STEWART v. FAIRLANE COMMUNITY MENTAL HEALTH CENTRE (ON REMAND)
Case Details
- Citation
- 225 Mich. App. 410
- Judge(s)
- Before: Mackenzie, P.J., and Neff and Markey, JJ.
- Procedural Posture — the stage the case had reached
- appeal
- State
- Michigan
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
The Court of Appeals affirmed the trial court's denial of the employer's motion for summary disposition, holding that the employer's unilaterally amendable personnel policy manual did not create an enforceable arbitration agreement barring the employee's whistleblower claim under Michigan's Whistleblowers' Protection Act.
Excerpt
STEWART v FAIRLANE COMMUNITY MENTAL HEALTH CENTRE (ON REMAND) Docket No. 191460. Submitted June 3, 1997, at Detroit. Decided September 16, 1997, at 9:00 A.M. Carol Stewart brought an action in the Wayne Circuit Court against Fairlane Community Mental Health Centre, alleging violation of the Whistleblowers’ Protection Act, MCL 15.361 et seq.; MSA 17.428(1) et seq., as a result of her alleged constructive discharge from employment. The defendant sought summary disposition, alleging that, through the defendant’s personnel policies manual, the plaintiff had agreed to binding arbitration with regard to any issues relating to her employment. The court, Michael J. Callahan, J., denied the defendant’s motion. The Court of Appeals, in lieu of granting the defendant’s application for leave to bring an interlocutory appeal, entered an unpublished order on February 3, 1995, reversing the trial court’s order and remanding the matter with instructions that the court enter an order directing the parties to proceed to arbitration. (Docket No. 180776). The Supreme Court, in lieu of granting leave to appeal, vacated the order of the Court of Appeals and remanded the matter to the Court of Appeals for plenary consideration. 450 Mich 943 (1995). On remand, the Court of Appeals held: The defendant’s personnel policy manual did not create an enforceable arbitration agreement. An agreement or provision in an employee manual is not mutual or binding where, as between a private employer and a nonunion employee, an employer may unilaterally amend at any time every policy contained in its employee manual. In the absence of a binding contract to arbitrate, the defendant is not entitled to summary disposition. Affirmed. 1. Arbitration — Master and Servant — Contracts. An employer’s personnel policy manual does not create an enforceable arbitration agreement with regard to employment-related issues where it is not a binding contract; an agreement or provision in an employee manual is not mutual or binding where, as between a private employer and a nonunion employee, the employer may unilaterally amend at any time every policy contained in its employee manual. 2. Arbitration — Contracts — Unilateral Revocation. Neither party to an arbitration agreement under the Michigan arbitration act may revoke the agreement without the other party’s consent; a party’s reservation of the right to change the agreement unilaterally at any time is inconsistent with the arbitration act (MCL 600.5011; MSA 27A.5011). Berkley, Mengel & Vining, P.C. (by Christopher E. Mengel and Guy C. Vining), for the plaintiff. Collins, Einhom, Farrell & Ulanoff, P.C. (by Janice G. Hildenbrand and Barbaa H. Goldman), for the defendant. ON REMAND Before: Mackenzie, P.J., and Neff and Markey, JJ. Per Curiam. Defendant appeals as of right from the trial court’s November 1994 order denying its motion for summary disposition regarding plaintiff’s cause of action under the Michigan Whistleblowers’ Protection Act (WPA), MCL 15.361 et seq.; MSA 17.428(1) et seq. In light of our Supreme Court’s decision in Heurtebise v Reliable Business Computers, Inc, 452 Mich 405, 413-414; 550 NW2d 243 (1996), we affirm. I This is the second time that this Court has addressed the instant matter. The facts are not in dispute. Plaintiff is a registered nurse who began working at defendant’s outpatient psychiatric facility in 1989. In 1993, defendant unilaterally amended its personnel policies manual that plaintiff was given in 1989 to include a binding arbitration provision, which states in pertinent part: XI. BINDING ARBITRATION: Pursuant to the Federal Arbitration Act (faa) the following procedure and practice will serve as an agreement between the Centre and all employees to arbitrate any dispute which may arise during the period of employment with the Centre. Both parties agree to the following: Terms of agreement. 1. A signed statement agreeing to this will be executed between both parties prior to employment or prior to the enactment of this policy of which is a separately signed document from the contractual agreement.[] 2. This agreement covers all terms, aspects, and potential disputes that may arise as a result of employment between the Centre and all employees unless otherwise stated below and includes claims that may be brought toward [sic] a third party such as fellow employees. 3. This agreement specifically covers all disputes that may occur that relate to the Age Discrimination in Employment Act (adea). 4. This agreement does however exclude all workers’ compensation claims. 5. This agreement is considered mutual. In as much that this agreement binds the employee to arbitrate claims against the employer, it also obligates the employer to arbitrate the' employee’s claims. 6. It is clearly understood between all parties that no dispute may be litigated in a court of law and that arbitration of all covered by this agreement shall be final and binding. 7. This agreement binds both parties to waive all rights to a jury trial with regard to employment disputes covered by the agreement. * * * 13. At the onset of this agreement all prospective employees shall be entitled to 7 days to consider whether to enter into this agreement and 21 days to revoke it. The arbitration agreement was adopted on January 13, 1993, and signed by defendant’s executive director. Plaintiff signed a document entitled “Acknowledgement of Receipt of the Centre’s Personnel Policies” acknowledging her receipt of the new policy manual containing the arbitration agreement, although she disputes that she actually received it. She also claims that she was induced to sign it in order to receive her paycheck. The document plaintiff signed, which was witnessed on January 27, 1993, did not contain language mentioning the new arbitration policy or indicating whether she agreed to the binding arbitration provision. Rather it contained the following disclaimer: Not a Contract of Employment: I understand the Personnel Policies Manual is neither an “employment agreement,” nor a “contract of employment.” It is a guide for the employer to provide, to the extent possible, a more uniform (though [sic] not precisely equal) approach to personnel practices and policies among Employees. [Emphasis added.][] According to plaintiffs complaint, in mid-1993, plaintiff became aware that members of defendant’s nonmedical staff were putting together and distributing medication without supervision and possibly breaking the law with respect to the dispensing of prescription drugs. When plaintiff informed her superiors of her concern and the fact that these activities should be reported to the proper authorities, plaintiff was told that her position may be compromised. In February 1994, plaintiff refused to prepare medication for a patient, despite her supervisor’s orders, because the medication order needed physician approval and a nonmedical staff member could not administer the medication. Instead, she consulted a physician, who altered the medications, and then gave them to her supervisor to administer to the patient. Plaintiff was thereafter suspended for two weeks for “unwillingness to obey a directive by [her] supervisor” and was placed on disciplinary probation for six months. When defendant refused to return plaintiff to work without the disciplinary conditions, plaintiff considered herself constructively discharged. In April 1994, plaintiff filed her complaint alleging a violation of the wpa. In response, defendant filed a motion for summary disposition pursuant to MCR 2.116(C)(7) claiming that, through defendant’s personnel policies manual, plaintiff had agreed to binding arbitration regarding any issues related to her employment. Rejecting defendant’s motion, the trial court found that the arbitration provision did not apply to the statutorily created tort alleged in plaintiffs complaint. Defendant filed a timely application for leave to bring an interlocutory appeal. Rather than grant leave, this Court, in an unpublished order entered February 3, 1995 (Docket No. 180776), reversed the trial court’s order and remanded the case with instructions that the trial court enter an order directing the parties to proceed to arbitration, citing this Court’s decision in Heurtebise v Reliable Business Computers, Inc, 207 Mich App 308; 523 NW2d 904 (1994). Plaintiff sought leave to appeal this Court’s order to the Michigan Supreme Court. In a December 19, 1995, order, 450 Mich 943 (1995), the Supreme Court, in lieu of granting leave to appeal, vacated this Court’s order and remanded the case to this Court for plenary consideration. n Defendant’s sole issue on appeal is whether the arbitration agreement in the personnel policies manual is enforceable with regard to plaintiff’s claim under the wpa. We believe that it is not enforceable but for different reasons than those cited by the trial court. As a preliminary matter, we review de novo the trial court’s ruling regarding summary disposition. Guerra v Garratt, 222 Mich App 285, 288; 564 NW2d 121 (1997). We must accept as true the plaintiff’s well-pleaded factual allegations, construing them in the plaintiffs favor, and consider the pleadings and other documentary evidence to determine if there is a genuine issue of material fact. Id. at 289. If no facts are in dispute and reasonable minds could not differ regarding the legal effect of those facts, however, the question whether the plaintiffs claim is barred presents a question of law for the court. Id. A The question whether an employee may validly waive her right to a judicial forum with respect to pursuing a claim under the wpa is an issue of first impression in Michigan. The Supreme Court in Heurtebise, 452 Mich 413-414, addressed this question in the civil rights context, and we believe that the same analysis applies to this wpa case. In Heurtebise, the plaintiff filed suit against her employer alleging she had been unlawfully terminated from her employment in violation of the Michigan Civil Rights Act (cra), MCL 37.2101 et seq.; MSA 3.548(101) et seq. 452 Mich 408. The plaintiff, a woman, claimed that she and her male co-worker took longer than the permitted one-hour lunch periods while working together on a project. After returning from a working lunch that lasted over an hour, she was terminated, but her male co-worker was not. The plaintiff filed suit alleging unlawful gender discrimination. The defendant filed its motion for summary disposition seeking, in part, to compel arbitration and stay the proceedings on the basis of a written acknowledgment that the plaintiff signed. The acknowledgment stated that she had received the defendant’s employee handbook and she agreed to be bound by its terms and policies. Heurtebise, 452 Mich 408-409. The handbook provided that all disputes involving money damages would be resolved by final and binding arbitration. Id. at 409, n 3. Refusing to enforce the arbitration agreement because it was against public policy and because the other clauses in the handbook made the arbitration provision ambiguous, the trial court denied the defendant’s motion. On appeal, this Court reversed the order of the trial court. Heurtebise, 207 Mich App 310-312. Without the benefit of the defendant’s entire policy manual, this Court found that the. plaintiff signed the acknowledgment regarding the arbitration agreement even though mutual assent was not required, citing In re Certified Question, 432 Mich 438; 443 NW2d 112 (1989). Heurtebise, 207 Mich App 311. Further, this Court found that the “[p]laintiff’s argument that the handbook specifically states that it does not create an enforceable contract is misguided. The provision plaintiff relies on addresses the at-will nature of plaintiff’s employment, not the handbook in its entirety.” Id. at 311. This Court also found that public policy did not prohibit the enforcement of a valid arbitration agreement in matters involving civil rights questions. Heurtebise, 452 Mich 411-412, citing Heurtebise, 207 Mich App 310-311. In reversing the decision of the Court of Appeals, the Michigan Supreme Court found that the parties were not bound by a valid arbitration agreement. “It is undisputed that an arbitration provision is unenforceable if it is not a binding contract.” Heurtebise, 452 Mich 413; accord Rushton v Meijer, Inc (On Remand), 225 Mich App 156, 161; 570 NW2d 271 (1997). The Supreme Court reviewed the opening statement in the defendant’s employee handbook, which stated: This document is intended to establish and clarify certain employment policies, practices, rules and regulations (hereinafter collectively referred to as “Policies”) of reliable business computers, inc., (hereinafter referred to as the “company”). ... It is important to recognize and clarify that the Policies specified herein do not create any employment or personal contract, express or implied, nor is it intended nor expected that the information provided in this document will provide sufficient detail to answer any and all questions which may arise. Notwithstanding any of the specific POLICIES HEREIN, EACH EMPLOYEE HAS THE ABSOLUTE RIGHT TO TERMINATE HIS/HER OWN EMPLOYMENT AT ANY TIME, WITHOUT NOTICE, AND FOR ANY REASON WHATSOEVER, AND THE COMPANY HAS THE SAME RIGHT. From time to time, the COMPANY specifically reserves the right, and may make modifications to any or all of the Policies herein, at its sole discretion, and as future conditions may warrant. . . . . . . Upon receipt, all employees will sign the Employee Acknowledgement [sic], acknowledging receipt of this document. [Emphasis added.] [Heurtebise, 452 Mich 413-414.] Without more, the Supreme Court set forth its findings and conclusions: This demonstrates that the defendant did not intend to be bound to any provision contained in the handbook. Consequently, we hold that the handbook has not created an enforceable arbitration agreement with respect to this dispute. We note that the above opening statement was not part of the record before the Court of Appeals. Had the Court of Appeals been able to examine the entire handbook, we are confident that it would have reached the same conclusion. We hold that the defendant was not entitled to summary disposition. [Id. at 414. Emphasis added.] Notably, the majority opinion did not address whether private employers can require employees, as a condition of employment, to waive their rights to pursue any future civil rights claims in a judicial forum. Nevertheless, Justice Cavanagh, the author of the majority opinion, opined that the right to pursue civil rights violations is of the highest priority, and the state constitution, as well as longstanding public policy, guaranteed direct access to a judicial forum in civil rights cases, despite an otherwise enforceable arbitration agreement. Id. at 414-438; see also Rushton, supra 158-164. B Applying the Supreme Court’s opinion in Heurtebise to the case at bar, we must reach the same conclusion with respect to plaintiff’s wpa claim: defendant’s personnel policy manual did not create an enforceable arbitration agreement. Heurtebise, 452 Mich 414. First, in January 1993, plaintiff signed a document acknowledging that she received a copy of defendant’s revised personnel policies manual that contained, in bold-faced type, the words "Not a Contract of Employment" and specifically stated that the manual is neither an “employment agreement” nor a “contract of employment.” The acknowledgment also noted that the personnel policies may be amended from time to time. “This demonstrates that the defendant did not intend to be bound to any provision contained in the handbook,” Heurtebise, 452 Mich 414, even though the arbitration provision referred to itself as a “mutual” agreement. We cannot conclude that an agreement or provision is mutual or binding where, as between a private employer and a nonunion employee, an employer may unilaterally amend at any time every policy contained in its employee manual. In the absence of a binding contract to arbitrate, defendant is not entitled to summary disposition. Id. Notably, the Supreme Court also believed that this Court’s reliance on In re Certified Question, supra, which held that an employer could unilaterally change a written policy, was misplaced. See Heurtebise, 207 Mich App 311. Under the Michigan arbitration act, neither party to an arbitration agreement can revoke the agreement without the other party’s consent, MCL 600.5011; MSA 27A.5011, which is contrary to the defendant’s reserving its right to change its employment policies at any time. Heurtebise, 452 Mich 411, n 5. We agree that defendant’s reservation is inconsistent with the Michigan arbitration act. Second, although the record is silent regarding why plaintiff did not sign the acknowledgment sheet entitled “Agreement to Binding Arbitration” that was attached to her brief on appeal, her failure to sign is pivotal. Indeed, this acknowledgment was identical to the one she did sign except that the headings on the documents differed and the one plaintiff signed made no reference to the arbitration agreement. Further, the unsigned acknowledgment states that. the employee had seven days to consider whether to enter into the binding arbitration agreement. Given that plaintiff, unlike the plaintiff in Heurtebise, did not sign the acknowledgment agreeing to the employer’s new binding-arbitration policy set forth in the revised manual, we believe that defendant is in a weaker position to attempt enforcement of the arbitration provision than was the defendant in Heurtebise. Third, although Heurtebise addressed the issue of enforcing a binding arbitration policy in the employment setting to resolve civil rights claims, we believe that the same analysis applies to plaintiff’s wpa claim. Case law supports the conclusion that the CRA and the wpa protect similar statutorily recognized interests and deserve like treatment. For example, in Suchodolski v Michigan Consolidated Gas Co, 412 Mich 692, 695; 316 NW2d 710 (1982), our Supreme Court recognized that ah exception to the rule of at-will employment exists where the reasons for discharging an employee are so contrary to public policy as to be actionable at law. The Court stated: “Most often these proscriptions are found in explicit legislative statements prohibiting the discharge, discipline, or other adverse treatment of employees who act in accordance with a statutory right or duty.” Id. In support of this proposition, the Court cited the CRA, MCL 37.2701; MSA 3.548(701), the Handicappers’ Civil Rights Act (hcra), MCL 37.1602; MSA 3.550(602), the Occupational Safety and Health Act, MCL 408.1065; MSA 17.50(65), and the wpa, MCL 15.362; MSA 17.428(2). Suchodolski, supra at 695, n 2. Moreover, in determining that the Legislature that drafted the wpa in 1980 expected that litigants under the wpa would retain the right to a jury trial, particularly given that the same right was preserved under the CRA and the hcra, this Court in Anzaldua v Band, 216 Mich App 561, 580; 550 NW2d 544 (1996), found that [t]he wpa bears substantial similarities to Michigan civil rights statutes under which the right to a jury trial is retained. Actions under the wpa are analyzed using the “shifting burdens” framework utilized in retaliatory discharge actions under the cra. We also note that the wpa is similar to Michigan’s civil rights statutes in that all three acts may be broadly characterized as civil rights acts, all three appear directed at protecting employees from wrongful treatment by employers, and actions brought under each of the three acts involve similar factual questions of employer motivation. [Emphasis added (citations omitted).] Finally, in concluding that the “continuing violations doctrine” applies to claims filed not only under title VII of the federal 1964 Civil Rights Act, 42 USC 2000e et seq., the CRA, and the HCRA but also under the wpa, ther
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