Northern Kentucky Area Development District v. Danielle Snyder
Arbitration JusticiabilityDoctri
Whether the Federal Arbitration Act (FAA) preempts Ky. Rev. Stat. § 336.700(2), which invalidates arbitration agreements between an employer and an employee, or whether the statute instead presents a 'generally applicable contract defense' that can withstand preemption under the FAA
QUESTION PRESENTED The question presented is: Whether the Federal Arbitration Act (FAA) preempts Ky. Rev. Stat. § 336.700(2), which invalidates arbitration agreements between an employer and an employee, or whether the statute instead presents a “generally applicable contract defense” that can withstand preemption under the FAA. Ky. Rev. Stat. § 336.700(2) provides: “[N]o employer shall require as a condition or precondition of employment that any employee or person seeking employment waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit to which the employee or person seeking employment would otherwise be entitled under any provision of the Kentucky Revised Statutes or any federal law.” The Supreme Court of Kentucky refused to enforce the parties’ arbitration agreement because it held that the statute — when applied to an arbitration agreement between an employer and its employee — provided a generally applicable contract defense. The FAA provides that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. §2 (emphasis added). It establishes a rule of equal-treatment: A court may invalidate an arbitration agreement based on “generally applicable contract defenses” like fraud li QUESTION PRESENTED — Continued or unconscionability, but not on legal rules that “apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” Kindred Nursing Ctrs. Ltd. P’ship v. Clark, 187 S. Ct. 1421 (2017) (citing AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011)). Only two years ago, the Kindred Nursing Court unanimously reversed a decision of the Kentucky Supreme Court holding that the FAA did not preempt a state rule that singled out arbitration agreements for less favorable treatment than other types of contracts. The Kentucky Supreme Court has again misapprehended this Court’s clear interpretation of the FAA, and again applied a state rule that disfavors arbitration agreements. Its decision is an untenable interpretation of the FAA, as a matter of law and logic. iii PARTIES Petitioner, Northern Kentucky Area Development District (NKADD), was the defendant-appellant below. Respondent, Danielle Snyder, was the plaintiffappellee below. STATEMENT OF RELATED CASES The following cases are directly related to the Petition before the Court: Snyder v. Northern Kentucky Area Development District, Kentucky Supreme Court, Case No. 2017-SC-000277-DG, Judgment entered on September 27, 2018, and Petition for Rehearing denied on April 18, 2019. Snyder v. Northern Kentucky Area Development District, Kentucky Court of Appeals, Case No. 2015-CA-001167-MR, Judgment entered on May 12, 2017. Snyder v. Northern Kentucky Area Development District, Boone Circuit Court, Case No. 14-CI-01622, Order denying NKADD’s Motion to Stay the Proceedings and Compel Arbitration entered on March 23, 2015, and Order denying NKADD’s Renewed Motion to Compel Arbitration entered on July 17, 2015.