ID Security Systems Canada, Inc. v. Checkpoint Systems, Inc.

Carol A. Warfield vs. Beth Israel Deaconess Medical Center, Inc., & others. Suffolk. March 5, 2009. July 27, 2009. Present: Marshall, C.J., Ireland, Spina, Cowin, Cordy, Botsford, & Gants, JJ. Federal Arbitration Act. Massachusetts Arbitration Act. Anti-Discrimination Law, Arbitration, Employment. Contract, Arbitration. Employment, Discrimination. Practice, Civil, Interlocutory appeal. Public Policy. An employment contract containing an agreement by the employee to limit or waive any of the rights or remedies conferred by G. L. c. 15 IB is enforceable only if such an agreement is stated in clear and unmistakable terms. [394-401] In a civil action brought in Superior Court alleging gender-based employment discrimination and retaliation in violation of G. L. c. 151B, the judge properly denied the defendants’ motion to dismiss, brought on the ground that the plaintiff’s employment agreement (agreement) mandated arbitration of all her claims, where neither the arbitration clause, which provided for the arbitration of any dispute “arising out of or in connection with this [ajgreement or its negotiations,” nor any of the other provisions contained in the agreement reflected the parties’ clear intent to subject statutory discrimination claims to arbitration. [401-402] Cowin, J., dissenting. Common-law claims that were integrally connected to an employee’s claims under G. L. c. 151B were required to be tried in the same action, despite the fact that the common-law claims were covered by an arbitration clause contained in an employment agreement. [403-404] Civil action commenced in the Superior Court Department on March 7, 2008. Motions to dismiss and to compel arbitration were heard by Isaac Borenstein, J. The Supreme Judicial Court granted an application for direct appellate review. John F. Welsh (Jennifer Belli with him) for Beth Israel Deaconess Medical Center, Inc. Tracey E. Spruce for Harvard Medical Faculty Physicians at Beth Israel Deaconess Medical Center, Inc. Richard D. Glovsky for Josef E. Fischer. Ellen J. Zucker (Laura R. Studen with her) for the plaintiff. Ben Robbins, Martin J. Newhouse, & Jo Ann Shotwell Kaplan, for New England Legal Foundation & another, amici curiae, submitted a brief. Patricia A. Washienko, for American Civil Liberties Union of Massachusetts & others, amici curiae, submitted a brief. Paul F. Levy; Harvard Medical Faculty Physicians at Beth Israel Deaconess Medical Center, Inc.; and Josef E. Fischer. Botsford, J. The plaintiff, Carol A. Warfield, the former chief of anesthesiology at Beth Israel Deaconess Medical Center, Inc. (BIDMC), filed this action in the Superior Court against her employers, alleging gender-based discrimination and retaliation in violation of G. L. c. 151B, and factually related common-law claims. BIDMC and the other defendants moved to dismiss Warfield’s complaint and compel arbitration on the ground that the employment agreement she signed soon after she became chief of anesthesiology mandated arbitration of all her claims. A judge in the Superior Court denied the motions, and the defendants filed this interlocutory appeal. We conclude that Warfield’s statutory discrimination claims do not fall within the scope of the arbitration clause contained in the employment agreement, and that she may proceed with her discrimination action in the Superior Court. Because her additional claims are wholly intertwined with her statutory discrimination claims, principles of judicial economy dictate that they be tried in the same action. 1. Facts. We recite only the facts relevant to the current dispute. Warfield, an anesthesiologist employed by Harvard Medical Faculty Physicians at Beth Israel Deaconess Medical Center, Inc. (HMFP), has been an anesthesiologist on the medical staff of BIDMC since 1980. On March 27, 2000, Warfield entered into an employment agreement with BIDMC and HMFP in which she agreed to serve in the capacity of anesthesiologist-in-chief for BIDMC (agreement). The agreement provides that Warfield’s duties as anesthesiologist-in-chief would commence on January 1, 2000, and sets forth, inter alia, her duties as chief, her compensation and benefits in that position, and circumstances in which she could be terminated for cause and without cause. The agreement further provides that Warfield remained an employee of HMFP, and that she was bound by the separate articles, bylaws, rules, guidelines, regulations, procedures, and standards of BIDMC, HMFP, and Harvard Medical School that were not part of the agreement. The agreement additionally provides that it supersedes “any and all previous discussions, understandings or agreements between the Physician, HMFP, and/or the Hospital relating to the subject matter hereof or any other employment or contracting relationship between Dr. Warfield and HMFP or the Hospital.” Section 17 of the agreement, titled Arbitration, provides: “Arbitration. Any claim, controversy or dispute arising out of or in connection with this Agreement or its negotiations shall be settled by arbitration. Each party hereto shall designate an independent arbitrator and these two[] arbitrators shall select a third independent arbitrator who shall be chairperson of the panel. The arbitrators shall then conduct the arbitration at a mutually acceptable site and a majority shall render a decision as to the matter in dispute, which decision shall be binding on the parties hereto. Each party shall bear the expense of its own arbitrator and an equal share of the expense of the third arbitrator. To the extent not otherwise hereinabove provided, the arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The full rules of discovery shall apply to any such proceeding. “In no event, however, shall this Section 17 be deemed to preclude a party hereto from instituting legal action seeking relief in the nature of a restraining order, an injunction or the like in order to protect her or its rights pending the outcome of an arbitration hereunder. With respect to matters submitted to arbitration other than claims for payment of monies due, the parties shall continue to perform their obligations hereunder relative to said matters pending resolution of the dispute by arbitration.” Neither § 17 nor any other provision of the agreement made reference to employment discrimination statutes or claims. In the fall of 2001, BIDMC hired Dr. Josef Fischer to be chief of surgery. In January, 2002, Paul Levy was hired as the president and chief executive officer of BIDMC. Warfield alleges in her complaint that during the next several years, Fischer engaged in a relentless pattern of gender-based discriminatory treatment of her. She also alleges that she repeatedly complained to Levy about Fischer’s treatment, but that no or insufficient action was taken. On July 18, 2007, carrying out a decision made by Levy and BIDMC that Warfield characterizes as “discriminatory and retaliatory in its motivation and defaming in its effect,” Levy terminated Warfield’s appointment as anesthesiologist-in-chief, effective immediately. Warfield further alleges that, since her termination, BIDMC, Levy, and HMFP have “marginalize^]” her by collaborating to push her out of her job as a staff anesthesiologist at BIDMC, and to deny her benefits to which she would have had access, absent the alleged discriminatory and retaliatory treatment. Warfield commenced this action in the Superior Court on March 7, 2008. In her complaint, Warfield alleges claims of gender discrimination under G. L. c. 15IB, § 4 (1), against BIDMC, Levy, and Fischer; retaliation under G. L. c. 151B, § 4 (4), against all defendants; tortious interference with advantageous or contractual relations against BIDMC, Levy, and Fischer; and defamation against BIDMC, Levy, and Fischer. Her claims of tortious interference with contractual relations are entirely based on the same alleged conduct that gave rise to Warfield’s statutory discrimination complaints. Her claims of defamation are primarily based on the same conduct that gave rise to her statutory claims, although as discussed below, Warfield additionally alleges that the defendants continued to defame her even after her termination as anesthesiologist-in-chief. The defendants moved to dismiss the case and to compel arbitration of Warfield’s claims pursuant to G. L. c. 251, § 2. On September 15, 2008, a judge in the Superior Court denied the defendants’ motions. He concluded that the arbitration clause did not reach Warfield’s claims for gender discrimination and retaliation because the agreement did not govern her employment relationship with BIDMC and HMFP generally, but only the narrow topic of her duties as chief of anesthesiology, and the claims of discrimination fell outside this narrow topic. He also concluded that to the extent Warfield’s claims concerned her termination, they were not arbitrable because the agreement provided specifically that it ended on Warfield’s termination, and therefore the arbitration clause would no longer be in effect. The defendants appealed pursuant to G. L. c. 251, § 18 (a) (1), which grants a right of interlocutory appeal from orders denying an application to compel arbitration. We granted the defendants’ application for direct appellate review. We affirm the order of the Superior Court judge but for different reasons. 2. Discussion. By its express terms, the agreement is governed by Massachusetts law, and thus the Massachusetts Arbitration Act (MAA) applies to it. At the same time, the agreement comes within the scope of the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (2006) (FAA), because it concerns Warfield’s employment as anesthesiologist-in-chief, and the defendants, as hospital-based health care providers, are involved in interstate commerce. See Miller v. Cotter, 448 Mass. 671, 678 (2007). In all relevant respects, the language of the FAA and the MAA providing for enforcement of arbitration provisions are similar, and we have interpreted the cognate provisions in the same manner. Id. at 678-679. The FAA provides in relevant part: “A written provision in . . .a contract evidencing a transaction involving interstate commerce to settle by arbitration a controversy thereafter arising out of such contract ... or the refusal to perform the whole or any part thereof . . . 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. Because procedures to compel arbitration under the FAA apply only in Federal courts, we apply the MAA’s procedures. See St. Fleur v. WPI Cable Sys./Mutron, 450 Mass. 345, 351-352 (2008). The MAA authorizes proceedings in the Superior Court to compel arbitration in accordance with the terms of an arbitration agreement, and permits an interlocutory appeal from orders denying an application to compel arbitration. See G. L. c. 251, §§ 2, 18. A defendant’s motion to compel arbitration is treated summarily. See Miller v. Cotter, 448 Mass, at 676; G. L. c. 251, § 2. We review the judge’s order de novo. See Commonwealth v. Philip Morris Inc., 448 Mass. 836, 844 (2007). It is settled that the FAA allows for the arbitration of Federal employment discrimination disputes, unless otherwise barred by law. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24-26 (1991); Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 170 F.3d 1, 19-20 (1st Cir. 1999). We have not had occasion to rule on whether employment discrimination claims arising under G. L. c. 15IB are arbitrable, but the parties here correctly assume their arbitrability. The dispute before us concerns only whether the parties have contractually agreed, in the agreement, to submit statutory claims of discrimination to arbitration. See Mugnano-Bornstein v. Crowell, 42 Mass. App. Ct. 347, 350 (1997), quoting Local 285, Serv. Employees Int’l Union v. Nonotuck (Mugnano-Bornstein) Resource Assocs., Inc., 64 F.3d 735, 738 (1st Cir. 1995) (“a party cannot be required to submit to arbitration any dispute which he has not agreed ... to submit”). We apply general principles of State contract law to determine whether a particular agreement requires arbitration of a claim. Mugnano-Bornstein, supra. See Brennan v. King, 139 F.3d 258, 264 (1st Cir. 1998), quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995) (“As with other issues involving the construction of individual employment contracts, in determining whether a contract requires arbitration, ‘courts generally . . . should apply ordinary state-law principles that govern the formation of contracts’ ”). See also Volt Info. Sciences, Inc. v. Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 474-476, All (1989) (where contract covered by FAA but choice of law clause provided California law would govern, parties in effect incorporated California arbitration rules into contract; under those rules, arbitration properly stayed even though FAA would not have called for stay). The arbitration clause in the agreement provides that “[a]ny claim, controversy or dispute arising out of or in connection with this Agreement or its negotiations shall be settled by arbitration.” Federal as well as State law and policy favor arbitration. See Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983) (Federal); Miller v. Cotter, 448 Mass, at 676 (Commonwealth). This policy generally instructs us that where a contract has an arbitration clause that is “broad” in its reach, there is a rebuttable presumption that a contract dispute is covered by the clause, and doubts whether a particular dispute comes within the scope of the clause should be resolved in favor of arbitration. See Drywall Sys., Inc. v. ZVI Constr. Co., 435 Mass. 664, 666-667 (2002). See also Commonwealth v. Philip Morris Inc., 448 Mass, at 843-844. Cf. Local No. 1710, Int’l Ass’n of Fire Fighters v. Chicopee, 430 Mass. 417, 421-422 (1999). In a number of contexts, we have construed the phrase “arising out of” and similar phrases (e.g., “connected to” or “relating to”) in an arbitration clause as constituting “broad” language that invokes the FAA’s (and MAA’s) presumption in favor of arbitration. See, e.g., Commonwealth v. Philip Morris Inc., supra at 844-845 (settlement agreement between Commonwealth and tobacco companies providing for arbitration of disputes “arising out of” or “relating to” calculation of companies’ annual payments required arbitration of claim under agreement); Drywall Sys., Inc. v. ZVI Constr. Co., supra at 666 (construction subcontracts between general contractor and subcontractor providing for arbitration of claims “arising out of or relative to” subcontracts required arbitration of all parties’ construction project claims, including claim under G. L. c. 93A). However, this court has never been called on to interpret the scope of such language when used in an employment agreement’s arbitration clause where the employee raises claims of discrimination under G. L. c. 151B. Cf. Mugnano-Bornstein, 42 Mass. App. Ct. at 351-353. Our State law principles of contract interpretation make clear that considerations of public policy play an important role in the interpretation and enforcement of contracts. See Feeney v. Dell Inc., ante 192, 193 (2009) (Commonwealth’s strong public policy supporting ability of consumers to bring class actions as means of seeking remedy for unfair or deceptive commercial conduct rendered unenforceable sales contract arbitration provision barring class actions). See also, e.g., A.Z. v. B.Z., 431 Mass. 150, 160 (2000); Beacon Hill Civic Ass’n v. Ristorante Toscano, Inc., 422 Mass. 318, 320-322 (1996). The Commonwealth has an “overriding governmental policy proscribing various types of discrimination, set forth in G. L. c. 151B.” Massachusetts Bay Transp. Auth. v. Boston Carmen’s Union, Local 589, ante 19, 26, 29 (2009). Section 9 of G. L. c. 151B, the Commonwealth’s antidiscrimination law, states expressly that it is to “be construed liberally for the accomplishment of its purposes, and any law inconsistent with any provision of [c. 151B] shall not apply.” The statute not only establishes substantive rights, but also makes available to an aggrieved party comprehensive administrative as well as judicial avenues of redress for substantive statutory violations. Thurdin v. SEI Boston LLC, 452 Mass. 436, 441-442 (2008). See Ayash v. Dana Farber Cancer Inst., 443 Mass. 367, 391-392, cert, denied sub nom. Globe Newspaper Co. v. Ayash, 546 U.S. 927 (2005) (G. L. c. 151B is “comprehensive statute enacted to provide judicial and administrative remedies for destructive acts of discrimination in the workplace”). Consistent with the public policy against workplace discrimination reflected in G. L. c. 151B, we conclude that an employment contract containing an agreement by the employee to limit or waive any of the rights or remedies conferred by G. L. c. 15 IB is enforceable only if such an agreement is stated in clear and unmistakable terms. See Garfinkel v. Morristown Obstetrics & Gynecology Assocs., P.A., 168 N.J. 124, 130-132 (2001) (plaintiff physician’s gender-based discrimination claims against defendant employer not subject to arbitration under arbitration clause in employment contract where terms of contract not sufficiently clear to constitute waiver of plaintiffs remedies under New Jersey antidiscrimination law). The interpretive rule we state here is not inconsistent with the presumption of arbitrability embedded in the FAA. That presumption signifies that “in applying general state-law principles of contract interpretation to the interpretation of an arbitration agreement within the scope of the [FAA] . . . due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself resolved in favor of arbitration.” Volt Info. Sciences, Inc. v. Trustees of Leland Stanford Jr. Univ., 489 U.S. at 475-476. Accord Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. at 24-25. But the purpose of the FAA was and is “to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. at 24. See Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 219-220 & n.6 (1985); St. Fleur v. WPI Cable Sys./Mutron, 450 Mass, at 349. The concern was to enforce private agreements to arbitrate according to their terms, not to encourage arbitration of contractual disputes for its own sake. See Volt Info. Sciences, Inc. v. Trustees of Leland Stanford Jr. Univ., supra at 474-475. See also Dean Witter Reynolds Inc. v. Byrd, supra at 221. Our interpretive rule states only that as a matter of the Commonwealth’s general law of contract, a private agreement that purports to waive or limit — whether in an arbitration clause or on some other contract provision — the employee’s otherwise available right to seek redress for employment discrimination through the remedial paths set out in G. L. c. 151B, must reflect that intent in unambiguous terms. In relation to an arbitration clause, the rule continues to uphold the language and generous spirit of the FAA and the Commonwealth’s own public policy in favor of arbitration agreements: parties to an employment contract are free to agree on arbitration of statutory discrimination claims, and the presumption of arbitrability is in effect. However, parties seeking to provide for arbitration of statutory discrimination claims must, at a minimum, state clearly and specifically that such claims are covered by the contract’s arbitration clause., A recent decision of the United States Supreme Court supports our view that an intent to arbitrate statutory empl

COLEMAN-NICHOLS v TIXON CORPORATION Docket No. 145235. Submitted November 3, 1993, at Detroit. Decided February 22, 1994, at 9:15 A.M. Beverly Coleman-Nichols brought an action in the Wayne Circuit Court against Tixon Corporation, William Herbert, Tixon’s general manager, and Armanda Herbert, Tixon’s president, alleging sex discrimination, wrongful discharge from employment, intentional infliction of emotional distress, defamation, and fraudulent conveyance against all three defendants and interference with contractual relations against Armanda Herbert individually. The court, James J. Rashid, J., granted summary disposition for the defendants with respect to the claims of intentional infliction of emotional distress and defamation, but denied summary disposition of the claims of sex discrimination, wrongful discharge, tortious interference with contractual relations, and fraudulent conveyance. The defendants appealed by leave granted. The plaintiff cross appealed from the trial court’s refusal to enter a default judgment in her favor based upon the defendants’ alleged failure to cooperate with discovery. The Court of Appeals held: 1. The plaintiff has presented a prima facie case of sex discrimination and has sustained her burden of demonstrating that the defendants’ proffered legitimate, nondiscriminatory reason for their action was merely a pretext. There is a genuine issue of fact regarding whether the plaintiff was discriminated against on the basis of her gender. 2. The plaintiff should have been permitted to attempt to demonstrate to the jury that her demotion may have been a disparate form of discipline. There was a genuine issue of fact regarding whether the plaintiff was treated differently than other employees similarly situated. The trial court properly refused to grant summary disposition with regard to the claim of sex discrimination. References Am Jur 2d, Fraudulent Conveyances §§ 1, 3, 5-41, 145, 174; Job Discrimination §§151, 2003, 2006, 2008-2012, 2015-2020, 2022, 2024, 2735; Judgments §§ 1152, 1154, 1158; Master and Servant §§ 14-18, 20, 27, 32, 33; Wrongful Discharge §§ 95, 101-103, 120-122, 161-166. Right to discharge allegedly "at-will” employee as affected by employer’s promulgation of employment policies as to discharge. 33 ALR4th 120. Liability of corporate director, officer, or employee for tortious interference with corporation’s contract with another. 72 ALR4th 492. 3. Under either a contractual analysis or a legitimate-expectations analysis, the plaintiff did not present sufficient evidence to create a genuine issue of fact concerning the existence of an employment contract terminable for just cause only. The trial court erred in failing to dismiss the wrongful discharge claim. 4. The trial court erred in denying summary disposition of the plaintiff’s claim of tortious interference with contractual relations against Armanda Herbert individually. The plaintiff presented no evidence of any affirmative acts by Armanda individually that corroborate an unlawful interference. 5. The trial court erred in denying summary disposition of the plaintiff’s claim that the defendants fraudulently conveyed certain property contrary to §§ 4, 5, and 6 of the Uniform Fraudulent Conveyance Act, MCL 566.14, 566.15, 566.16; MSA 26.884, 26,885, 26.886, but properly denied summary disposition of the claim involving § 7 of the act, MCL 566.17; MSA 26.887. The plaintiff presented sufficient evidence to create a question of fact regarding the defendants’ intent to defraud creditors under § 7 of the act. 6. The plaintiff was a creditor under the Uniform Fraudulent Conveyance Act and is entitled to pursue her claim under § 7 of the act. 7. Although the record confirms facts sufficient to warrant the entry of a default judgment based on the defendants’ failure to cooperate with discovery, the trial court’s refusal to enter a default judgment was not an abuse of discretion in light of the measures the court took to remedy the defendants’ abuse of the discovery process. 8. The trial court’s denial of summary disposition of the claims of wrongful discharge and tortious interference with contractual relations is reversed. The court’s denial of summary disposition of the claims of sex discrimination and fraudulent conveyance is affirmed. The trial court’s refusal to enter a default judgment based on the defendants’ failure to cooperate with discovery is affirmed. Affirmed in part and reversed in part. 1. Civil Rights — Sex Discrimination — Motions and Orders — Summary Disposition. A plaintiff must demonstrate a genuine issue of material fact regarding whether a prima facie case of sex discrimination exists to avoid summary disposition of such a claim; a prima facie case of discrimination can be made by proving either intentional discrimination or disparate treatment; where the defendant puts forth a legitimate, nondiscriminatory reason for its actions in response to a prima facie case of discrimination, the plaintiff has the burden of showing that the proffered reason is merely a pretext (MCR 2.116[C][10]). 2. Civil Rights — Sex Discrimination — Prima Facie Case. In order to establish a prima facie case of intentional sex discrimination in employment, a plaintiff must prove membership in a protected class, discharge or other discrimination with respect to employment, predisposition of the defendant to discriminate against persons in the class, and action by the defendant upon that disposition when the employment decision was made; to establish a prima facie case under the disparate-treatment theory, the plaintiff must show membership in a protected class and that, for the same conduct or performance, a person of the other gender was treated differently. 3. Master and Servant — Termination for Cause. An employment relationship terminable for just cause only can arise either by contract or by an employee’s legitimate expectations in reliance on company policies; a general statement concerning job security, without further discourse about causes for termination, is insufficient to establish an employer’s intent to create a just-cause contract. 4. Torts — Interference with At-Will Employment Contract. A plaintiff with a claim of tortious interference with an at-will employment contract against a defendant who is an officer of the employer must prove that the officer was acting outside the scope of the officer’s authority; such a claim requires proof, with specificity, of affirmative acts by the defendant that corroborate the unlawful purpose of the interference. 5. Fraudulent Conveyances — Uniform Fraudulent Conveyance Act — Intent to Defraud — Badges of Fraud. Actual intent to defraud creditors can be inferred under the Uniform Fraudulent Conveyance Act from certain "badges” of fraud, although the existence of such badges is not conclusive evidence of intent to defraud; badges of fraud include lack of consideration for the conveyance, a close relationship between transferor and transferee, pendency or threat of litigation, financial difficulties of the transferor, and retention of the possession, control, or benefit of the property by the transferor (MCL 566.17; MSA 26.887). 6. Fraudulent Conveyances — Uniform Fraudulent Conveyance Act — Creditor. A creditor, for purposes of the Uniform Fraudulent Conveyance Act, is a person having a claim, whether matured or unmatured, liquidated or unliquidated, absolute, fixed, or contingent; a person with a tort claim is a creditor from the date of the tort, any liabilities are considered as existing from the date the cause of action arose, and an action can be brought under the act before the rendering of a judgment in a preceding action involving the parties (MCL 566.11, 566.20; MSA 26.881, 26.890). 7. Pretrial Procedure — Discovery — Remedies — Default Judgments. The entry of a default judgment for failure to cooperate with discovery is an extraordinary remedy reserved for use within the sound discretion of the trial court (MCR 2.313[B][2][c]). Kelman, Loria, Downing, Schneider & Simpson (by Janet M. Tooley), for the plaintiff. Bell & Gardner, P.C. (by James W. McGinnis), for the defendants. Before: Gribbs, P.J., and Shepherd and P. E. Deegan, JJ. Circuit judge, sitting on the Court of Appeals by assignment. Shepherd, J. Defendants appeal by leave granted from a November 1, 1991, order of the trial court granting defendants partial summary disposition but denying summary disposition with regard to the balance of plaintiffs claims. Plaintiff cross appeals from the trial court’s refusal to grant entry of a default judgment based on defendants’ alleged failure to cooperate in discovery. We affirm in part and reverse in part. This case arises out of plaintiffs employment relationship with Tixon Corporation, of which William Herbert was general manager, and his wife, Armanda Herbert, was president. Tixon was in the business of collecting parking violation fines for the City of Detroit. Plaintiff began working for Tixon in September, 1986. After working as a supervisor for two years, plaintiff was promoted to the position of assistant operations manager. Plaintiff was primarily responsible for the operations support and the public service departments. Tixon’s other assistant manager was Derrick Gray. Gray was responsible for the revenue and data entry departments, and was later also given the title of marketing director. On May 9, 1990, defendant William Herbert issued a memorandum that announced the elimination of two positions—those of plaintiff and defendant William Herbert’s son, Steven Herbert, ostensibly for economic reasons. Plaintiff’s responsibilities were to be consolidated with those of Gray, who was to be given the sole assistant manager position. At the same time, plaintiff was offered an alternative position as a processor, with a reduction in pay. Plaintiff accepted the lower-level position, but resigned by June, 1990. Following her demotion, plaintiff filed suit against defendants. Then, on November 2, 1990, after her resignation, plaintiff filed an amended complaint. Plaintiff’s amended complaint alleged sex discrimination, wrongful discharge, intentional infliction of emotional distress, defamation, and fraudulent conveyance against all three defendants. Further, plaintiff’s amended complaint alleged interference with contractual relations against defendant Armanda Herbert individually. As noted above, on November 1, 1991, following a hearing on defendants’ motion for summary disposition pursuant to MCR 2.116(0(10), the trial court ordered partial summary disposition. The trial court granted defendants’ motion for summary disposition regarding plaintiff’s claims of intentional infliction of emotional distress and defamation, but denied summary disposition of plaintiff’s claims of sex discrimination, wrongful discharge, tortious interference with contractual relations, and fraudulent conveyance. From that November 1, 1991, order, defendants appeal by leave granted. Plaintiff cross appeals from the trial court’s refusal to enter a default judgment in her favor based upon defendants’ alleged failure to cooperate in discovery. On appeal, our review of a motion for summary disposition pursuant to MCR 2.116(C)(10) is de novo. Adkins v Thomas Solvent Co, 440 Mich 293, 302; 487 NW2d 715 (1992). A motion for summary disposition under MCR 2.116(C)(10) tests the factual support for a claim. Buczkowski v Allstate Ins Co (On Rehearing), 198 Mich App 276, 278; 502 NW2d 343 (1993). The trial court must give the benefit of any reasonable doubt to the nonmoving party. Schultes v Naylor, 195 Mich App 640, 645; 491 NW2d 240 (1992). The trial court must then determine whether a record might be developed that would leave open an issue upon which reasonable minds might differ. Featherly v Teledyne Industries, Inc, 194 Mich App 352, 357; 486 NW2d 361 (1992). i First, defendants argue that the trial court should have granted summary disposition with regard to plaintiff’s claim of sex discrimination under the Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq. Defendants argue that plaintiff was not similarly situated to the male employees to whom she compares herself. Defendants also argue that plaintiff has not demonstrated that the reasons given by defendants for eliminating plaintiffs position were a mere pretext. In order to avoid summary disposition of this claim, plaintiff had to demonstrate a genuine issue of material fact regarding whether a prima facie case of discrimination exists. Schultes, supra at 645; MCR 2.116(c)(10). A prima facie case of discrimination can be made by proving either intentional discrimination or disparate treatment. Reisman v Regents of Wayne State Univ, 188 Mich App 526, 538; 470 NW2d 678 (1991). In order to establish a prima facie case of intentional sex discrimination, a plaintiff must show that she was a member of a protected class, that she was discharged or otherwise discriminated against with respect to employment, that the defendant was predisposed to discriminate against persons in the class, and that the defendant acted upon that disposition when the employment decision was made. Schultes, supra at 646. In order to establish a prima facie case of sex discrimination under the disparate-treatment theory, a plaintiff must show that she was a member of a protected class, and that, for the same conduct or performance, she was treated differently than a man. Id. at 645. Where, in response to a prima facie case of discrimination, a defendant puts forth a legitimate, nondiscriminatory reason for its actions, the plaintiff has the burden of showing that the proffered reason was merely a pretext. Featherly, supra at 362. A In the present case, our review of the record reveals that there is a genuine issue of fact regarding whether plaintiff was discriminated against on the basis of her gender. MCR 2.116(0(10). There is no question that plaintiff is a member of a protected class, and that an employment decision was made that was adverse to her. Schultes, supra at 646. Further, it is undisputed that a male coworker, Gray, was paid significantly more as a new supervisor than plaintiff was paid for being an experienced supervisor. Although Gray was promoted to assistant manager a few months after plaintiff, Gray also earned more than plaintiff in the assistant manager position. Then, when the two assistant manager positions were consolidated, Gray was chosen over plaintiff despite plaintiffs greater experience. This was sufficient to create a prima facie case of sex discrimination. Reisman, supra at 538. While at this stage of the proceedings there may be some dispute regarding whether plaintiff and Gray were similarly situated, this is a factual question to be answered by a jury. It does appear that plaintiffs duties as an assistant manager were different from Gray’s. Plaintiff oversaw the public relations and operations support departments. Gray oversaw the revenue and data entry departments, and was later also given the title of marketing director when the assistant manager positions were consolidated. However, on the basis of the job descriptions and various other exhibits presented by the parties, we cannot say with certainty that the two assistant manager positions were substantially different. While plaintiff acknowledges that Gray had attained a higher level of education with his college degree, we cannot say that Gray’s college degree made him any more qualified for the consolidated assistant manager position because the position entailed responsibilities in a wide array of disciplines. By comparison, plaintiff was already proficient at supervising the public relations and operations support departments. Overall, plaintiff and Gray appear to have been equally qualified for the consolidated assistant manager position—although plaintiff had been with the company longer. Thus, we are left with a question of fact regarding why plaintiff was not chosen for the position despite her equal or superior qualifications. Schultes, supra at 645. Plaintiff has presented a prima facie case of sex discrimination. In response to plaintiff’s prima facie case of sex discrimination, defendants argue that plaintiff’s position was eliminated because of economic necessity. However, plaintiff has presented evidence that defendant Tixon Corporation operated at a substantial profit for the period in question. Thus, plaintiff has sustained her burden of demonstrating that defendants’ proffered reason was merely a pretext. Featherly, supra at 362. B On an independent basis, as discussed above, we would sustain plaintiff’s claim of sex discrimination in light of the disparate treatment she received in comparison to Gray. However, in a separate argument, plaintiff also alleges that other male employees were not proportionately disciplined for various incidents of misconduct, while she was constructively discharged for remarking that the Herberts spent their money in ways other than on their employees. On this point—with the elimination of a valid economic rationale for defendants’ actions, as noted above—plaintiff should also be permitted to attempt to demonstrate to a jury that her demotion may have been a disparate form of discipline. The evidence presented by plaintiff in support of this argument strongly suggests that a number of other male employees were not proportionately disciplined for far more egregious conduct. For example, some male employees received neither a demotion nor a pay cut for such serious infractions as fighting on the job and falsifying timesheets. Thus, here also there is a genuine issue of fact. MCR 2.116(0(10). In sum, there exists a genuine issue of material fact whether plaintiff was treated differently than other employees similarly situated. It appears that the record may be further developed in support of plaintiff’s claim of sex discrimination. Featherly, supra at 357. The trial court properly refused to grant summary disposition with regard to this count. ii Next, defendants argue that the trial court erred in refusing to grant summary disposition of plaintiff’s claim of wrongful discharge. Defendants argue that plaintiff was not discharged, but rather resigned. Further, defendants argue that even if plaintiff was constructively discharged, she cannot prove the existence of an employment contract providing for termination only for just cause. Here, we agree that there is no genuine issue of material fact that plaintiff’s employment was terminable only for just cause. MCR 2.116(0(10). No reasonable juror could find that plaintiff had a just-cause employment contract. Featherly, supra at 357. In the recent case of Rood v General Dynamics Corp, 444 Mich 107, 119, 140; 507 NW2d 591 (1993), our Supreme Court reiterated that a just-cause employment relationship can arise either by contract or by an employee’s legitimate expectations in reliance on company policies. However, there is a strong presumption that employment contracts for an indefinite duration are terminable at the will of either party for any reason or for no reason at all. Id. at 116. Under a contractual theory, courts use an objective test, looking at the expressed words of the parties and their visible acts to determine whether a reasonable person could have interpreted the words or conduct to create such a contract. Id. at 119. Under the legitimate-expectations theory, the courts must "examine employer policy statements, concerning employee discharge, if any, to determine, as a threshold matter, whether such policies are reasonably capable of being interpreted as promises of just-cause employment.” Id. at 140. In support of her claim of a just-cause employment relationship, plaintiff stated during her deposition that William Herbert told her that she would keep her job as long as Tixon was doing business. In addition, plaintiff emphasizes that she was given a management training