COMMONWEALTH OF MASSACHUSETTS
Supreme Judicial Cour t
NO. SJC-09961
MIDDLESEX COUNTY.
OLGA ST. FLEUR,
PLAINTIFF-APPELLEE ,
V .
WPI CABLE SYSTEMS/MUTRON, a/k/a WIREPRO, a/k/a WPI-BOSTON DIVISION, I N C . ,
DEFENDANT-APPELLANT .
ON APPEAL FROM AN ORDER OF THE SUPERIOR COURT.
Brief of the Defendant-Appellant
JOSEPH F. HARDCASTLE BBO No. 559479
CINTRA S. SHOBER BE0 No. 560120
HARDCASTLE & SHOBER 50 Congress Street,
Boston, MA 02109 Suite 314
(617) 2 4 8 - 2 2 4 0
T a b l e of Contents
Page
Issues Presented. . . . . . . . . . . . . . . . . .1
Statement of the Case. . . . . . . . . . . . . . . 2
Statement of Facts. . . . . . . . . . . . . . . . . 9
Summary of Argument. . 2 1
Argument. . . . . . . . . . . . . . . . . . . . . 2 3
1. THE FEDERAL ARBITRATION ACT REQUIRES THAT AGREEMENTS TO ARBITRATE EMPLOYMENT CLAIMS BE ENFORCED. . . . . . . . . . . . . . . . . 23
A. The Federal Arbitration Act Reflects A Strong P o l i c y In Favor Of Enforcement Of Agreements To Arbitrate And Applies To This Action. . . . . . . . . . . . . 23
B. The Trial Court Judge Mistakenly Concluded That Agreements To Arbitrate Claims Arising Out Of G.L. c. 151B Only May B e Enforced Following A Determination That It Would Be "Appropriate" To Do So. . . . . . . . . 27
11. BECAUSE ST. FLEUR SIGNED THE ARBITRATION AGREEMENT AND EXPRESSLY ACKNOWLEDGED THAT SHE READ AND UNDERSTOOD IT, IT WAS ERROR FOR THE TRIAL COURT TO DENY WPI'S MOTION TO COMPEL ARBITRATION. . . . . . . . . . . . . .3,4
111. THE FACTUAL DISPUTES RAISED BY ST. FLEUR REGARDING THE CIRCUMSTANCES UNDER WHICH SHE SIGNED THE ARBITRATION AGREEMENT ARE NOT GROUNDS FOR DENIAL OF WPI'S MOTION TO COMPEL ARBITRATION. . . . . . . . . . . . . .37
A . A P a r t y Cannot Avoid Arbitration Simply By Alleging Fraud In Connection With The Formation Of A Contract That Contains An Arbitration Provision. . . .37
i
Page
B . If There Is A Factual Dispute As To Whether An Agreement To Arbitrate Exists, An Evidentiary Hearing Must Be Held Before A Motion To Compel Arbitration CanBe Denied. . .
Conclusion. . . . . . . . . . . . . . . Addendum
* .
. . 40
4 3
ii
T a b l e of Authorities
Page
Cases
Anastos v. Sable, 443 Mass. 146 (2004). . . . . . . . . . . . . . . 2 6
A / S Custodia v. Lessin International, Inc., 503 F . 2 d 318 (2d Cir. 1974). . . . . . . . . . 40-41 Bernhardt v. Polygraphic Co. of America, 350 U . S . 198 (1956). . . . . . . . . . . . . . . -24
Campbell v. General Dynamics Gov' t Systems Corp . , 407 F.3d 546 (1st Cir. 2 0 0 5 ) . . . . . . . . . . . 26
Carpenter v. Pomerantz, 36 Mass. App. C t . 627 (1994). . . . . . . . . . . 25
Circuit C i t y Stores, Inc. v. Adams, 532 U . S . 105 (2001). . . . . . . . . . . . . . . - 2 5
Friedman v. Fife, 262 A.D.2d 167, 692 N.Y.S.2d 6 1 (N.Y. App. Div. 1999). . . . . . . . . . . . . . - 3 7
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991). . . . . . . . . . . . 28, 29, 30
Gonzalez v. GE Group Administrators, Inc., 321 F. Supp. 26 165 (D. Mass. 2 0 0 4 ) . . . . . . . . 3 6
Hanslin Builders, Inc. v. Britt Development Corp., 15 Mass. App. Ct. 319 (1983). . . . . . . . . .26-27
Kremer v. Chemical Construction Corp . , 456 U.S. 461 ( 1 9 8 2 ) . . . . . . . . . . . . . . . - 3 3
Large v. Conseco F i n . Servicing Corp., 292 F.3d 49 (1st Cir. 2002). . . . . . . . . . . - 3 8
iii
Page
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 ( 1 9 8 5 ) . . . . . . . . . . . . . 2 9
Moses H. Cone Mem'l Hosp. v. Mercurv Constr. CorD., 460 U.S. 1 ( 1 9 8 3 ) . . . . . . . . . . . . . . . . - 2 4
Mugnano-Bornstein v. Crowell, 42 Mass. App. Ct. 347 (1997). . . . . 25, 26 , 28, 33
Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, 7 F .3d 1110 (3d Cir. 1993). . . . . . . . . . - 2 4 - 2 5
Quirk v. Data Terminal Systems, Inc., 379 Mass. 762 (1980). . . . . . . . . . . . . . . 38
Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 170 F.3d 1 (1st Cir. 1999). . . . . . . . . . passim
Spencer Furniture, I n c . v . Media Arts Group, Inc., 349 F. Supp. 2 6 49 (D. Mass. 2003). . . . . . . . 38
Thomson McKinnon Secur., Inc. v. Cucchiella, 32 Mass. App. Ct. 698 (1992). . . . . . . . . . . 41
T i f f a n y v. Sturbridge Camping Club, Inc., 32 Mass. App. Ct. 173 (1992). . . . . . . . . .35-36
Weston Securities Corp. v. Aykanian, 46 Mass. App. Ct. 72 (1998). . . . . . . . . . . - 2 7
iV
Page
S t a t u t e s
9u.s.c. 5 1 . . . . . . . . . . . . . . . . . . - 2 3
9 U.S.C. § 2 . . . . . . . . . . . . . . . . . 23, 24 9u.s.c. § 3 . . . . . . . . . . . . . . . . . . . 25
9 U.S.C. § 4 . . . . . . . . . . . . . . . . . 40. 41
9 U . S . C . § 16 . . . . . . . . . . . . . . . . . . . 26 29 U.S.C. 5 621 . . . . . . . . . . . . . . . . . . 29 42 U.S.C.S. § 2000e (Title VII) . . . . . . . .passim G.L. c . 151B . . . . . . . . . . . . . . . . . passim G.L. c . 251, 5 1 . . . . . . . . . . . . . . . . . 2 5
G.L. c . 251, 5 2 . . . . . . . . . . . . . 25, 40, 41
G.L. c . 251, § 18 . . . . . . . . . . . . . . .26. 27
Other Authorities
S u p e r i o r Court Rule 9A(c) ( 2 ) . . . . . . . . . . . . 7
Issues Presented.
1. Did the trial court err in denying
defendant/appellant WPI-Boston Division, Inc. d/b/a
WPI Cable Systems/Mutron's ("WPI") motion to compel
arbitration of plaintiff/appellee Olga St.
("St. F l e u r " ) employment discrimination claims,
where such claims are expressly covered by a written
arbitration agreement that St. Fleur acknowledged
reading and understanding?
Fleur's
2 . Did the trial court err in denying WPI's
motion to compel arbitration on the grounds that
"arbitration agreements are only enforced where
appropriate" in employment discrimination cases and
that in such cases "defendants bear the r i s k of
plaintiff's ignorance?"
3. Should St. Fleur's allegation of f r a u d in
the inducement of the contract containing the
arbitration obligation itself be resolved in
arbitration, where the subject agreement provides
that the arbitrator has exclusive authority to
resolve disputes relating to the interpretation,
applicability, enforceability, or formation of the
agreement?
4. Should St. Fleur be estopped from claiming
that the arbitration agreement is not enforceable
because she did not read or understand it, where
there is an acknowledgement in bold capital letters
directly above her signature acknowledging that she
carefully read the agreement, understood its terms,
entered into the agreement voluntarily, and had the
opportunity to discuss t h e agreement with legal
counsel?
5. If there is a factual dispute as to the
existence of an arbitration agreement, is an
evidentiary hearing to resolve the dispute required
before a court can decide the issue?
Statement of the Case.
N a t u r e of the C a s e .
This case involves a dispute over whether St.
F l e u r must be required to arbitrate the employment
discrimination claims she asserted under G.L. c.
151B i n t h e Superior Court a f t e r the same claims
were dismissed by the Commonwealth of Massachusetts
Commission Against Discrimination (the "MCAD")
following an investigation and finding of lack of
probable cause for the claims. It is undisputed
that (i) the terms of the written arbitration
2
agreement at issue in this case provide that the
claims asserted by St. F l e u r in the Superior C o u r t
a r e subject to mandatory arbitration, and (ii) St.
F l e u r executed the signature page of the arbitration
agreement, which contains her acknowledgment that
she carefully read the agreement, understood its
terms, entered into the agreement voluntarily, and
had the opportunity to discuss the agreement with
legal counsel.
Following commencement of St. Fleur's Superior
C o u r t action, WPI moved to compel arbitration and to
s t a y or dismiss the pending action. In s u p p o r t of
its motion, WPI submitted three affidavits, along
with supporting exhibits, showing that the claims at
issue were governed by the arbitration agreement,
that St. Fleur had been given a copy of the
arbitration agreement, along with other company
documents regarding the newly enacted arbitration '
policy, and that St. F l e u r had signed the
arbitration agreement after initially declining to
do so.
St. Fleur responded to the motion to compel
arbitration with her own affidavit, in which she
acknowledged signing the signature page of the
3
arbitration agreement, but otherwise largely
disputed the veracity of the affidavits submitted by
WPI. Notwithstanding the acknowledgments printed
directly above her signature on the arbitration
agreement, St. Fleur in her affidavit expressly
denied that she had r e a d the arbitration agreement,
denied that she understood what arbitration meant,
and denied t h a t she had been provided an opportunity
to review the agreement or discuss it with counsel.
A hearing was held on W P I f s motion to compel
arbitration, at which the t r i a l court judge
indicated that, b a s e d on t h e conflicting affidavits,
and because the court could n o t decide issues of
credibility on the affidavits, an evidentiary
h e a r i n g o r mini-trial may b e necessary t o decide
whether arbitration s h o u l d be compe l l ed . A f t e r
taking the matter under advisement, however, the
trial court issued a ruling denying WPI's motion.
This appeal followed.
P r i o r Proceedings.
On or about June 9, 2004, St. Fleur f i l e d a
complaint with t h e MCAD alleging that she had been
subjec ted by WPI and certain of its employees to
harassment, discrimination, a hostile work
4
environment, and wrongful termination based on her
gender, race, and color and national origin, and
also alleging that she had been retaliated against
for engaging in activities protected under G.L.
151B. (A. 4 3 ; Crowley Aff. at Exh. F (MCAD
c .
Memorandum)).’ Following an investigation of St.
F l e u r ’ s complaint, on or about September 20, 2004,
the MCAD issued a summary of its factual findings
and dismissed St. Fleur’s complaint based on a
determination of lack of probable cause for t h e
claims asserted. (A. 41-44).
On or about February 3, 2005, St. Fleur f i l e d
the underlying Superior Cour t action, in which she
continued her prosecution of the employment claims
against WPI initially presented in the MCAD action. 2
(A. 01; Docket Entry 1). In her Complaint, St.
Fleur asser t s three claims against WPI pursuant to
1 References to page numbers of the Record Appendix are designated ”A. . ” Where appropriate, citation also will be made inthe Brief to specific paragraphs or sections of pleadings or exhibits, e . g . , “A.
* did not include as defendants the individual defendants named in the MCAD complaint.
; Crowley Aff. at ¶ _. I f -
In the Superior Court action, however, St. F l e u r
5
G.L. c. 151B. In Count One of her Complaint, St.
Fleur alleges unlawful sex discrimination in the
form of termination of her employment because she
"is a member of several protected classes pursuant
to G.L. c. 151B, to wit: female, black , and
Caribbean Islander." (A. 06; Complaint at ¶ ¶ 36-
37). In Count Two of her Complaint, St F l e u r
a l l e g e s a "hostile work environment.'' (A. 07-08;
Complaint at ¶ ¶ 39-53). In Count Three of h e r
Complaint, St. F l e u r alleges unlawful retaliation in
violation of G.L. c. 151B. ( A . 08; Complaint at ¶ ¶
54-57).
On or about May 9, 2005, WPI filed its Motion
to Compel Arbitration and Dismiss Complaint or, in
the Alternative, to Stay Proceedings, along with its
supporting affidavits and exhibits and St. Fleur's
opposition to the motion and her affidavit. (A. 01;
Docket E n t r y 4). In its motion, WPI requested that
St. F l e u r be directed to a r b i t r a t e her claims
because she signed a written agreement specifically
providing that employment claims such as those
asserted in this action be resolved through
arbitration. (A. 10-11) a
6
With its motion papers, WPI also filed a
Request f o r Hearing pursuant to Superior Court Rule
9A(c) ( 2 ) , in which it suggested that an evidentiary
hearing may be appropriate in light of the
"affidavits setting f o r t h conflicting versions of
the circumstances under which the subject
arbitration agreement was signed by the p l a i n t i f f . "
( A . 5 3 ) .
On July 21, 2005, a hearing on WPI's motion to
compel arbitration was held. (A. 59; Hearing
Transcript). At the hearing, the court (Kerns, J.)
noted the factual conflicts between the respective
affidavits submitted by t h e parties, emphasized that
"clearly this court cannot decide issues of
credibility on the basis of affidavits," and
questioned whether "we have a mini-trial first on
t h i s issue and on t h e basis of the mini-trial decide
first as s o r t of a stage one, do I compel
arbitration." (A. 63). WPI argued that,
notwithstanding the factual disputes raised in the
affidavits, an evidentiary hearing was not required
to compel a r b i t r a t i o n because, based upon St.
Fleur's concession t h a t "she did put pen to paper
and sign at least the signature page," she should be
7
held to the acknowledgments on t h a t piece of p a p e r
that she reviewed the entire agreement, understood
the agreement, and had the opportunity to c o n s u l t
counsel. (A. 64). WPI also emphasized to the
court, however, that if the court believed
consideration of the circumstances surrounding the
signing of the document was necessary in order for
the court to compel a r b i t r a t i o n , then an evidentiary
hearing must be conducted because of the need to
resolve finally the issue of whether arbitration is
required before proceeding to the merits of t h e
case. (A. 66-67). At t h e end of the hearing, the
court took the motion under advisement. (A. 77).
On August 9, 2005, the trial court's Memorandum
and Order denying WPI's motion to compel arbitration
was entered on the d o c k e t . (A. 01; Docket Entry 5).
In the Memorandum and Order, the trial c o u r t (Kerns,
J.) stated that "given plaintiff's allegations
concerning the circumstances surrounding the signing
of the arbitration agreement in this case,
defendants bear the risk of plaintiff's ignorance
for employment discrimination cases and arbitration
agreements a r e only enforced where appropriate."
(A. 55).
On September 8, 2005, WPI filed its Notice of
Appeal of the Order denying its motion to compel
arbitration. (A. 02; Docket Entry 7). On November
18, 2005, the parties' J o i n t Motion to S t a y
Proceedings During Pendency of Interlocutory Appeal
was allowed by the trial court (Sanders, J.). (A.
02; Docket Entry 9 ) .
Statement of Facts.
The "facts" of this case are in certain
important areas undisputed, b u t in other areas,
particularly concerning t h e circumstances
surrounding St. Fleur's execution of the subject
arbitration agreement, they are the subject of very
different accounts. In this statement of facts, WPI
first will present the undisputed facts. It then
will present i t s account of how St. F l e u r came to
s i g n the arbitration agreement, followed by St.
Fleur's version of events.
The Undisputed Facts.
WPf and St. F l e u r .
WPI operates a Chelsea, Massachusetts assembly
plant for electronic products s o l d nationally and
internationally. (A. 12; Crowley Aff. at ¶l). WPI
is wholly-owned by Wire-Pro, I n c . ("Wire-Pro"), a
9
New Jersey corporation. (A. 12; Crowley Aff. at
¶2). As a general matter, Wire-Pro's corporate
headquarters in New Jersey establishes company
policies with respect to human resource matters.
(Id.). - Nicolletta Crowley ("Crowley") is the office
manager of WPI's Chelsea, Massachusetts facility and
is responsible for coordinating with headquarters in
New Jersey and implementing company policy at the
Massachusetts subsidiary. (Id.). -
St. Fleur was hired by WPI on or about July 31,
2000 to work at the WPI Massachusetts facility (at
that time located in Everett, Massachusetts) as an
inspector in WPI's Quality Control Department. (A.
12, 49; Crowley Aff. at ¶3; St. Flew Aff. at ¶l).
St. Fleur's job consisted of working on the factory
f l o o r inspecting the quality of e l e c t r o n i c p r o d u c t s
being assembled at the plant. (A. 12-13; Crowley
Aff. at ¶3). At the time of her hiring, St. Fleur
was given a copy of WPI's Policies and Procedures
Manual (the "Policy Manual") and acknowledged
receipt in writing. (A. 13, 16; Crowley Aff. at ¶ 3 ,
Exh. A).
Joseph Galli ("Galli") is employed by WPI as
the General Manager of WPI's Chelsea, Massachusetts
10
facility. (A. 45; Galli Aff. at '31). Prior to
September 18, 2001, Galli's duties included acting
as the Supervisor of the Quality Control department
where St. F l e u r worked. (A. 45; Galli Aff. a t ¶ 2 ) .
On September 18, 2001, Sergio Sessa ("Sessa") w a s
hired to be the Supervisor of the Quality Control
department and took over responsibility f o r
supervising S t . Fleur from Galli. (A. 45, 47, 49;
Galli Aff. at ¶2, Sessa Aff. at ¶l; St. Fleur A f f .
at ¶ 2 ) .
WPI terminated St. Fleur's employment on May
26, 2004. (A. 14; Crowley Aff. at ¶lo).
The Arbitration P o l i c y .
In August or September 2001, C r o w l e y received
from N e w Jersey headquarters a package that included
a memorandum addressed to all employees dated August
3, 2001 concerning Wire-Pro's new arbitration
policy, a copy of the Arbitration P o l i c y to be added
to the Policy Manual, with an effective date of
August 23, 2001, and a form Mutual Agreement to
Arbitrate Claims (the "Arbitration Agreement") . (A.
13, 17-28; Crowley Aff. at ¶ 4, Exh. B). The
package Crowley received from headquarters had
enough copies of the memorandum, policy, and
11
Arbitration Agreement to distribute to all of the
employees who worked at the Chelsea facility.
13; Crowley Aff. at !I 5). On September 10, 2001,
Crowley distributed the memorandum, policy, and
Arbitration Agreement to all department supervisors
at the Chelsea facility, including St. Fleur's
(A .
Galli, with
documents to the
. St. F l e u r worked
supervisor at the time, Joseph
instructions to distribute the
workers they supervised. (E
on September 10, 2001. (Id.). -
St. Fleur's Signing of the Arbitration Agreement.
Most employees signed the Arbitration Agreement
either on September 10, 2001 or soon thereafter, b u t
some, including St. Fleur, did not. (A. 13; Crowley
Aff. at ¶6). Crowley periodically received
communications from corporate headquarters noting
that a number of employees had not signed the
Arbitration Agreement and requesting that she find
out if they were willing to sign the agreement. ( A .
13-14; Crowley Aff. at ¶ 6 ) . For example, on J a n u a r y
30, 2002, Crowley received a facsimile from
headquarters with a list of Chelsea employees with
designations identifying whether or not they had
signed the Arbitration Agreement, a l o n g with a
1 2
request that she see if the eight employees,
including St. Fleur, who had not yet signed the
agreement would be willing to sign the document.
(A. 14, 29-32; Crowley Aff. at ¶6, Exh. C ) .
By February 8, 2002, several Chelsea employees,
including St. Fleur, still had not signed the
Arbitration Agreement and Crowley was requested by
headquar t e r s to distribute to those employees a
memorandum dated February 8, 2002 from Wire Pro's
Chief Executive Officer, Henry Barbera. (A. 14, 33-
35; Crowley Aff. at ¶7, Exh. D) . The February 8,
2002 memorandum from Mr. Barbera was directed to
those employees who had not signed the Arbitration
Agreement and required those employees to e i t h e r
sign and return the signature page to the copy of
the Arbitration Agreement previously distributed to
them, or (ii) sign and return a form attached to the
February 8, 2002 memorandum confirming their refusal
to sign the Arbitration Agreement and stating their
reason for not signing the Arbitration Agreement.
(A. 33-35; Crowley Exh. D).
(i)
On February 8, 2002, Crowley gave a copy of Mr.
Barbera's F e b r u a r y 8, 2002 memorandum to Sessa to
pass on to St. F l e u r , (A. 14; Crowley Aff. at ¶ 8 ) .
13
Two employees of WPI refused to sign the Arbitration
Agreement and instead signed the refusal form that
accompanied Mr. Barbera's Febsuary 8, 2002
memorandum. (Id.). St. Fleur signed the signature
page to the Arbitration Agreement on February 8,
2002, the same day Mr. Barbera's memorandum was
issued. (A. 14, 40, 50-51; Crowley Aff. at ¶¶8-9,
-
Exh. E, St. F l e w Aff. at ¶ ¶ 7 - 8 ) . 3
me T e r m s of the Arbitxation Agreement.
The Arbitration Agreement provides that the
parties agree to resolve by arbitration certain
employment related claims, specifically including
"claims f o r discrimination or harassment on bases
which include b u t are not limited to race, sex,
sexual orientation, religion, national origin, age,
marital status . . . whistle blower claims, and claims
St. Fleur has not disputed that the signature dated February 8, 2002 on the signature page of the Arbitration Agreement is hers, although a number of the dates referred to in her affidavit are obviously incorrect. For example, at paragraph seven of her affidavit, she indicates that she was given the signature page to sign on "February 8, 2001," a date well before the arbitration policy even was put in place, and at paragraph eight she indicates that she signed the document that Galli gave her "on February 8, 2005," a date nearly a year after her employment at WPI terminated. (A. 50, 51).
3
14
f o r violation of any federal, state or other
governmental constitution, statute, ordinance,
regulation, or public policy.'' (A. 36). The
Arbitration Agreement excludes from its scope
certain claims and provides that the agreement "does
not preclude an employee from filing a complaint
with a f ede ra l , state or other governmental
administrative agency. r'4 (A. 37). It does make
clear, however, that " [ b l y entering into this
Agreement, the Company and Employee each knowingly
and voluntarily waive any and all rights they have
under law to a trial before a jury." (A. 36). It
also makes clear that "[flor claims covered by this
Agreement, arbitration is the parties' exclusive
remedy." (A. 38).
The Arbitration Agreement specifies that
arbitrations of matters subject to the agreement are
to be conducted under t h e National Rules f o r the
Resolution of Employment Disputes of the American
Arbitration Association ("AAA") I that the arbitrator
For that reason, WPI never suggested t h a t St. Fleur was p r o h i b i t e d from litigating her claims at the MCAD.
15
shall be licensed to practice law and selected in
accordance with AA4 rules, and that the arbitration
hearing shall take place in or near the city where
the employee was last employed by WPI. (A. 37).
With respect to interpretation or enforcement
of the Arbitration Agreement, the agreement itself
specifies that:
The arbitrator, and not any federal, state, or local court or agency, shall have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability o r formation of this Agreement, including but not limited to any claim t h a t all or par t of this Agreement is void or voidable.
(A. 3 7 ) .
The Arbitration Agreement further provides that
the employee will be responsible f o r payment of no
more than $125 .00 toward the arbitration filing fee
and that WPI will pay the remainder of the filing
fee and the arbitrator's fee. (A. 38).
The signature page to the Arbitration Agreement
contains the following language just above the
employee's signature line, in all capital letters
and in bold print:
FACH PARTY TO THIS AGREEMENT ACKNOWLEDGES CAREEWLLY READING THIS AGREEMENT, UNDERSTANDING ITS TERMS, AND ENTERING INTO THIS A G R E M N T VOLUNTARILY AND NOT IN RELIANCE ON ANY PROMISES OR REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS AGREEMENT ITSELF.
16
EACH PARTY F'URTHER ACKNOWLEDGES HAVING THE OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH PERSONAL LE- COUNSEL AND HAS USED THAT OPPORTUNITY TO THE EXTENT DESIRED.
( A . 4 0 ) .
The Disputed Facts.
WI's Version of How St. F l e u r Came to Sign the Arbitration Agreement
On September 10, 2001, copies of the memorandum
from New Jersey headquarters explaining the new
arbitration policy, the policy itself, and t h e
Arbitration Agreement were distributed t o a l l
Massachusetts employees, including St. F l e u r , with
the exception of several employees who were absent
from work that day and who were given the materials
when they returned to work. (A. 13, 4 5 - 4 6 ; Crowley
Aff. a t ¶5; Galli Aff. at ¶ 3 ) . Galli, St. Fleur's
Supervisor at the time, delivered the materials to
St. Fleur that day. (A. 45; Galli Aff. at ¶¶2, 3 ) .
At that time, Galli explained the arbitration policy
to St. Fleur, who informed Galli t h a t she wanted an
opportunity to review the Arbitration Agreement more
thoroughly and that she was not willing t o sign the
agreement until she had a chance to do so. (A. 46;
Galli Aff. at ¶ 3 ) . In response, Galli told St.
1 7 I
Fleur, and other members of the department, that
they did not have to sign the Arbitration Agreement
at that time and that they should feel free to have
a lawyer look at the agreement (Id.). -
Sessa was hired by WPI on September 18, 2001,
and at that time replaced Galli as St. Fleur's
Supervisor. (A. 45, 47; Galli A f f . at ¶2, Sessa
Aff. at ¶1). At the time he was hired, Sessa was
given copies of the company's arbitration policy and
the Arbitration Agreement and signed the Arbitration
Agreement. (A. 47; Sessa A f f . at ¶ 2 ) . On Februa ry
8, 2002, Sessa gave St. Fleur a copy of the February
8, 2002 memorandum from Wirepro's Chief Executive
Officer Henry Barbera, including t h e form to be
completed by any employee not willing to sign the
Arbitration Agreement. (A. 47-48; Sessa Aff. at
¶3). At that time, Sessa let St. F l e u r know t h a t
she had to either sign the Arbitration Agreement or
the form i n d i c a t i n g that she was not willing to sign
the Arbitration Agreement (Id.). - St. Fleur signed
the Arbitration Agreement that same day, February 8,
2002. ( A . 14; Crowley Aff. at ¶ 8 ) .
18
St. Fleur'a Version of How She Came t o S i g n the Arbitration Agreement.
St. Fleur denies that she had any discussion
with G a l l i on September 10, 2001 regarding the
company's new arbitration policy and denies
receiving any of the documents Galli claims to have
given her that day. (A. 49; St. Fleur Aff. at ¶ 3 ) .
St Fleur also denies that she ever had any
discussion with Sessa at any time "pertaining to
Wire Pro's new arbitration policy." (Id. at 50). -
St. Fleur does not dispute t h a t she signed t h e
signature page to the Arbitration Agreement or that
the signature on the' Arbitration Agreement appended
a s Exhibit E t o Crowley's affidavit is her
signature. Instead, she claims that "on or about
February 8, 2001" while she was working, Galli
brought t o her a one-page document and asked her to
sign it, b u t did not tell her that it was an
arbitration agreement. (A. 50; St. Fleur Aff. at
¶ 7 ) . Assuming, as appears to be the case, she is
r e f e r r i n g to the signature page to t h e Arbitration
Agreement, the date obviously is not correct.
Notably, however, although Galli was St. Fleur' s
Supervisor in February of 2001, when she says he
19
gave her the document to sign, and on September 10,
2001, when copies of the Arbitration Agreement were
distributed to WPI employees, he was no longer St.
Fleur's Supervisor in February of 2002, when St.
Fleur actually signed the signature page to the
Arbitration Agreement. In her affidavit, St. Fleur
also refers to Galli requiring her \\to sign the one
page document on February 8, 2005." (A. 51; St.
F l e u r Aff. at ¶ 8 ) . As that date is more than three
years a f t e r Galli stopped being St. Fleur's
supervisor, and nearly a year after St. Fleur's
employment at WPI ended, it also cannot be accurate.
Notwithstanding the bold, capitalized language
on the Arbitration Agreement signature page directly
above St. Fleur's signature acknowledging "THE
OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH PERSONAL
LEGAL COUNSEL," St. Fleur claims that "I was never
told by any representative of Wire Pro that I had
the right to consult with a lawyer." (A. 40, 51;
St. Fleur Aff. at ¶ 9 ) . 5
Interestingly, St. Fleur also states that had she 5
known what she was being asked to sign, she "would have consulted with a lawyer to learn t h e impact such an agreement would have on me." (A. 50).
20
Further, notwithstanding the bold, capitalized
language on the Arbitration Agreement signature page
signed by St. Fleur acknowledging that s h e was
"ENTERING INTO THIS AGREEMENT VOLUNTARILY I II St.
Fleur claims that "I was never told by any
representative of Wire Pro that I could r e fuse to
sign the document." (A. 51; St. Fleur Aff. at ¶lo) .6
Summary of Argument.
The Federal Arbitration Act (the "FAA")
reflects a policy strongly in favor of enforcing
agreements to arbitrate disputes, including disputes
of employment discrimination claims. ( A r g . at pp.
2 3 - 2 7 ) . The trial court's reliance on federal court
caselaw in the F i r s t Circuit to deny WPI's motion to
compel arbitration is misplaced because the case
relied upon by the lower c o u r t in this action is (i)
limited in scope to arbitration of claims asserted
St. F l e u r in h e r affidavit claims that because Galli t o l d her to sign the document "1 had no choice but to sign it." ( A . 51; St. F l e w Aff. At ¶ 8 ) . It is worth noting that while St. Fleur now finds it helpful to claim that she had "no choice" but to sign the Arbitration Agreement signature page because she was told to do so, she felt no such lack of choice when s h e refused to sign a warning notice given her in connection w i t h h e r chronic tardiness. (A. 43; MCAD Findings).
21
under certain f ede ra l discrimination statutes, and
(ii) actually rejects the argument that significant
limitations be placed on the ability to arbitrate
federal discrimination claims. (Arg. at pp. 27-32).
As f o r cases involving claims, such as those
asserted by St. Fleur in this action, under G.L. c.
151B, this Court has held that agreements to
arbitrate such claims are to be enforced so long as
the agreement minimally identifies such employment
claims as within its scope, as WPI clearly has done
in this case. (Arg. at pp. 32-34).
Because St. Fleur admitted signed the signature
page of the arbitration agreement at issue here,
which contains an acknowledgement directly above h e r
signature in bold capital letters that she had read
and understood the agreement, she should be estopped
as a matter of law from disclaiming knowledge of the
terms of the agreement. (Arg. at pp. 34-37). St.
Fleur's argument that she should be relieved of her
obligations under the agreement she signed because
there was fraud in the inducement prope r ly is
addressed in arbitration rather than by the court
because disputes as to enforcement of the contract
must themselves be arbitrated. (Arg. at pp. 37-39).
22
Finally, to the extent that the conflicting
affidavits submitted in this action r a i s e a dispute
as to whether an arbitration agreement between the
parties even exists, an evidentiary hearing would be
required to comply with the statutory mandate to
reso lve the dispute before a c o u r t can either compel
arbitration or deny a motion to compel arbitration.
(Arg. at pp. 40-42).
Argument.
I. THE FEDERAL ARBITRATION ACT REQUIRES THAT AGREEMENTS TO ARBITRATE EMPLOYMENT CLAIMS BE ENFORCED.
The Federal Arbitration Act, 9 U . S . C . § 1, et -
s ~ q . , (the "FM'') evidences a federal policy
f a v o r i n g arbitration and the enforcement of
agreements to arbitrate that has been recognized and
followed by the courts in this Commonwealth,
including with respect to contractual agreements to
arbitrate statutory employment discrimination and
harassment claims.
A. The Federal Arbitration Act Reflects A St rong Policy In Favor Of Enforcement Of Agreements To Arbitrate And Applies To This Action.
The FAA provides that a written agreement to
arbitrate a dispute is enforceable. 9 U.S.C. 5 2 .
2 3
The FAA "creates a body of federal substantive law
of arbitrability, applicable to any arbitration
agreement within the coverage of the Act." Moses H.
Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U . S .
1, 24 (1983). The FAA provides for the
enforceability of written arbitration provisions in
any maritime transaction or in "a contract
evidencing a transaction involving commerce." 9
U.S.C. 5 2. The FAA "commerce" requirement is met
if there is any connection to interstate commerce,
including employment in connection with goods to be
sold in interstate commerce. I_ See, e . g . , Bernhardt
v. Polygraphic Co. of America, 350 U.S. 198, 200-201
(1956)(employment contract would evidence a
transaction involving commerce within the meaning of
the FAA if employee in performing duties was
producing goods for commerce) . 7 In this case, the
' The FAA defines commerce as meaning interstate, international, or inter-territorial commerce, bu t specifically excludes from the definition of commerce "contracts of employment of seamen, railroad employees, and any other class of workers engaged in foreign or interstate commerce." 9 U . S . C . 5 1. That language had been interpreted by some circuits to mean that all employment contracts are excluded from the scope of the FAA. - See, e.g., Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, 7
(continued ... )
2 4
FAA applies without question because St. Fleur
worked at an assembly plant f o r electronic products
sold nationally and internationally. (A. 12-13;
Crowley Aff. at '31, 3 ) .
The FAA governs the arbitrability of disputes
in state or federal court. Carpenter v. Pomerantz,
3 6 Mass. App. Ct. 627, 628 n.3 (1994). 8 Courts
addressing the issue of whether a p a r t y should be
( . .continued)
F.3d 1110, 1119-1120 (3d Cir. 1993) ("contracts of employment are explicitly exempted from the FAA" and "the FAA by its own terms does not apply to employment contracts"). The United States Supreme Court, however, has resolved the dispute among the circuits on the issue, holding that "Section 1 exempts from the FAA only contracts of employment of transportation workers." Circuit C i t y Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001).
a The Massachusetts Arbitration Act (the "MAA"), G.L. c. 251, § 1 et seq., may also apply to this dispute, but the FAA will govern in the event of any conflict between the FAA and MAA. See. Muanano- A
Bornstein v. Crowell, 42 Mass. App. Ct. 347, 350 n . 7 (1997)(review denied, 425 Mass. 1102). Because there is little if- any substantive difference the two statutory schemes for termination of litigation commenced in violation of an enforceable agreement to arbitrate, there is no need to address any conflict between the statutes. Compare, 9 U.S.C. 5 3 (stay of proceedings where issue referable to arbitration); G.L. c. 251, 5 2 (d) ( s t a y of proceedings where issue referable to arbitration).
2 5
required to submit a dispute to arbitration must
consider the federal policy favoring arbitration as
an alternative to litigation and must resolve any
doubts in favor of arbitration. Mugnano-Bornstein
v. Crowell, 42 Mass. A p p . Ct. 347, 351 (1997).
Although ordinarily appeal of an interlocutory
order must await final judgment in a case, policy
favoring enforcement of arbitration agreements also
is reflected in the right to immediately appeal the
d e n i a l of a motion to compel arbitration in order to
avoid having to litigate a matter on the merits in
court before being ab le to seek appellate review of
the denial of a motion to compel arbitrations. Both
the FAA and the MAA provide that denial of a motion
to compel arbitration is immediately appealable. 9
U . S . C . 5 16(a) (1) ( A ) ; G . L . c . 251, 5 18(a) (l).' - See
also, Hanslin Builders, Inc. v. Britt Development
Further, because the trial court's order denying WPI's motion to compel arbitration rests on l e g a l conclusions, this court's review of the order is de novo. Anastos v. Sable, 443 Mass. 146, 149 (2004) (judge's legal conclusions are reviewed de novo). See also, Campbell v. General Dynamics Gov't Systems Corp., 407 F.3d 546, 551 (1st Cir. 2005) (order denying motion to stay proceedings and compel arbitration "reflects an essentially legal conclusion and, thus, warrants plenary review").
--
2 6
Corp., 15 Mass. App. Ct. 319, 322 (1983) (denial of
motion to compel arbitration immediately appealable
under G.L. c. 251, 518 (a) (1) ) ; Weston Securities
Corp. v. Aykanian, 46 Mass. App. Ct. 72, 75-76
(1998) (provisions in G.L. c. 251, 518 regarding
timing of appeal procedural in nature and therefore
govern motions asserted in state c o u r t under FAA).
B. The T r i a l Court Judge Mistakenly Concluded That Agreements To Arbitrate Claims Arising Out Of G.L. c. 151B Only May Be Enforced Following A Determination That It Would Be "Appropriate" To Do So.
In its Memorandum and Order denying WPI's
motion to compel arbitration, the trial court relied
on Rosenberg v. Merrill Lynch, Pierce, Fenner &
Smith, Inc., 170 F.3d 1 (1st Cir. 1999) for t h e
propositions that in an employment discrimination
case "defendants bear the risk of plaintiff's
ignorance" of the nature of an arbitration agreement
and that "arbitration agreements are enforced only,
where appropriate." (A. 55). This reliance is
misplaced and inappropriate because (i) Rosenberg is
limited to consideration of language unique to
federal discrimination statutes, and (ii) the
analysis in Rosenberg relied on by the t r i a l court
addresses only the question of whether the language
2 7
in an arbitration agreement is sufficient to put the
employee on notice that federal employment
discrimination claims are subject to a r b i t r a t i o n .
170 F.3d at 21. With respect to the arbitrability
of claims asserted under G.L. c. 151B, this Court in
the Mugnano-Bornstein case held that as long as the
arbitration agreement in question minimally
identifies employment discrimination claims as among
the claims subject to arbitration, arbitration is
required. 42 Mass. App. Ct. at 352-53.
The significance of the Rosenberg case in the
development of the law applicable to arbitration of
employment discrimination claims is its holding
rejecting the argument that language in the Civil
Rights Act of 1991 (the "1991 CRA") ba r s enforcement
of agreements mandating arbitration of claims
asserted under federal discrimination statutes. 170
F.3d at 4. The starting point in understanding the
Rosenberg holding is the United States Supreme Court
decision in Gilmer v. Interstate/Johnson Lane Corp.,
500 U.S. 20 (1991). Having previously concluded
that statutory claims may be the s u b j e c t of an
arbitration agreement, the Supreme Court in Gilmer
held that claims under the Age Discrimination in
2 8
Employment A c t of 1967 ("ADEA"), 29 U . S . C . § 621, et
=., are subject to arbitration under the FAA
because "nothing in the text of the ADEA or its
legislative history explicitly precludes
arbitration. 500 U.S. at 26. In Gilmer, the
Supreme Court also emphasized that in agreeing to
arbitrate a statutory claim, "a p a r t y does not forgo
the substantive rights afforded by the statute; it
only submits to their resolution in an arbitral,
rather than a judicial, forum." Id. (citing
Mitsubishi Motors Corp. v. S o l e r Chrysler-Plymouth,
Inc., 473 U.S. 614, 628 ( 1 9 8 5 ) ) .
-
Notwithstanding the holding in Gilmer, at the
time Rosenberg was decided there remained some
question as to whether language in the 1991 CRA,
which amended Title VI1 of the Civil Rights Act of
1964 ( " T i t l e VII"), 42 U.S.C.S. 5 2000e, et seq.,
precluded mandatory arbitration of Title VI1 claims.
In Rosenberg, the First Circuit reviewed a district
court ruling "that in Title VII, in contrast to the
ADEA, Congress intended to preclude pre-dispute
arbitration clauses.'' 170 F.3d at 6. The 1991 CRll
language relied upon by the district court to
conclude that the statutory language and legislative
-
2 9
history "unambiguously reject mandatory arbitration
agreements,'' provides that:
where appropriate and to the extent authorized by law, the use of alternative means of dispute resolution, including . . . arbitration, is encouraged to resolve disputes arising under the Acts or provisions of Federal law amended by this title.
- Id. at 8. In Rosenberg, the First Circuit rejected
the analysis of the district court and held that the
language of t h e 1991 CRA does not preclude mandatory
arbitration of Title VI1 claims. lo I_ Id. at 4.
Although it concluded that mandatory
arbitration of Title VI1 claims is not barred by the
language of the 1991 CRA, the First Circuit in
Rosenberg nevertheless held that the particular
arbitration agreement at issue i n the case was not
"appropriate" within the meaning of that term in the
1991 CRA. 170 F.3d at 20. The First Circuit based
that conclusion on the fact that the arbitration
agreement in question did not itself "define the
range of claims subject to arbitration" or identify
lo The district court reasoned that the legislative history suggested that "to the extent authorized by law" was intended to refer "to the law as kt existed p r i o r to Gilmer," and thus precluded mandatory arbitration. Rosenberg, 170 F.3d at 8.
3 0
that employment discrimination claims were
included.'' Id. at 19. The court also emphasized,
however, that had the written agreement in question
"provided for arbitration of all disputes, or given
explicit notice that employment disputes were
subject to arbitration, we would have had little
difficulty in finding that Rosenberg had agreed to
arbitrate her employment discrimination claims
within the meaning of the 1991 CRA."
-
Id. at 18.12
The arbitration agreement in Rosenberg provided that the employee, a financial consultant, agreed to arbitrate a l l disputes between her and her firm or a customer that were required to be arbitrated under the rules of certain organizations, including the New York Stock Exchange ("NYSE") . 170 F.3d at 4. It was undisputed that (i) the employee was not provided with the rules of the NYSE, which at the time required arbitration of all employment disputes, (ii) no one explained that the arbitration agreement included employment disputes she might have with her employer, and (iii) there was no reference to arbitration of employment disputes in Merrill Lynch' s "voluminous" employment handbook provided to the employee. Id. at 5-6.
l2
the dispute, the First Circuit in Rosenberg a l s o emphasized that "[tlhere is no contention here that the parties agreed that an arbitrator should decide questions of arbitrability." 170 F. 3d at 19 11.14. In contrast, as discussed in section 1II.A. below, this case does involve an arbitration agreement that requires arbitration of any dispute as to enforcement, interpretation, or formation of the Arbitration Agreement. (A. 3 7 ) ..
In reaching its conclusion as to arbitrability of
31
The Rosenberg court also emphasized that its
ho ld ing is limited to consideration of the scope of
the language of the 1991 CRA and does not address
broader questions of enforceability of arbitration
clauses "when the 1991 CRA and ADEA are not
involved." 170 F.3d at 19. The court specifically
noted that its holding does not concern situations
"where the claims involved are n o t employment
discrimination claims under the federal civil rights
laws." - Id. at 21 .
Had St. Fleur asserted claims in this action
under Title VII, Rosenberg would provide little help
to her e f f o r t to avoid arbitration in light of the
clear language in the Arbitration Agreement calling
for arbitration of employment discrimination claims.
Because her claims in this action are for alleged
violations of G.L. c. 151 rather than under federal
discrimination law. Rosenberu has no application to ' 2
13 the case.
l3 There is a procedural relationship c. 151B and Title VII. Where a state
between G . L . has
antidiscrimination laws similar to Title VII, a claimant must first pursue state administrative remedies and may elect to bring a civil action in court under either state law or Title VI1 after
( cont inued ...I
32
This Court has held that, under the FAA,
statutory remedies such as t h e right to a trial by
jury that a re available with respect to claims
arising under G.L. c . 151B, including harassment and
discrimination claims, may be waived by an agreement
to arbitrate the claims. Mugnano-Bornstein, 42
Mass. App. Ct. at 352. Indeed, the Appeals Court
made c lea r that to effectively require arbitration
of Chapter 1 5 1 B claims an arbitration agreement need
o n l y refer generally to required arbitration of
employment claims, and need not contain a list of
specific claims or causes of action, a requirement
the Appeals Court suggested would be "unreasonable
and impractical." Id. at 352-353. Thus, even if
Rosenberg is viewed as requiring a heightened
identification of the nature of Title VI1 employment
claims subject to arbitration, no such requirement
( . .continued)
initially pursuing the administrative remedy. Kremer v. Chemical Construction Corp., 456 U . S . 461, 468-69 (1982). If, as is the case here, a claimant elects to pursue the state law claims in court, principles of res judicata bar relitigation of the same claims under Title VII. Id. at 481. -
3 3
applies to Chapter 151B claims. In any event, the
Arbitration Agreement here identifies the scope of
covered employment claims with such specificity t h a t
there could be no basis f o r a contention that
discrimination claims are not sufficiently
identified under any standard. l4 As such, it was
error for the trial court to deny WPI's motion to
compel arbitration based on its interpretation of
the Rosenberg case.
11. BECAUSE S T . FLEUR SIGNED THE ARBITRATION AGREEMENT AND EXPRESSLY ACKNOWLEDGED THAT SHE READ AND UNDERSTOOD IT, IT WAS ERROR FOR THE TRIAL COURT TO DENY WPI'S MOTION TO COMPEL ARBITRATION.
Had St. Fleur asserted claims under Title VI1
in this action, and had the Arbitration Agreement
not clearly included employment discrimination
claims within its scope, the Rosenberg case might
have provided some support for the lower court's
l4 The Arbitration Agreement provides that the parties agree to resolve by arbitration certain employment related claims, specifically including "claims for discrimination or harassment on bases which include b u t are not limited to race, sex, sexual orientation, religion, national origin, age, marital status . . . whistle blower claims, and claims f o r violation of any federal, state or other governmental constitution, statute, ordinance, regulation, or public policy." (A. 36).
34
conclusion that the Arbitration Agreement is not
enforceable in this case.
however, provides no support for refusing to compel
arbitration in this case on the ground t h a t St.
F l e u r did not read or understand the Arbitration
Agreement whose signature page she signed.
The Rosenberg case,
Indeed, in Rosenberg, the First Circuit noted
that an employee cannot avoid an obligation to
arbitrate simply by contending that she has not read
written arbitration provisions. 170 F.3d at 21
n.17. There, t h e court expressly rejected any
"assumption that women and minorities, otherwise
competent to enter contracts, were somehow disabled
and in need of such special protections where t h e
subject of the contract was an agreement to
arbitrate." Id. In stating its rejection of an
argument that the employee had not read o r
understood written arbitration provisions as a
defense to arbitration, the First Circuit relied on
Massachusetts caselaw setting f o r t h "the traditional
rule of contract law that a party to a contract is
assumed to have read and understood the terms of a
contract s h e signs." Id. (citinq Tiffany v.
-
-
35
Sturbridge Camping Club, Inc., 32 Mass. A p p . Ct.
1 7 3 , 175 n . 5 ( 1 9 9 2 ) ) .
Further, not only can one who signs a contract
not avoid her obligations by claiming not to have
read or understood the contract, she cannot succeed
on a claim that she only saw the signature page and
not the terms of the agreement when t h e signature
page contains an express acknowledgement t h a t the
signing party has reviewed the agreement. In
Gonzalez v. GE Group Administrators, Inc., 321 F.
Supp. 2 6 165 (D. Mass. 2 0 0 4 ) , the court rejected the
employee's contention that he should not be required
to arbitrate a claim because he did not get a copy
of the terms of the arbitration policy or understand
the effect of his signing a document. In rejecting
the employee's argument, the court emphasized that
the one-page document he signed contained an
and reviewed"
at 168-169.
t. Fleur's
acknowledgement that he had "received
the arbitration policy document. Id. -
For the same reason, the language on
signature page acknowledging that she had read and
understood t h e Arbitration Agreement should be
sufficient to estop her from disclaiming knowledge
of the terms of the agreement she signed. See also,
3 6
Friedman v. F i f e , 262 A . D . 2 d 1 6 7 , 168, 692 N.Y.S.2d
61, 62 (N.Y. A p p . Div. 1999) ("Plaintiff will not be
heard to claim that he received only a signature
page f o r the stock restriction agreement, since he
was bound to know and read what he signed").
111. THE FACTUAL DISPUTES RAISED BY ST. FLEUR REGARDING THE CIRCUMSTANCES UNDER WHICH SHE SIGNED THE ARBITRATION AGREEMENT ARE NOT GROUNDS FOR DENIAL O F WPI'S MOTION TO COMPEL ARBITRATION.
A . A Party Cannot Avoid Arbitration Simply By Alleging Fraud In Connection With The Formation Of A Contract That Contains An Arbitration Provision.
By contending against overwhelming evidence to
the contrary that she was improperly induced to sign
the contract at issue, St. Fleur may have raised an
issue for the arbitrator to consider, but her
contention does not allow her to avoid arbitration
and have the merits of her claims decided in a
court. To the contrary, courts addressing t h i s
issue under the FAA or the MAA have held that, at
least where arbitration language is sufficiently
broad to include arbitration of disputes regarding
enforcement of the arbitration agreement itself, a
claim of fraud in the inducement of the contract
containing the arbitration requirement is one for
37
arbitration. See Large v. Conseco Fin. Servicing
Corp., 292 F.3d 49, 53 (1st Cir. 2002) (under the
-
FAA, a broad arbitration clause will be held to
encompass a r b i t r a t i o n of a claim that the contract
containing the arbitration obligation was induced by
f r a u d ) ; Quirk v. Data Terminal Systems, Inc., 379
Mass. 762, 767-768 (1980) (under the MAA, a claim of
fraud in the inducement of a contract as a whole
presents a question which, must be decided by
arbitration). Were the rule otherwise, “any
arbitration clause could easily be avoided simply by
alleging fraud in the formation of the contract,
which would defeat the strong federal policy
favoring arbitration.” Spencer Furniture, Inc. v.
Media Arts Group, Inc., 349 F. Supp. 2d 49, 52 (D.
Mass. 2 0 0 3 ) .
The Arbitration Agreement here p l a i n l y is broad
enough to encompass arbitration of the contention
raised by St. Fleur that she should not be required
to arbitrate her claims because she improperly was
induced to sign the contract containing the
arbitration obligation. The agreement specifically
provides that:
38
The arbitrator, and not any federal, state, or l o c a l court or agency, s h a l l have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement, including b u t not limited to any claim that all or part of this Agreement i s void or voidable.
(A. 37) (emphasis added) .
Based on the strong policy in f a v o r of
arbitration, in circumstances such as those
presented in this case it is f o r an arbitrator to
decide whether fraud in the inducement of the
contract precludes a r b i t r a t i o n of the merits of the
claims at issue. If such fraud is found by the
arbitrator, the merits of the claims will be
litigated in court rather than in arbitration. The
alternative, i.e., forcing the parties to litigate
the matter in court simply because f r a u d in the
inducement was alleged, would frustrate the
legislative intent of the FAA by allowing a party
who does not wish to arbitrate t o maintain the
litigation in the courts merely by alleging fraud in
the inducement.
3 9
E. If There Is A Factual Dispute As To Whether An Agreement To Arbitrate Exists, An Evidentiary Hearing Must Be Held Before A Motion To Compel Arbitration Can Be Denied
If there is a dispute as to whether an
arbitration agreement exists at all, as opposed to a
dispute as to whether there was fraud in the
inducement of a contract that includes arbitration
requirements, a court properly may, and indeed must,
resolve that dispute before allowing or denying a
motion
(court
to compel arbitration. See 9 U.S.C. § 4
requi red to compel arbitration if satisfied
that there is an arbitration agreement); G.L. c.
251, 5 2 (a) (same) . The procedural rules that would a p p l y if this
matter was in federal court make clear that if a
determination cannot be made by the c o u r t on the
submissions of the parties as to whether there is an
agreement to arbitrate, then a t r i a l on the question,
is required before deciding whether the merits of a
claim must be arbitrated or, alternatively,
litigated in court. 9 U.S.C. 5 4 (if there is a
factual dispute as to the existence of an
arbitration agreement, "the court shall proceed
summarily to the trial thereof"). See also, A/S
4 0
Custodia v. Lessin International, Inc., 503 F . 2 d
318, 320 (2d Cir. 1974) (if there is a factual issue
as to whether an arbitration agreement has been
made, 9 U . S . C . 5 4 requires that the issue not be
decided on affidavits, but through a full trial of
the issue). However, while substantive principles
of the FAA apply to cases covered by the FAA that
are pending in Massachusetts, the issue of whether
the procedures set forth in 9 U.S.C. § 4 are
applicable to state court proceedings "remains an
open question. " Thomson McKinnon Secur. I Inc. v.
Cucchiella, 32 Mass. App. Ct. 698, 701 ( 1 9 9 2 ) .
The MAA does not provide the procedural
specificity of the FAA as to how a court should deal
with a factual dispute as to the existence of an
arbitration agreement, but does r equ i r e that if a
party opposing a motion to compel arbitration denies
the existence of t h e agreement to arbitrate,
court shall proceed summarily to the determination
of the issue so raised and shall, if it f i n d s for
the applicant, order arbitration; otherwise, the
application shall be denied." G.L. c. 251, § 2 ( a ) .
Logically, if "determination of the issue" cannot be
made on affidavits due to f a c t u a l disputes,
"the
an
41
evidentiary hearing would be required to comply with
t h e statutory mandate to r e so lve the dispute.
Therefore, if this Court concludes that t h e r e
is a factual dispute as to whether an arbitration
agreement between the parties exists, the matter
should be remanded f o r an evidentiary hearing or
preliminary trial on the i s sue . That should,
however, not be necessary because t h e undisputed
evidence in this case compels the conclusion that
there does exist an agreement, signed by St. Fleur,
to a r b i t r a t e St. F l e u r ' s employment claims a g a i n s t
WPI. While St. Fleur raises some question
concerning the circumstances under which s h e e n t e r e d
into the agreement, that question is for
arbitration.
42
Conclusion.
For the foregoing reasons, this Court should
reverse the Superior Court's Order denying WPI's
motion to compel a r b i t r a t i o n of St. Fleur's
employment discrimination claims and remand t h e
matter for an order compelling arbitration of St.
Fleur's employment discrimination claims and s t a y i n g
further proceedings d u r i n g the pendency of the
arbitration.
Respectfully submitted
JOSEPH F. HARDCASTLE CINTM S. SHOBER HARDCASTLE & SHOBER 50 Congress Street Boston, MA 02109
( 6 1 7 ) 248-2240
Certification Under Mass. R. App. P. 16(k)
I hereby certify that this brief complies with a l l applicable rules of court that p e r t a i n to t h e filing of briefs.
F. Hardcastle
43