Williams v. General Electric
MEMORANDUM OPINION. Signed by Judge Sharon Lovelace Blackburn on 3/28/2014. (AVC)
2014 Mar-28 PM 01:27
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
CASE NO. 1:12-cv-3869-SLB
This case is before the court on defendant’s Motion to Dismiss or, in the Alternative,
to Stay this Action and to Compel Arbitration. (Doc. 7.)1 Upon consideration of the record,
the submissions of the parties, and the relevant law, the court finds that defendant’s Motion
is due to be denied.
STATEMENT OF FACTS
On January 16, 1995, plaintiff Connie Williams (“plaintiff”) began working for
defendant General Electric (“defendant”) at its Decatur, Alabama plant as a Processor I.
(Doc. 1 ¶ 9; doc. 8-1 ¶ 3.) Plaintiff remains employed with defendant to date. (Doc. 8-7
In December of 2009, defendant developed and implemented a four-step internal
dispute resolution process called “SOLUTIONS.” (Doc. 8-1 ¶ 5; see generally doc. 8-2.)
Reference to a document number, [“Doc. ___”], refers to the number assigned to each
document as it is filed in the court’s record.
The SOLUTIONS handbook provides that “covered employees,” which include hourly and
salaried employees at the Decatur plant, must bring “covered claims” through the
SOLUTIONS multi-tiered dispute resolution process. (Doc. 8-1 ¶ 5; doc. 8-2 at 3, 5-6.)
“Covered claims” are “all claims that arise out of or are related to an employee’s
employment,” including, but not limited to, “[e]mployment discrimination and harassment
claims, based on . . . age, race, sex, religion, national origin, veteran status, citizenship,
handicap/disability, or other characteristic protected by law” and “[r]etaliation claims for
legally protected activity and/or for whistleblowing.” (Doc. 8-2 at 6.) The SOLUTIONS
handbook states: “This Procedure . . . creates a binding obligation on Covered Employees
and the Company for the resolution of employment disputes.” (Id. at 3.) The handbook
further states that “Covered Employees . . . are not allowed to litigate a Covered Claim in any
court. . . . All covered claims must be brought on an individual basis only in Solutions.” (Id.
In November of 2009, defendant first introduced SOLUTIONS to its Decatur plant
employees through a Newsletter.2 (Doc. 8-1 at 3.) The Newsletter provided an overview of
the SOLUTIONS process and stated that “all U.S. employees based in the U.S. . . . or
elsewhere (hourly or salary) who continue their employment will be deemed covered by this
procedure.” (Doc. 8-3 at 2.) Employees received hard copies of the Newsletter and
defendant made the Newsletter accessible on the Decatur plant’s intranet. (Doc. 8-1 ¶ 6.) In
When capitalized, “Newsletter” refers to doc. 8-3 at 2.
April of 2010, the Business Team Leaders asked each employee at the Decatur plant to sign
a SOLUTIONS Program Acknowledgment Form (the “Acknowledgment Form”). (Id.; see
doc. 8-4 at 3.) The Acknowledgment Form states: “Signing this form indicates that you have
received an overview of SOLUTIONS and that you have been informed as to where you can
access SOLUTIONS information later.”
(Doc. 8-4 at 3.)3
Plaintiff received the
SOLUTIONS Overview4 and signed the Acknowledgment Form. (Doc. 8-1 ¶ 6; doc. 8-4
On about April 20, 2011, plaintiff had a “flare up” of preexisting injuries causing her
significant pain. (Doc. 1 ¶ 11.) On July 20, 2011, plaintiff received a disciplinary letter from
Business Team Leader Kathy Wright (“Wright”) in which Wright claimed that plaintiff had
given the company untimely notice of her medical absence on July 15, 2011. (Doc. 8-5 at
2.) After receiving Wright’s letter, plaintiff submitted a letter of complaint to defendant’s
Human Resources department, claiming that Wright treated her unfairly and that she had
informed Wright of her absence on July 13, 2011. (Doc. 8-6 at 2-3.)
On August 31, 2011, plaintiff filed a Charge of Discrimination with the Equal
Employment Opportunity Commission (“EEOC”) against defendant alleging race and
disability discrimination based on the events surrounding her July 15, 2011 absence. (Doc.
Employees were notified that a SOLUTIONS handbook could be accessed through a
Human Resources representative. (Doc. 8-1 ¶ 7.)
When capitalized, “Overview” refers to doc. 8-4 at 2.
1 at 6.) On August 24, 2012, plaintiff filed an amended EEOC Charge alleging that
defendant retaliated against her for filing the August 31, 2011 charge “by adding harder jobs
to [her] position and denying [her] a reasonable accommodation.” (Doc. 8-8 at 3.) On
November 14, 2012, plaintiff filed this lawsuit against defendant pursuant to Title VII of the
Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq. (“Title VII”) and 42 U.S.C. § 1981
(“section 1981”), asserting claims for race and disability discrimination and retaliation. (See
generally doc. 1.)
On February 19, 2013, defendant filed the instant Motion to Dismiss, or in the
Alternative, to Stay this Action and to Compel Arbitration. (Doc. 7.) In it, defendant
requests that the court compel arbitration pursuant to § 4 of the Federal Arbitration Act, 9
U.S.C. § 4, (doc. 7 at 1), or stay this proceeding pending completion of arbitration of all
arbitrable issues pursuant to § 3. (Id. at 5.) Attached to the Motion is a declaration from
defendant’s Human Resources Manager during the relevant time period stating that plaintiff
never sought resolution of her grievances through SOLUTIONS. (Doc. 8-1 ¶ 10.) Plaintiff,
who is proceeding pro se, responds that she attempted to invoke but was denied access to the
SOLUTIONS process, and that she will not sign the “solutions process forms” because they
will deny her her rights. (Doc. 11 at 1.)
STANDARD OF REVIEW
Congress enacted the Federal Arbitration Act (“FAA”) to reverse longstanding
judicial hostility toward arbitration agreements and to place them on the same footing as
other contracts. Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 111 (2001); Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991); Shearson/American Express, Inc. v.
McMahon, 482 U.S. 220, 225-26 (1987). Congress’ preeminent goal in passing the FAA
“was to enforce private agreements into which parties had entered.” Mitsubishi Motors Corp.
v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625-26 (1985); Dean Witter Reynolds, Inc.
v. Byrd, 470 U.S. 213, 221 (1985). The FAA “makes a written agreement to arbitrate ‘in . . .
a contract evidencing a transaction involving commerce . . . valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity for the revocation of any
contract.’” Mitsubishi Motors, 473 U.S. at 625 (quoting 9 U.S.C. § 2). “The FAA also
provides for stays of proceedings in federal district courts when an issue in a proceeding is
referable to arbitration, § 3, and for orders compelling arbitration when one party has failed,
neglected, or refused to comply with an arbitration agreement, § 4.” Gilmer, 500 U.S. at 25.
The Supreme Court has declared that these provisions manifest a “liberal federal policy
favoring arbitration agreements.” Id. (quoting Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 24 (1983)). Of course, that policy only extends insofar as an
agreement actually exists: “whether parties have agreed to submit a particular dispute to
arbitration is typically an issue for judicial determination.” Granite Rock Co. v. Int’l Bhd. of
Teamsters, 561 U.S. 287, 130 S. Ct. 2847, 2855 (2010). “When deciding whether the parties
agreed to arbitrate a certain matter . . . courts generally . . . should apply ordinary state-law
principles that govern the formation of contracts.” First Options of Chicago, Inc. v. Kaplan,
514 U.S. 938, 944 (1995). “Courts should not assume that the parties agreed to arbitrate
arbitrability unless there is ‘clea[r] and unmistakabl[e]’ evidence that they did so.” Id.
(quoting AT& T Tech., Inc. v. Comm. Workers of America, 475 U.S. 643, 649 (1986)).
Arbitration clauses “are therefore interpreted according to ordinary state-law rules of
contract construction.” Paladino v. Avnet Computer Techs., Inc., 134 F.3d 1054, 1061 (11th
Cir. 1998) (Cox, J., concurring specially); Kaplan, 514 U.S. at 944. In this case, Alabama
law governs the question of contract formation.5 “If the making of the arbitration agreement
. . . [is] in issue, the court shall proceed summarily to the trial thereof.” 9 U.S.C. § 4; Granite
Rock Co. v. Int’l Broth. of Teamsters, 130 S. Ct. 2847, 2859 & n.8 (2010).
The SOLUTIONS handbook provides that New York law, without regard to its choice of
law principles, shall be applied in construing and interpreting the agreement. (Doc. 8-2 at
11.) However, a court cannot sensibly apply a contractual choice-of-law provision before
the court determines that the parties have a valid contract. Schnabel v. Trilegiant Corp.,
697 F.3d 110, 119 (2d Cir. 2012) (“Applying the choice-of-law clause to resolve the
contract formation issue would presume the applicability of a provision before its
adoption by the parties has been established.” (citing Trans–Tec Asia v. M/V Harmony
Container, 518 F.3d 1120, 1124 (9th Cir. 2008) (“[W]e cannot rely on the choice of law
provision until we have decided, as a matter of law, that such a provision was a valid
contractual term and was legitimately incorporated into the parties’ contract.”))); B–S
Steel of Kansas, Inc. v. Texas Indus., Inc., 439 F.3d 653, 661 n.9 (10th Cir. 2006)
(referring to “the logical flaw inherent in applying a contractual choice of law provision
before determining whether the underlying contract is valid”). The law of the state where
the parties were located at the time of the alleged agreement applies. Schnabel, 697 F.3d
The “party seeking to compel arbitration must prove . . . the existence of a contract.”
Owens v. Coosa Valley Health Care, Inc., 890 So. 2d 983, 986 (Ala. 2004).6 The requisite
elements of a contract under Alabama law are offer, acceptance, consideration, and mutual
assent to the terms essential to the formation of a contract. S. Energy Homes, Inc. v. Hennis,
776 So. 2d 105, 108 (Ala. 2000). Defendant relies on the Alabama Supreme Court decisions
of Hoffman–La Roche, Inc. v. Campbell, 512 So.2d 725 (Ala.1987) [hereinafter Hoffman-La
Roche], and Baptist Health System, Inc. v. Mack, 860 So. 2d 1265 (Ala. 2003) [hereinafter
Baptist Health], for the proposition that by signing the Acknowledgment Form and
continuing her employment, plaintiff agreed to arbitrate her claims as described in the
The Hoffman–La Roche Regime
In Hoffman–La Roche, the Alabama Supreme Court held that provisions contained
in an employee handbook may, in some situations, “constitute an offer to create a binding
unilateral contract” between the employer and employee. 512 So. 2d at 735. Whether an
implied contract arises under these circumstances, the court explained, is determined by
applying the following four-part analysis of offer, communication, acceptance, and
Because the burden is on defendant, the analysis below entertains arguments that
plaintiff, proceeding pro se, did not make.
First, the language contained in the handbook must be examined
to see if it is specific enough to constitute an offer. Second, the
offer must have been communicated to the employee by
issuance of the handbook, or otherwise. Third, the employee
must have accepted the offer by retaining employment after he
has become generally aware of the offer. His actual performance
supplies the necessary consideration.
Discussing the element of offer, the court found that “to become a binding promise,
the language used . . . must be specific enough to constitute an actual offer rather than a mere
general statement of policy.” Id. at 734. Whether an offer exists “is determined by the
outward manifestations of the parties, rather than by their uncommunicated beliefs.” Id.
In discussing the element of communication, the court analyzed precedent in which
an employer “published” and “posted through the plant” a “notice” stating the material terms
of an offer. See id. at 732-33 (quoting Henderson Land & Lumber Co. v. Barber, 17 Ala.
App. 337, 85 So. 35 (1920)). It concluded that in light of Barber, there was “no reason why
a policy contained in an employee manual issued to an employee,” as opposed to a published,
posted notice, “cannot become a binding promise . . . .” Hoffman–La Roche, 512 So. 2d at
733. In other words, it does not matter “that the promise is communicated to the employee
through the medium of a handbook, rather than by some other means” (as in, other more
patent means). Id. at 733-734.
“Under this analysis, it does not matter whether the offer is made at the time of
original hiring or after the employee has been hired” because, in either context, the
employee’s continuation of employment supplies the necessary consideration. Id. at 734 n.3.
The Spectrum of Employer-Employee Offers
As is often true, this case falls somewhere on a spectrum created by precedent. The
spectrum weighs the strength of the communication to an employee about the terms of a
proposed agreement. The spectrum is discussed in Baptist Health, and it is helpful to
illustrate it here. At the far end of the spectrum are agreements involving parties who sign
explicit agreements to arbitrate. Then there are two cases, Baptist Health and Hoffman-La
Roche, where the court held it sufficient for the employer to give the employee a document
containing the specific terms that are sought to be enforced, although in Baptist Health the
employer did more than simply that. Finally, there is a case where the court enforced against
the employer a policy that was detailed in an employee handbook not issued to the employee,
but the terms of which had been orally communicated to the employees by their supervisors
and had been followed in the past as a “course of dealings.” Ex parte Amoco Fabrics and
Fibers Co., 729 So. 2d 336, 340 (Ala. 1998).
i. Signed Agreements
In Ex Parte Beasley, 712 So. 2d 338, 341 (Ala. 1998), the court hypothesized in
dictum that “the acknowledgment form contained in [the employer’s] standard employee
handbook would have created a binding obligation to arbitrate . . . if Beasley had signed that
form . . . .” The form required the signor to attest: “I also understand that as a condition of
employment and continued employment I agree to submit any complaints to [arbitration] and
agree to abide by and accept the final decision of the arbitration panel.” Id. at 340 (emphasis
added). The hypothetical in Beasley became a reality in Kelly v. UHC Management Co., 967
F. Supp. 1240, 1243 (N.D. Ala. 1997), where the employee received a handbook detailing
an ADR program and signed a form providing: “I agree to submit all employment related
disputes based on a legal claim to arbitration.” At the top of the signed page the form stated:
“I understand that arbitration is the final, exclusive and required forum for the resolution of
all employment related disputes which are based on a legal claim.” Id. at 1256. The court
held that “the acknowledgment forms that plaintiffs signed made it clear that arbitration was
the exclusive method by which they could resolve . . . claims . . . .” Id.
Strong, specific language accompanied by the employee’s signature in close proximity
is likely the safest, most explicit way to ensure that an employee will be bound to arbitrate
a dispute with an employer.7 But that is not always necessary.
ii. Receipt of the Document Sufficient
Similar to Beasley and Kelly is Baptist Health. In Baptist Health, the employee
“received a copy of a Program document” stating that “[t]his Program precludes an employee
and [the employer] from going to court to have disputes heard by a judge or jury. . . . By
One court concluded that the formation of an arbitration agreement is rarely at issue
because “virtually all employers require signed contracts or acknowledgment forms.” See
Owen v. MBPXL Corp., 173 F. Supp. 2d 905, 923 (N.D. Iowa 2001) (citing cases).
remaining or becoming employed after receiving notice of this Program, you consent to
resolution by arbitration of any dispute . . . .” Baptist Health Sys., Inc. v. Mack, 860 So. 2d
1265, 1267-68 (Ala. 2003). Although the court based its finding of the existence of an offer
and acceptance on the receipt of the Program document alone,8 the employee also signed an
acknowledgment form that read:
I acknowledge receipt of the BHS Dispute Resolution Program
document. I understand I am obligated to read this document as
it governs my continued employment and all future legal
disputes between me and Baptist Health System as defined in
the document. I understand that it is my responsibility to consult
my Human Resource director if I have any questions.
Id. at 1268 (emphasis added). In addition, “meetings were held with the employees to explain
the terms of the Program and to ensure that BHS employees were aware of the Program and
the arbitration provision contained in the Program document.” Id. at 1268-69.
In Hoffman-La Roche, the landmark Alabama case enforcing terms contained in an
employee handbook, the employee was personally issued the handbook and continued
working, which the handbook stated would manifest acceptance of the terms therein.
Hoffman-La Roche, Inc. v. Campbell, 512 So. 2d 725, 737 (Ala. 1987). The parties did not
See id. at 1274 (“Thus, we conclude that [plaintiff], by continuing her employment with
[defendant] subsequent to her receipt of the Program document, expressly assented to the
terms of the Program document . . . .”).
sign any acknowledgments. The important factors were that the promise was specific, and
that it was communicated.9 Id. at 734-35.
iii. Oral Communication Plus Course of Dealings
Finally, in Ex parte Amoco Fabrics and Fibers Company, 729 So. 2d 336 (Ala. 1998),
two employees sought to enforce as an agreement a seniority policy. The full terms of the
policy were contained in a policy-and-procedure manual, but that manual was only issued to
supervisors (which the plaintiff employees were not). Id. at 337-338. Instead, the employees’
supervisors “briefed them on the layoff/reduction-in-workforce policy and told them how it
worked.” Id. at 338. The policy was “communicated . . . to them as a benefit of employment,
and . . . [the defendant employer] followed the seniority policy during [one of the
employee’s] employment” as a “course of dealings.” Id. at 340. The court did not find it
problematic that the policy-and-procedure manual was not distributed to the employees, since
“both testified in their depositions that their supervisors informed them of the layoffreduction-in-workforce policy,” the employees were told when they began their employment
“that all layoffs were done according to seniority,” and the course of dealings evidence was
“most compelling.” Id. at 340 & n.3. In other words, the communication of the offer was still
clear. The four-Justice dissent would have held that no agreement existed, since the employer
A wrinkle should be noted in discussing Hoffman-La Roche. There, the party seeking
recognition and enforcement of a contract was the employee. The agreement sought to be
enforced was that the employee’s status was not “at will,” but “permanent.” It seems
easier to hold the drafter of an alleged contract to its terms than it is to hold an offeree to
the terms of an alleged unilateral offer.
“did not actively disseminate” its policy-and-procedure manual to the employees, id. at 341,
and the documents that the employees were given did not contain the specific policy at issue,
which “should have alerted” the employees that it was not truly an offer, id. at 342.
Did Plaintiff Agree to Arbitrate Her Claims Through SOLUTIONS?
The above spectrum demonstrates how far employers have gone to ensure their
employees are aware of the terms of a deal that they can accept merely by not objecting, or
how much courts have required before enforcing an “offer” against an employer. Defendant
suggests that this case should fall somewhere close to Baptist Health on the spectrum. (Doc.
8 at 11.) The court agrees that this case and Baptist Health are similar in some respects,
namely, in the specificity of their handbook’s language. Both provide specific terms of a
proposed agreement. The SOLUTIONS handbook provides: “This Procedure . . . creates a
binding obligation on Covered Employees and the company for the resolution of employment
disputes,” (doc. 8-2 at 3), and “Covered Employees and the Company are not allowed to
litigate a Covered Claim in any court,” (id. at 8). However, these cases differ in a crucial
An employer satisfies the second element of the Hoffman La-Roche test by
communicating its offer through “issuance of the handbook, or otherwise.” Hoffman–La
Roche, 512 So. 2d at 735. “The offer . . . must be communicated to the offeree,” id. at 731,
because “[a]s a general principle, an offeree cannot actually assent to an offer unless he
knows of its existence.” 1 WILLISTON ON CONTRACTS § 4:16 (4th ed.). “In the parlance of
contract law, communication of the offer is a prerequisite to the parties reaching a ‘meeting
of the minds.’” Owen v. MBPXL Corp., 173 F. Supp. 2d 905, 921 (N.D. Iowa 2001) (citing
RESTATEMENT (SECOND) OF CONTRACTS § 17, cmt. c (1981)).
The employer in Baptist Health met Hoffman-La Roche’s offer and communication
requirement by issuing a copy of the Program document to its employees that states in clear
terms that: a) arbitration is mandatory and binding; and b) acceptance of this agreement is
manifested by continuing to work. Baptist Health, 860 So. 2d at 1275. But the employer in
Baptist Health went further: it had the plaintiff acknowledge her receipt of and obligation to
read the Program document. Id. at 1268. The signed acknowledgment included language
suggesting that the plaintiff was making an important decision concerning “all future legal
disputes.” Id. Finally, the employer conducted meetings to educate its employees on the
Program and its mandatory arbitration provision. Id. at 1268-69.
On the record before the court, defendant did far less in this case. Defendant claims
that it communicated notice of the offer contained in the SOLUTIONS handbook through
three documents: (1) a single-page SOLUTIONS Overview distributed to the employees,
including instructions on where to obtain additional information, for which plaintiff signed
a form acknowledging her receipt; (2) a virtually identical overview of SOLUTIONS in the
Decatur plant Newsletter distributed to employees, except that the top of the Newsletter says:
“all U.S. employees based in the U.S. . . . or elsewhere (hourly or salary) who continue their
employment will be deemed covered by this procedure”; and (3) a detailed handbook
containing the complete substance of the SOLUTIONS program kept in the HR office. What
the defendant did not do, for whatever reason, was distribute the SOLUTIONS handbook to
Issuance of the handbook or the document containing the specific language forming
the contract was crucial to the holdings in Baptist Health and Hoffman-La Roche.10 See
Baptist Health, 860 So. 2d at 1274 (“[W]e conclude that [plaintiff], by continuing her
employment with [defendant] subsequent to her receipt of the Program document, expressly
assented to the terms . . . .”); see generally Hoffman-La Roche, 512 So.2d 725 (mentioning
the word “issuance” seven times, including in the summary of the framework itself). As
discussed above, the court was explaining why giving a copy of the offer to the employee
was a sufficient alternative to posting a notice of a specific offer around the workplace. Id.
at 733-35. The court did approve of communication “by issuance of the handbook, or
otherwise,” id. at 735, and did say that it did not matter that communication was “through the
medium of a handbook, rather than by some other means,” id. at 734. But in saying “or
otherwise” and “rather than by some other means,” the court was not creating a catch-all
provision, enabling employers to legally “communicate” unilateral offers by including them
The court in Hoffman-La Roche modeled its opinion on a Supreme Court of Minnesota
case. In introducing the issue, it quoted from that case verbatim the following: “If the
handbook language constitutes an offer, and the offer has been communicated by
dissemination of the handbook to the employee, the next question is whether there has
been an acceptance of the offer and consideration furnished for its enforceability.”
Hoffman-La Roche, 512 So. 2d at 731 (quoting Pine River State Bank v. Mettille, 333
N.W.2d 622, 626-27 (Minn. 1983)) (emphasis added).
in a 30-page document and keeping it in a management-level office.11 See id. at 734-35. It
was referring to publishing and posting the offer throughout the workplace. Id. When
someone is issued a physical, personal copy of a substantial document to take home, it is a
signal that they need to be aware of the information contained therein because it is important.
The implication is that they have to make personal–perhaps even legal–decisions regarding
the information. And issuance of a personal, physical copy means that the communication
travels directly from the employer to the employee without the employee having to do
Compare that communication to the alleged communication in this case. To receive
a communication of a specific offer here, the employee has to seek it out. The employee has
to think—during work—either immediately upon reading the Newsletter or the
Acknowledgment Form, or later, spontaneously, “Should I look up something else in the HR
office regarding that form we signed?” Only by taking that affirmative step—not to simply
read what was given (which is a natural impulse and, often, a legal presumption), but to
remember, locate, and obtain something—would an employee ever come across language
explaining that arbitration is mandatory and binding, and that working constitutes acceptance
of that offer.12 By failing to issue plaintiff a handbook, defendant did not “communicate” any
In Ex parte Amoco Fabrics and Fibers Company, 729 So. 2d 336, 340 (Ala. 1998),“or
otherwise” was met through the employee’s testimony that their supervisors had briefed
them on how the policy worked, and that the policy had been followed in the past.
There is no evidence in the record that defendant’s employees were trained or instructed
on the SOLUTIONS program. Although there is no evidence that would impute
terms contained in the handbook to plaintiff, and therefore defendant cannot rely on the
handbook or its terms as presumptive evidence of an offer or its communication. It would be
unreasonable to suggest, even as a presumption of law, that she knew of the existence of an
offer contained therein. See 1 WILLISTON ON CONTRACTS § 4:16 (4th ed.). Rather, the terms
in the handbook kept in the HR office are exactly the sort of “uncommunicated beliefs” that
the court in Hoffman-La Roche stated would not be evidence of an offer. Hoffman-La Roche,
512 So. 2d at 734.
And what defendant did communicate to plaintiff, far from being specific enough to
form an offer, the acceptance of which would conclude the deal, does not even raise any red
flags like the signed form should have in Baptist Health. A red flag might have provided the
crucial link to argue that the Overview and the handbook kept in the HR office should be
combined to form a unified, specific communication. Just three words might have been
sufficient: “mandatory, binding arbitration.” Instead, the one-page13 Overview introduces a
program that defendant advertises “will supplement, not replace, other processes, including”
a brief, apparently non-exhaustive list of internal processes already in place. (Doc. 8-4 at 2)
(emphasis in original). The most obvious “other process” to a dispute–what an “Alternative
Dispute Resolution Program” is an “alternative” to, a lawsuit–is referenced in passing by
knowledge of the terms of the program to plaintiff, there is evidence that plaintiff knew
about the existence of the program and received the one-page Overview. (See doc. 8-4 at
3; doc. 11 at 1.)
The bottom-right pagination indicates that it may have been a four-page overview. (Doc.
8-4 at 2.) Either way, defendant is only relying on the selected page it attached to its brief.
stating that “[e]mployees may raise covered claims only (claims involving legally protected
rights such as employment discrimination, layoffs, and discharges) at Level III and Level
IV.” (Doc. 8-4 at 2) (italicized emphasis added). The court must determine whether that
language is specific enough to constitute an offer.
“Only” could refer to “covered claims,” meaning that only covered claims, not other
kinds of claims, were eligible for Level III and Level IV.14 Other claims, it would seem,
General Electric had not deemed important enough to be provided (presumably at General
Electric’s own expense) additional levels of process. Or it could mean that only when an
employee has a “covered claim” may (since everything is framed permissively in the
document) the employee bypass the Informal Process, Level I, and Level II, and raise that
claim in Level III.
Alternatively, “only” could refer to “raise,” meaning that covered claims can only be
raised—addressed for the first time—“at Level III and Level IV.”15 By one definition, to
“raise” a claim is to “bring [it] up for discussion or consideration; to introduce [it] or put [it]
A close look at the SOLUTIONS handbook reveals that this is the correct interpretation
of that clause: “If the employee is not satisfied with the outcome of Levels I and II, and
the concern is a Covered Claim, the employee may submit the claim to Level III.” (Doc.
8-2 at 3.) However, the court is reading the Overview as one would who was only given
the Overview, searching for possible interpretations.
Another look at the SOLUTIONS handbook reveals that this is the incorrect
interpretation of that clause: “The levels of Solutions are in a logical sequence, and
employees must complete each level of the process before proceeding to the next level.”
(Doc. 8-2 at 3.) The same caveat from the previous footnote applies.
forward.” BLACK’S LAW DICTIONARY 1373 (9th ed. 2009). So if an employee can only bring
up a covered claim for consideration at Level III—i.e., in SOLUTIONS—then the
SOLUTIONS ADR Process would be mandatory. An employee could not race to the
courthouse and file a lawsuit involving a covered claim without having initially introduced
it in SOLUTIONS. However, a lawsuit would presumably be available after the Process was
exhausted to challenge the decision rendered in arbitration. In other words, decisions reached
in the Process are not binding.16 But since SOLUTIONS is presented merely as a
“supplement” to “other processes,” it makes more sense that “raise” means merely raise in
the SOLUTIONS process. Therefore, covered claims, if raised in the SOLUTIONS process
at all, can only be raised at Level III and IV. But having “only” refer to “raise” doesn’t make
sense in the context of the whole Overview, because “any claim” can be raised “during the
Informal Process or at Level I and Level II.” And if any claim can be raised then, how could
a covered claim be raised only at “Level III or Level IV?” Also, reading “only” to refer to
“raise” is awkward because “may . . . only” would be such a roundabout way of saying
something that is straightforward: “must.”
Of course, the court is not interpreting a contract on which a signature meant
agreement to the substance of the expressed terms. Then such verbal calisthenics would be
justified to determine the exact meaning of the terms. Rather, the court is reading a form that
Although arbitration “normally means binding arbitration,” Dow Corning Corp. v.
Safety Nat’l Cas. Corp., 335 F.3d 742, 746 (8th Cir. 2003), it is not within the province of
most lay persons to understand this without explanation.
does not purport to be a contract, but an “overview,” on which a signature “simply states that
[the signing employee] received an overview and instructions on how to access additional
details of the program.” (Doc. 8-4 at 2) (emphasis added). The signature does not
acknowledge any substantive terms, such as that the document, or any other document in
defendant’s possession that perhaps could have been incorporated by reference, “governs my
continued employment and all future legal disputes.” Baptist Health, 860 So. 2d at 1268. The
calisthenics do not prove one interpretation over another, but they do prove all that is
necessary on this Motion: that the Overview was not an offer “communicated” to plaintiff
“specific enough to constitute an actual offer rather than a mere general statement of policy.”
Hoffman-La Roche, 512 So. 2d at 734. Thus, the Overview does not prove the existence of
Outside of the handbook, which was not communicated to plaintiff, and the Overview,
which is not specific enough to be an offer, defendant has little else on which to rely to form
a communicated offer. It has the language from the top of the Newsletter, removed, for
whatever reason, from the signed Overview, which states that all employees “who continue
their employment will be deemed covered by this procedure,” but that is not specific
enough either. (Doc. 8-3 at 2.) Being “covered” by a program framed as a permissive
alternative does not even hint at a possibility that the employee could be forsaking all
traditional legal process. It does not suggest that the employee is agreeing to anything, much
less to give something up. “Covered” suggests that, like a free insurance policy, as long as
the employee works, he or she is covered by the process if needed. Even if the “covered by”
language was specific enough to constitute an offer of binding, mandatory arbitration, which
it is not, this case would still be distinguishable from other precedent. Unlike signed
documents or employee handbooks, newsletters are not the sort of documents that one would
expect to contain binding agreements. They are the sort of documents that people glance at
and throw away. There is no basis for presuming that an employee read and agreed to the
contents of a newsletter, especially if the clause at issue is on “page 6” of the newsletter. (See
doc. 8-3 at 2.)
There is another precedent, albeit not from Alabama law, in which an employer
enclosed a brochure in all “new-hire packets” that included the following language: “Binding
arbitration is a legal process much like a court, but is much faster and less costly. You and
the [employer] will be bound by the decision . . . .” HSS Systems, LLC v. Lucan, No.
03-10-00761-CV, 2011 WL 2297716, at *1-2 (Tex. Ct. App. June 9, 2011). In addition, the
full policy, entitled “Mandatory Binding Arbitration Policy,” was posted on the employer’s
intranet. Id. at *4. Finally, there was evidence that the HR manager during the new-hire
presentation “alerted the employees that mandatory arbitration was the final step in the
dispute resolution process . . . that arbitration was required in lieu of going to court . . . [and
that] by coming to work . . . the employees were accepting all of the policies discussed,
including arbitration,” although the plaintiff claimed that the presentation did not “involve
any significant discussion of arbitration.” Id. at *2. The present case involves significantly
less communication than was shown in Lucan, and the Lucan court held that notice of the
arbitration policy was not “unequivocal”17 and affirmed the trial court’s denial of the
defendant’s motion to compel arbitration. See id. at *5.
Reviewing the evidence before the court, defendant met some of the requirements in
Hoffman-La Roche sometimes, but it never met all of them at once. When it wrote language
specific enough to constitute an offer, it did not actually communicate that offer. When it
actually communicated, it did not use language specific enough to constitute an offer.
Because the court finds that defendant has not proven that the parties agreed to
arbitrate this dispute, it does not address whether the terms of SOLUTIONS are reasonable
and fair. Since plaintiff did not demand a jury trial on the issue, the court will hold a hearing
to determine whether the parties in fact agreed to arbitrate this dispute. 9 U.S.C. § 4.
While the Lucan court spoke in terms of “unequivocal notice,” Lucan, 2011 WL
2297716, at *5, instead of a “communication” that is “specific enough to constitute an
actual offer rather than a mere general statement of policy,” Hoffman-La Roche, 512 So.
2d at 734, the tests are similar enough for illustrative purposes.
For the reasons stated above, defendant’s Motion to Dismiss, or, in the Alternative to
Stay this Action and to Compel Arbitration is due to be denied.
DONE this 28th day of March, 2014.
SHARON LOVELACE BLACKBURN
UNITED STATES DISTRICT JUDGE
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