454 Mass. 390 | Mass. | 2009
Lead Opinion
The plaintiff, Carol A. Warfield, the former chief of anesthesiology at Beth Israel Deaconess Medical Center, Inc. (BIDMC), filed this action in the Superior Court against her employers, alleging gender-based discrimination and retaliation in violation of G. L. c. 151B, and factually related common-law claims. BIDMC and the other defendants moved to dismiss Warfield’s complaint and compel arbitration on the ground that the employment agreement she signed soon after she became chief of anesthesiology mandated arbitration of all her claims. A judge in the Superior Court denied the motions, and the defendants filed this interlocutory appeal. We conclude that Warfield’s statutory discrimination claims do not fall within the scope of the arbitration clause contained in the employment agreement, and that she may proceed with her discrimination action in the Superior Court. Because her additional claims are wholly intertwined with her statutory discrimination claims, principles of judicial economy dictate that they be tried in the same action.
1. Facts. We recite only the facts relevant to the current dispute. Warfield, an anesthesiologist employed by Harvard Medical Faculty Physicians at Beth Israel Deaconess Medical Center, Inc. (HMFP), has been an anesthesiologist on the medical staff of BIDMC since 1980. On March 27, 2000, Warfield entered into an employment agreement with BIDMC and HMFP in which she agreed to serve in the capacity of anesthesiologist-in-chief for BIDMC (agreement).
Section 17 of the agreement, titled Arbitration, provides:
“Arbitration. Any claim, controversy or dispute arising out of or in connection with this Agreement or its negotiations shall be settled by arbitration. Each party hereto shall designate an independent arbitrator and these two[5 ] arbitrators shall select a third independent arbitrator who shall be chairperson of the panel. The arbitrators shall then conduct the arbitration at a mutually acceptable site and a majority shall render a decision as to the matter in dispute, which decision shall be binding on the parties hereto. Each party shall bear the expense of its own arbitrator and an equal share of the expense of the third arbitrator. To the extent not otherwise hereinabove provided, the arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The full rules of discovery shall apply to any such proceeding.
“In no event, however, shall this Section 17 be deemed to preclude a party hereto from instituting legal action seek*393 ing relief in the nature of a restraining order, an injunction or the like in order to protect her or its rights pending the outcome of an arbitration hereunder. With respect to matters submitted to arbitration other than claims for payment of monies due, the parties shall continue to perform their obligations hereunder relative to said matters pending resolution of the dispute by arbitration.”
Neither § 17 nor any other provision of the agreement made reference to employment discrimination statutes or claims.
In the fall of 2001, BIDMC hired Dr. Josef Fischer to be chief of surgery. In January, 2002, Paul Levy was hired as the president and chief executive officer of BIDMC.
Warfield alleges in her complaint that during the next several years, Fischer engaged in a relentless pattern of gender-based discriminatory treatment of her. She also alleges that she repeatedly complained to Levy about Fischer’s treatment, but that no or insufficient action was taken. On July 18, 2007, carrying out a decision made by Levy and BIDMC that Warfield characterizes as “discriminatory and retaliatory in its motivation and defaming in its effect,” Levy terminated Warfield’s appointment as anesthesiologist-in-chief, effective immediately. Warfield further alleges that, since her termination, BIDMC, Levy, and HMFP have “marginalize^]” her by collaborating to push her out of her job as a staff anesthesiologist at BIDMC, and to deny her benefits to which she would have had access, absent the alleged discriminatory and retaliatory treatment.
Warfield commenced this action in the Superior Court on March 7, 2008.
The defendants moved to dismiss the case and to compel arbitration of Warfield’s claims pursuant to G. L. c. 251, § 2.
The defendants appealed pursuant to G. L. c. 251, § 18 (a) (1), which grants a right of interlocutory appeal from orders denying an application to compel arbitration. We granted the defendants’ application for direct appellate review. We affirm the order of the Superior Court judge but for different reasons.
2. Discussion. By its express terms, the agreement is governed by Massachusetts law, and thus the Massachusetts Arbitration Act (MAA) applies to it. At the same time, the agreement comes within the scope of the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (2006) (FAA), because it concerns Warfield’s employment as anesthesiologist-in-chief, and the defendants, as hospital-based health care providers, are involved in interstate commerce. See Miller v. Cotter, 448 Mass. 671, 678 (2007). In all relevant respects, the language of the FAA and the MAA providing for enforcement of arbitration provisions are similar, and we have interpreted the cognate provisions in the same manner. Id. at 678-679. The FAA provides in relevant part:
*395 “A written provision in . . .a contract evidencing a transaction involving interstate commerce to settle by arbitration a controversy thereafter arising out of such contract ... or the refusal to perform the whole or any part thereof . . . shall be valid, irrevocable and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”
9 U.S.C. § 2.
Because procedures to compel arbitration under the FAA apply only in Federal courts, we apply the MAA’s procedures. See St. Fleur v. WPI Cable Sys./Mutron, 450 Mass. 345, 351-352 (2008). The MAA authorizes proceedings in the Superior Court to compel arbitration in accordance with the terms of an arbitration agreement, and permits an interlocutory appeal from orders denying an application to compel arbitration. See G. L. c. 251, §§ 2, 18. A defendant’s motion to compel arbitration is treated summarily.
It is settled that the FAA allows for the arbitration of Federal employment discrimination disputes, unless otherwise barred by law. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24-26 (1991); Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 170 F.3d 1, 19-20 (1st Cir. 1999). We have not had occasion to rule on whether employment discrimination claims arising under G. L. c. 15IB are arbitrable, but the parties here correctly assume their arbitrability. The dispute before us concerns only whether the parties have contractually agreed, in the agreement, to submit statutory claims of discrimination to arbitration. See Mugnano-Bornstein v. Crowell, 42 Mass.
We apply general principles of State contract law to determine whether a particular agreement requires arbitration of a claim. Mugnano-Bornstein, supra. See Brennan v. King, 139 F.3d 258, 264 (1st Cir. 1998), quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995) (“As with other issues involving the construction of individual employment contracts, in determining whether a contract requires arbitration, ‘courts generally . . . should apply ordinary state-law principles that govern the formation of contracts’ ”). See also Volt Info. Sciences, Inc. v. Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 474-476, All (1989) (where contract covered by FAA but choice of law clause provided California law would govern, parties in effect incorporated California arbitration rules into contract; under those rules, arbitration properly stayed even though FAA would not have called for stay).
The arbitration clause in the agreement provides that “[a]ny claim, controversy or dispute arising out of or in connection with this Agreement or its negotiations shall be settled by arbitration.” Federal as well as State law and policy favor arbitration. See Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983) (Federal); Miller v. Cotter, 448 Mass, at 676 (Commonwealth). This policy generally instructs us that where a contract has an arbitration clause that is “broad” in its reach, there is a rebuttable presumption that a contract dispute is covered by the clause, and doubts whether a particular dispute comes within the scope of the clause should be resolved in favor of arbitration. See Drywall Sys., Inc. v. ZVI Constr. Co., 435 Mass. 664, 666-667 (2002). See also Commonwealth v. Philip Morris Inc., 448 Mass, at 843-844. Cf. Local No. 1710, Int’l Ass’n of Fire Fighters v. Chicopee, 430 Mass. 417, 421-422 (1999).
Our State law principles of contract interpretation make clear that considerations of public policy play an important role in the interpretation and enforcement of contracts. See Feeney v. Dell Inc., ante 192, 193 (2009) (Commonwealth’s strong public policy supporting ability of consumers to bring class actions as means of seeking remedy for unfair or deceptive commercial conduct rendered unenforceable sales contract arbitration provision bar
Consistent with the public policy against workplace discrimination reflected in G. L. c. 151B, we conclude that an employment contract containing an agreement by the employee to limit or waive any of the rights or remedies conferred by G. L. c. 15 IB is enforceable only if such an agreement is stated in clear and unmistakable terms.
The interpretive rule we state here is not inconsistent with the presumption of arbitrability embedded in the FAA. That presumption signifies that “in applying general state-law principles of contract interpretation to the interpretation of an arbitration agreement within the scope of the [FAA] . . . due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself resolved in favor of arbitration.” Volt Info. Sciences, Inc. v. Trustees of Leland Stanford Jr. Univ., 489 U.S. at 475-476. Accord Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. at 24-25. But the purpose of the FAA was and is “to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. at 24. See Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 219-220 & n.6 (1985); St. Fleur v. WPI Cable Sys./Mutron, 450 Mass, at 349. The concern was to enforce private agreements to arbitrate according to their terms, not to encourage arbitration of contractual disputes for its own sake. See Volt Info. Sciences, Inc.
Our interpretive rule states only that as a matter of the Commonwealth’s general law of contract, a private agreement that purports to waive or limit — whether in an arbitration clause or on some other contract provision — the employee’s otherwise available right to seek redress for employment discrimination through the remedial paths set out in G. L. c. 151B, must reflect that intent in unambiguous terms.
We return to the agreement in this case to determine whether its arbitration clause or any other of its provisions reflect a clear intent to subject statutory discrimination claims to arbitration.
Contrary to the dissent, our review of the agreement does not persuade us that the arbitration clause at issue covers claims of statutorily based gender discrimination and retaliation under G. L. c. 15IB. The clause refers to disputes arising out of or concerning the agreement or negotiations leading to the agreement rather than concerning employment generally, and it seems to presume a continuing working relationship even as disputes pertaining to the provisions of the agreement would be resolved through arbitration.
We recognize that in appropriate instances, a plaintiff’s complaint may be resolved through arbitration of those claims that are covered by an arbitration clause and litigation of those claims that are not so covered, despite the lack of efficiency of such an outcome. See Miller v. Cotter, 448 Mass, at 685, 686 (that arbitration agreement may result in actions brought in two forums and thereby be “inconvenient, duplicative, or inefficient” is not determinative if it is “necessary result” of choice made when parties entered into arbitration agreement). See also Dean Witter Reynolds Inc. v. Byrd, 470 U.S. at 220-221. However, proceeding in two forums is not proper where, as here, Warfield’s common-law
In light of the foregoing, we do not reach the issue whether the employment agreement would require Warfield to arbitrate her claims against Levy and Fischer.
Order denying motions to dismiss and to compel arbitration affirmed.
We acknowledge the amicus briefs filed by New England Legal Foundation and Associated Industries of Massachusetts on behalf of the defendants; and by the American Civil Liberties Union of Massachusetts, Lawyers’ Committee for Civil Rights Under the Law of Boston Bar Association, and the National Employment Lawyers Association, Massachusetts Chapter, on behalf of the plaintiff.
The parties to Warfield’s employment agreement (agreement) were all represented by counsel in connection with its negotiation and drafting.
The language of the agreement on this point is that “the Physician [War-field] shall render services as an employee of HMFP to the Hospital and HMFP consistent with the terms of this Agreement.”
There were three rather than two parties to the agreement: Warfield, Beth Israel Deaconess Medical Center, Inc. (BIDMC), and Harvard Medical Faculty Physicians at Beth Israel Deaconess Medical Center, Inc. (HMFP). The language in the arbitration clause providing that “[e]ach party” is to select an independent arbitrator might suggest that there be three rather than two independent arbitrators chosen by the parties, but the agreement clearly does not so provide.
Warfield filed a complaint of discrimination with the Massachusetts Commission Against Discrimination (MCAD) on December 4, 2007; the complaint named BIDMC, HMFP, Josef Fischer, and Paul Levy as respondents. Pursuant to G. L. c. 151B, § 9, she filed her complaint in the Superior Court against the same parties a little over ninety days later, and her complaint before the MCAD was dismissed.
BIDMC and Levy also moved to dismiss the case on other grounds that are not relevant to this appeal.
The Massachusetts Arbitration Act (MAA), G. L. c. 251, § 1, in turn, provides in pertinent part:
“A written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties shall be valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract.”
The defendants did not request any evidentiary hearing to support their motion to dismiss and compel arbitration. We therefore analyze the facts alleged as we would a motion to dismiss.
This court’s decision in Local No. 1710, Int’l Ass’n of Fire Fighters v. Chicopee, 430 Mass. 417 (1999), concerned a public sector collective bargaining agreement, not a private employment contract. Nevertheless, this case is
In Mugnano-Bornstein v. Crowell, 42 Mass. App. Ct. 347 (1997) (Mugnano-Bornstein), the Appeals Court addressed the question whether the arbitration clause in the plaintiffs employment agreement covered her claims of sexual harassment and gender discrimination in violation of G. L. c. 93 and G. L. c. 151B. The clause provided in relevant part: “I hereby agree that any controversy arising out of or in connection with my compensation, employment or termination of employment shall be submitted to arbitration . . . Id. at 348 n.3. The employment agreement did not contain any specific reference to claims of sexual harassment or gender discrimination. Stating that the comprehensive scope of the arbitration clause created a presumption of arbi-trability, the Appeals Court concluded that the clause covered the plaintiffs claims because they arose out of her employment and later termination from her job. Id. at 352-353. Federal courts have similarly construed comparable language in arbitration clauses of employment agreements. See, e.g., Myrick v. GTE Main Inc., 73 F. Supp. 2d 94, 95 (D. Mass. 1999). For reasons discussed infra, and applying Massachusetts rules of contract interpretation, we do not adopt Mugnano-Bornstein’s analysis.
The administrative avenue includes provisions for the MCAD to (1) prosecute the discrimination claim on behalf of the complainant and to vindicate the public interest, (2) award damages to the complainant in appropriate cases for emotional distress, and (3) fashion equitable remedies intended to promote the broader public interest in eliminating employment discrimination. See G. L. c. 151B, §§ 5, 6. See also Stonehill College v. Massachusetts Comm’n Against Discrimination, 441 Mass. 549, 563, cert, denied sub nom. Wilfert Bros. Realty Co. v. Massachusetts Comm’n Against Discrimination, 543 U.S. 979 (2004). The judicial remedy includes the right to a speedy trial, see G. L. c. 151B, § 9, as well as rights generally available in a judicial forum such as the right to a jury trial, full discovery limited only by the Massachusetts Rules of Civil Procedure, and full appellate review.
While not an issue in this case, it seems obvious that in view of the strength of the Commonwealth’s policy against employment discrimination, no employment contract purporting to waive entirely an employee’s right to assert or seek any redress for a claim of discrimination, no matter how
We recognize that where the FAA applies, it would preempt a conflicting State law — one that might, for example, bar arbitration or authorize a party to proceed in a judicial forum regardless of the party’s having entered into an agreement to arbitrate. See, e.g., Perry v. Thomas, 482 U.S. 483, 490-492 (1987). We also appreciate that a State court cannot invalidate an arbitration agreement in a private contract pursuant to a State law or policy that applies only to arbitration agreements when doing so would be in conflict with the FAA. See Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996). As indicated in the text, however, our rule of contract interpretation neither bars agreements to arbitrate employment discrimination disputes nor applies only to arbitration clauses.
The Supreme Court, which frequently has instructed all State and Federal courts to address questions of arbitrability “with a healthy regard for the federal policy favoring arbitration,” Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983), has very recently observed that this is a “vague prescription” with an opaque meaning. Arthur Andersen LLP v. Carlisle, 129 S. Ct. 1896, 1902 n.5 (2009). In any event, an appropriately respectful regard for the Federal policy favoring arbitration does not require arbitration where an agreement is so vaguely or generally worded that an employee would not know that she had waived her right to pursue statutorily available administrative and judicial remedies. Cf. Campbell v. General Dynamics Gov’t Sys. Corp., 407 F.3d 546, 559 (1st Cir. 2005) (“an employer who takes a barebones approach to affording notice [of what claims are subject to arbitration] runs the risk that its efforts will fall short”).
We emphasize that we deal here with what we have termed an “overriding” statutorily expressed, public policy against discrimination. Massachusetts Bay Transp. Auth. v. Boston Carmen’s Union, Local 589, ante 19, 26 (2009). The presumption of arbitrability that accompanies the use of a “broad”
In 14 Penn Plaza LLC v. Pyett, 129 S. Ct. 1456 (2009), the Supreme Court concluded that Federal law permits a collective bargaining agreement to compel arbitration of claims alleging statutory discrimination, provided the provision is clearly stated. Id. at 1474. The four dissenting Justices disagreed with the Court’s holding that a collective bargaining agreement could waive an individual’s right to court access for individually based statutory claims (and further disagreed with the Court’s description of the Supreme Court’s precedent), but they did not challenge the clarity of the notice provided by the collective bargaining agreement under review in the case. Id. at 1476-1481 (Souter, J., dissenting, with whom Stevens, Ginsburg, & Breyer, JJ., joined).
As indicated at the outset, the agreement expressly provides that it is to be “governed by the laws of the Commonwealth of Massachusetts,” and therefore the rule of contract interpretation discussed above applies to it. Cf.
Section 17 of the agreement specifies that “[w]ith respect to matters submitted to arbitration other than claims for payment of monies due, the parties shall continue to perform their obligations hereunder relative to said matters pending resolution of the dispute by arbitration.”
In reaching this conclusion, we agree with the Superior Court judge that the defendants’ motions to compel arbitration should be denied. We do
Dissenting Opinion
(dissenting). I agree with the court that discrimination claims are arbitrable. While G. L. c. 15 IB creates substantive rights, and provides both judicial and administrative remedies, there is no legal principle that precludes a potential plaintiff from agreeing that his or her claims shall be arbitrated instead. Indeed, while arbitration clauses in employment agreements are generally inserted at the employer’s behest, arbitration may well bring about a speedier, less expensive, less stressful result from which an employee may be able to benefit. I accept also that, as in the case of any arbitration, the parties must agree that a given dispute is to be arbitrated rather than left to administrative or judicial proceedings. In other words, arbitration cannot be imposed unilaterally; it is a product of a mutual understanding.
Where I depart from the court is with its conclusion that the arbitration clause in this employment agreement does not reflect the consent of all parties to arbitrate discrimination claims. The arbitration provision applies to “[a]ny claim, controversy or
The court pays lip service to the intent of the parties, and then refuses to enforce the clearly stated intent on the basis of its public policy views. In so doing, the court, in my opinion, exaggerates the significance of antidiscrimination claims as opposed to other claims of equal importance to those who assert them. That G. L. c. 151B “shall be construed liberally for the accomplishment of its purposes, and any law inconsistent with any provision of this chapter shall not apply,” G. L. c. 15IB, § 9, repeats an admonition found in a number of our statutes,
The court characterizes its “interpretive rule” as leaving “parties to an employment contract. . . free to agree on arbitration of statutory discrimination claims, and the presumption of arbitrability is in effect. However, parties seeking to provide for arbitration of statutory discrimination claims must, at a minimum, state clearly and specifically that such claims are covered by the contract’s arbitration clause .” Ante at 400. In my opinion, the parties before us have done so. When they entered the agreement, they stated that they agreed to arbitrate “[a]ny claim, controversy or dispute arising out of or in connection with this Agreement.” They could hardly expect that the court would rewrite their agreement for them by insisting on a redrafting
See, e.g., St. 1978, c. 512 (“claims and indemnity procedure for the Commonwealth, its municipalities, counties and districts”). As to liberal construction, see, e.g., G. L. c. 175A, § 2; G. L. c. 174A, § 2.