[Cite as Kushan v. King David Post Acute Nursing & Rehab., L.L.C., 2026-Ohio-2717.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
PERRI KUSHAN, ET AL., :
Plaintiffs-Appellants, :
No. 115666
v. :
KING DAVID POST ACUTE NURSING
& REHABILITATION LLC, ET AL., :
Defendants-Appellees. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: July 16, 2026
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-25-110659
Appearances:
HABER LLP, Richard C. Haber, Lindsey K. Self, and
Natalie D. Davis, for appellants.
FRANTZ WARD LLP, Ryan T. Smith, Angela D. Lydon,
and Katherine E. McLaughlin, for appellees.
ANITA LASTER MAYS, J.:
Plaintiffs-appellants Perri Kushan and Linda Novak-Eedy
(collectively, “appellants”) appeal from the judgment of the trial court granting the
motion of defendants-appellees King David Post Acute Nursing & Rehabilitation LLC, Outcome Healthcare LLC, Diane Liliestedt, and Tara Miller (collectively,
“appellees”) to stay the underlying proceedings pending arbitration. After a
thorough review of the record and applicable law, we affirm.
I. Facts and Procedural History
Appellants were employed as dietitians at a long-term care facility
located in Beachwood, Ohio. Kushan began her employment at the facility in July
1989, and Novak-Eedy began her employment in May 1990. Both appellants were
employed at the facility for more than three decades, originally working for Menorah
Park.
In 2023, defendant-appellee Outcome Healthcare LLC (“Outcome”)
became the owner and operator of the facility, and the facility was renamed King
David Post Acute Nursing & Rehabilitation LLC (“King David”). Appellants
continued their employment under the new ownership. Defendant-appellee Diane
Liliestedt (“Liliestedt”) and defendant-appellee Tara Miller (“Miller”) were
appellants’ supervisors during the relevant time period.
On or about December 13, 2023, representatives from Outcome
informed current employees at the facility that each employee was required to
execute a series of agreements and acknowledgements (the “onboarding
documents”) as a condition of continued employment. The onboarding documents
were transmitted to employees through an electronic portal called HostedTime.
Employees received an email from HostedTime with instructions on how to create
an account on the portal in order to access and sign the onboarding documents.
The onboarding documents included a USCIS Form I-9, an IRS Form
W-4, a Non-Union PTO Plan Acknowledgement, an IRS Form 8850, a Time Clock
Procedures Acknowledgement, a Confidentiality and HIPAA Acknowledgement, a
Confidentiality in the Workplace and Resident Information Agreement, a Release
for Criminal History Records, a Drug-Free Workplace Policy Agreement, and a
Mutual Arbitration Agreement (the “Arbitration Agreement”). The Arbitration
Agreement was the final document presented to employees through the HostedTime
portal.
The Arbitration Agreement was a four-page document between the
employee and Healthcare Payroll KD, a special purpose limited liability company
that King David used for its payroll services. The Arbitration Agreement provided
that the parties would arbitrate “any and all claims” arising out of or related to the
employment relationship, including “any claim of any kind . . . arising from or
relating to an alleged violation of Federal or State employment law of any kind.” The
Arbitration Agreement further provided that, by signing, the employee was
relinquishing the right to file a lawsuit in any court and the right to a jury trial.
The Arbitration Agreement contained a one-year contractual
limitations period that stated: “Any request for arbitration of a dispute must be
requested and submitted to the arbitrator within one (1) year of the date on which
the event giving rise to the dispute occurred. The failure to submit a request for
Arbitration within such one (1) year period shall operate as a bar to any subsequent
requests for arbitration, or for any claim for relief or remedy, or to any action or legal proceeding of any kind or nature, and the parties will be forever barred from
arbitrating or litigating a resolution to any such dispute.” The Arbitration
Agreement also contained a 30-day rescission provision permitting an employee to
rescind the agreement by notifying the facility in writing. The agreement specifically
states: “Employee or, in the event of Employee’s incapacity, Employee’s authorized
representative have the right to rescind this arbitration agreement by notifying the
Facility in writing within thirty (30) days of the employment date.” Arbitration
Agreement, Section I.
According to appellants, the HostedTime portal prompted each
employee to sign each onboarding document immediately upon its display and did
not permit the user to move forward without signing the preceding document.
Appellants averred that they were not given an opportunity to negotiate any part of
the Arbitration Agreement, that the portal did not permit users to modify or rescind
a signature once entered, and that the portal did not prompt or permit users to view,
download, or print the documents. Appellants further averred that once they
submitted the signed onboarding documents, they no longer had access to those
documents and did not receive an email confirmation or receipt. Appellants stated
that Novak-Eedy requested copies of the onboarding documents and that her
request was not fulfilled. Appellees, by contrast, submitted the affidavit of Maggie
Rodriguez, King David’s current human resources director, who stated that
employees could access, download, and print the onboarding documents through HostedTime at any time and that Kushan logged into HostedTime numerous times
between June 24, 2024, and August 30, 2024.
Appellants’ employment was terminated on September 9, 2024. Both
appellants were women over the age of forty at the time of their terminations.
Kushan filed a charge of discrimination with the Ohio Civil Rights
Commission on September 27, 2024, and Novak-Eedy filed a similar charge on
October 3, 2024. On October 9, 2024, counsel for appellants notified appellees that
appellants had retained legal counsel, had filed charges with the Ohio Civil Rights
Commission, and intended to pursue legal action. Between October 9, 2024, and
January 21, 2025, appellees did not submit the dispute to arbitration.
On January 21, 2025, appellants filed their complaint in the trial
court. The complaint asserted three counts: age discrimination in violation of
R.C. 4112.02 (Count 1); aiding and abetting age discrimination in violation of
R.C. 4112.02(J) (Count 2); and retaliation in violation of R.C. 3721.24 (Count 3).
Appellees’ counsel also represented the defendants in a separate but
related action filed by Ilona Yormick (“Yormick”), a former coworker of appellants,
who was represented by the same counsel as appellants. Yormick v. King David
Post Acute Nursing & Rehab., Cuyahoga C.P. No. CV-24-108123, was litigated in
tandem with the matter underlying this appeal.
On February 24, 2025, King David, Liliestedt, and Miller filed an
answer to the complaint. The answer asserted 38 affirmative defenses, none of
which referenced arbitration or an agreement to arbitrate. On the same date, Outcome filed a motion to dismiss for lack of personal jurisdiction pursuant to
Civ.R. 12(B)(2). Outcome’s motion to dismiss did not assert any right to arbitrate
and did not reference the Arbitration Agreement.
On March 10, 2025, appellants served their first set of discovery
requests on appellees. Interrogatory No. 2 requested identification of all individuals
known to be in possession of “[o]nboarding agreements between Plaintiffs and
Outcome executed in or around December 2023.” Request for Admission No. 3
asked appellees to admit whether they “asked Menorah Park/King David employees
to sign onboarding agreements with Outcome in or around December 2023.”
On March 13, 2025, Outcome filed the affidavit of H. Jason Black
(“Black”), the Administrator for King David, as an exhibit to its reply in support of
the motion to dismiss in the related Yormick action. Outcome filed the same
affidavit in the present matter on March 18, 2025, as exhibit No. 4 to its reply in
support of the motion to dismiss. The Black affidavit attached, as Exhibit A, copies
of the onboarding documents executed by Yormick, including the Arbitration
Agreement signed by Yormick. On March 18, 2025, appellants supplemented their
discovery requests to seek unredacted copies of the onboarding documents attached
to the Black affidavit, including any agreements signed by appellants.
On April 3, 2025, appellees’ former counsel requested a 28-day
extension to respond to appellants’ initial discovery requests. On or about April 9,
2025, appellees retained new counsel. New counsel entered a notice of substitution
on April 18, 2025. On April 30, 2025, Outcome filed its answer in the related Yormick action. Outcome’s answer in Yormick did not assert arbitration as an
affirmative defense, although the Arbitration Agreement had been filed on the
record in that case approximately six weeks earlier.
On May 1, 2025, additional counsel for appellees entered a notice of
appearance in the present matter. On May 5, 2025, appellees served their responses
to appellants’ first set of discovery requests. In response to Interrogatory No. 2,
appellees objected on the basis that the interrogatory sought information that was
“neither relevant nor reasonably calculated to lead to the discovery of admissible
evidence as to any of the claims or defenses in this lawsuit.” Appellees raised the
same objection in response to Request for Admission No. 3. Appellees did not
produce the onboarding documents at that time.
On May 27, 2025, appellants served their second set of discovery
requests on appellees. Between May 22, 2025, and July 16, 2025, counsel for the
parties corresponded regularly regarding discovery and depositions. On July 14,
2025, appellants’ counsel served notices of depositions.
On July 16, 2025, appellees’ counsel notified appellants’ counsel that
appellees had “very recently discovered arbitration agreements signed by
Ms. Yormick, Ms. Kushan, and Ms. Novak-Eedy.” Appellees then provided copies
of the Arbitration Agreements to appellants. On July 21, 2025, approximately six
months after the filing of the complaint and five months after Outcome filed its
motion to dismiss, appellees filed a motion to stay proceedings pending arbitration
pursuant to R.C. 2711.02. On the same date, appellees filed a separate motion to stay discovery pending a ruling on the motion to stay pending arbitration. Appellees
represented in their motion that counsel had first learned of the applicability of the
Arbitration Agreement on July 11, 2025, while reviewing appellants’ personnel and
onboarding documents.
On August 4, 2025, appellants filed an unopposed motion for a sevenday extension of time to file their oppositions On August 11, 2025, appellants filed
their brief in opposition to the motion to stay proceedings pending arbitration and
their brief in opposition to the motion to stay discovery. Appellants argued that the
Arbitration Agreement was procedurally and substantively unconscionable, that
appellees had waived any right to arbitration through their litigation conduct, and
that appellees had failed to timely initiate arbitration as required under the
Arbitration Agreement.
On August 15, 2025, the trial court set a case-management conference
for August 22, 2025, by telephone. The parties appeared at the August 22, 2025
case-management conference and orally briefed the trial court on the issues raised
in the motion to stay. On August 25, 2025, appellees filed their reply in support of
the motion to stay proceedings pending arbitration and their reply in support of the
motion to stay discovery. The trial court set an additional case-management
conference for September 4, 2025.
On September 2, 2025, appellants filed a motion for leave to file a
surreply in opposition to appellees’ motion to stay proceedings pending arbitration,
with the proposed surreply attached.
On September 4, 2025, the trial court entered a journal entry
referring the case to arbitration pursuant to Loc.R. 21 of the Court of Common Pleas
of Cuyahoga County, General Division. The journal entry directed that the case be
arbitrated no later than January 28, 2026.
On September 19, 2025, appellees filed an unopposed motion for
clarification of docket entry, requesting that the trial court vacate and reissue its
September 4, 2025 order to reflect that the case was being referred to arbitration
under the parties’ Arbitration Agreement pursuant to R.C. 2711.03(A), rather than
to court-administered arbitration under Loc.R. 21.
On September 25, 2025, the trial court in the related Yormick action
denied the substantially identical motion to stay pending arbitration filed by
appellees in that case.1 On September 30, 2025, the trial court in the present matter
vacated its September 4, 2025 arbitration referral. That same day, appellants filed
a motion for reconsideration and notice of supplemental authority, alerting the trial
court to the contrary ruling in Yormick and raising the issue of the scope of the
Arbitration Agreement.
On October 1, 2025, the trial court entered a journal entry granting
appellees’ motion to stay pending arbitration. The journal entry provided that the
case was “stayed and is to be arbitrated pursuant to the Parties’ arbitration
agreement and not through the Court’s DR Department.” The trial court did not
1 Yormick filed an appeal with this court, and in Yormick v. King David Post Acute
Nursing & Rehab. LLC, 2026-Ohio-1776, ¶ 1 (8th Dist.), this court affirmed the trial court’s denial of the motion to stay pending arbitration.
expressly rule on appellants’ motion for reconsideration and notice of supplemental
authority.
On October 6, 2025, appellants timely filed their notice of appeal
from the October 1, 2025 journal entry pursuant to R.C. 2711.02(C). Appellants raise
three assignments of error for review.
1. The trial court committed reversible error when it granted
defendant-appellees’ motion to stay proceedings pending arbitration
pursuant to the arbitration agreement which is: (1) substantively
unconscionable; and (2) procedurally unconscionable;
2. The trial court committed reversible error when it referred the
parties to arbitration, despite defendant-appellees’ waiver of the right
to arbitration; and
3. The trial court committed reversible error when it compelled the
parties to arbitrate claims outside the scope of the arbitration
agreement.
II. Arbitration
A. Standard of Review
The question of whether an arbitration agreement is enforceable,
including whether the agreement is unconscionable, presents a mixed question of
law and fact. Wilson v. Lawrence, 2017-Ohio-1410, ¶ 9. The factual findings of the
trial court are reviewed for an abuse of discretion, while the legal conclusion as to
whether the contract is enforceable is reviewed de novo. Arnold v. Burger King,
2015-Ohio-4485, ¶ 47 (8th Dist.); DeVito v. Autos Direct Online, Inc., 2015-Ohio3336, ¶ 19 (8th Dist.).
An appellate court reviews a trial court’s decision to grant or deny a
motion to stay proceedings pending arbitration under an abuse-of-discretion standard. However, the question of whether a particular dispute falls within the
scope of an arbitration agreement, and the related question of who decides that
issue, the court or the arbitrator, presents a question of contract interpretation that
this court reviews de novo. Vining v. Logan Clutch Corp., 2020-Ohio-675, ¶ 9 (8th
Dist.); Blue Technicians Smart Solutions, L.L.C. v. Ohio Collaborative Learning
Solutions, Inc., 2020-Ohio-806, ¶ 17 (8th Dist.).
Ohio public policy favors the enforcement of arbitration agreements.
R.C. 2711.02(B); Epps v. State Farm Auto. Ins., 2022-Ohio-4084, ¶ 13 (8th Dist.).
However, an arbitration provision, like any contract clause, will not be enforced if it
is found to be unconscionable. Arnold at ¶ 49. The party seeking to invalidate an
arbitration agreement on the ground of unconscionability bears the burden of
demonstrating that the agreement is both procedurally and substantively
unconscionable. Arnold at ¶ 50; DeVito at ¶ 27. Both elements must be present; a
deficiency in only one prong is fatal to the challenge. Arnold at ¶ 50.
B. Law and Analysis
In their first assignment of error, appellants argue that the trial court
committed reversible error in granting the motion to stay proceedings pending
arbitration because the Arbitration Agreement was both substantively and
procedurally unconscionable.
Substantive unconscionability concerns the terms of the agreement
itself and whether those terms are commercially reasonable, while procedural
unconscionability concerns the circumstances surrounding the formation of the agreement, including factors bearing on the parties’ relative bargaining position.
Arnold, 2015-Ohio-4485, at ¶ 51 (8th Dist.). We address each prong in turn.
Appellants contend that the Arbitration Agreement is substantively
unconscionable on three grounds: (1) the fee-splitting provision imposes prohibitive
costs; (2) the one-year contractual limitations period is unreasonably short and
effectively waives statutory remedies under R.C. Ch. 4112 and R.C. 3721.24; and (3)
the agreement deprives them of substantive rights available in a judicial forum. We
find these arguments unpersuasive.
The Arbitration Agreement at issue is a stand-alone, four-page
document captioned as a “Mutual Arbitration Agreement” between the employee
and Healthcare Payroll KD. The agreement covers “any and all claims” arising from
or relating to employment, expressly including claims of discrimination under
federal or state law. The agreement is mutual: both the employee and the employer
are bound to arbitrate covered disputes. It contains an express recommendation
that the employee consult with legal counsel before signing, and it provides a 30-day
rescission period during which the employee may withdraw from the agreement
without consequence.
With respect to the fee-splitting provision, appellants assert that the
requirement to share arbitration costs renders vindication of their statutory rights
prohibitively expensive. However, appellants have offered no concrete evidence of
what those costs would actually be in their specific case. Generalized assertions
about the potential cost of arbitration, unsupported by record evidence demonstrating that the costs would in fact be prohibitive for these particular
claimants, are insufficient to establish substantive unconscionability. DeVito, 2015-Ohio-3336, at ¶ 35 (8th Dist.) (party challenging arbitration on cost grounds must
offer specific evidence of prohibitive expense, not speculation).
As to the one-year limitations period, Ohio courts have repeatedly
upheld contractually shortened limitations periods in arbitration agreements as
commercially reasonable, provided the period affords a meaningful opportunity to
assert the claim. The one-year period in this agreement begins to run from “the date
on which the event giving rise to the dispute occurred” and applies symmetrically to
both parties. A one-year window is not so short as to deprive an employee of a
reasonable opportunity to discover, investigate, and assert an employment claim.
Indeed, appellants here filed charges with the Ohio Civil Rights Commission within
weeks of their September 9, 2024 terminations and filed their complaint in the court
of common pleas on January 21, 2025, well within one year. The contractual
limitations period did not, on this record, foreclose appellants from asserting their
claims; their inability to proceed in court arose not from the limitations clause but
from the agreement’s referral of those claims to a different forum.
Appellants’ contention that the agreement deprives them of
substantive rights conflates the forum in which a claim is heard with the substantive
law applied to it. An arbitration agreement does not extinguish statutory claims; it
merely provides an alternative forum for their resolution. The agreement here
expressly covers, rather than waives, statutory employment claims, and nothing in its terms purports to limit the substantive remedies available under R.C. Ch. 4112 or
R.C. 3721.24.
Appellants have not carried their burden of demonstrating that the
agreement is substantively unconscionable. Because both prongs of the
unconscionability test must be satisfied, this conclusion alone is dispositive of the
assignment of error. Arnold, 2015-Ohio-4485, at ¶ 50 (8th Dist.). Nevertheless, in
the interest of completeness, we address the procedural prong.
Procedural unconscionability focuses on the circumstances
surrounding the contracting parties’ bargaining, including each party’s age,
education, intelligence, business acumen, and experience; who drafted the contract;
whether alterations in the printed terms were possible; and whether there were
alternative sources of supply for the goods or services in question. Arnold, 2015-Ohio-4485, at ¶ 52 (8th Dist.).
Appellants argue that the agreement was procedurally
unconscionable because: (1) the agreement was presented through the HostedTime
online portal as part of a series of onboarding documents that had to be signed
sequentially; (2) the portal did not afford adequate time to review the documents;
(3) employees could not negotiate any term; (4) employees could not download or
print the documents and lost access once submitted; and (5) the agreement was a
condition of continued employment.
While the manner of presentation, particularly through an electronic
portal that allegedly limited the ability to retain a copy of the executed document, raises some concern, the record does not establish that the circumstances of
formation rose to the level of procedural unconscionability under Ohio law. Several
features of the transaction weigh decisively against appellants’ challenge.
First, the Arbitration Agreement was a stand-alone, four-page
document, separately captioned and distinct from the other onboarding materials.
It was not buried in fine print within a larger document. The agreement itself
expressly advised the employee to seek legal counsel before signing and
conspicuously notified the employee, in plain language, that signing meant
relinquishing the right to file a lawsuit and the right to a jury trial.
Second, and most significant, the agreement contained a 30-day
rescission period during which appellants could have withdrawn from the
agreement without any consequences to their employment. The presence of a
meaningful rescission right substantially undermines a claim that the agreement
was the product of oppression or unfair surprise. The agreement specifically states:
“Employee or, in the event of Employee’s incapacity, Employee’s authorized
representative have the right to rescind this arbitration agreement by notifying the
Facility in writing within thirty (30) days of the employment date.” Arbitration
Agreement, Section I. Appellants had a full month after signing to consult counsel,
reflect on the terms, and exercise their unilateral right to opt out. They did not do
so. A party who is given, but declines to exercise, the right to withdraw from an
arbitration agreement without penalty cannot persuasively argue that the agreement was procedurally unconscionable on the grounds that they had no
meaningful choice. Arnold, 2015-Ohio-4485, at ¶ 77 (8th Dist.).
Third, appellants are educated adult professionals with decades of
work experience. Both worked as dietitians and had been employed on the King
David campus for more than two decades at the time the agreement was presented.
Although the agreement was offered on a take-it-or-leave-it basis as a condition of
continued employment, that fact alone does not establish procedural
unconscionability. Ohio courts have consistently held that the adhesive nature of an
employment-related arbitration agreement, standing alone, is not sufficient to
render it unconscionable. Arnold at ¶ 77.
Fourth, appellants’ assertion that they could not later access the
documents, while a legitimate concern about recordkeeping practices, does not bear
on the circumstances of formation. The relevant inquiry for procedural
unconscionability is what the parties knew, understood, and were able to do at the
time of contracting. At the time of signing, appellants were presented with the
agreement, were given the opportunity to read it, were advised to consult counsel,
and were afforded a 30-day window to rescind. Difficulties in obtaining copies of
the executed agreement after the fact, while perhaps relevant to other issues, do not
establish that the formation process itself was unconscionable.
On this record, appellants have not demonstrated that the agreement
was procedurally unconscionable.
Because appellants have failed to establish either substantive or
procedural unconscionability, and because both prongs are required, the trial court
did not err in determining that the Arbitration Agreement is enforceable and in
staying the proceedings pending arbitration.
Therefore, appellants’ first assignment of error is overruled.
In their second assignment of error, appellants argued that the trial
court committed reversible error when it referred the parties to arbitration because
King David, Outcome, Liliestedt, and Miller waived any right to arbitrate by acting
inconsistently with that right.
A party may waive the right to arbitrate, like any other contractual
right. Blue Technologies, 2020-Ohio-806, at ¶ 25. To establish waiver, the party
opposing arbitration must demonstrate that (1) the party seeking arbitration knew
of an existing right to arbitrate, and (2) the party acted inconsistently with that right.
Id. at ¶ 26; Midland Funding, 2022-Ohio-4506, at ¶ 18.
In determining whether the totality of the circumstances supports a
finding of waiver, Ohio courts consider several factors, including: (1) whether the
party seeking arbitration invoked the jurisdiction of the trial court by filing a
complaint, counterclaim, or third-party complaint without asking for a stay; (2) the
delay, if any, by the party seeking arbitration in requesting a stay or order compelling
arbitration; (3) the extent to which the party seeking arbitration participated in
litigation, including the status of discovery, dispositive motions, and the trial date; and (4) any prejudice to the nonmoving party because of the moving party’s prior
inconsistent actions. Blue Technologies at ¶ 27; Midland Funding at ¶ 19.
Turning to the first prong of the waiver inquiry by the opposing party,
the record reflected that King David, and the affiliated appellees had actual
knowledge of the Arbitration Agreement well before they moved to stay proceedings.
On March 13, 2025, in the companion Yormick matter, counsel for Outcome filed
the affidavit of H. Jason Black, which attached the onboarding documents executed
by Yormick, including the Arbitration Agreement at issue. The same affidavit and
exhibits were filed in this case on March 18, 2025, as an exhibit to Outcome’s reply
in support of its motion to dismiss. Appellees were the parties who placed the
Arbitration Agreement before the trial court. By that date at the latest, appellees
knew that an arbitration agreement existed in connection with the King David
onboarding process under which appellants were employed.
Although appellees represented to the trial court that current counsel
did not appreciate the applicability of arbitration until July 11, 2025, knowledge of a
corporate party is not measured solely by the awareness of successor counsel. The
Arbitration Agreement was drafted by, executed in favor of, and held within the
custody of appellees’ own onboarding system. Appellees’ new counsel entered an
appearance on April 18, 2025, and the existence of the Agreement was already a
matter of record by that time. The first prong of the waiver test was therefore
satisfied.
The closer question, and the one on which this assignment of error
turns, is whether appellees acted inconsistently with the right to arbitrate. After
review of the totality of the circumstances, the court concluded that they did not.
As to the first factor, appellees did not invoke the jurisdiction of the
trial court by filing a complaint, counterclaim, or third-party complaint. Appellants
initiated this litigation. King David, Liliestedt, and Miller filed an answer, and
Outcome filed a Civ.R. 12(B)(2) motion challenging personal jurisdiction. A motion
contesting the trial court’s power to adjudicate the dispute over a particular
defendant is a threshold defense and is not the kind of affirmative invocation of the
court’s merits jurisdiction that ordinarily supports a finding of waiver. See Blue
Technologies, 2020-Ohio-806, at ¶ 28-31. This factor weighed against waiver.
As to the second factor, appellees filed their motion to stay on July 21,
2025, approximately six months after the complaint was filed on January 21, 2025,
and approximately four months after the Arbitration Agreement appeared on the
docket in this case. Although a delay of this duration is not insignificant, this district
has recognized that delay alone, without a showing of meaningful participation in
the litigation or prejudice, does not establish waiver. Midland Funding, 2022-Ohio4506, at ¶ 24. The record further reflected that during a substantial portion of this
period, the case sat dormant because of a series of visiting-judge assignments. No
case-management conference occurred until August 22, 2025, after appellees had
already moved to stay. The delay factor, while not entirely neutral, did not, standing
alone, demonstrate conduct completely inconsistent with arbitration.
As to the third factor, the extent of appellees’ participation in the
litigation, the record showed that appellees’ substantive engagement was limited.
The motion practice that occurred was confined to Outcome’s threshold personal
jurisdiction motion and routine answer Although appellants propounded two sets
of written discovery and noticed depositions, appellees did not propound any
discovery of their own, did not respond substantively to a significant portion of the
written discovery, did not take any depositions, did not file any dispositive motion
directed at the merits, and did not obtain a trial date or substantive casemanagement order. See Blue Technologies, 2020-Ohio-806, at ¶ 32. Appellees did
serve responses to the first set of written discovery on May 5, 2025, but those
responses were largely tied to the pending jurisdictional dispute. On this record,
appellees did not litigate the merits of the case in a manner that this court has
previously found sufficient to constitute waiver.
The court acknowledged appellants’ contention that appellees’
discovery responses objecting to the production of onboarding documents as not
“relevant” to any “claims or defenses” reflected a strategic decision to forgo
arbitration. (Defs.’ May 5, 2025 Disc. Resp.) That argument has surface appeal.
However, objections lodged during pre-arbitration jurisdictional discovery, even
when imprecise, do not, without more, demonstrate the kind of affirmative, meritsbased litigation conduct that this court has required to support a finding of waiver.
Blue Technologies at ¶ 27.
As to the fourth factor, prejudice, appellants were required to
demonstrate concrete prejudice flowing from appellees’ delay or litigation conduct.
Midland Funding, 2022-Ohio-4506, at ¶ 25. The record did not establish such
prejudice. No depositions had been taken; no merits discovery had been completed;
no dispositive motions had been litigated; and no trial date had been set. Although
appellants understandably expended resources in propounding discovery and
litigating the personal jurisdiction motion, that work was largely tied to the
jurisdictional issue and to obtaining the onboarding documents themselves. The
expenditure of routine litigation costs, without more, does not amount to the degree
of prejudice required to overcome the strong presumption in favor of arbitration.
Blue Technologies, 2020-Ohio-806, at ¶ 33.
Considering the totality of the circumstances under the four-factor
framework, the court could not conclude that appellees engaged in conduct
completely inconsistent with the right to arbitrate. Appellees did not invoke the
court’s jurisdiction by filing affirmative claims, did not engage in significant meritsbased motion practice, did not take or substantively respond to merits discovery, did
not obtain a trial date, and did not cause demonstrable prejudice to appellants
beyond the costs ordinarily incurred at the outset of any litigation. While appellees’
delay and their initial failure to plead arbitration as an affirmative defense gave the
court pause, those facts alone did not satisfy appellants’ heavy burden to
demonstrate waiver in the face of Ohio’s strong public policy favoring arbitration. Midland Funding, 2022-Ohio-4506, at ¶ 17. Accordingly, the trial court did not err
in concluding that appellees did not waive their right to arbitrate.
Therefore, appellants’ second assignment of error is overruled.
In their third assignment of error, appellants argued that the trial
court committed reversible error when it compelled the parties to arbitrate claims
outside the scope of the Arbitration Agreement. Specifically, appellants contended
that because appellees failed to “request and submit” a demand for arbitration to an
arbitrator within one year of the events giving rise to the dispute, the contractual
one-year limitations period set forth in Paragraph E of the Agreement extinguished
any right to arbitrate, placing appellants’ claims outside the scope of the Agreement.
The Arbitration Agreement signed by each appellant contains a oneyear contractual limitations provision, which states:
Any request for arbitration of a dispute must be requested and
submitted to the arbitrator within one (1) year of the date on which the
event giving rise to the dispute occurred. The failure to submit a
request for Arbitration within such one (1) year period shall operate as
a bar to any subsequent requests for arbitration, or for any claim for
relief or remedy, or to any action or legal proceeding of any kind or
nature, and the parties will be forever barred from arbitrating or
litigating a resolution to any such dispute.
Motion to Stay, July 21, 2025, Ex. 1-A at ¶ E.
Appellants were terminated on September 9, 2024. Appellees did not
file their motion to stay proceedings pending arbitration until July 21, 2025, and did
not submit a demand to any arbitrator at all before that filing. Appellants argued
that because more than one year passed between the events giving rise to the dispute, namely their September 9, 2024 terminations, and any request to arbitrate,
the contractual one-year period had run, and appellees could no longer pull the
claims into arbitration. However, per the facts, it was nine months, not 12.
According to appellants, the consequence of that expiration was that the claims fell
outside the scope of the Agreement, and the trial court erred by referring them to
arbitration over appellants’ objection.
The threshold question, however, is not whether the one-year
provision was triggered or how it should be applied. The threshold question is who
decides that issue. On that point, Ohio law is settled. Once a court determines that
the parties entered into a valid agreement to arbitrate and that the subject matter of
the dispute falls within the substantive scope of that agreement, procedural
questions that grow out of the dispute and bear on its final disposition are
presumptively for the arbitrator, not the court. This includes questions of
timeliness, compliance with conditions precedent, notice, and the application of
contractual limitations periods. Blue Techs. Smart Sols., L.L.C. at ¶ 17.
Appellants did not dispute, and could not credibly dispute, that the
substantive subject matter of their claims, namely age discrimination and retaliation
arising out of their employment and termination at King David, falls squarely within
the language of Paragraph C of the Agreement, which covers “any claim of
any kind . . . arising from or relating to an alleged violation of Federal or State
employment law of any kind, or any other cause or reason arising from employee’s
employment in the Facility.” Motion to Stay, July 21, 2025, Ex. 1-A at ¶ C.
The dispute about the one-year provision in Paragraph E is not a
dispute about whether the claims, by their nature, are the kind of claims the parties
agreed to arbitrate. It is a dispute about whether a particular procedural condition
within the arbitration framework, a contractual statute of limitations, was satisfied.
That is the paradigmatic procedural question reserved for the
arbitrator. Whether a party “timely” invoked arbitration under a contractual
deadline, and what consequence flows from any delay, are matters that go to the
application of the agreement’s own internal timing rules, not to whether an
agreement to arbitrate exists or what categories of disputes it covers. Treating the
one-year clause as a scope question would invert the analysis and would convert
every contractual limitations provision into a judicial gateway issue, contrary to
Ohio’s strong policy in favor of allowing arbitrators to decide such procedural
questions. Crider v. GMRI, Inc., 2020-Ohio-3668, ¶ 14 (8th Dist.).
Appellants’ reading also produced an internally inconsistent result.
By its own terms, Paragraph E bars “any subsequent requests for arbitration, or for
any claim for relief or remedy, or to any action or legal proceeding of any kind or
nature,” and provides that “the parties will be forever barred from arbitrating or
litigating a resolution to any such dispute.” Motion to Stay, July 21, 2025, Ex. 1-A
at ¶ E. On appellants’ construction, the running of the one-year period would
simultaneously remove the claims from the scope of arbitration and free appellants
to litigate them in court. The text says the opposite The provision operates as a
contractual statute of limitations that bars both arbitration and litigation, not as a gateway that returns time-barred claims to the courthouse. Whether and how that
bar applies to appellants’ particular claims is itself a question committed, in the first
instance, to the arbitrator. Blue Technicians Smart Solutions, L.L.C. at ¶ 17.
The trial court did not compel arbitration of claims “outside the
scope” of the Agreement. The trial court determined that the parties had a valid
agreement to arbitrate employment-related claims of the type appellants asserted
and properly left the procedural question of timeliness under Paragraph E to the
arbitrator. That ruling was consistent with Ohio’s strong policy favoring arbitration
and with the settled allocation of issues between courts and arbitrators. Crider at
¶ 14; Vining at ¶ 9.
Therefore, appellants’ third assignment of error is overruled.
Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this
judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule
27 of the Rules of Appellate Procedure.
ANITA LASTER MAYS, JUDGE
LISA B. FORBES, P.J., and
MICHAEL JOHN RYAN, J., CONCUR