Opinion
Cause No. IP99-1507-C-T/G
June 2, 2000
ENTRY REGARDING MOTION TO COMPEL ARBITRATION
Defendant, Delta Faucet Company, a Division of Masco Corporation of Indiana, filed a motion requesting the court enter an order compelling Plaintiff, Sue Kreimer, to arbitrate the claims she asserts or, alternatively, that the court dismiss this action with prejudice.
I. Background
These facts are established by submissions made by Delta Faucet that have not been disputed by Ms. Kreimer.
Ms. Kreimer is a former employee of Delta Faucet, and filed this action on September 29, 1999, asserting claims of discrimination on the basis of disability, retaliatory discharge and intentional infliction of emotional distress.
On July 14, 1997, while Ms. Kreimer was employed with Delta Faucet, Delta Faucet issued to its employees a copy of its Corporate Dispute Resolution Policy ("the Policy"). The document included the terms of the Policy, some questions and answers about the Policy, and a form for employees to execute and return acknowledging receipt of the Policy. The Policy established a procedure for the resolution of claims by current and former Delta Faucet employees which culminated in final and binding arbitration. Claims covered by the Policy included:
all claims for: wages or other compensation due; breach of any contract; negligence; intentional torts; any alleged exception to the workers' compensation laws; defamation; all forms of unlawful discrimination including, but not limited to, race, color, sex, religion, national origin, disability, marital status or age; denial of fringe benefits; violation of any federal, state, or other governmental law, statute, regulation, or ordinance; and, any other matters arising under common or statutory law. Disputes covered by this policy shall also include any claim an employee might have against any officer, director, employee, or agent of the Company, or any of the Company's subsidiaries divisions, and affiliates, if that claim in any way arises out of or relates to the employment relationship or the termination of the employment relationship.
(Funcheon Aff., Ex. A, at 1.) According to the Policy, acceptance of the Policy was a "condition of continued employment and binding upon the Company and the employee." ( Id.) In addition, contained within one of the written answers attached to the copy of the policy given to Ms. Kreimer is the statement that, "As a condition of continued employment all covered employees, as well as Masco Corporation, will be required to follow the Policies and are bound by their terms." ( Id. at 5.)
On July 17, 1997, Delta Faucet held a meeting for the employees at the Greensburg, Indiana facility, where Ms. Kreimer worked, to present and explain the Policy. Also on July 17, 1997, Ms. Kreimer executed and returned the form acknowledging receipt of the policy. Ms. Kreimer then continued her employment with Delta Faucet until she was terminated in December 1998.
Though there is no factual evidence confirming Ms. Kreimer did attend this meeting, she provides no statement contradicting such an inference.
The form states: "I acknowledge receipt of the corporate dispute resolution policy and the questions and answers." (Funcheon Aff., Ex. A, at 9.)
Following Ms. Kreimer's discharge from Delta Faucet in December 1998, she filed this action. Ms. Kreimer alleges that Delta Faucet violated her rights under the Americans with Disabilities Act when it terminated her employment. She also alleges that Delta Faucet tortiously terminated her employment in retaliation for exercising her rights under Indiana's workers' compensation laws, and that Delta Faucet intentionally inflicted emotional distress upon her. Despite her signature on the acknowledgment form, and a request by Delta Faucet by letter on November 4, 1999, that she abide by the Policy, Ms. Kreimer refuses to submit to the arbitration process.
II. Analysis
The Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("FAA"), provides that written agreements to arbitrate disputes, "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. The Supreme Court has noted that the FAA "manifests a `liberal federal policy favoring arbitration agreements'." Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (citing Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). Furthermore, the FAA provides:
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the Court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, proving the applicant for the stay is not in default in proceeding with such arbitration.9 U.S.C. § 3 (emphasis added).
Here, Ms. Kreimer challenges the arbitration agreement as being unenforceable since she did not accept the agreement, and no consideration was exchanged. She further argues that an evidentiary hearing is necessary to resolve this motion. Finally, she contends that policy considerations weigh against arbitration in this case.
A. Contract Requirements
An arbitration agreement is only enforceable if it is a valid contract. See Gibson v. Neighborhood Health Clinics, Inc., 121 F.3d 1126, 1130 (7th Cir. 1997). Federal courts examine state contract law principles to determine whether an arbitration agreement is a valid contract. See id. Under Indiana law, it is a combination of offer, acceptance and consideration that comprise a complete contract. See Zemke v. City of Chicago, 100 F.3d 511, 513 (7th Cir. 1996) (elements are offer, acceptance, and consideration). An "enforceable contract . . . is an exchange." Patel v. American Bd. of Psychiatry Neurology, Inc., 975 F.2d 1312, 1314 (7th Cir. 1992). As long as the facts demonstrate that some consideration has been exchanged, Indiana courts will not "inquire into the adequacy of the consideration exchanged in the contract." Ackerman v. Kimball Int'l, Inc., 634 N.E.2d 778, 781 (Ind.Ct.App. 1994), aff'd, 652 N.E.2d 507 (Ind. 1995). When consideration of some value is agreed upon by the parties, "the judgment of the parties as to its sufficiency will not be disturbed by the court." Tanton v. Grochow, 707 N.E.2d 1010, 1013 (Ind.Ct.App. 1999). This consideration can be either a benefit to Ms. Kreimer or a detriment to Delta Faucet. See Gibson, 121 F.3d at 1130.
Though Ms. Kreimer contends that no consideration has been exchanged to make this a valid contract, that is not correct under Indiana law. Under Indiana law, an agreement by an employer to continue at-will employment is adequate consideration to support a binding promise from an employee. See Ackerman, 634 N.E.2d at 781 (continued employment is sufficient consideration for a binding contract).
Ms. Kreimer contends that under Advanced Copy Products, Inc. v. Cool, 363 N.E.2d 1070 (Ind.Ct.App. 1977), the promise of continued employment is not necessarily consideration for the employee's exchanged promise. However, in Advanced Copy Products, the court determined that continued employment did not constitute sufficient consideration since "there was no evidence which indicated that Cool's continued employment with ACP was dependent on his signing the new contract whi[c]h contained the covenant not to compete." Id. at 1071. This finding is distinguishable from the present case since there is evidence from both the language of the Policy and the answers to the questions attached to it that Ms. Kreimer's continued employment with Delta Faucet was dependent on her acceptance of the arbitration agreement.
In addition to the continued eligibility for at-will employment, consideration can also be found by way of Delta Faucet's agreement to be bound by the arbitrator's decision, thereby waiving its right to seek judicial determination of a raised claim. See Koveleskie v. SBC Capital Mkts., Inc., 167 F.3d 361, 366, 368 (7th Cir. 1999) (holding that arbitration agreement, signed as a condition of plaintiff's employment, was supported by adequate consideration for two reasons: the plaintiff promised to arbitrate all future disputes in exchange for the company's promise to employ her, and both parties were bound by the terms of the agreement). This, combined with Delta Faucet's agreement to pay the expenses and fees of mediation and the entire arbitrator's fee in the event of arbitration, demonstrate a detriment to Delta Faucet that can constitute consideration. See Ondo v. Northwest Airlines, Inc., CA No. IP 98-0992-C-M/S, slip op. at 11 (S.D.Ind. Jan. 15, 1999) (McKinney, J.) (Promises to pay for any arbitration and to be bound by the "terms of the arbiter's decision" suffice for consideration. "[The employer] does not have to promise to submit its claims to arbitration in order for there to be consideration and mutuality.").
Under the Policy, Delta Faucet agrees to be bound by the conditions of the Policy, and one of the conditions is that the arbitrator's "decision shall be final and binding upon both the Company and the employee. (Funcheon Aff., Ex. A, at 1-2.)
Ms. Kreimer contends that Gibson, 121 F.3d at 1131, supports her claim that she should not be bound by the arbitration agreement simply because she signed an acknowledgment of her receipt of the policy. In Gibson, the court held that the plaintiff was not bound by an arbitration agreement despite her signature acknowledging her receipt of the policy. However, Gibson is readily distinguishable from the present case. The court in Gibson held that there was no consideration to support the arbitration agreement because the agreement only bound the employee and not the employer to arbitrate disputes. See id. ("Often, consideration for one party's promise to arbitrate is the other party's promise to do the same. In the present case, however, NHC cannot point to its own promise to arbitrate in order to make enforceable Gibson's promise to do likewise. The Understanding contains no promise on NHC's part to submit claims to arbitration."). In the present case, the Policy expressly states that it is "binding upon the Company and the employee." Cf. Michalski v. Circuit City Stores, Inc., 177 F.3d 634, 636 (7th Cir. 1999) ("The present case is distinguishable from our decision in Gibson because, as the appellant points out, [employer]'s promise to be bound by the arbitration process itself serves as mutual consideration here.").
Ms. Kreimer also argues that her signature acknowledging that she received the Policy cannot constitute acceptance under Indiana law. However, Delta Faucet's Policy specifically states that compliance with the Policy is a condition for continued employment with the company. In addition to the express wording of this condition in the Policy itself, the information was also available in the written answers to the attached questions, and during the informational meeting held prior to her signing the form. If Ms. Kreimer did not agree to comply with the Policy, she would not have been eligible to continue her employment with Delta Faucet. Indiana law does not require that the form she signs has to specifically state she is agreeing to the terms, or even that she has to sign a form at all. See International Creative Management, Inc. v. D R Entertainment Co., Inc., 670 N.E.2d 1305 (Ind.Ct.App. 1996) (validity of contract not dependent on signature of parties as long as have assent by acts). Other jurisdictions have held similarly. See Nghiem v. NEC Elec., Inc., 25 F.3d 1437, 1439-40 (9th Cir. 1994), cert. denied, 513 U.S. 1044 (1994) (employee received employment handbook containing policy but had no signature requirement and that was sufficient); see also Lang v. Burlington N. Railroad Co., 835 F. Supp. 1104, 1106 (D.Minn. 1993) (unilateral verbal announcement of policy was sufficient); Kinnebrew v. Gulf Ins. Co., CA No. 3:94-CV-1517-R, 1994 WL 803508, at *2 (N.D.Tex. Nov. 28, 1994) (arbitration agreement upheld though unilaterally established by the employer's verbal announcement). Indeed, the court in Gibson explicitly endorsed Delta Faucet's method of instituting the Policy-convening a meeting and distributing the explanatory paperwork:
As mentioned above, though there is no direct evidence that Ms. Kreimer attended the meeting held at Delta Faucet regarding the arbitration agreement, there is no statement by Ms. Kreimer's counsel to rebut an inference that she did attend the meeting.
Obviously, the strongest case for a court's finding that an employer and employee agreed to submit claims to arbitration will arise when the record indicates the employee has knowingly agreed to do so. If parties operate under these conditions, we believe that the twin goals of protecting federal rights and resolving claims where possible through arbitration will be effected. Moreover, the formation of arbitration agreements upon terms that both parties understand need not be unduly burdensome. The course that [the employer] undertook to alert those already employed to the change in policy (the convening of a meeting and the presentation of the appropriate documentation) demonstrates the feasibility of achieving this objective.Gibson, 121 F.3d at 1130.
Under Indiana law, Ms. Kreimer became bound by the Policy by receiving the benefit of continued employment for more than a year after she signed the acknowledgment form. See Raymundo v. Hammond Clinic Ass'n, 449 N.E.2d 276, 283 (Ind. 1983) ("A party may not claim benefits under a transaction or instrument and, at the same time, repudiate its obligations."); Anderson v. Indianapolis Ind. AAMCO Dealers Adver. Pool, 678 N.E.2d 832, 836 (Ind.Ct.App. 1997) ("[W]here a party receives the benefit of a contract for a period of time, he cannot later disavow its validity."); Matter of Estate of Palamara, 513 N.E.2d 1223, 1228 (Ind.Ct.App. 1987) ("In this state, a party may not accept benefits under a transaction or instrument and at the same time repudiate its obligations."). Under Indiana law, after Ms. Kreimer received the Policy and the written question and answer section, her continued employment with Delta Faucet was indicative of acceptance of the Policy. Ms. Kreimer's acceptance of continued at-will employment with Delta Faucet shows that an agreement was reached regarding the Policy and that this agreement is binding as to any claims coming within the Policy's scope. Cases from other jurisdictions are analogous to how Indiana law would resolve this matter and illustrate that the facts in this case provide strong support for finding that a contract exists between Ms. Kreimer and Delta Faucet. See Venuto v. Insurance Co. of N. Am., No. CIV. A. 98-96, 1998 WL 414723, at *5 (E.D.Pa. July 22, 1998) ("[A]n employee's decision to continue working with an employer for a substantial period of time after the imposition of a new [arbitration] policy, demonstrates acceptance of its terms.") (citing Kinnebrew v. Gulf Ins. Co., CA No. 3:94-CV-1517-R, 1994 WL 803508, at *2 (N.D.Tex. Nov. 28, 1994) ("[F]ederal courts do not hesitate to find an enforceable agreement to arbitrate when an arbitration policy is instituted during an employee's employment and the employee continues to work for the employer thereafter."); Durkin v. Cigna Property Cas. Corp., 942 F. Supp. 481, 488 (D.Kan. 1996) (holding that an at-will employee's continued employment provided sufficient consideration for the arbitration provision)); see also Porter v. Cigna, No. CIV.A.1:96-CV765MHS, 1997 WL 1068630, at *1 (N.D.Ga., Mar. 26, 1997) ("[P]laintiff admits that defendant notified him of the new policy. Plaintiff's continued employment after such notification and failure to object to the new condition demonstrate his intent to be bound."). Given Ms. Kreimer's acceptance of the benefit of continued employment in exchange for her agreement to arbitrate her claims, she is barred from now repudiating the agreement.
To the extent that Ms. Kreimer argues that the industrial-factory employee situation in this case is different from employment situations such as those in Kovaleskie, 167 F.3d 361, and Gilmer, 500 U.S. 20, involving the securities industry, such a difference is not a significant point of distinction. Neither the Supreme Court, nor the Seventh Circuit found the distinction to be significant enough to mention. Another court who has looked at this issue has found that a party does not need to be a sophisticated business-person or have an advanced education to be bound by an arbitration agreement. See Sheller v. Frank's Nursery Crafts, 957 F. Supp. 150, 154 (N.D.Ill. 1997) (holding that minors employed by a garden and crafts store were precluded from bringing their Title VII claims in federal court due to the presence of an arbitration clause in their employment application).
Similarly, to the extent Ms. Kreimer held an unsophisticated job or lacks advanced education, these facts are not enough to automatically invalidate the agreement. Though the arbitration agreement was enacted after Ms. Kreimer had been employed with Delta Faucet for twenty years, given the distribution of the Policy, the question and answer section supplied with the Policy, and the informational meeting held in the factory, Ms. Kreimer appeared to be in a position to understand the Policy and its significance to her continued employment. See Durkin, 942 F. Supp. at 481 (the announcement of the policy, both in written form with the distribution of the policy and verbally in a meeting, sufficed to alert the plaintiff that the arbitration clause was a condition of her employment). As such, since she was given the necessary information and chose to continue her employment with Delta Faucet, enforcement of the arbitration agreement is warranted.
In her brief, Ms. Kreimer hints at a possibility that she was not in a position to understand the Policy but she does not deny that the language in the Policy, as well as that in the attached question and answer section, is very clear, or that the Policy was discussed at the meeting held on the premises. Rather, Ms. Kreimer just makes an unsupported assertion that her ability to read and write the English language reflects the fact that she is not a native of this country. Such an assertion without supporting evidence is not enough to create a question of fact on her ability to understand the Policy. The language in the policy is not sophisticated, and the meaning is readily ascertainable to the average person. Ms. Kreimer has failed to show that she is not an average person.
Yet another distinction between this case and Gibson, relied on by Ms. Kreimer to contend that no contract exists, is that Ms. Kreimer received a copy of the Policy prior to signing the acknowledgment form. Between the wording of the Policy, the information provided in the question and answer section and the informational meeting (which Ms. Kreimer has not claimed she did not attend), Ms. Kreimer was provided with the necessary means to understand the Policy and to be aware that acceptance of the Policy was a condition of her continued employment with Delta Faucet. This is different from Gibson, where the plaintiff was not provided with a copy of the arbitration policy at the time of the signing of the agreement. See Gibson, 121 F.3d at 1128. In addition, in Gibson, the signature form was buried in a stack of papers given to the employee. In the present case, the only papers handed to Ms. Kreimer were a copy of the Policy and the signature form. It was very clear that the signature form accompanied the Policy and its return was required.
With the presence of an offer, acceptance, and consideration (by way of a combination of a benefit to Ms. Kreimer and a detriment to Delta Faucet), a valid contract has been formed. This valid contract constitutes an agreement to arbitrate disputes arising from the employee's relationship with the employer. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Ind., 473 U.S. 614, 626 (1985) ("The first task of a court asked to compel arbitration of a dispute is to determine whether the parties agree to arbitrate that dispute."). When arbitration agreements are interpreted, "every doubt is resolved in favor of arbitration." Dickinson v. Heinold Sec., Inc., 661 F.2d 638, 643 (7th Cir. 1981). Thus, arbitration must be compelled "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute." See Ziegler v. Whale Sec. Co., L.P., 786 F. Supp. 739, 741 (N.D.Ind. 1992) (quoting Morrie Mages and Shirlee Mages Found. v. Thrifty Corp., 916 F.2d 402, 406 (7th Cir. 1990)). Such is not the case here since the arbitration clause explicitly includes "intentional torts," "all forms of unlawful discrimination including . . . disability," and any other claim that "arises out of or relates to the employment relationship or the termination of the employment relationship." (Funcheon Aff., Ex. A, at 1.) Thus, all Ms. Kreimer's claims are substantively covered by the arbitration agreement.
Evidentiary Hearing
Under § 4 of the FAA, the court is instructed to:
hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. . . . If the making of the arbitration agreement or the failure, neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof. If no jury trial be demanded by the party alleged to be in default, . . ., the court shall hear and determine such issue.9 U.S.C. § 4. In determining whether a trial is required, the Seventh Circuit has found that:
Section 4 of the arbitration code, 9 U.S.C. § 4, provides that if a question is raised as to whether the parties had agreed to arbitrate and the party alleged to be in default demands a jury trial of the question, the district court "shall" conduct such a trial. But it also provides that "upon being satisfied that the making of the agreement for arbitration . . . is not in issue, the court shall make an order directing the parties to" arbitrate. It is not true that by merely demanding a jury trial a party to an arbitration agreement can get one. He can get one only if there is a triable issue concerning the existence or scope of the agreement.Saturday Evening Post Co. v. Rumbleseat Press, Inc., 816 F.2d 1191, 1196 (7th Cir. 1987).
Here, Ms. Kreimer is not asking for a jury trial but for an evidentiary hearing. The Seventh Circuit has not decided if supporting evidence is required before an evidentiary hearing is granted, or if mere allegations are sufficient to warrant a hearing. Ms. Kreimer cites to Schacht v. Beacon Ins. Co., 742 F.2d 386, 390 (7th Cir. 1984), for support of her request for an evidentiary hearing, claiming there are questions regarding contract formation. However, the cited portion of Schacht merely states the holding of Interocean Shipping v. National Shipping Trading Corp., 462 F.2d 673, 677 (2d Cir. 1972), wherein the Second Circuit indicated that "to make a genuine issue entitling the plaintiff to a trial by jury, an unequivocal denial that the [arbitration] agreement had been made was needed, and some evidence should have been produced to substantiate the denial." Id. at 676 (affidavits and exhibits attached to the pleadings substantiated the denial of the existence of a contract) (citing Almacenes Fernandex, S.A. v. Golodetz, 148 F.2d 625 (2d Cir. 1945)). Due to Schacht's reliance on Interocean, which clearly said evidence is needed to support the denial of the existence of a contract, and the fact that Delta Faucet provided evidence (two affidavits and three exhibits) with its Motion to Compel Arbitration, Ms. Kreimer was put on notice that if she wanted to assert an issue of disputed fact she had to provide at lease some evidence. However, she submits no evidence of her own, and does not contend that the evidence provided by Delta Faucet is false.
This requirement (that some evidence be submitted to substantiate the claim for an evidentiary hearing or trial) is not unique to the Seventh Circuit. The courts who have considered the issue agree that in order to be entitled to a trial on the issue of whether an arbitration agreement was formed, some evidence must be submitted to the court. See Doctor's Assoc., Inc. v. Distajo, 107 F.3d 126, 129-30 (2d Cir. 1997) ("[A] party resisting arbitration . . . `bears the burden of showing that he is entitled to a jury trial.' As when opposing a motion for summary judgment under Fed.R.Civ.P. 56, the party requesting a jury trial must `submit evidentiary facts showing that there is a dispute of fact to be tried.'") (quotations omitted); Doctor's Assoc., Inc. v. Jabush, 89 F.3d 109, 114 (2d Cir. 1996) (holding that to "establish a genuine issue entitling a party to a jury trial, `an unequivocal denial that the agreement [to arbitrate] had been made [is] needed, and some evidence should [be] produced to substantiate the denial'") (quotations omitted); Dillard v. Merrill Lynch, Pierce, Fenner Smith, Inc., 961 F.2d 1148 (5th Cir. 1992) ("The party resisting arbitration bears `the burden of showing that he is entitled to a jury trial under § 4 of the Arbitration Act.' . . . [H]e must produce at least some evidence to substantiate his factual allegations.") (quotation and citations omitted); WFC Commodities Corp. v. Linnco Futures Group, Inc., No. 98 C 1354, 1998 WL 834374, at *2 (N.D.Ill. Nov. 25, 1998) ("The court should apply the same standard to the question of arbitrability as it would to a summary judgment motion, such that `the movant under § 4 would have to provide sufficient evidence in support of their claims such that a reasonable jury could return a verdict for them under applicable law.'") (quoting Topf v. Warnaco, Inc., 942 F. Supp. 762, 766 (D.Conn. 1996) (citing, inter alia, Saturday Evening Post to conclude that arbitrability should be reviewed under the summary judgment standard)); cf. Saturday Evening Post Co., 816 F.2d at 1196 ("It is not true that by merely demanding a jury trial a party to an arbitration agreement can get one."); Great W. Mortgage Corp. v. Peacock, 110 F.3d 222, 231 (3rd Cir. 1997) (request for jury trial denied because requesting party failed to demonstrate a material dispute of fact). This case law should have been clear guidance to Ms. Kreimer that evidence is needed to support her claim for an evidentiary hearing. From the direction provided by the Seventh Circuit, as well as other courts, this court finds that in order to determine whether an evidentiary hearing is necessary, a summary judgment type standard should be used. See China Resource Products (U.S.A.) Ltd. v. Fayda Int'l, Inc., 747 F. Supp. 1101, 1105 (D.Del. 1990) ("[T]he Court notes that neither party briefed the issue of the proper standard to be applied in evaluating a section 3 [of the FAA] motion for stay [pending completion of arbitration]. Given the nature of this matter — Fayda seeks an evidentiary hearing, while China Products contests the necessity of such a hearing because of the alleged absence of any genuine factual issue — the Court will apply a summary judgment type standard to resolve the dispute.").
Ms. Kreimer contends that "sufficient factual issues exist . . . to make an evidentiary hearing necessary," and she argues that she "is not a native of this country and her ability to read and write in the English language reflects this." (Pl.'s Resp. Br. at 2.) However, Ms. Kreimer does not provide any affidavits or other evidence to support this contention. Indeed, in her brief (which would not constitute "evidence" in any event), she does not even argue that because of her (presumably limited) "ability to read and write in the English language," she did not understand the Policy or what was said at the informational meeting when the Policy was discussed. The only reason Ms. Kreimer's ability to understand English would be relevant to this case is if it prevented her from understanding the Policy. But without some substantiating evidence of this, the court finds that an evidentiary hearing is not warranted. There is no dispute about the language of the Policy, the questions and answers distributed to her, and the fact that she signed the acknowledgment form and then continued her employment with Delta Faucet. The mere unverified possibility of a language impediment is not enough to show a question of fact.
Policy Considerations
Ms. Kreimer contends that public policy does not favor arbitration in this case. For support, she provides a quote from Pryner v. Tractor Supply Co., 109 F.3d 354 (7th Cir.), cert. denied, 522 U.S. 912 (1997), which says, "That interest [in the effective enforcement of rights for the protection of workers whom Congress has classified as belonging to vulnerable groups] will be impaired if the right to bring suit in federal court to enforce these rights is taken away from the workers. . . ." Id. at 360. Furthermore, Ms. Kreimer cites to Gibson where the Seventh Circuit asserted that "by being forced into binding arbitration [employees] would be surrendering their right to a trial by jury-a right that civil rights plaintiffs fought hard for and finally won in the 1991 amendments to Title VII." Gibson, 121 F.3d at 1129.
However, the Seventh Circuit recently stated:
We . . . concur with the majority of circuits that have held that Congress did not intend Title VII to preclude enforcement of pre-dispute arbitration agreements such as the one signed by [plaintiff]. Specifically, we conclude . . . that on its face, the text of § 118 [of the Civil Rights Act] evinces a clear Congressional intent to encourage arbitration of Title VII and ADEA claims, not to preclude such arbitration.Koveleskie, 167 F.3d at 365 (quotation omitted). The policy encouraging arbitration of Title VII and ADEA claims is no different for ADA claims. See Gibson, 121 F.3d at 1129 (can contractually agree to submit federal claims, including Title VII and ADA claims to arbitration) (citing Civil Rights Act of 1991, Pub.L. No. 102-166 So. 118, 105 Stat. 1071, 1081 (1991) (not codified) (authorizing use of arbitration where appropriate to resolve disputes arising under certain federal statutes, including Title VII); 42 U.S.C. § 12212 (same for ADA)); see also Gilmer, 500 U.S. at 35. Ms. Kreimer did not forgo any substantive rights by agreeing to submit her claims to mediation and arbitration. Rather, she could still submit her claim. The only difference is the resolution would be in arbitral rather than judicial form. See Sheller, 957 F. Supp. at 152 (citing Mitsubishi Motors Corp., 473 U.S. at 628); see also Groves v. Ring Screw Works, Ferndale Fastener Div., 498 U.S. 168, 173-74 ("a prescription favoring access to a judicial forum is overcome whenever the parties have agreed upon a different method for the adjustment of their disputes").
In addition, the Seventh Circuit has noted that there is no question that the "Federal Arbitration Act, 9 U.S.C. § 1 et seq., has established a federal policy favoring arbitration and that the courts are required to `rigorously enforce agreements to arbitrate.'" Washburn v. Societe Commerciale de Reassurance, 831 F.2d 149, 150 (7th Cir. 1987) (citing Shearson/American Express v. McMahon, 482 U.S. 220, 225 (1987)). The federal courts generally endorse the concept of arbitrating employment disputes as a way of relieving the pressure such cases place on the federal judiciary's docket. Courts have noted that "questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration" with any doubts regarding scope being "resolved in favor of arbitration. . . ." Id. at 150-51 (citing Moses H. Cone Hosp., 460 U.S. at 24-25; see also Schacht, 742 F.2d at 390).
It has been noted that when resolving this policy dispute, the strongest case in support of an arbitration agreement arises "when the record indicates the employee has knowingly agreed to do so." Gibson, 121 F.3d at 1129. Here, the record demonstrates a knowing acquiescence on Ms. Kreimer's part. She was supplied with a copy of the policy along with the acknowledgment form she had to return in order to continue working at the company, and prior to signing the form, she attended the informational meeting conducted at the work site. By attending the meeting and having the opportunity to review the text of the Policy as well as the question and answer section attached to the Policy, Ms. Kreimer had the information needed to knowingly agree to the condition. Thus, with her compliance by signing the form and enjoying the benefit of continued employment, public policy favors enforcement of the arbitration agreement.
III. Conclusion
Given the fact that compliance with the arbitration agreement was a condition for employment with Delta Faucet, and that Ms. Kreimer accepted the benefit of continued employment after signing the acknowledgment form, there is consideration for the arbitration agreement. With the presence of a valid contract, the arbitration agreement is to be enforced.
Since the court has found that compliance with the Policy should be compelled, the remaining issue is if the proceedings should be stayed or dismissed with prejudice. Delta Faucet requests either outcome. Under § 3 of the FAA, trial proceedings are to be stayed "until such arbitration has been had in accordance with the terms of the agreement. . . ." 9 U.S.C. § 3. As a result, this court orders proceedings STAYED pending compliance with the dispute resolution procedure outlined in the Policy. There is no final judgment at this time.
ALL OF WHICH IS ORDERED.