Lead Opinion
This case concerns a company’s effort to enforce an arbitration clause contained in a job application against an unsuccessful applicant. Appellee Ann Gove filed suit against Career Systems Development Corporation (“CSD”) alleging that she was denied a position because of her gender and pregnancy at the time of her application. CSD moved to compel arbitration pursuant to an arbitration clause in Gove’s job application, but was rebuffed by the district court. The court concluded that the arbitration clause was ambiguous as to whether disputes between CSD and applicants who were not hired were covered, and that this ambiguity must be construed against CSD.
We affirm the judgment, albeit on somewhat different reasoning.
I.
CSD’s motion to compel arbitration was made in connection with a motion to dismiss or stay. Accordingly, the following recitation of the facts is drawn from Gove’s complaint as well as documents submitted to the district court in support of CSD’s motion to compel arbitration. The facts are undisputed.
In May 2008, Gove began working for the Training & Development Corp. (“TDC”), a job training and placement organization, which had a contract to provide services to the Loring Job Corps (“Lor
The final section of the application included the following provision:
CSD also believes that if there is any dispute between you and CSD with respect to any issue prior to your employment, which arises out of the employment process, that it should be resolved in accord with the standard Dispute Resolution Policy and Arbitration Agreement (“Arbitration Agreement”) adopted by CSD for its employees. Therefore, your submission of this Employment Application constitutes your agreement that the procedure set forth in the Arbitration Agreement will also be used to resolve all pre-employment disputes. A copy of that procedure is on display in our employment office and a copy [of the] Arbitration Agreement setting forth that procedure will be provided to you.
If you have any questions regarding this statement and the Arbitration Agreement, please ask a CSD representative before acknowledging, because by acknowledging, you acknowledge that you have received a copy of the Arbitration Agreement and agree to its terms. Do not check the Accept box below until you have read this statement.
Directly following this provision was the statement “I accept the terms of the above agreement: □ Accept.” Gove placed a checkmark in the “accept” box and submitted her job application to CSD.
On April 21, Gove was interviewed by representatives of CSD. At the time, she was visibly pregnant and due to deliver on May 30. During the interview, she was asked “How much longer do you have?” She replied that she was due in about five weeks. When Gove was also asked whether she had any other children, she informed the interviewer that she had a seven-year-old son.
Gove was not hired by CSD, although CSD continued to have a need for the position she had applied for and continued to advertise for the position. Subsequently, Gove filed a complaint with the Maine Human Rights Commission (“MHRC”), which found reasonable grounds to conclude that she was denied the position because of her pregnancy. After the MHRC was unable to persuade the parties to reach a conciliation agreement, Gove filed suit in the United States District Court for the District of Maine, alleging that CSD discriminated against her on account of her gender and her pregnancy in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, and the Maine Human Rights Act, Me.Rev.Stat. tit. 5, §§ 4551-4634. CSD moved to compel arbitration, arguing that Gove was bound by the arbitration clause in the job application. The district court, however, found that the arbitration clause was not valid. It reasoned that the provision was ambiguous as to whether it covered an applicant such as Gove, who was never hired, and concluded that such an ambiguity must be construed against CSD, the drafter of the agreement. CSD now brings this interlocutory appeal challenging the district court’s decision.
Wé review both the interpretation of arbitration agreements and orders compelling arbitration (or declining to do so) de novo. Dialysis Access Ctr., LLC v. RMS Lifeline, Inc.,
In deciding a motion to compel arbitration, a court must ascertain whether: “(i) there exists a written agreement to arbitrate, (ii) the dispute falls within the scope of that arbitration agreement, and (iii) the party seeking an arbitral forum has not waived its right to arbitration.” Combined Energies v. CCI, Inc.,
In this case, the parties agree that Maine law governs. Under Maine law,
[a] contract exists if the parties mutually assent to be bound by all its material terms, the assent is either expressly or impliedly manifested in the contract, and the contract is sufficiently definite to enable the court to ascertain its exact meaning and fix exactly the legal liabilities of each party.
Sullivan v. Porter,
The Maine Law Court has applied to arbitration clauses the “bedrock rule of contract interpretation ... that ambiguities in a document are construed against its drafter.” Barrett v. McDonald Invs., Inc.,
The Law Court has explained that “[t]he rationale for interpreting ambiguities against the drafter is particularly compelling in contracts where one party had little or no bargaining power.” Barrett,
III.
The parties present dueling interpretations of the arbitration clause at issue. As a preliminary matter, we must determine whether this dispute goes to the existence of a valid arbitration agreement between the parties or merely the scope of any such agreement. The district court found that the validity of the agreement itself was called into question. Gove v. Career Sys. Dev. Corp.,
Normally, in evaluating the scope of an arbitration agreement, we would give significant weight to the federal policy favoring arbitration and the presumption of arbitrability.
Turning to Maine law, we must determine whether the arbitration clause is ambiguous in its coverage of applicants who are not hired. CSD argues that the clause unambiguously covers all disputes between it and applicants for employment. It asserts that “the term ‘pre-employment’ is widely understood to refer to the period of time between the submission of an application and hiring, whether or not someone is hired,” and that “employment process” refers to every step of the potential employment relationship between Gove and itself. It also argues that arbitration clauses are subject to broad interpretation as a matter of Maine law.
In contrast, Gove argues that the clause’s references to the “employment process” and “pre-employment disputes” should be read literally. Under her reading, if one is never employed by CSD, then a dispute cannot be “pre-employment” or related to the “employment process,” and the arbitration clause is inapplicable. Gove argues that this reading is particularly appealing to a lay person to whom the phrase “employment process” “clearly meant the process culminating in her hire, a process from which she never benefit-ted.” See Alt. Energy, Inc. v. St. Paul Fire & Marine Ins. Co.,
Importantly, nothing in the arbitration clause refers to “applicants.” Instead, every reference is to “your employment,” “the employment process,” or “pre-employment disputes.” Accordingly, there is a reasonable basis for Gove’s belief that she would only be bound by the arbitration clause if ultimately hired. Then, if she had post-hire claims arising out of promises made or actions taken during the hiring process (e.g., claims that she was being paid less or given fewer hours than she had been led to believe, or claims that similarly situated male employees were hired to more favorable positions or awarded a higher pay rate), she would be obligated to pursue those claims in an
In Johnson v. Circuit City Stores,
Given this ambiguity, we are bound by Maine law’s “bedrock rule of contract interpretation ... that ambiguities in a document are construed against its drafter.” Barrett,
To be sure, the Law Court also acknowledged in Barrett that Maine has “a broad presumption favoring arbitration.” Id. at 149; see also Anderson v. Banks,
Applying Maine contract law, we must follow the Law Court’s lead. Because of the obligation under Maine law to construe ambiguities against the drafter of a contract, we conclude that Gove is not required to arbitrate her claims. Therefore, the judgment of the district court is affirmed and the case is remanded for further proceedings consistent with this opinion.
So ordered.
Notes
. Typically, interlocutory orders are not immediately appealable. See 28 U.S.C. § 1291;
. We have often observed that in evaluating an arbitration clause, courts must give due regard to the federal policy favoring arbitration. See Dialysis Access Ctr.,
. We do not dispute the dissent’s reading of our precedents concerning the federal policy favoring arbitration. But the dissent attempts to bring these precedents to bear in support of an argument that appellant does not make. To the extent that the dissent suggests that the principle announced in Kristian v. Comcast Corp.,
. The clause does state, "If you have any questions regarding this statement and the Arbitration Agreement, please ask a CSD representative before acknowledging.” However, no contact information is provided and, because the application is to be completed online, an applicant may be required to agree to arbitrate before having any contact with a CSD representative.
Dissenting Opinion
(Dissenting).
The panel majority acknowledges that Gove’s application for employment at CSD contained a valid agreement to arbitrate. Nonetheless, it concludes that Gove is not required to take her claims to arbitration because principles of Maine contract law— specifically, the Maine Law Court’s fealty to the tenet of contra proferentem
To begin with, the majority’s application of the contra proferentem principle to resolve ambiguities regarding the scope of the arbitration clause against arbitrability is antithetical to a previous holding of this court that is directly on point. In Kristian v. Comcast Corp.,
Thus, while I fully agree with the majority’s threshold conclusion in this case, that we are considering here “a dispute concerning the scope of the arbitration clause, not its validity,” Maj. Op. at 5, given our holding in Kristian, I do not consider it sufficient here to resort to the doctrine of waiver in order to avoid taking into account “the interaction of the federal policy favoring arbitration with Maine contract law,” Maj. Op. at 6. Indeed, Kristian appears to require the opposite outcome than my colleagues in the majority reach in this case. See United States v. Guzman,
As to the issue of waiver, the record shows that CSD presented its motion to compel arbitration pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16, and neither party contests that the arbitration clause at issue is subject to the provisions of the FAA. See Preston v. Ferrer,
Given how this case evolved below, it was appropriate for CSD to devote a considerable portion of its initial brief on appeal to refuting the district court’s premise that there was any ambiguity in the arbitration clause to begin with,
To that end, in its initial briefing, CSD discussed our circuit’s case law regarding the appropriate legal standard for analyzing a motion to compel arbitration. It cited to Combined Energies v. CCI, Inc.,
Notably, after concluding its discussion of why, under the first prong of the analysis, there existed a valid agreement to arbitrate, CSD made a separate case for why Gove’s dispute with CSD falls within the scope of that agreement. That discussion included an excerpt from Dialysis Access Center, LLC v. RMS Lifeline, Inc.,
Certainly, as the majority points out, the discussion that followed this reference relied on Maine case law and focused on why state contract principles required interpreting the arbitration clause broadly. However, CSD subsequently used its reply brief to flesh-out the idea that it had already introduced, i.e., that under our case law arbitrability should be favored in the scope analysis.
It is significant that CSD relied on Paul Revere because that case dealt with issues analogous to the ones currently sub judice, and it also formed the basis for this court’s holding in Kristian. In Paul Revere, the district court had applied the same contractual doctrine relied upon here (the tenet of contra proferentem for adhesion contracts) to conclude that an asserted ambiguity in the arbitration clause at issue should be interpreted against the drafters. Id. The parties whose motion for arbitration had been denied below argued on appeal that the court was required to resolve any doubts in favor of arbitration. Id. The Paul Revere panel held that, because the alleged ambiguity went to the arbitration agreement’s existence, rather than its scope, “[t]he federal preference for arbitration [did] not come into play and, a fortiori, it [could not] undermine the lower court’s reliance on the contra proferentem tenet.” Id. An essential component to our holding in that case was the finding that the question of ambiguity presented went to the validity of the agreement to arbitrate, not its scope. See id. (determining question whether a party has standing to compel arbitration concerned “[the] right to arbitrate at all” and was, therefore, “not a scope question”). Paul Revere clarified that, in contrast, “[a] scope question arises Vhen the parties have a contract that provides for arbitration of some issues’ and it is unclear whether a specific dispute falls within that contract.” Id. (quoting First Options v. Kaplan,
Although CSD did not discuss the Paul Revere holding in detail in its brief, it did refer us to First Sealord Surety, Inc. v. TLT Construction Corp.,
On this basis, CSD adequately brought before this court the issue of whether or not the federal policy favoring arbitration should be applied in the scope analysis to favor arbitrability, vis-a-vis the tenet of contra proferentem for adhesion contracts. I find sufficient that CSD highlighted the distinction drawn in our case law between the court’s analysis of an arbitration agreement’s validity as opposed to its scope. Despite the majority’s refusal to engage with it, this distinction was key to the Kristian holding that now binds us, and generally to our preceding case law on how to interpret ambiguities in arbitration clauses. See Kristian,
In sum, because all judges on this panel conclude that Gove accepted and entered into a valid agreement to arbitrate some of the disputes between herself and CSD, our precedent is clear that Maine contract law cannot trump the federal policy favoring arbitration in our assessment of CSD’s motion to compel. See Kristian,
. The contract principle of contra proferentem is a Latin term meaning "against the offeror” and stands for "[t]he doctrine that, in interpreting documents, ambiguities are to be construed unfavorably to the drafter.” Black’s Law Dictionary 377 (9th ed. 2009).
. I take issue with the majority's suggestion that because CSD indicated at one point in its briefing that "there [was] no need to resort to the various rules of construction when the plain language of the agreement is unambiguous,” it necessarily waived any argument based on the federal policy. See Maj. Op. at 6. It is acceptable for parties to make arguments in the alternative, see, e.g., Fed.R.Civ.P. 8(d)(2) (indicating that pleadings containing alternative statements of a claim or defense “[are] sufficient if any one [of the alternative statements] is sufficient”), and it was sensible in this case for CSD to make its initial line of attack an argument against the ambiguity of the arbitration clause. I do not interpret CSD’s discussion in this regard as relinquishing the position that any potential ambiguities found by this court should be interpreted in favor of arbitration.
. CSD elaborated this point in its reply brief because it understood the argument in Gove's appellee brief as “conflating the two issues,” that is, (1) whether there exists a valid agreement to arbitrate and (2) whether the scope of any such agreement covers the dispute at hand. CSD indicated that this resulted in Gove's “ignor[ing] (or perhaps attempt[ing] to avoid) the analytical distinction between the two analys[es].” It was appropriate for CSD to use its reply brief to clarify that distinction, the relevance of which I will discuss infra.