Opinion
Cause No. IP02-0982-C-B/S
April 2, 2003
ENTRY ON DEFENDANT'S MOTION TO COMPEL ARBITRATION
I. Introduction.
This is a sex discrimination and harassment case brought by Mary Ann Wilkerson against her former employer, Service Corporation International (hereafter SCI). Ms. Wilkerson alleges that SCI engaged in several adverse employment actions against her based on her gender, that it condoned or tolerated a hostile work environment based on sex, and that it retaliated against her for complaining of the discrimination.
The case is before us not on the substance of Ms. Wilkerson's complaint, but on defendant's motion to compel Ms. Wilkerson to submit to arbitration and prevent her from pursuing this case in this court, or, alternatively, to dismiss the complaint. SCI claims that there is an enforceable arbitration agreement between Ms. Wilkerson and the company and that the agreement compels her to arbitrate any claims she may have regarding her employment. Ms. Wilkerson argues that the arbitration provision does not constitute a contract and is not enforceable.
II. Discussion.
For nearly half a century, since the Steelworkers Trilogy of 1960, arbitration has been a favored form of dispute resolution in labor disputes. United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960); United Steelworkers of America v. Warrior Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers of America v. Enterprise Wheel Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). See, Amoco Oil Co. v. Oil, Chemical and Atomic Workers Intern. Union, Local 7-1, Inc., 548 F.2d 1288, 1293 (7th Cir. 1977) (already referring to the "national policy . . . favoring the orderly resolution of grievances through arbitration. . . .") Since the Supreme Court's decision in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) this has also been increasingly true in employment cases as well as in traditional labor law. See, Tinder v. Pinkerton Security, 305 F.3d 728, 733 (7th Cir. 2002).
More and more, employees are being required to enter into arbitration provisions as a condition of employment. See, E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 296, n. 11, 122 S.Ct. 754, 765, n. 11, 151 L.Ed.2d 755 (2002). Interpretation of arbitration agreements is governed by state law.
According to Indiana law, we approach an arbitration agreement as we would any other contract. ISP.com LLC v. Theising, 783 N.E.2d 1228, 1232 (Ind.Ct.App., 2003).
Significantly, where an employee enjoys employment or continued employment, there is consideration for the arbitration agreement. Rollins v. American State Bank, 487 N.E.2d 842 (Ind.Ct.App. 1986). Also see, Kreimer v. Delta Faucet Co., 2000 WL 962817 (S.D.Ind. 2000), p. *9 (interpreting Indiana law); DeGroff v. MascoTech Forming Technologies Fort Wayne, Inc., 179 F. Supp.2d 896, 904 (N.D.Ind. 2001) (interpreting Indiana law). Here we will see shortly, Ms. Wilkerson agreed to be bound by the arbitration provision, and, as we recently held elsewhere, her promise to be bound is sufficient consideration for the agreement. Flynn v. Aerchem, Inc., 102 F. Supp.2d 1055, (S.D.Ind. 2000).
The agreement at issue here appears in a document called "Principles of Employment." The document recites some self-serving comments about the company and how fair it is to employees. It then includes a four paragraph arbitration provision, which clearly specifies "Matters Subject to Arbitration" and refers to "binding arbitration." Def. Ex. 1, ¶ 1. The matters that are subject to arbitration are the full panoply of legal actions that would, absent the arbitration provision, be actionable in court: breach of contract, wrongful discharge, discrimination, harassment, defamation, misrepresentation, and emotional distress." Id. The provision triggers the arbitration procedures of the American Arbitration Association, and includes as an exhibit an overview of those procedures. Id. Ex.
A.
The arbitration provision expressly excludes claims for workers compensation and unemployment compensation, which are governed by state law and are not waivable. It also expressly excludes actions to enforce any noncompetition agreement or confidentiality agreement that may exist between the employer and employee. While these latter two exclusions clearly operate one-sidedly to the benefit of the employer — which, after all, is the only party that may seek to enforce a non-compete and ordinarily the party that seeks to enforce a confidentiality agreement — their exclusion clearly reenforces the fact that the arbitration provision is binding on both parties. The employer would have no need to exclude these causes of action were the arbitration agreement not binding on it.
In addition to those matters which are subject to and those which are excluded from arbitration, the arbitration agreement also contains in capital letters and boldface a "NOTICE TO EMPLOYEE," which reads:
BY SIGNING THIS AGREEMENT, YOU ARE AGREEING TO HAVE ANY AND ALL DISPUTES BETWEEN YOU AND YOUR COMPANY, (EXCEPT THOSE SPECIFICALLY EXCLUDED IN SECTION 2 ABOVE AND THOSE OTHERWISE EXCLUDED BY APPLICABLE LAW IF ANY) DECIDED BY BINDING ARBITRATION AND YOU ARE WAIVING YOUR RIGHT TO A JURY OR COURT TRIAL.
Def. Ex. 1. The arbitration agreement is not subject to modification without a written agreement signed by the parties. Id.
Ms. Wilkerson would like us to go outside the agreement as written and consider matters concerning her agreement to its provisions. We have no mandate to do so. Under Indiana contract law, absent ambiguity in a contract, we must confine ourselves to its four corners. Dick Corp. v. Geiger, 783 N.E.2d 368 (Ind.App. 2003); Buschman v. ADS Corp., 782 N.E.2d 423, 428-429 (Ind.Ct.App., 2003). We find no ambiguity here. The agreement clearly provides for mandatory and binding arbitration under specified circumstances and Ms. Wilkerson signed it. Although it may be regrettable that employees need counsel just to accept a job, as we observed In Aerchem, "[i]t is a basic tenet of contract law that a person is assumed to have read and understood documents that they sign; a lack of understanding or failure to read the contract's provisions does not relieve a party from the terms of that agreement." 102 F. Supp.2d at 1060, citing, Clanton v. United Skates of America, 686 N.E.2d 896, 900-01 (Ind.Ct.App. 1997).
Ms. Wilkerson does not allege that she signed the agreement under duress, or that SCI misrepresented the terms of the agreement, or that SCI committed fraud to induce her to sign it, or that the terms are unconscionable, or even that she made a mistake (as the law understands the term) in signing it. See Aerchem, 102 F.Spp.2d at 1061-1062; Buschman, 782 N.E.2d at 428-429 (fraud, duress); Robert's Hair Designers, Inc. v. Pearson, 780 N.E.2d 858, 869 (Ind.Ct.App. 2002) (fraud); Smith v. Brown, 778 N.E.2d 490, 494 (Ind.Ct.App. 2002) (misrepresentation); Lightning Litho, Inc. v. Danka Industries, Inc., 776 N.E.2d 1238, 1241-1242 (Ind.Ct.App. 2002) (fraud in inducement); Strong v. Jackson, 777 N.E.2d 1141, 1150 (Ind.Ct.App. 2002) (fraud in inducement, mistake).
Her argument amounts to the claims that: the arbitration agreement is not really an agreement because it appears in the Principles of Employment, which discuss company policies and which reference an employee handbook which is expressly not a contract; Ms. Wilkerson didn't really realize what she was giving up when she signed the agreement; and finally, the arbitration provision (and by implication any arbitration provision) is inconsistent with employment at will. None of these arguments will bear much weight.
First, the Principles of Employment is clearly a stand-alone document. The fact that it refers to another document to clarify and enlarge upon some of the principles in no way affects the arbitration provision. Nor does the fact that the handbook may be altered unilaterally by the employer. As we noted earlier, the arbitration provision expressly provides that it may not be altered except by the mutual agreement of the parties. Second, we have already pointed out that Indiana law ordinarily holds people responsible for the agreements they sign when the agreements are unambiguous and are not the subject of fraud, duress, or mistake. We see no basis for finding an exception to the rule here.
Finally, courts have routinely held that arbitration is a mean of alternative dispute resolution; it does nothing to alter the essential terms and conditions of employment. Where, as here, the employer provides independent consideration for the arbitration provision — continued employment and an agreement to be bound by any arbitration decision — and where, as here the employee agrees to arbitrate the enumerated claims, the arbitration provision is consistent with employment at will. See, Tinder, 305 F.3d at 734. Also see, Curry v. MidAmerica Care Foundation d/b/a/ Westridge Healthcare Center, 2002 WL 1821808 (S.D.Ind. 2002), pp. **2-3.
III. Conclusion.
For the reasons addressed, we find the arbitration provision enforceable and that Ms. Wilkerson's claims in this lawsuit are cognizable by the arbitration provision. Accordingly, we GRANT defendant's motion to compel arbitration and stay these proceedings pending the outcome of the arbitration, if any.
It is so ORDERED.