A Kansas Court of Appeals panel on Friday reversed a ruling by a Douglas County judge and found that a former employee’s claims in a lawsuit against Hallmark Cards Inc. were subject to arbitration.
The appellate court made the ruling and ordered the case back to District Judge Michael Malone with instructions to stay further proceedings in the lawsuit and to compel further arbitration in the dispute.
According to the opinion, Jana Hague sued her employer, Hallmark, which operates a production plant in Lawrence, for breach of contract and for unpaid wages. She began suffering health problems in 2008 and took a leave of absence. Hallmark initially approved her application for short-term disability benefits but, after further review, denied the benefits. When she did not return to work, she was fired.
Court of Appeals Judge Steve Leben wrote the legal issues of the lawsuit relate to whether it would be proper for an arbitrator or a judge to determine the merits of her claims,
Hague’s attorneys argued she should have received further short-term disability benefits and that a court should award her back benefits, plus interest, penalties and attorneys fees. Hallmark had asked Malone to put the lawsuit on hold while the parties arbitrated the dispute because the company said her claims were subject to mandatory arbitration under Hallmark’s dispute-resolution program. Malone agreed with Hague’s attorneys that the company’s dispute-resolution program did not require her to arbitrate her claims.
“But what Hague has filed in court is a lawsuit, not an objection to Hallmark policies, and her agreement with Hallmark requires that legal claims be arbitrated,” Leben wrote in the Friday’s opinion.