HEURTEBISE v. RELIABLE BUSINESS COMPUTERS, INC
Case Details
- Citation
- 452 Mich. 405
- Judge(s)
- Levin and Mallett, JJ., concurred with Cavanagh, J.; Brickley, C.J., and Riley and Weaver, JJ., concurred with Boyle, J.
- Procedural Posture — the stage the case had reached
- motion to dismiss
- State
- Michigan
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
Michigan Supreme Court reversed the Court of Appeals and held that the employer's arbitration agreement was unenforceable because the handbook's opening statement demonstrated the employer did not intend to be bound by its provisions. The Court remanded the case, allowing the plaintiff's gender discrimination claim to proceed in court rather than arbitration.
Excerpt
HEURTEBISE v RELIABLE BUSINESS COMPUTERS, INC Docket No. 102019. Argued April 10, 1996 (Calendar No. 5). Decided July 16, 1996. Rehearing denied 453 Mich 1204. Theresa Heurtebise brought an action in the Wayne Circuit Court against Rehable Business Computers, Inc., alleging unlawful termination of her employment because of gender discrimination in violation of the Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq. The court, Cynthia D. Stephens, J., denied the defendant’s motion to compel arbitration and to stay the proceedings, finding that the arbitration agreement signed by the plaintiff was against public policy. The Court of Appeals, Neff, P.J., and McDonald and M. Warshawsky, JJ., reversed in an opinion per curiam, finding no public policy prohibition against the enforcement of a valid arbitration agreement that provides for meaningful arbitration in matters involving civil rights questions, and determined that arbitration does not impair the remedies afforded under the statute (Docket No. 152041). The plaintiff appeals. In separate opinions, the Supreme Court unanimously held: An arbitration provision is unenforceable if it is not a binding contract. The opening statement of the defendant’s handbook demonstrates that the defendant did not intend to be bound to any provision contained in the handbook. Consequently, the handbook did not create an enforceable arbitration agreement with respect to this dispute. Thus, the defendant was not entitled to summary disposition. Justice Cavanagh, joined by Justices Levin and Mallett, additionally stated that the Michigan Constitution and longstanding public policy preclude private employers from requiring their employees, as a condition of employment, to waive prospectively the right to pursue civil rights claims in a judicial forum. Rights secured by the Michigan Civil Rights Act are nonnegotiable state rights that apply to all employees and cannot be waived or conditioned. The Michigan Constitution expressly prohibits exhaustion of administrative remedies for civil rights claims. In addition, the Legislature has underscored this policy by expressly prohibiting an exhaustion of administrative remedies requirement. In creating the Civil Rights Commission, Const 1963, art 5, § 29 did not diminish the right of any party to direct and immediate legal or equitable remedies in the courts, and it was intended that the role of the judiciary in enforcing civil rights was to remain supreme. As the scope of equal protection expanded, the private right to judicial remedies, whether expressly provided by statute or inferred by the judiciary, was always included. The Legislature has done nothing to impair or restrict an aggrieved person’s access to judicial remedies, nor could it. The judicial remedies provision of Const 1963, art 5, § 29, along with the tone of the constitutional debates that produced the provision, reveal that an aggrieved person’s direct access to a judicial forum is so interwoven with the enforcement of substantive civil rights in Michigan that they cannot be separated without potentially harming substantive civil rights. Public policy favoring arbitration can be outweighed by contrary constitutional or legislative intent. Reversed and remanded. 207 ¡Mich App 308; 523 NW2d 904 (1994) reversed. Goodman, Eden, Millender & Bedrosian (by Christopher R. Holliday and Julia Sherwin) for the plaintiff. Shapack, McCullough & Ranter, RC. (by Alan M. Ranter, Michael R. Shpiece, and Michael L. Getter), and Walton & Stafford, P.C. (by Jonathan T. Walton, Jr., and Laura S. Stafford), for the defendant. Amici Curiae: Frank J. Relley, Attorney General, Thomas L. Casey, Solicitor General, and Rebekah F. Visconti, Assistant Attorney General, for Michigan Civil Rights Commission and Michigan Department of Civil Rights. Stewart R. Hakola and Gayle C. Rosen for the Michigan Protection & Advocacy Service. Sachs, Waldman, O’Hare, Helveston, Bogas & McIntosh, P.C. (by Mary Ratherine Norton and Elizabeth A. Cabot), for Michigan State AFL-CIO, International Union UAW, National Employment Lawyers Association, and Michigan Employment Lawyers Association. Jeanne M. VanderHeide and Jeanne Mirer for National Lawyers Guild, Detroit Chapter. Stark & Gordon (by Sheldon J. Stark and Carol A. Laughbaum) for the Association of Trial Lawyers of America, Michigan Trial Lawyers Association, American Civil Liberties Union of Michigan, and Wolverine Bar Association. Clark, Hill, P.L.C. (by Duane L. Tamacki, J. Walker Henry, and Patricia S. Bordman), for Michigan Manufacturers Association. Amberg, McNenly, Zuschlag, Firestone & Lee, PC. (by Joseph H. Firestone), for Michigan Education Association. Vercruysse, Metz & Murray (by Diane M. Soubly and David B. Calzone) for American Society of Employers, American Automobile Manufacturers Association, Greater Detroit Chamber of Commerce, and Michigan Chamber of Commerce. Cavanagh, J. We are asked in this case to address whether the instant parties have created a binding arbitration agreement with respect to employment discrimination claims accruing subsequent to such an agreement. If yes, then we would need to address whether such agreements between employers and employees, entered into as a condition of employment, violate public policy in Michigan. We hold that no binding agreement was created in this case. Consequently, a majority of this Court declines to address the second issue. However, I would further hold that the public policy against discrimination in Michigan precludes enforcement of prospective waivers in employment contracts of a judicial forum for civil rights claims. Before turning to the matter at hand, we thank all the amici curiae who filed briefs for assisting us in resolving the issues. i This case is at the summary disposition stage. In November 1991, the plaintiff, Theresa Heurtebise, filed suit against the defendant, Reliable Business Computers, alleging that she had been unlawfully terminated from her employment in violation of the Michigan Civil Rights Act. MCL 37.2101 et seq.\ MSA 3.548(101) et seq. The plaintiff alleged that she had been hired in May 1989 to perfomi computer software support work. She further alleged that she and a coworker, who was male, often took lunches that lasted longer than the company’s established one-hour period, while working together on a project. Additionally, she alleged that on July 20, 1990, the plaintiff and this male co-worker returned from a working lunch that had lasted longer than one hour. The plaintiff alleged that she was terminated, while her male co-worker was not. The plaintiff argued that this was unlawful gender discrimination and sought money damages. In response, the defendant brought a motion to dismiss, pursuant to MCR 2.116(C)(4) (lack of subject matter jurisdiction), or, alternatively, to compel arbitration and to stay proceedings, pursuant to MCR 3.602. The defendant relied on a written acknowledgment signed by the plaintiff and dated May 25, 1989, which stated that she had received the defendant’s employee handbook and that she had agreed to be bound by its terms and policies. The handbook provided an internal review mechanism for disputes with respect to dismissals. In addition, it provided that all disputes involving money damages would go to final and binding arbitration. The trial court denied the defendant’s alternative motions. It refused to enforce the arbitration agreement on the grounds that it was against public policy and that other clauses in the handbook made the arbitration provision ambiguous. The Court of Appeals reversed. 207 Mich App 308; 523 NW2d 904 (1994). It reasoned: The trial court appears to have denied defendant’s motion in part because it found there was no “meeting of the minds” between plaintiff and defendant with regard to the arbitration clause. The record does not support such a finding. Before beginning employment, plaintiff signed an acknowledgment form that stated that she agreed to conform to the various procedures, rules, and regulations of the company as set forth in the handbook. Moreover, even were the record devoid of plaintiff’s express acceptance of the handbook’s provisions, it is well established under Michigan law that mutual assent to a term of employment is not required. In re Certified Question, 432 Mich 438; 443 NW2d 112 (1989); Carlson v Hutzel Corp of Michigan, 183 Mich App 508; 455 NW2d 335 (1990); Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579; 292 NW2d 880 (1980).11 Plaintiff’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. Finally, we find no “public policy” prohibition against the enforcement of a valid arbitration agreement that provides for meaningful arbitration in matters involving civil rights questions. See Gilmer v Interstate/Johnson Lane Corp, 500 US 20; 111 S Ct 1647; 114 L Ed 2d 26 (1991). To the contrary, arbitration has long been a favorable method of dispute resolution. Detroit v AW Kutsche & Co, 309 Mich 700; 16 NW2d 128 (1944). Thus, arbitration clauses are to be liberally construed with any doubts to be resolved in favor of arbitration. Chippewa Valley Schools v Hill, 62 Mich App 116; 233 NW2d 208 (1975). Contrary to plaintiff’s suggestion, arbitration of plaintiff’s claims will not result in the loss of her rights under the Civil Eights Act, but, instead, merely constitutes enforcement of an agreement to have those rights determined in a different forum. Arbitration does not impair the remedies afforded under the statute. [207 Mich App 310-311.] We granted leave to the plaintiffs appeal. 450 Mich 963 (1995). We note that the entire handbook was not presented to the trial court or to the Court of Appeals. After oral argument, we granted the plaintiffs motion to expand the record to include the entire handbook. It is seventy-one pages long and covers a broad scope of subjects.* The expanded record reveals that the handbook included an anti-discrimination policy statement. In the introduction on page 2, the handbook further reserved in the defendant the right to modify any policy contained in the handbook “at its sole discretion.” n We turn first to whether the parties are bound by a valid arbitration agreement. It is undisputed that an arbitration provision is unenforceable if it is not a binding contract. The opening statement in the handbook provides: This document is intended to establish and clarity certain employment policies, practices, rules and regulations (hereinafter collectively referred to as “Policies”) of Reliable Business Computers, Inc., (hereinafter referred to as the “company”). Except as may otherwise be provided, the Policies will apply to all company employees, and it is each employee’s responsibility to assure that his/her own conduct is in conformity with those Policies. 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. In the event employees have any questions relative to any of the Policies, they are urged to contact their supervisor for clarification purposes. New employees will receive a copy of this document at the time of formal hire. Upon receipt, all employees will sign the Employee Acknowledgement, acknowledging receipt of this document. [Emphasis added.] 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. in Although a majority of this Court saves the public policy issue for another day, because the Court of Appeals addressed it, I believe that we should decide it as well. Therefore, I turn now to the issue whether private employers can require employees, as a condition of employment, to waive prospectively their right to pursue civil rights claims in a judicial forum. As I will demonstrate, Michigan has a long history of stalwartly defending individuals from invidious discrimination in their pursuit of basic civil liberties, such as equal opportunity in the pursuit of employment. Unlike federal law, Michigan also has an unwavering history of faithfully defending an aggrieved individual’s right to a judicial forum to remedy unlawful discrimination. The defendant relies on federal title VII and age discrimination (adea) case law. However, it is axiomatic that even under federal law, “an employee may not prospectively waive his or her rights under either Title VII or the ADEA.” Adams v Philip Morris, Inc, 67 F3d 580, 584 (CA 6, 1995). Likewise, we have held that the rights secured by the Michigan Civil Rights Act are “nonnegotiable state rights.” Betty v Brooks & Perkins, 446 Mich 270, 282; 521 NW2d 518 (1994). “These are rights that apply to all employees, whether or not they belong to a union. Such rights cannot be waived or conditioned on success at the bargaining table.” Id. The defendant and its amici curiae would have us believe that the only interest at stake in enforcing a prospective arbitration agreement is the parties’ choice of forum in which an aggrieved party may pursue statutory remedies. We should decide whether a prospective waiver of an aggrieved individual’s right to a judicial forum, which is required of the employee as a condition of employment, comports with Michigan public policy as reflected in our constitution, civil rights statute, and case law. The issue before us would be one of first impression. There are several layers of considerations that I will address. First, I will briefly review the prevailing precedent with respect to federal discrimination claims. Second, I will consider whether Michigan civil rights law is substantially similar to federal anti-discrimination law or whether it is materially different with respect to an aggrieved individual’s access to a judicial forum. I will then trace the role of an aggrieved individual’s access to a judicial forum in the development of Michigan civil rights law to determine whether Michigan public policy precludes the enforcement of prospective arbitration agreements in employment contracts with respect to statutory civil rights claims. FEDERAL DISCRIMINATION CLAIMS The Court of Appeals relied on Gilmer, supra, in holding that public policy did not prevent the enforcement of a valid prospective arbitration agreement. 207 Mich App 311. In 1991, the Gilmer Court held that a broadly worded arbitration clause in a securities registration form, which is often referred to as a stockbroker U-4 form, covered an adea claim. In doing so, the Court found that the Federal Arbitration Act (faa) applied and that it evidenced a “ ‘liberal federal policy favoring arbitration agreements.’ ” Id. at 25 (citation omitted). However, the faa expressly excludes from coverage “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 USC l. Referencing this clause, Gilmer expressly did not decide what the result would be if the arbitration clause had been contained in an employment contract. Id. at 25, n 2. Gilmer also distinguished a trilogy of cases that had arisen in the collective bargaining setting: Alexander v Gardner-Denver Co, 415 US 36; 94 S Ct 1011; 39 L Ed 2d 147 (1974) (title VII claim), Barrentine v Arkansas-Best Freight System, Inc, 450 US 728; 101 S Ct 1437; 67 L Ed 2d 641 (1981) (right to minimum wage claim under the Fair Labor Standards Act), and McDonald v West Branch, 466 US 284; 104 S Ct 1799; 80 L Ed 2d 302 (1984) (42 USC 1983 claim). Following Gilmer, there has been a lot of appellate activity involving the applicability of prospective arbitration agreements to federal discrimination claims. Although there remain many unanswered questions in Gilmer’s wake, two general rules have emerged. First, an arbitration clause in a collective bargaining agreement does not extend to federal statutory claims of discrimination. E.g., Pike v Burlington Northern R Co, 273 Mont 390, __; 903 P2d 1352, 1357 (1995). One overriding rationale for this rule is that civil rights are individual personal rights, while union bargaining representatives act for the benefit of the group. The apparent “tension between collective representation and individual statutory rights” led the Court in the Alexander line of cases to protect the rights of the individual employee by not enforcing arbitration agreements in collective bargaining agreements with respect to claims of unlawful discrimination. Gilmer, 500 US 35. The second rule is that an arbitration clause in a stockbroker U-4 form does extend to title VII claims, in addition to adea claims. Bender v AG Edwards & Sons, Inc, 971 F2d 698 (CA 11, 1992); Alford v Dean Witter Reynolds, Inc (On Remand), 939 F2d 229 (CA 5, 1991). The defendant cites numerous cases for the proposition that prospective arbitration agreements in individual employment contracts have been enforced with respect to federal and state discrimination claims. However, those cited cases arose under the faa or were not ordinary employment contracts. I have found other cases that have distinguished the contract at issue, such as a stockbroker u-4 form, as not being an employment contract. Willis v Dean Witter Reynolds, Inc, 948 F2d 305, 312 (CA 6, 1991); Alford, 939 F2d 230, n * (“[cjourts should be mindful of this potential issue in future cases”). On the basis of the fact that the Gilmer Court expressly distinguished employment contracts, id. at 25, n 2, and because many subsequent cases have continued that distinction, I would find that the cases upholding prospective arbitration agreements in stockbroker u-4 forms, including Gilmer, are not on point in the case at hand because they did not concern ordinary employment contracts. Hence, I would find that there remains a conflict among courts regarding whether arbitration agreements in individually negotiated employment contracts are enforceable under the FAA with respect to claims of unlawful discrimination. In any event, the defendant has not argued that the instant case is controlled by the FAA. Therefore, even if prospective arbitration agreements in individually negotiated employment contracts are enforceable with respect to federal and other state discrimination claims when the FAA does apply, such cases would not necessarily apply here. TITLE VH AND ADEA DISTINGUISHED FROM THE MICHIGAN CIVIL RIGHTS ACT Even though we often look to title VII precedent in interpreting our own civil rights statute, we decline to do so when the Michigan statute provides greater protection to victims of discriminatory actions than title VII provides. Title VII requires claimants to exhaust administrative remedies with the Equal Employment Opportunity Commission (eeoc) before pursuing judicial relief. Likewise, the ADEA requires an aggrieved individual to seek relief first with the E
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