## Facts

- FedEx contracted with three individual delivery contractors under operating agreements that were materially identical.
- Before execution, a FedEx recruiter allegedly made oral representations that contractors would earn about $1,500 per week (plus bonuses) if they worked 10–12 hours per day.
- The recruiter also allegedly stated the contractors had to buy trucks and that FedEx would help resell the route and truck if they left.
- The contractors bought trucks, performed delivery services, later believed the earnings representations were unachievable, and claimed FedEx did not provide promised resale assistance.
- All contractors resigned in 2001 and alleged FedEx refused to help them sell their trucks.
- In 2003, they sued asserting claims including rescission, fraud, negligent misrepresentation, breach of contract, breach of the covenant of good faith and fair dealing, and deceptive trade practices.
- FedEx removed on diversity and moved to dismiss and compel arbitration under an agreement clause titled “Arbitration of Asserted Wrongful Termination,” which required arbitration when FedEx acted to terminate the agreement (including claimed constructive termination).
- Plaintiffs amended to state their claims were based solely on alleged oral representations, not on the written agreements.
- The district court denied arbitration as outside the clause’s limited scope; FedEx appealed under 9 U.S.C. § 16(a)(1)(C).

## Issues

1. Whether an arbitration clause limited to disputes arising when FedEx “act[ed] to terminate” the operating agreement (including constructive termination) required arbitration of claims pleaded as based on pre-contract oral representations and implied obligations rather than termination.

## Decision

- The Tenth Circuit affirmed the order denying FedEx’s motion to compel arbitration.
- The court held the arbitration clause was narrowly drafted to cover only termination-related disputes.
- Because plaintiffs did not allege actual or constructive termination by FedEx and framed their claims as arising from oral representations and implied promises, the claims fell outside the clause.

## Legal Principles

- Arbitration is a matter of contract; courts enforce arbitration provisions according to their terms and do not expand a narrow clause beyond its stated scope.
- A federal policy favoring arbitration supports enforcement of agreed arbitration, but does not justify rewriting a provision to cover disputes the parties did not submit to arbitration.
- A clause focused on “wrongful termination” does not reach non-termination claims merely because they relate to the parties’ broader business relationship; broad “arising out of or relating to” language is required to capture such disputes.

## Conclusion

The court declined to compel arbitration because the parties’ arbitration agreement was limited to disputes involving FedEx’s termination or constructive termination of the operating agreements, while the contractors’ pleaded claims rested on alleged pre-contract oral representations and implied promises unrelated to termination.


Cummings v. FedEx Ground Package Sys., Inc., 404 F.3d 1258 (10th Cir. 2005)