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MOE v. REO PLASTICS

Minnesota Court of Appeals
Oct 7, 1997
No. C7-97-814 (Minn. Ct. App. Oct. 7, 1997)

Opinion

No. C7-97-814.

Filed October 7, 1997.

Appeal from the District Court, Hennepin County, File No. EM9614698.

Thomas B. Wieser, John C. Gunderson, (for respondent)

Martin L. Garden, John P. Haberman, (for appellant REO Plastics, Inc.)

Phillip F. Fishman, (for appellant Daniel Ciatti)

Considered and decided by Davies, Presiding Judge, Klaphake, Judge, and Peterson, Judge.


This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).


UNPUBLISHED OPINION


Employer challenges the district court's refusal to compel arbitration of employee's sexual harassment claim against employer, arguing that an arbitration clause contained in a collective bargaining agreement requires the employee to arbitrate the claim. We affirm.

FACTS

Appellant REO Plastics (REO) employed respondent Jane Moe. Moe alleges that her supervisor, appellant Daniel Ciatti, sexually harassed her. Moe reported Ciatti's conduct to REO's human resources manager and filed a grievance with her union, the United Steelworkers of America, Local 9376. After Moe reported the alleged sexual harassment, REO transferred Ciatti to a new position; Moe alleged that Ciatti continued to harass her. In March 1996, Moe gave notice, claiming she had been constructively discharged.

After leaving her employment, Moe brought an action against REO and Ciatti, alleging a violation of the Minnesota Human Rights Act (Human Rights Act), Minn. Stat. §§ 363.01-.20 (1996). REO moved to dismiss Moe's claim, arguing that the claim was subject to mandatory arbitration under the terms of the collective bargaining agreement between REO and the union.

Moe also asserted claims of negligent retention, negligent hiring, and assault and battery. The district court noted, however, that appellants did not contend that the collective bargaining agreement arbitration clause encompassed these claims.

The district court concluded that the terms of the collective bargaining agreement did not require arbitration of Moe's Human Rights Act claim and denied REO's motion. This appeal followed.

DECISION

REO moved to dismiss the claims under Minn.R.Civ.P. 12.02(a), but denial of a motion to dismiss is not an appealable order. See Minn.R.Civ.App.P. 103.03 (listing appealable judgments and orders). We, therefore, construe REO's motion as one to compel arbitration under Minn. Stat. § 572.09 (1996). An order denying an application to compel arbitration is appealable. Minn. Stat. § 572.26, subd. 1(1) (1996).

The district court's denial of the motion to compel arbitration is reviewed de novo by this court. Michael-Curry Cos. v. Knutson Shareholders Liquidating Trust , 449 N.W.2d 139, 141 (Minn. 1989). Unless the parties have unmistakably provided otherwise, courts, rather than arbitrators, determine whether parties must submit a dispute to arbitration. AT T Techs., Inc. v. Communications Workers , 475 U.S. 643, 649, 106 S.Ct. 1415, 1418 (1986).

Arbitration is a matter of contract. See First Options, Inc. v. Kaplan , 514 U.S. 938, 944, 115 S.Ct. 1920, 1924 (1995) (in deciding whether parties agreed to arbitrate a certain matter, courts should apply ordinary state-law principles that govern formation of contracts). A party is bound to arbitrate a claim only if he or she actually agreed to submit the specific claim to arbitration. AT T , 475 U.S. at 648, 106 S.Ct. at 1418. The issue of arbitrability is determined by ascertaining the intention of the parties through examination of the language found in the arbitration agreement. State v. Berthiaume , 259 N.W.2d 904, 909 (Minn. 1977). Any doubts concerning the scope of arbitrable issues must be resolved in favor of arbitration. Johnson v. Piper Jaffray, Inc. , 530 N.W.2d 790, 795 (Minn. 1995). If the agreement does not show an intent to arbitrate the specific claim, or if the language in the agreement is not sufficiently broad to include arbitration of that issue, the court may "protect a party from being compelled to arbitrate." Atcas v. Credit Clearing Corp. , 292 Minn. 334, 341, 197 N.W.2d 448, 452 (1972).

REO contends that this court should conclude that the arbitration clause encompasses Moe's statutory claims because the arbitration clause in AT T is nearly identical to the language at issue here. AT T does not, however, support REO's position. Although the arbitration clauses are similar, the issue in AT T was whether arbitrability of a claim is for the court or an arbitrator to determine. AT T , 475 U.S. at 652, 106 S.Ct. at 1420. The Supreme Court specifically declined to determine whether the claim was subject to the arbitration clause at issue and remanded for the district court to decide that question. Id. at 651-52; 106 S.Ct. at 1420.

REO also argues that the arbitration clause contained in the collective bargaining agreement requires arbitration of Moe's claims because there is no express provision in the collective bargaining agreement "excluding any of her employment disputes." REO maintains this case is analogous to Piper Jaffray , in which the arbitration clause provided:

I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm * * * that is required to be arbitrated under the rules, constitutions, or by-laws of the [NASD or the NYSE] as may be amended from time to time * * *.

Piper Jaffray , 530 N.W.2d at 796 (alterations in original). The NASD (National Association of Securities Dealers) Code required "arbitration of any dispute, claim or controversy * * * between or among members." Id. The Minnesota Supreme Court held that an employee who had executed this arbitration agreement was required to arbitrate her sex and age discrimination claims against the employer. Id. at 798. Here, Article 21 of the collective bargaining agreement, setting forth REO's grievance and arbitration procedures, requires arbitration "[i]n the event of any dispute with reference to the interpretation, application or breach of any of the terms contained in this Agreement ." (Emphasis added.) In contrast to the all-encompassing arbitration clause at issue in Piper Jaffray, which required "arbitration of any dispute, claim or controversy," this provision limits the agreement to arbitrate to the " interpretation, application or breach" of the agreement. Moe's sexual harassment claim does not arise out of the interpretation, application or breach of the collective bargaining agreement, but instead is based on statute. Accordingly, the arbitration clause at issue here does not require Moe to arbitrate her sexual harassment claim. Cf. Johnson v. Hubbard Broadcasting, Inc. , 940 F. Supp. 1447, 1450, 1462-63 (D.Minn. 1996) (employee compelled to arbitrate statutory claim by clause that expressly and unequivocally stated she agreed to arbitrate all statutory claims).

REO argues, alternatively, that Moe must arbitrate her sexual harassment claim because the collective bargaining agreement contains a clause prohibiting sex discrimination. Paragraph 4.03 of the agreement provides:

The Employer and the Union are pledged to policies of employing personnel and dealing with employees on the basis of skill, ability, qualifications and performance, with no distinction in the assignment, training, promotion, layoff or compensation of employees because of race, creed, color, religion, sex, age, national origin, disability or marital status. The parties will observe non-discriminatory practices in the application and administration of the provisions of this Agreement .

(Emphasis added.) This clause refers only to the exercise of non-discriminatory practices in "application and administration of the provisions of this Agreement." This provision does not address statutory discriminatory claims arising (as does this claim) outside the "application" or "administration" of the collective bargaining agreement. Therefore, this provision does not require Moe to arbitrate her claims.

Finally, REO maintains that the arbitration clause encompasses Moe's statutory sexual harassment claim because Article 24 of the collective bargaining agreement incorporates REO's sexual harassment policy. Article 24 provides that REO has the exclusive right to

formulate * * * and enforce personnel policies, procedures, rules and regulations applicable to employees covered by this Agreement, so long as such personnel policies, rules and regulations are not inconsistent with any express provision of this Agreement.

This language is included in a portion of the collective bargaining agreement that discusses REO's ability to set work schedules and to formulate rules, methods of production, etc.; nothing in this section discusses anything related to REO's sexual harassment policy. Furthermore, REO's interpretation of this language, which would allow the employer to unilaterally broaden the scope of the arbitration clause, is inconsistent with case law holding that a party is not bound to arbitration if he or she did not agree to submit the specific kind of claim to arbitration. See AT T , 475 U.S. at 648, 106 S.Ct. at 1418 ("party cannot be required to submit to arbitration any dispute which he has not agreed to submit"). Even if we were to conclude that this provision of the collective bargaining agreement incorporated REO's sexual harassment policy, nothing in that policy requires arbitration of Moe's statutory claim. We conclude that the arbitration clause contained in the collective bargaining agreement does not require Moe to arbitrate her statutory sexual harassment claim.

Because we resolve this case solely on the language of the agreement, we need not determine whether an arbitration clause requiring arbitration of statutory discrimination claims violates the Human Rights Act voiding provision (Minn. Stat. § 363.031 (1996), which expressly prohibits waiver of statutory rights under the act.

We affirm the district court order denying appellant's motion to compel arbitration.

Affirmed.


Summaries of

MOE v. REO PLASTICS

Minnesota Court of Appeals
Oct 7, 1997
No. C7-97-814 (Minn. Ct. App. Oct. 7, 1997)
Case details for

MOE v. REO PLASTICS

Case Details

Full title:Jane Moe, Respondent, v. REO Plastics, Inc., Appellant, Daniel Ciatti…

Court:Minnesota Court of Appeals

Date published: Oct 7, 1997

Citations

No. C7-97-814 (Minn. Ct. App. Oct. 7, 1997)

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