dispute that arose out of . . . or related to

the employment or termination” of Keyes, it claims that the charges filed by Dollar General

against Keyes in the municipal court were not covered. Keyes argues Dollar General’s own

action in pursuing criminal claims in municipal court is evidence that the parties did not

intend to arbitrate any claims related to a criminal charge.

¶19.   The Arbitration Agreement contains no exclusions of any criminal proceedings, but

it expressly includes claims for defamation. Keyes’s claim for defamation is within the scope

of the Arbitration Agreement. The order of the trial court is affirmed as to the defamation

claim, and the court is instructed to stay this claim, pending arbitration.




                                               9
¶20.   As to all other claims, we find that, like Pedigo, Doe, and Smith, Keyes’s claims are

beyond the scope of the Arbitration Agreement. When Keyes agreed to arbitrate all claims

arising out of her employment or termination of employment with Dollar General, no

evidence was presented that she contemplated she would be arrested for embezzlement and

later have those charges dismissed after Dollar General refused to prosecute. The Arbitration

Agreement specifically identified defamation as a covered claim. However, as the author of

the Arbitration Agreement, Dollar General did not include claims of malicious prosecution,

infliction of emotional distress, false imprisonment, fraud, deceit, and misrepresentation as

covered claims.1

¶21.   Keyes’s suit is based on Dollar General’s swearing out of a criminal complaint against

her. Such an action was not included in the Arbitration Agreement. We reverse the circuit

court’s decision ordering Keyes’s claims of malicious prosecution, infliction of emotional

distress, false imprisonment, fraud, deceit, and misrepresentation to arbitration and remand

those claims for proceedings consistent with this opinion. Keyes is free to pursue them

against Dollar General in the circuit court.

II.    IF KEYES’S CLAIMS ARE “COVERED CLAIMS” UNDER THE
       ARBITRATION AGREEMENT, WHETHER DOLLAR GENERAL WAIVED
       ITS RIGHT TO ARBITRATE BY FILING CRIMINAL CHARGES IN
       MUNICIPAL COURT.




       1
         Additionally, the Federal Arbitration Act, while pro-arbitration, “does not
contemplate the arbitration of criminal activity.”Prescott-Follett & Assocs., Inc. v.
Delasa/Prescott Follett & Assocs., No. Civ. A. 01-3178, 2002 WL 31528463, at *5 (E.D.
La. Nov. 8, 2002) (citing Myers v. Rosenberg, No. 83 C 1342, 1986 WL 3329, at *2 (N.D.
Ill. March 7, 1986)).

                                               10
¶22.   As to the second prong regarding legal constraints external to the agreement

foreclosing the possibility of arbitration, Keyes argues that, even if any of her claims were

covered under the Arbitration Agreement, Dollar General waived its right to arbitrate by

filing criminal charges against her in municipal court. Dollar General argues that merely

reporting a crime to the authorities does not invoke the judicial process, as is required in a

finding of waiver. See University Nursing Assocs., PLLC v. Phillips, 842 So. 2d 1270, 1278

(Miss. 2003) (waiver could be found when the party seeking arbitration “substantially

invokes the judicial process to the detriment or prejudice of the other party.”).

¶23.   Swearing out a criminal affidavit does not constitute waiver of the right to arbitrate.

Although no Mississippi court has addressed this issue, the vast majority of courts which

have considered this issue have held that filing a criminal affidavit, in and of itself, does not

waive the right to arbitrate. See e.g., Consorcio Rive, S.A. de C.V. v. Briggs of Cancun, Inc.,

134 F. Supp. 2d 789, 795-96 (E.D. La. 2001) (finding that filing a statement of facts with the

attorney general “did not amount to substantial invocation of the judicial process”); Griffin

v. Burlington Volkswagen, Inc., 411 N.J. Super. 515, 521 (N.J. Sup. Ct. App. Div. 2010)

(rejecting the claim that a car dealership’s “invocation of the criminal process to regain

possession of the car constituted waiver” of the right to arbitrate). See also Cash Biz, LP v.

Hiawatha Henry, No. 01-15-00469-CV, 2016 WL 4013794, at *8 (Tex. Ct. App. July 27,

2016), cert. granted, (holding “Cash Biz’s filing of a criminal complaint does not rise to the

extent of active engagement in litigation that Texas courts have consistently held to be

specific and deliberate actions inconsistent with a right to arbitrate or that display an intent



                                               11
to resolve a dispute through litigation”); InfoSpan, Inc. v. Emirates NBD Bank PJSC, Case

No. SACV 11-1062 JVS, 2012 WL 12960766, at * 4 (C.D. Cal. Dec. 7, 2012) (holding that

a bank “did not implicitly waive its right to arbitrate by filing the criminal complaint for

fraud”); Gatlin v. Criscione, No. 1:07-cv-7212, 2008 WL 2745956, at *3 (N.D. Ill. July 11,

2008) (finding that a car dealership’s use of the criminal justice system “to effect its

contractual right to take possession of the vehicle” did not amount to submitting an arbitrable

issue to a court); Prescott-Follett & Assocs., Inc., 2002 WL 31528463, at *5 (finding “the

alleged filing of criminal charges . . . did not amount to a waiver of the defendants’ right to

arbitrate”).

¶24.   The law does not require choosing between reporting a crime and maintaining the

right to arbitrate future disputes that may arise. Dollar General did not have to arbitrate

whether Keyes had committed a crime. Dollar General was not limited to arbitration to seek

recoupment of its lost funds. Therefore, Dollar General was not avoiding an arbitration action

because it was not required to arbitrate a criminal action under the plain language of the

arbitration agreement.

¶25.   Because Dollar General did not waive all arbitration claims and Keyes’s claim for

defamation falls within the scope of the Arbitration Agreement, we affirm the trial court’s

finding submitting this claim only to arbitration.

                                      CONCLUSION

¶26.   Only Keyes’s claim for defamation falls within the scope of the Arbitration

Agreement. Because Dollar General did not waive its right to arbitrate all claims by filing



                                              12
a criminal complaint, the trial court’s order staying the claim and submitting the defamation

claim to arbitration is affirmed. The other claims brought by Keyes do not fall within the

Arbitration Agreement, and those claims were not properly submitted to arbitration. The

order dismissing Keyes’s claims for malicious prosecution, infliction of emotional distress,

false imprisonment, fraud, deceit, and misrepresentation against Dollar General and

compelling arbitration of them is reversed, and these claims are remanded to the Smith

County Circuit Court for proceedings consistent with this opinion.

¶27.   AFFIRMED IN PART; REVERSED AND REMANDED IN PART.

       MAXWELL, BEAM, CHAMBERLIN AND ISHEE, JJ., CONCUR. WALLER,
C.J., CONCURS IN PART AND DISSENTS IN PART WITH SEPARATE WRITTEN
OPINION JOINED BY KITCHENS, P.J., KING AND COLEMAN, JJ.

     WALLER, CHIEF JUSTICE, CONCURRING IN PART AND DISSENTING
IN PART:

¶28.   I concur with the majority’s conclusion that Keyes’s claims against Dollar General for

malicious prosecution, infliction of emotional distress, false imprisonment, fraud, deceit, and

misrepresentation are not subject to arbitration, as those claims fall outside the scope of the

arbitration clause in Keyes’s employment contract. However, I disagree with the majority

that Keyes’s defamation claim must be submitted to arbitration. Accordingly, I concur in part

and dissent in part.

¶29.   The majority finds that Keyes’s defamation claim must be arbitrated because her

employment contract includes “defamation” as a “Covered Claim” subject to arbitration.

However, the inclusion of “Covered Claims” in a contract, while relevant to the scope of the

parties’ agreement, is not dispositive of whether a specific claim is subject to arbitration.


                                              13
Regardless of the legal causes of action asserted by the plaintiff, we still must look to the

factual allegations in the complaint to determine whether a claim falls within the scope of the

arbitration agreement. Scruggs v. Wyatt, 60 So. 3d 758, 766 (Miss. 2011). Under the

arbitration clause at issue here, a plaintiff’s claims must arise out of or relate to his or her

employment or termination to be subject to arbitration. Keyes’s defamation claim bears no

more relation to her employment or termination than her other claims, which the majority

correctly finds are outside the scope of the parties’ arbitration agreement. Thus, despite the

inclusion of “defamation” as a Covered Claim, I would find that the parties did not intend

that Keyes would be forced to arbitrate a defamation claim based on Dollar General’s filing

of a criminal complaint for embezzlement against her.

¶30.   Because none of Keyes’s claims fall within the scope of the parties’ arbitration

agreement, Keyes’s argument that Dollar General waived its right to arbitration by filing a

criminal complaint against her is moot, and I would decline to address it. We reached the

same conclusion recently in Pedigo v. Robertson, 2017 WL 4838243, at *2 n.1 (Miss. Oct.

26, 2017) (“Because we find Pedigo’s suit to be outside the scope of the arbitration

agreement, we need not address whether RAC waived its right to arbitration.”).

¶31.   For the foregoing reasons, I would reverse the trial court’s judgment as to all of

Keyes’s claims and remand this case to the trial court for further proceedings.

       KITCHENS, P.J., KING AND COLEMAN, JJ., JOIN THIS OPINION.




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