This case is on remand to us from the Michigan Supreme Court, 453 Mich. 943, 557 N.W.2d 308 (1996), for reconsideration in light of Heurtebise v. Reliable Business Computers, Inc., 452 Mich. 405, 550 N.W.2d 243 (1996). We reverse in part and affirm in part.
As we stated in our earlier opinion:
In our original opinion, we reversed the trial court's denial of a defense motion for summary disposition of plaintiff's wrongful discharge and gender discrimination claims because plaintiff had failed to exhaust the remedies available to her pursuant to the ADR procedure that defendant had established to resolve such claims. In reversing the trial court's denial of defendant's motion for summary disposition of plaintiff's gender discrimination claim, we relied on Heurtebise v. Reliable Business Computers, Inc., 207 Mich.App. 308, 523 N.W.2d 904 (1994), as controlling precedent for the proposition that private agreements to arbitrate civil rights claims are enforceable.
The Michigan Supreme Court reversed this Court's decision in Heurtebise, because the employee handbook contained language demonstrating that the employer did not intend to be bound by its provisions. 452 Mich. at 414, 550 N.W.2d 243. As the Supreme Court noted, the handbook in Heurtebise contained clauses stating: (1) the policies in the handbook do not create any employment or personal contract, express or implied; (2) the employer had the right to terminate employees' employment at any time, without notice, for any reason; and (3) the employer reserved the right to make modifications to any or all of the policies in the handbook. Thus, the instrument in Heurtebise expressly disclaiming contract status, yielding the employee no benefit above the minimal required status even to be an employee—namely, at-will status—and having provisions that could be changed unilaterally by the employer was, as might be expected, determined not to be a contract by the Supreme Court.
It is in light of this holding that we are directed to reexamine the Meijer employee handbook. The dissimilarities are marked.
This argument has some allure, but on serious scrutiny, the problem plaintiff points to is illusory in the factual circumstances found here. It must be recalled that this instrument is an agreement to control an ongoing course of conduct between the employer and its employees. By its clear terms, they are both bound by it unless and until the employer chooses to change it. Even then, the employer cannot retroactively escape from its requirements. Any change can only take effect prospectively. See In re Certified Question, 432 Mich. 438, 441, 443 N.W.2d 112 (1989). Accordingly, because the alleged improper acts by the employer at issue here came before any change was made in the agreement by the employer (in fact, as far as we know, even now no changes have been instituted by the employer), both parties are bound. In particular, the parties are bound to utilize the exclusive ADR procedure for handling their contract dispute. While the reservation language in the handbook will allow Meijer, for example, to change its policy of being a just-cause employer to become an at-will employer, the change would be effective only from the time of the implementation of the change (and after reasonable employee notification). Until such a change is made (which might cause the new arrangement to run afoul of the Heurtebise holding), Meijer is bound by the handbook in its dealing with its employees. Indeed, any other conclusion would mean that an employer could never change its employment agreements with its employees. Once a just-cause employer would mean always a just-cause employer. No employer would be likely to choose voluntarily to be so bound, and, thus, plaintiff's position, if adopted, would have the unfortunate and surely undesirable consequence of discouraging the practice of granting employees just-cause termination protection. Moreover, if an employer should cavalierly eliminate provisions that restrict its options in dealing with its employees, arbitrability could be jeopardized under Heurtebise, and valued employees, the retention of whom no doubt prompted the adoption of the just-cause policy in the first place, might choose to leave the employer. Rood v. General Dynamics Corp., 444 Mich. 107, 137-141, 507 N.W.2d 591 (1993). This economic regulation of the employment marketplace will undoubtedly cause an employer to exercise caution before making any change in the employment relationship, just as conditions of the employment market no doubt were factors considered in the granting of just-cause termination status in this case.
Therefore, because the Meijer and Heurtebise handbooks are distinguishable, this plaintiff was bound by the handbook with regard to any contractual claim. The fact that Meijer could later change the agreement does not vitiate the fact that, as things currently stand, these parties are contractually bound. Accordingly, Meijer can, consistent with prior case law, require employees to arbitrate contract disputes regarding adverse employment decisions. See, e.g., Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 624, 292 N.W.2d 880 (1980). Because plaintiff failed to pursue her breach of contract claim utilizing the required ADR procedure, she is barred from pursuing such a claim in the circuit court. Renny v. Port Huron Hosp., 427 Mich. 415, 429-430, 398 N.W.2d 327 (1986); Zeniuk v. RKA, Inc., 189 Mich.App. 33, 35, 37-38, 472 N.W.2d 23 (1991). Accordingly, we reverse the trial
With regard to plaintiff's gender discrimination claim, we conclude, in light of Heurtebise, that summary disposition was properly denied by the trial court. To this end, we agree with and adopt as our own the reasoning of Justice Cavanagh in parts III through VI of his opinion in Heurtebise, which addressed, albeit in dicta, 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 noted by Justice Cavanagh in Heurtebise, "[u]nlike federal law, Michigan has an unwavering history of faithfully defending an aggrieved individual's right to a judicial forum to remedy unlawful discrimination." 452 Mich. at 414, 550 N.W.2d 243. This unwavering history is currently reflected in the judicial remedies clause of Const.1963, art. 5, § 29, as well as its legislative counterpart, M.C.L. § 37.2803; M.S.A. § 3.548(803). Article 5, § 29 of our state constitution establishes a civil rights commission with certain powers and responsibilities, and incorporates a judicial remedies clause: "Nothing contained in this section shall be construed to diminish the right of any party to direct and immediate legal or equitable remedies in the courts of this state." Similarly, our Legislature in § 803 of the Civil Rights Act has reinforced and broadened the constitutional right of Michigan's citizens to immediate and direct judicial review of a civil rights claim: "This [civil rights] act shall not be construed to diminish the right of a person to direct or immediate legal or equitable remedies in the courts of this state." Justice Cavanagh aptly concluded that § 803 "expressly prohibits an exhaustion of administrative remedies requirement." 452 Mich. at 420, 550 N.W.2d 243.
Michigan's declared public policy entitling a state civil rights plaintiff to direct and immediate review of such claims in the circuit court cannot be abrogated by contract:
Contrary to defendant Meijer's argument, we do not find the parties' employment contract to be governed by the federal arbitration act (FAA), 9 U.S.C. § 1 et seq.
The facts of the present case are considerably less compelling than those in Bernhardt. Plaintiff Rushton was employed by Meijer as a floor detective. Her contractual duties did not facilitate, affect, or arise out of interstate or foreign commerce. Thus, even the broadest construction of the statutory phrase "involving commerce" cannot encompass plaintiff's employment contract with Meijer.
Only two of the dissent's arguments warrant a response. First, the dissent chides us for neglecting this state's statutory arbitration act,
Second, the dissent asserts that our decision will force "sophisticated employers," like defendant Meijer, either to abandon its policy of just-cause employment or to simply leave the state for a business-friendly environment. The dissent "cannot help but sense" that we, along with three members of the Supreme Court, have attempted to "str[ike] a blow for the working people of this state." As members of the judiciary, however, our mandate is to enforce the laws as written by the Legislature. We acknowledge our surprise at our dissenting colleague's willingness, in this case, to abandon his long-held support for the unambiguous written word of the Legislature. Indeed, it was our dissenting colleague who stated that,
After examining federal and Michigan civil rights jurisprudence, Justice Cavanagh stated, and we agree:
Accordingly, we hold that Meijer cannot require its employees, as a condition of employment, to waive prospectively their right to pursue direct and immediate review of civil rights claims in a judicial forum. The provision of the parties' private employment contract requiring plaintiff, a non-union employee, to exhaust the termination appeal procedure, including binding arbitration, before filing a lawsuit in the circuit court, is void as it relates to her gender discrimination claim under Michigan law.
Reversed in part and affirmed in part. Remanded for further proceedings regarding plaintiff's gender discrimination claim. We retain no further jurisdiction.
FITZGERALD, P.J., concurred.
TAYLOR, Judge (concurring in part and dissenting in part).
I wholeheartedly concur with part I of the majority opinion; however, I dissent from part II. Thus, I would reverse the lower court's order denying summary disposition for defendant in its entirety.
The essence of the majority position is that the parties' contract is valid except for the agreement to arbitrate a civil rights claim. Thus, the agreement to arbitrate, as it pertains to civil rights, has been found to violate public policy, and the court has rewritten the parties' agreement by striking that provision. Accordingly, the current state of the law is that the freedom to contract prospectively with regard to arbitration of civil rights claims is not available to our citizens on the asserted ground that such freedom offends public policy. I respectfully disagree.
In our original opinion in this case, we held that defendant was entitled to summary disposition of plaintiff's gender discrimination claim because she failed to exhaust the remedies available to her pursuant to defendant's alternative dispute resolution (ADR) procedure.
The conclusion of the minority opinion in Heurtebise is premised primarily upon Const.1963, art. 5, § 29, which provides: "Nothing contained in this section [establishing the civil rights commission] shall be construed to diminish the right of any party to direct and immediate legal or equitable remedies in the courts of this state," and its statutory counterpart, M.C.L. § 37.2803; M.S.A. § 3.548(803), which provides: "This [civil rights] act shall not be construed to diminish the right of a person to direct or immediate legal or equitable remedies in the courts of this state." As explained below, the conclusion of the minority opinion in Heurtebise and the majority here is not established by the cited constitutional provision or the cited statute.
Indeed, the Supreme Court has definitively construed these provisions in a controlling opinion in a way that is not harmonious with the minority dicta opinion in Heurtebise or the majority opinion herein. In Nummer v. Dep't of Treasury, 448 Mich. 534, 550, 533 N.W.2d 250 (1995), the Supreme Court said that the above-cited constitutional provision and statute mean that "the Civil Rights Commission does not have exclusive jurisdiction over discrimination claims, but instead has concurrent jurisdiction with the circuit courts."
The cited statutory language is similarly straightforward. Section 803 states that the Michigan Civil Rights Act itself is not to be construed to diminish the right of a person to direct or immediate legal or equitable remedies in Michigan courts. That is, the Legislature wished to make it clear that the remedies in the Civil Rights Act are cumulative to preexisting common-law and statutory rights. This was necessary because, before passage of the Civil Rights Act, certain civil rights were already guaranteed by the common-law and by statute, and the Legislature wanted to make clear that its broad entry into the field had not abrogated the previously existing common-law and statutory rights. See Marsh v. Dep't of Civil Service, 142 Mich.App. 557, 563, n. 2, 567, n. 6, 370 N.W.2d 613 (1985). See also Heurtebise, supra at 423, 550 N.W.2d 243. Thus, as with the constitutional provision, § 803 simply does not address the issue of the propriety of prospective agreements to arbitrate civil rights claims. Accord Prudential Ins. Co. v. Shammas, 865 F.Supp. 429, 433 (W.D.Mich., 1993) (the court rejected the argument that M.C.L. § 37.2803; M.S.A. § 3.548 precluded arbitration under the federal arbitration act of a Michigan civil rights claim).
A statute that does address the issue is Michigan's statutory arbitration act.
Moreover, reading § 803 to produce the result that the majority reaches here requires one to ignore how explicitly our Legislature speaks when it wants to bar prospective contractual waivers of important rights. For example, in the Employment Security Act, the Legislature provided that no agreement by an individual to waive his right to benefits or any other rights under the act is valid. M.C.L. § 421.31; M.S.A. § 17.533. Similarly, when enacting the Worker's Disability Compensation Act, the Legislature provided that no agreement by an employee to waive his rights to compensation under the worker's compensation act before an injury shall be valid. M.C.L. § 418.815; M.S.A. § 17.237(815). In contrast, there is no waiver-bar language in either the constitution or § 803 vis-a-vis predispute agreements to arbitrate civil rights claims. This lack of language barring a waiver is inappropriately given no weight by the majority.
In addition, the majority misunderstands, and thus mischaracterizes, the import of the proper construction of the constitution and § 803. Defendant is not asserting that, because of the existence of the Civil Rights Commission section of the constitution or of the Civil Rights Act, plaintiff is precluded from going to the circuit court. Rather, defendant argues that these provisions do not mean one must go to the circuit court, and in no way preclude contracting parties from agreeing to a different forum than a court, to adjudicate their civil rights disputes. I agree with defendant's argument because this construction leaves the constitution and § 803 with the meaning their language clearly implies and also because it does not obliterate freedom of contract with regard to the matter here under consideration.
Finally, the whole notion of prospective waivers of important rights is not, as the majority seems to believe, inherently repugnant to our constitutional order. Indeed, it is well established that rights of a higher standing than that of forum selection, i.e., constitutional rights themselves, may be prospectively waived.
The majority also adopts Justice Cavanagh's statement that § 803 expressly prohibits an exhaustion of administrative remedies requirement. I agree with this proposition of law, but note that it has no relevance to the question whether parties may enter into predispute agreements to arbitrate civil rights claims.
At this point, then, at least to my satisfaction, the flaws in the majority's position have been demonstrated. This draws me to the conclusion that the real objection the majority has can be found at the end of the minority opinion in Heurtebise. Id. at 438, 550 N.W.2d 243. There, Justice Cavanagh states that he believes that the right to be free of unlawful discrimination is just "too important" to be left to any dispute resolution process, prospectively agreed upon, other than that available in a court. Id. at 438, 550 N.W.2d 243 (emphasis supplied). While a jurist can, of course, hold this view as a
Further, I respectfully point out that, in my view, Justice Cavanagh's position also is ill-advised because it can only be reached if one, notwithstanding protests to the contrary, id. at 438, 550 N.W.2d 243, holds the notion that arbitration is a second-rate type of fact-finding and remedy-producing vehicle that is to be discouraged in favor of traditional litigation. That, however, is inconsistent with how the courts view arbitration. Both the Michigan and the federal courts have enunciated strong public-policy positions that favor the utilization of arbitration to resolve disputes. Such statements are premised, in part, upon Congress' enactment of the federal arbitration act, 9 U.S.C. § 1-9 U.S.C. § 15, and Michigan's enactment of the previously discussed statutory arbitration act, M.C.L. § 600.5001 et seq.; M.S.A. § 27A.5001 et seq., and clearly show that arbitration is favored as a means of resolving disputes.
The United States Supreme Court in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 34, n. 5, 111 S.Ct. 1647, 1656, n. 5, 114 L.Ed.2d 26 (1991), stated:
The Court in Alexander v. Gardner-Denver Co. [415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974) ] also expressed the view that arbitration was inferior to the judicial process for resolving statutory claims. 415 U.S., at 57-58, 94 S.Ct. at 1024. That "mistrust of the arbitral process," however, has been undermined by our recent arbitration decisions. [Shearson American Express, Inc. v. McMahon, 482 U.S. 220, 231-232, 107 S.Ct. 2332, 2340, 96 L.Ed.2d 185 (1987) ]. "[W]e are well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals inhibited the development of arbitration as an alternative means of dispute resolution." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626-627 [105 S.Ct. 3346, 3354, 87 L.Ed.2d 444] (1985).
Our Michigan courts have said no less. In Huntington Woods v. Ajax Paving Industries, Inc., 177 Mich.App. 351, 356, 441 N.W.2d 99 (1989), rev'd in part on other grounds on rehearing 179 Mich.App. 600, 446 N.W.2d 331 (1989), Judge (now Justice) Marilyn Kelly said: "Our courts have long been supportive of arbitration agreements and have discouraged efforts to circumvent their objectives." Also, in Whispering Pines, supra at 550, 538 N.W.2d 452, the Court stated: "[T]he law favors contractual terms providing for alternate dispute resolution mechanisms." Most recently, in Brucker v. McKinlay Transport, Inc., 454 Mich. 8, 17, 557 N.W.2d 536 (1997), the Michigan Supreme Court stated: "[P]arties who can locate an alternative method of dispute resolution are encouraged to bypass the courts and use other appropriate means." Indeed, Justice Cavanagh himself acknowledges this virtually uniform view by conceding that there is a public policy favoring alternative dispute resolution, while puzzlingly asserting that the import of this view does not adversely affect his position. Heurtebise, supra at 438, 550 N.W.2d 243.
One cannot help sensing that the members of the Supreme Court who joined in the Heurtebise minority opinion, as well as the majority here, feel that they have struck a blow for the working people of this state. After all, no arbitration of civil rights claims, and only full dress litigation with all of its protections, sounds at first blush to be protective of civil rights principles. Yet, the cost may well be that just-cause employers, such as Meijer, having had much of the value of their bargain (just-cause employment given in return for a promise to eliminate lengthy costly civil rights litigation in court) stripped from them by this decision, will simply terminate the whole just-cause regime, as they have reserved the right to do,
In short, can it be said with certainty that the majority's opinion has really advanced the cause of this state's employees? It can be doubted. The reason is that every worker cares about freedom from arbitrary termination while fewer, fortunately, have any need to worry about, or avail themselves of, civil rights remedies. While this calculus may not be every person's, it is for that reason it would be wise, especially given the legislative allowance of predispute agreements to arbitrate civil rights claims and no constitutional bar against it, not to impose our preferences on the parties and to allow them instead, as free men and women, to enter or not to enter into employment with these conditions. Were we to have ruled that just-cause employers may prospectively agree with their employees to arbitrate civil rights claims, one could reasonably assume that more at-will employers would seriously consider, and have incentive to become, just-cause employers. It is fortunate that ours may not be the final word on this question and that our Supreme Court, should it grant leave in this case (which I urge), will see this issue, as the Heurtebise majority's refusal to join the minority opinion may suggest, more clearly than the majority in this Court does.
In my opinion, defendant was entitled to summary disposition of plaintiff's civil rights claim because the contract she had with Meijer required utilization of arbitration as the "exclusive, final and binding method to resolve all claims arising out of termination from employment." Plaintiff's civil rights have not been diminished one iota by the agreement to arbitrate, and the only waiver involved is the forum for deciding if her civil rights had been violated. McKinstry v. Valley Obstetrics-Gynecology Clinic, PC, 428 Mich. 167, 405 N.W.2d 88 (1987). There is no valid reason not to enforce this contractual provision. Thus, I would hold that a just-cause employer that agrees to pay the costs of arbitration and authorizes the arbitration panel to grant any relief a court of law could grant, as Meijer's policy provides, may require a nonunion employee to arbitrate all employment-related disputes, including civil rights claims, as a condition of employment. Accord Cole v. Burns Int'l Security Services, 323 U.S.App.D.C. 133, 105 F.3d 1465 (1997) (employer may require arbitration of civil rights claims by employees if employer assumes responsibility for the payment of the arbitrator's compensation and arbitrators are authorized to grant all of the types of relief that would otherwise be available in court).
As a final matter, one of the reasons cited by the trial court for refusing to summarily dismiss plaintiff's gender discrimination
Because I would find the prospective agreement to arbitrate civil rights claims enforceable under Michigan law, I find it unnecessary to address defendant's claim that the federal arbitration act preempts a ruling to the contrary. See, e.g., Great Western Mortgage Corp. v. Peacock, 110 F.3d 222 (C.A.3, 1997) (in enacting the federal arbitration act, Congress withdrew the power of the states to require a judicial forum for the resolution of claims that the contracting parties agreed to resolve by arbitration), Patterson v. Tenet Healthcare, Inc., 113 F.3d 832 (C.A.8, 1997) (federal arbitration act required the plaintiff to arbitrate a state [Missouri] civil rights claim), O'Neil v. Hilton Head Hosp., 115 F.3d 272 (C.A.4, 1997), and Burns v. Olde Discount Corp., 212 Mich.App. 576, 580, 538 N.W.2d 686 (1995) (state courts are bound under the Supremacy Clause, U.S. Const., art. VI, § 2, to enforce the substantive provisions of the federal arbitration act).
For these reasons I would reverse and remand for entry of a judgment in defendant's favor.