Juhasz v. Menard, Inc.

Filing 11

ORDER Granting 4 Motion to Compel Arbitration, Staying and Administratively Closing Case. (All Deadlines/Hearings Terminated.) Signed by District Judge Thomas L. Ludington. (KWin)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
NORTHERN DIVISION
FRANKIE JUHASZ,
Plaintiff,

Case. No. 18-cv-10708

v.

Honorable Thomas L. Ludington
Magistrate Judge Patricia T. Morris

MENARD, INC.,
Defendant.
__________________________________________/
ORDER GRANTING MOTION TO COMPEL ARBITRATION, STAYING AND
ADMINISTRATIVELY CLOSING CASE
On March 1, 2018, Defendant, Menard, Inc., removed this case from the Circuit Court of
Saginaw County. ECF No. 1. The complaint alleges discrimination and retaliation in violation of
the Michigan Elliot Larson Civil Rights Act, (“ELCRA”), M.C.L. 37.2202. ECF No. 1-2. On
March 2, 2018, Defendant filed a motion to compel arbitration, seeking to enforce the terms of
the employment agreement between Plaintiff and Menard. ECF No. 4. Plaintiff responded on
March 22, 2018, opposing the motion. ECF No. 10.
I.
Pursuant to the Federal Arbitration Act (FAA), when an arbitration agreement governs a
dispute that a Federal District Court would otherwise have jurisdiction to adjudicate, the party
aggrieved by the alleged failure to arbitrate may petition that Federal District Court for an order
compelling such arbitration to proceed. 9 U.S.C. § 4. The FAA requires a Federal Court to
compel arbitration when a party to an arbitration agreement fails or refuses to comply with the
provisions of an enforceable arbitration agreement. Id.

In three cases now known as the “Steelworkers Trilogy,” the Court established four
fundamental principles regarding federal arbitration. E.g., AT&T Techs., Inc. v. Commc’ns
Workers of Am., 475 U.S. 643, 648 (1986) (citing Steelworkers v. Warrior & Gulf Navigation
Co., 363 U.S. 574 (1960); Steelworkers v. Am. Mfg. Co., 363 U.S. 564 (1960); and Steelworkers
v. Enter. Wheel & Car Corp., 363 U.S. 593 (1960)).
First, “arbitration is a matter of contract and a party cannot be required to submit to
arbitration any dispute which he has not agreed so to submit.” AT&T, 475 U.S. at 648 (quoting
Warrior & Gulf, 363 U.S. at 582). That is, “arbitrators derive their authority to resolve disputes
only because the parties have agreed in advance to submit such grievances to arbitration.”
AT&T, 475 U.S. at 648–49 (citing Gateway Coal Co. v. United Mine Workers of Am., 414 U.S.
368, 374 (1974)). Therefore, arbitration agreements are “valid, irrevocable, and enforceable, save
upon such grounds as exist at law or in equity for the revocation of any contract.”
AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (citing 9 U.S.C. § 2).
Second, “the question of arbitrability — whether a [contract] creates a duty for the parties
to arbitrate the particular grievance — is undeniably an issue for judicial determination.” AT&T,
475 U.S. at 649. Thus, “whether or not the company was bound to arbitrate, as well as what
issues it must arbitrate, is a matter to be determined by the Court on the basis of the contract
entered into by the parties.” Id. (quoting John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543,
547(1964)).
Third, “in deciding whether the parties have agreed to submit a particular grievance to
arbitration, a court is not to rule on the potential merits of the underlying claims.” AT&T, 475
U.S. at 649.

Rather, the court must simply evaluate whether the particular grievance is

arbitrable. Id. at 650.

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And fourth, under federal law “there is a presumption of arbitrability.”

Id.

Consequently, “an order to arbitrate the particular grievance should not be denied unless it may
be said with positive assurance that the arbitration clause is not susceptible of an interpretation
that covers the asserted dispute. Doubts should be resolved in favor of coverage.” Id. (internal
alteration omitted) (quoting Warrior & Gulf, 363 U.S. at 582–83).
II.
It is undisputed that the employment agreement, including the remedy provision, is valid
and enforceable. The dispute concerns the scope of the remedy provision. Defendant essentially
argues that the remedy provision speaks for itself, and the Court should compel arbitration.
Defendant did not file a reply brief addressing Plaintiff’s arguments. Plaintiff argues that the
remedy provision is ambiguous and only applies to current employees, not employees who have
been terminated. The provision at issue provides as follows:
Remedy. I agree that all problems, claims and disputes experienced related to
my employment area shall first be resolved as outlined in the Team Member
Relations section of the "Grow With Menards Team Member Information
Booklet" which I have received. If I am unable to resolve the dispute by these
means for any reason, I agree to submit to final and binding arbitration.
Arbitration shall be the sole and exclusive forum and remedy for all covered
disputes of either Menard, Inc. or me. Unless Menard and I agree otherwise, any
arbitration proceeding will take place in the county of my Menard's employment
where the dispute arose. Problems, claims or disputes subject to binding
arbitration include, but are not limited to: statutory claims under 42 U.S.C. §§
1981-1988; Age Discrimination in Employment Act of 1967; Older Workers'
Benefit Protection Act ("OWPBA"); Fair Labor Standards Act; Title VII of the
Civil Rights Act of 1964; Title I of the Civil Rights Act of 1991; Americans with
Disabilities Act; Uniformed Services Employment and Reemployment Rights Act
of 1994 ("USERRA"); Family Medical Leave Act; and non-statutory claims such
as contractual claims, quasi-contractual claims, tort claims and any and all causes
of action arising under state or common law.
ECF No. 10-4 (emphasis added).

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Plaintiff argues that the bolded portion above is ambiguous and “can be best described as
an internal dispute resolution process which includes a final arbitration step.” Resp. at 6. Plaintiff
contends that this remedy provision “suggests the existence of an ongoing employer/employee
relationship at the time the dispute or claim is being addressed” which suggests that the remedy
provision does not apply to former (terminated) employees, but only to current employees. Thus,
Plaintiff contends there is a patent ambiguity because the ambiguity “clearly appears on the face
of the document, arising from the language itself.” Resp. at 8 (citing Hall v. Equitable Life
Assurance Society, 295 Mich. 404, 409 (1940)).
Plaintiff argues that the remedy provision also suffers from latent ambiguity which is
apparent when the remedy provision is applied or executed. Specifically, Plaintiff contends that
the Menard’s Team Member Information Booklet is not accessible to former employees. Thus,
Plaintiff was unable to ascertain what rights may have been available to her via Menard’s
internal grievance process and unable to avail herself of those rights. In support of her argument
as to latent ambiguity, Plaintiff submitted extrinsic evidence in the form of her affidavit in which
she sets forth that she had no access to the information booklet after her termination and was
unable to determine what rights she had. ECF No. 10-5 at ¶ 9-12; Resp. at 8 (citing McCarty v.
Mercury Metalcraft Co., 372 Mich. 567, 575 (1964) (“[because] the detection of a latent
ambiguity requires a consideration of factors outside the instrument itself: extrinsic evidence is
obviously admissible to prove the existence of the ambiguity, as well as to resolve any ambiguity
proven to exist.”).
Here, the remedy provision is unambiguous because it fairly admits of only one
interpretation. Leja v. Health All. Plan, 202 Mich. App. 582, 584 (1993). The remedy provision
contains no patent ambiguity, nor does Plaintiff’s affidavit establish any latent ambiguity.

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Plaintiff is correct that the reference to the “Team Member Relations section” of the information
booklet suggests the existence of an internal dispute resolution process, the completion of which
is to precede arbitration. However, there is nothing in the agreement that calls into question the
fact that the remedy provision is equally applicable to current and former employees. Indeed,
after referring to the internal grievance process outlined in the information booklet, the
agreement goes on to state: “If I am unable to resolve the dispute by these means for any reason,
I agree to submit to final and binding arbitration.” ECF No. 10-4 (emphasis added). As Plaintiff
indicates in her affidavit, an employee who is terminated is unable to resolve the dispute by the
means provided in the information booklet. Termination clearly falls under the umbrella of “any
reason” that might prevent an employee from resolving such a dispute via the means set forth in
the information booklet. Because she was unable to resolve her dispute via those means, the
agreement requires her to submit to final and binding arbitration.
Furthermore, Plaintiff overlooks that final paragraph of the agreement, which provides: “.
. .THE PARTIES ALSO AGREE THAT BOTH I AND MENARD INC ARE EACH WAIVING
THE RIGHT TO A TRIAL BY JURY . . .” Id. This refutes any notion that terminated employees
are exempt from the exclusive remedy of arbitration.
Finally, Plaintiff argues that “the explanation provided to the Plaintiff prior to signing the
document contradicts the position taken by Defendant in its motion.” Resp. at 10. Plaintiff stated
in her affidavit that:
As I read the document I was concerned by what the Defendant meant in the
“remedy” provision since I did not understand it so I asked Mr. Sprague to
explain to me what was meant by that provision. Mr. Sprague reassured me that
the process including the arbitration provision set forth in the remedy portion of
the Employee/Employer Agreement was standard language that meant if I had an
issue during my employment with an employee or manager that I could utilize the
process set forth in the Team Member Information Booklet up to and including
arbitration to address the matter and that all employees were required to sign the
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document . . . At no time was it explained to me that Defendant would seek to
impose the arbitration portion of the remedy provision after my employment with
the Defendant was terminated prior Defendant’s motion before this Court.
ECF No. 10-5 at ¶ 4-5, 7.
There is no contradiction between Mr. Sprague’s alleged statement and the position taken
by Defendant in its motion. Mr. Sprague described examples of situations that would fall within
the scope of the remedy provision. Plaintiff does not allege that Mr. Sprague purported to present
an exhaustive explanation of all situations that might fall within the scope of the remedy
provision. Nor does she allege that he affirmatively represented that terminated employees are
not bound by the agreement.
Plaintiff also argues that Mr. Sprague never explained to her that Menard would seek to
impose the remedy provision against her in the event of her discharge. Resp. at 11. Plaintiff does
not explain why Mr. Sprague was under any duty to provide an exhaustive description of all
potential legal consequences of signing the agreement. Mr. Sprague was not representing
Plaintiff when she signed the agreement. Rather, he was an agent of Menard. Plaintiff’s
argument sounds in procedural unconscionability, but Plaintiff makes no attempt to develop that
line of reasoning or to explain the relevance of Mr. Sprague’s alleged failure to explain the scope
of the agreement.
Furthermore, even if Mr. Sprague’s statement could be interpreted as saying that the
remedy provision was only intended to apply to current employees, the statement cannot be used
to alter the clear language of the provision. As explained above, the remedy provision
unambiguously applies to all claims and disputes related to Plaintiff’s employment, irrespective
of the fact that she was terminated. Parol evidence of prior representations by Defendant’s

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manager cannot vary the unambiguous terms of the contract. Salzman v. Maldaver, 315 Mich.
403, 412 (1946); Shay v. Aldrich, 487 Mich. 648, 667 (2010).

III.
Accordingly, it is ORDERED that Defendant’s motion to compel arbitration, ECF No. 4,
is GRANTED.
It is further ORDERED that proceedings in this matter are STAYED pending
arbitration.
It is further ORDERED that the clerk of court is DIRECTED to administratively close
this case. Upon conclusion of the arbitration proceedings, either party may move to lift the stay
and reopen the case.

s/Thomas L. Ludington
THOMAS L. LUDINGTON
United States District Judge
Dated: May 23, 2018

PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on May 23, 2018.
s/Kelly Winslow
KELLY WINSLOW, Case Manager

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