Appendix — Reliable Business Computers v. Heurtebise

Supreme Court, U.S.

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No. __ 9g 08 HE GLENS

In The

Supreme Court of the United States

*»> October Term, 1996 +

*

RELIABLE BUSINESS COMPUTERS,

Petitioner,

Vv.

THERESA A. HEURTEBISE,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE MICHIGAN SUPREME COURT

APPENDIX

TO PETITION FOR A WRIT OF CERTIORARI

TO THE MICHIGAN SUPREME COURT

CHRISTOPHER R. HOLLIDAY (P 39173) VEeRCRUYSSE METZ & Murray, P.C.

JULIA SHERWIN (P50992) By: DIANE M. SOUBLY (P 32005)

Attorneys for Respondent Counsel of Record

3000 Cadillac Tower ROBERT M. VERCRUYSSE (P 21810)

Detroit, Michigan 48226 Attorneys for Petitioner

(313) 965-0050 31780 Telegraph Road, Suite 200

Bingham Farms, Michigan 48025

(810) 540-8019

Interstate Brief & Record Company, a division of North American Graphics, Inc.

1629 West Lafayette Boulevard, Detroit, MI 48216 (313) 962-6230

DMR ii i A. RNR EERE RETR SN

ss as iy aa em i ai ia die se i ah 2 5

TABLE OF CONTENTS OF APPENDIX

PAGE

ORDER DENYING REHEARING - State of Michigan

Supreme Court (September 16, 1996) ........cccccccccceeee. A-1

OPINION — State of Michigan Supreme Court

I Mel IND Vesela ganelhcccsncibaradabesiiteniscrnasiseicssibnain, A-2

OPINION — State of Michigan Court of Appeals

I Ty I a, A-35

EXCERPTS FROM DEFENDANT-APPELLEE’S BRIEF

ON APPEAL — State of Michigan Supreme Court

Bs FS Or ea A-38

EMPLOYEE ACKNOWLEDGMENT - Reliable Business

Computers, Inc (May 25, 1989) ....cccccccccccssssscesseesseees A-62

EXCERPT FROM

PLAINTIFF-APPELLANT’S SUPPLEMENTAL APPENDIX —

State of Michigan Supreme Court ..........0000000000... A-63

AFFIDAVIT OF THOMAS RIDDLE - State of Michigan

Court of Appeals (May 6, 1993) ...ccccccccccccssccsssececseees A-67

STATUTORY AND CONSTITUTIONAL AUTHORITIES:

oe a YR eee n ene A-71

Michigan Fair Employment Practices Act .............. A-72

Elliott-Larsen Civil Rights Act. ...........ccccccccceceeeeeeeeee A-86

Title 9, United States Code, §§ 1-2 .......cccceeceeee. A-111]

ee eg PINs Ba OE Hececsnchecdcncscscecocvancabedcscinsate A-112

as: eis I IG aan A-112

No.

In The

Supreme Court of the United States

* October Term, 1996 «

RELIABLE BUSINESS COMPUTERS,

Petitioner,

Vv.

THERESA A. HEURTEBISE,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE MICHIGAN SUPREME COURT

APPENDIX

TO PETITION FOR A WRIT OF CERTIORARI

TO THE MICHIGAN SUPREME COURT

A-l

ORDER DENYING REHEARING

(State of Michigan — Supreme Court)

(Entered September 16, 1996)

(THERESA S. HEURTEBISE, Plaintiff-Appellant, v RELI-

ABLE BUSINESS COMPUTERS, INC., Defendant-Appellee —

SC: 102019; CoA: 152041; LC: 91-131165-CZ; Rehearing

N1.366)

James H. Brickley, Chief Justice; Charles L. Levin, Michael

F. Cavanagh, Patricia J. Boyle, Dorothy Comstock Riley,

Conrad L. Mallett, Jr., Elizabeth A. Weaver, Justices.

In this cause, a motion for rehearing is considered,

and it is hereby DENIED.

(SEAL)

(Certification Omitted)

A-2

OPINION

(State of Michigan — Supreme Court)

(Argued April 10, 1996 [Calendar No. 5};

Decided & Filed July 16, 1996)

(THERESA S. HEURTEBISE, Plaintiff-Appellant, v RELI-

ABLE BUSINESS COMPUTERS, INC., a Michigan corporation,

Defendant-Appellee — No. 102019)

James H. Brickley, Chief Justice; Charles L. Levin, Michael

F Cavanagh, Patricia J. Boyle, Dorothy Comstock Riley,

Conrad L. Mallett, Jr., Elizabeth A. Weaver, Justices.

BEFORE THE ENTIRE BENCH

CAVANAGH, J.

We are asked in this case to address whether the

instant parties have created a binding arbitration agree-

ment with respect to employment discrimination claims

accruing subsequent to such an agreement. If yes, then

we would need to address whether such agreements

between employers and employees, entered into as a

condition of employment, violate public policy in

Michigan. We hold that no binding agreement was cre-

ated in this case. Consequently, a majority of this Court

declines to address the second issue. However, | would

further hold that the public policy against discrimina-

tion in Michigan precludes enforcement of prospective

waivers in employment contracts of a judicial forum for

civil rights claims. Before turning to the matter at hand,

we thank all of the amici curiae who filed briefs for

assisting us in resolving the issues.

/

This case is at the summary disposition stage. In

November 1991, the plaintiff, Theresa Heurtebise, filed

suit against the defendant, Reliable Business Computers,

alleging that she had been unlawfully terminated from

A-3

her employment in violation of the Michigan Civil Rights

Act. MCL 37.2101 et seg.; MSA 3.548(101) et seq. The

plaintiff alleged that she had been hired in May 1989 to

perform computer software support work. She further

alleged that she and a co-worker, who was male, often

took lunches that lasted longer than the company’s

established one-hour period, while working together on

a project. Additionally, she alleged that on July 20, 1990,

the plaintiff and this male co-worker returned from a

working lunch that had lasted longer than one hour.

The plaintiff alleged that she was terminated, while her

male co-worker was not. The plaintiff argued that this

was unlawful gender discrimination and sought money

damages.

In response, the defendant brought a motion to dis-

miss, pursuant to MCR 2.116(C)(4) (lack of subject

matter jurisdiction), or, alternatively, to compel arbitra-

tion and to stay proceedings, pursuant to MCR 3.602.

The defendant relied on a written acknowledgment

signed by the plaintiff and dated May 25, 1989, which

stated that she had received the defendant's employee

handbook and that she had agreed to be bound by its

terms and policies.' The handbook provided an internal

review mechanism for disputes with respect to dis-

1 The document provided:

I acknowledge receipt of the Reliable Business Com-

puters, Inc. Lmployee Handbook. I agree to conform to

the various procedures, rules and regulations of the com-

pany, as set forth therein, and as may be promulgated by

the company in the future, and further understand that my

employment and compensation can be terminated with, or

without cause, and with or without notice at any time, at

the option of either me or the company. I further under-

stand that no employee, other than the president or his

designee, in a duly executed written document, has any

authority to enter into any agreement for employment for

any specified period of time, or to make any arrangements

contrary to or different from what is provided in this

handbook.

A-4

missals.? In addition, it provided that all disputes

involving money damages would go to final and binding

arbitration.’

. Notwithstanding that employees are employed by the COM-

PANY “at will” and that an employee’s employment may be

terminated by the employee or the COMPANY, at any time,

(without notice and without cause). An employee who has

followed the internal review procedure for review by the

Executive Committee, (specified above), and who is not sat-

isfied with the results of the review and who feels com-

pelled to seek redress from a source outside the COMPANY

may challenge the propriety of the dismissal outside the

COMPANY, only through arbitration as hereinafter

described.

Such arbitration shall be the final arena of dispute reso-

lution and the decision of the arbitrator(s) shall be final

and binding upon both the COMPANY and the employee.

3 Section VIII of the handbook provided:

ARBITRATION OF DISPUTES

If any dispute, matter or controversy involving claims of

monetary damages and/or employment related matters

should arise between an employee and the COMPANY,

including, but not limited to, any and all claims relating to

termination of employment (regardless of whether or not

the employee has exhausted the various mandatory proce-

dures for internal review of complaints and dismissals),

then such dispute, matter or controversy shall be referred

for binding arbitration under the laws of the State of

Michigan to the American Arbitration Association (here-

inafter “AAA” ) under the rules of such AAA, to be decided

by a three (3) member arbitration panel, except that the

COMPANY shall have the right to select one arbitrator, the

employee shall have the right to select one arbitrator, and

the two arbitrators so selected shall select a third arbitrator.

A decision or award of the AAA shall be accepted as final

and conclusive and shall be binding upon both the

employee and the COMPANY ... . The arbitration pro-

ceeding shall afford the COMPANY and the employee with

opportunities to present and rebut evidence relative to the

applicable issues. Nothing herein relative to arbitration,

however, shall prevent either employee or COMPANY from

seeking and obtaining equitable relief on a temporary or

permanent basis from a court of competent jurisdiction by

(concluded on page A-5)

? Rota

A-5

The trial court denied the defendant's alternative

motions. It refused to enforce the arbitration agreement

on the grounds that it was against public policy and

that other clauses in the handbook made the arbitra-

tion provision ambiguous.‘

The Court of Appeals reversed. 207 Mich App 308; 523

NW2d 904 (1994). It reasoned:

The trial court appears to have denied defend-

ant’s motion in part because it found there was

no “meeting of the minds” between plaintiff and

defendant with regard to the arbitration clause.

The record does not Support such a finding.

Before beginning employment, plaintiff signed an

acknowledgment form that stated that she

agreed to conform to the various procedures,

rules, and regulations of the company as set

forth in the handbook. Moreover, even were the

record devoid of plaintiff's express acceptance of

the handbook’'s provisions, it is well established

(continued from page AA)

instituting a legal action or other court proceeding in order

to protect or enforce the rights of either or to prevent

irreparable harm and injury. However, the court's jurisdic-

tion over any such matter between the COMPANY and the

employee shall be expressly limited only to the equitable

issues and relief sought, and all issues involving monetary

damages between the COMPANY and the employee shall be

determined through arbitration as described above.

4 The court stated from the bench:

This is a situation in which an employer hires an em-

ployee and as a condition, in giving that employee ...

employment hands her an employee handbook, and the

employee handbook purports to handle any number of

things, including providing an internal review process for

dismissals. It is an agreement which, if one were to enforce

it, would indicate that this employee could not bring an

action for anything, including, by the way, [the] whistle

blowers act, against this employer without subjecting it to

arbitration. That strikes me as if not absurd certainly viola-

tive of public policy.

A6

under Michigan law that mutual assent to a term

of employment is not required. /n re Certified

Question, 432 Mich 438; 443 NW2d 112 (1989);

Carlson v Hutzel Corp of Michigan, 183 Mich App

508; 455 NW2d 335 (1990); Toussaint v Blue Cross

& Blue Shield of Michigan, 408 Mich 579; 292

NW2d 880 (1980).'5)

Plaintiff's argument that the handbook specifi-

cally states that it does not create an enforce-

able contract is misguided. The provision

plaintiff relies on addresses the at-will nature of

plaintiff's employment, not the handbook in its

entirety.

Finally, we find no “public policy” prohibition

against the enforcement of a valid arbitration

agreement that provides for meaningful arbitra-

tion in matters involving civil rights questions.

See Gilmer v Interstate/Johnson Lane Corp, 500 US

20; 111 S Ct 1647; 114 L Ed 2d 26 (1991). To the

contrary, arbitration has long been a favorable

method of dispute resolution. Detroit v AW

Kutsche & Co, 309 Mich 700; 16 NW2d 128 (1944).

Thus, arbitration clauses are to be liberally con-

strued with any doubts to be resolved in favor of

arbitration. Chippewa Valley Schools v Hill, 62

Mich App 116; 233 NW2d 208 (1975). Contrary to

plaintiff's suggestion, arbitration of plaintiff's

claims will not result in the loss of her rights

under the Civil Rights Act, but, instead, merely

constitutes enforcement of an agreement to have

those rights determined in a different forum.

Arbitration does not impair the remedies

5 We note that the panel’s citation of In re Certified Question,

which held that an employer could unilaterally change a written

policy, was misplaced. Assuming arguendo that the Michigan Arbi-

tration Act applies, it provides that neither party to an arbitration

agreement can revoke the agreement without the other party's con-

sent. MCL 600.5011; MSA 27A.5011.

A-7

afforded under the statute. [207 Mich App 310-

311. ]

We granted leave to the plaintiff's appeal. 450 Mich

960 (1995). We note that the entire handbook was not

presented to the trial court or to the Court of Appeals.

After oral argument, we granted the plaintiff's motion to

expand the record to include the entire handbook. It is

seventy-one pages long and covers a broad scope of

subjects.® The expanded record reveals that the hand-

book included an antidiscrimination policy statement.’

In the introduction on page 2, the handbook further

reserved in the defendant the right to modify any policy

contained in the handbook “at its sole discretion.”

6 The table of contents lists the following headings:

administrative policies, rules and procedures ... salary and

wage levels, promotions and transfers ... absence from

work ... employee benefits ... security provisions — non-

disclosure of company trade secrets and confidential infor-

mation ... company’s ownership of inventions and other

developments ... termination and dismissal ... [and] arbi-

tration of disputes.

7 On page 4, the handbook provided:

It is the policy of the company to recruit, hire and pro-

mote without regard to physical handicap, race, religion,

national origin, sex, age or veteran status. It is also com-

pany policy to require that all other personnel action such

as compensation, transfers, company sponsored training,

educational assistance, social and recreational programs,

and all employee benefit programs are administered

without regard to physical handicap, race, religion, national

origin, sex, age or veteran status. It is important that every

employee, regardless of status, understand the intent of

and comply with this policy. Should you feel that someone

has violated this policy, please contact the Chief Operating

Officer, or any member of the Executive Committee,

immediately.

We note that a contractual provision providing parallel protection

against discrimination cannot supplant independent statutory and

constitutional rights. Betty v Brooks & Perkins, 446 Mich 270, 289;

521 NW2d 518 (1994).

A-8

Il

We turn first to whether the parties are bound by a

valid arbitration agreement. It is undisputed that an

arbitration provision is unenforceable if it is not a

binding contract.’ The opening statement in the hand-

book provides:

This document is intended to establish and

clarify certain employment policies, practices,

rules and regulations (hereinafter collectively

referred to as “Policies”) of Reliable Business

Computers, Inc., (hereinafter referred to as the

“company” ). Except as may otherwise be pro-

vided, the Policies will apply to all company

employees, and it is each employee's responsi-

bility to assure that his/her own conduct is in

conformity with those Policies. /t is important to

recognize and clarify that the Policies specified

herein do not create any employment or personal

contract, express or implied, nor is it intended

nor expected that the information provided in

this document will provide sufficient detail to

answer any and all questions which may arise.

NOTWITHSTANDING ANY OF THE SPECIFIC POLICIES

HEREIN, EACH EMPLOYEE HAS THE ABSOLUTE RIGHT

TO TERMINATE HIS/HER OWN EMPLOYMENT AT ANY

TIME, WITHOUT NOTICE, AND FOR ANY REASON WHAT-

SOEVER, AND THE COMPANY HAS THE SAME RIGHT.

From time to time, the company specifically

reserves the right, and may make modifications

to any or all of the Policies herein, at its sole dis-

cretion, and as future conditions may warrant. In

the event employees have any questions relative

to any of the Policies, they are urged to contact

their supervisor for clarification purposes.

x***

8 4 Am Jur 2d, Alternative Dispute Resolution, § 70, pp 129-130.

Assuming arguendo that the MAA applies, it provides the same con-

tractual requirements. MCL 600.5001(2); MSA 27A.5001(2).

a

ee

A-9

New employees will receive a copy of this doc-

ument at the time of formal hire. Upon receipt,

all employees will sign the Employee Acknowl-

edgement, acknowledging receipt of this docu-

ment. [Emphasis added. ]

This demonstrates that the defendant did not intend

to be bound to any provision contained in the hand-

book. Consequently, we hold that the handbook has

not created an enforceable arbitration agreement with

respect to this dispute. We note that the above

opening statement was not part of the record before

the Court of Appeals. Had the Court of Appeals been

able to examine the entire handbook. we are confident

that it would have reached the same conclusion. We

hold that the defendant was not entitled to summary

disposition.

Il

Although a majority of this Court saves the public

policy issue for another day, because the Court of

Appeals addressed it, | believe that we should decide it

as well. Therefore, | turn now to the issue whether pri-

vate employers can require employees, as a condition of

employment, to waive prospectively their right to

pursue civil rights claims in a judicial forum.

As | will demonstrate, Michigan has a long history of

stalwartly defending individuals from invidious discrimi-

nation in their pursuit of basic civil liberties. such as

equal opportunity in the pursuit of employment. Unlike

federal law, Michigan also has an unwavering history of

faithfully defending an aggrieved individual's right to a

judicial forum to remedy unlawful discrimination.

The defendant relies on federal title VII and age dis-

crimination (ADEA) case law. However, it is axiomatic

that even under federal law, “an employee may not

prospectively waive his or her rights under either Title

Vil or the ADEA.” Adams v Philip Morris, Inc, 67 F3d 580,

A-10

584 (CA 6, 1995).® Likewise, we have held that thé rights

secured by the Michigan Civil Rights Act are “nonnego-

tiable state rights.” Betty v Brooks & Perkins, 446 Mich

270, 282; 521 NW2d 518 (1994). “These are rights that

apply to all employees, whether or not they belong to a

union. Such rights cannot be waived or conditioned on

success at the bargaining table.” /d. The defendant and

its amici curiae would have us believe that the only

interest at stake in enforcing a prospective arbitration

agreement is the parties’ choice of forum in which an

aggrieved party may pursue statutory remedies. We

should decide whether a prospective waiver of an

aggrieved individual's right to a judicial forum, which is

required of the employee as a condition of employment,

comports with Michigan public policy as reflected in

our constitution, civil rights statute, and case law.

The issue before us would be one of first impression.

There are several layers of considerations that | will

address. First, | will briefly review the prevailing prece-

dent with respect to federal discrimination claims.

Second, | will consider whether Michigan civil rights law

is substantially similar to federal antidiscrimination law

or whether it is materially different with respect to an

aggrieved individual’s access to a judicial forum. | will

them trace the role of an aggrieved individual's access

to a judicial forum in the development of Michigan civil

rights law to determine whether Michigan public policy

precludes the enforcement of prospective arbitration

agreements in employment contracts with respect to

statutory civil rights claims.

Federal Discrimination Claims

The Court of Appeals relied on Gilmer, supra, in

holding that public policy did not prevent the enforce-

9 See also Kendall vy Watkins, 998 F2d 848, 851 (CA 10, 1993)

(“an employee may agree to waive Title VII rights that have

accrued, but cannot waive rights that have not yet accrued” ).

A-11

ment of a valid prospective arbitration agreement. 207

Mich App 311. In 1991, the Gilmer Court held that a

broadly worded arbitration clause in a securities regis-

tration form, which is often referred to as a stock

broker U-4 form, covered an ADEA claim. In doing so,

the Court found that the Federal Arbitration Act (FAA)

applied and that it evidenced a “‘liberal federal policy

favoring arbitration agreements.’” /d. at 25 (citation

omitted). However, the FAA expressly excludes from

coverage “contracts of employment of seamen, railroad

employees, or any other class of workers engaged in for-

eign or interstate commerce.” 9 USC 1.” Referencing this

clause, Gilmer expressly did not decide what the result

would be if the arbitration clause had been contained in

an employment contract. /d. at 25, n2. Gilmer also dis-

tinguished a trilogy of cases that had arisen in the col-

lective bargaining setting: Alexander v Gardner-Denver

Co, 415 US 36; 94 S Ct 1011; 39 L Ed 2d 147 (1974) (title

Vil claim), Barrentine v Arkansas-Best Freight System, Inc,

450 US 728; 101 S Ct 1437; 67 L Ed 2d 641 (1981) (right

to minimum wage claim under the Fair Labor Standards

Act), and McDonald v West Branch, 466 US 284: 104 S Ct

1799; 80 L Ed 2d 302 (1984) (42 USC 1983 claim).

Following Gilmer, there has been a lot of appellate

activity involving the applicability of prospective arbitra-

tion agreements to federal discrimination claims. Al-

though there remain many unanswered questions in

Gilmer’s wake, two general rules have emerged. First,-an

arbitration clause in a collective bargaining agreement dees

not extend to federal statutory claims of discrimination.

E.g., Pike v Burlington Northern R Co, 273 Mont 390, —; 903

10 The courts remain split over the scope of 9 USC 1. See

Williams v Katten, Muchin & Zavis, 837 F Supp 1430, 1438-1439 (ND

Ill, 1993) (listing cases holding that the exclusionary clause is lim-

ited to transportation industries employment contracts and cases

holding that the clause extends to all employment contracts);

Fletcher v Kidder, Peabody & Co, 81 NY2d 623, 637; 601 NYS2d 686;

619 NE2d 998 (1993) (citing cases).

A-12

P2d 1352, 1357 (1995). One overriding rationale for this

rule is that civil rights are individual personal rights, while

union bargaining representatives act for the benefit of the

group. The apparent “tension between collective repre-

sentation and individual statutory rights” led the Court in

the Alexander line of cases to protect the rights of the

individua! employee by not enforcing arbitration agree-

ments in collective bargaining agreements with respect to

claims of unlawful discrimination. Gilmer, 500 US 35.

The second rule is that an arbitration clause in a

stock broker U-4 form does extend to title VII claims, in

addition to ADEA claims. Bender v AG Edwards & Sons,

Inc, 971 F2d 698 (CA 11, 1992); Alford v Dean Witter

Reynolds, Inc (On Remand), 939 F2d 229 (CA 5, 1991).

The defendant cites numerous cases for the proposi-

tion that prospective arbitration agreements in indi-

vidual employment contracts have been enforced with

respect to federal and state discrimination claims."

However, those cited cases arose under the FAA or were

not ordinary employment contracts.” | have found

1 In Mago v Shearson Lehman Hutton, Inc, 956 F2d 932 (CA 9,

1992), the court assumed that the FAA applied because the employee

did not challenge its applicability. Applying the FAA, the court found

that a privately negotiated arbitration agreement in an employment

application covered a title VII claim. /d. at 935. Likewise, in DiCrisci

v Lyndon Guaranty Bank of New York, 807 F Supp 947 (WD NY, 1992),

the court applied the FAA and enforced an arbitration clause in an

employment contract with respect to title VII and New York discrimi-

nation claims. However, the court reserved the issue of punitive dam-

ages under state law for postarbitration consideration. /d. at 953-954.

See also Scott vy Farm Family Life Ins Co, 827 F Supp 76 (D Mass, 1993)

(applying the FAA, the court held that an arbitration agreement in an

insurance sales agent contract covered title VII and state discrimina-

tion claims), and Hull vy NCR Corp, 826 F Supp 303 (ED Mo, 1993)

(applying the FAA, the court enforced arbitration agreement with

respect to title VII, the ADEA, and state discrimination claim).

12 See Williams, n 10 supra, 837 F Supp 1438, characterizing a

partnership agreement as an employment contract and enforcing a

prospective arbitration clause with respe >t to a title VIi claim. See

also Dancu v Coopers & Lybrand, 778 F Supp 832 (ED Pa, 1991),

aff'd 972 F2d 1330 (CA 3, 1992) (partnership agreement).

A-13

other cases that have distinguished the contract at

issue, such as a stock broker U-4 form, as not being an

employment contract. Willis v Dean Witter Reynolds, Inc,

948 F2d 305, 312 (CA 6, 1991); Alford, 939 F2d 230, n*

(“{c]ourts should be mindful of this potential issue in

future cases” )." On the basis of the fact that the Gilmer

Court expressly distinguished employment contracts, id

at 25, n2, and because many subsequent cases have

continued that distinction, | would find that the cases

upholding prospective arbitration agreements in stock

broker U-4 forms, including Gilmer, are not on point in

the case at hand because they did not concern ordi-

nary employment contracts." Hence, | would find that

there remains a conflict among courts regarding

whether arbitration agreements in individually negoti-

ated employment contracts are enforceable under the

FAA with respect to claims of unlawful discrimination.

In any event, the defendant has not argued that the

instant case is controlled by the FAA. Therefore, even if

prospective arbitration agreements in individually nego-

tiated employment contracts are enforceable with

respect to federal and other state discrimination claims

when the FAA does apply, such cases would not neces-

sarily apply here.”

I$ The defendant has pointed out Beauchamp v Great West Life

Assurance Co, 918 F Supp 1091 (ED Mich, 1996). However,

Beauchamp involved a U-4 form, which the court expressly stated

was not an employment contract. /d. at 1094, n 2.

14 There may also be an issue whether the level of sophistica-

tion of the employee may factor into the enforceability of an arbi-

tration agreement. See Asplundh Tree Expert Co v Bates, 71 F3d 592,

602 (CA 6, 1995) (applying the FAA and noting that “the arbitration

clause is contained in an employment contract between a highly

paid executive and his corporate employer” ).

15 Further, even if the FAA were to apply, it can be surmounted

by contrary legislative or constitutional intent. See discussion infra

at 29.

A-14

Title Vil and ADEA Distinguished From

the Michigan Civil Rights Act

Even though we often look to title VII precedent in

interpreting our own civil rights statute,” we decline to

do so when the Michigan statute provides greater pro-

tection to victims of discriminatory actions than title

VII provides.” Title VII requires claimants to exhaust

administrative remedies with the Equal Employment

Opportunity Commission (EEOC) before pursuing judi-

cial relief." Likewise, the ADEA requires an aggrieved

individual to seek relief first with the EEOC." In sharp

contrast, the Michigan Constitution expressly prohibits

an exhaustion of administrative remedies requirement

for civil rights claims.*° In addition, the Legislature has

underscored this policy by also expressly prohibiting an

exhaustion of administrative remedies requirement.”!

16 Radthe v Everett, 442 Mich 368, 381-382; 501 NW2d 155 (1993).

17 Eide v Kelsey-Hayes Co, 431 Mich 26, 36-38; 427 NW2d 488 (1988).

18 42 USC 2000e-5(b), (c), (e). See Shannon v Ford Motor Co, 72

F3d 678, 684 (CA 8, 1996):

In general, “|e|xhaustion of administrative remedies is

central to Title VII's statutory scheme because it provides

the EEOC the first opportunity to investigate discriminatory

practices and enables it to perform its role of obtaining vol-

untary compliance and promoting conciliatory efforts.” To

exhaust her remedies, a Title VII plaintiff must timely file

her charges with the EEOC and receive, from the EEOC, a

“right to sue” letter. 42 USC 2000e-5(b), (c), (e). The proper

exhaustion of administrative remedies gives the plaintiff a

green light t« bring her employment-discrimination claim,

along with allegations that are “like or reasonably related”

to that claim, in federal court. [Citations omitted. |

19 29 USC 626(d); Gilmer, 500 US 27.

20 See Const 1963, art 5, § 29.

21 MCL 37.2803; MSA 3.548(803) provides:

This act shall not be construed to diminish the right of a

person to direct or immediate legal or equitable remedies

in the courts of this state.

A-15

Even if federal precedent had answered the issue at

hand with respect to ordinary individually negotiated

employment contracts, and | have found above that it

has not, I would find that the Michigan constitutional

and statutory enforcement scheme for civil rights is sig-

nificantly different from the statutory enforcement

scheme for federal discrimination statutes with respect

to an aggrieved individual's access to judicial remedies.

Accordingly, | would decline to rely on federal precedent.

IV

Although | do not find Gilmer to be on point with

respect to the issue at hand, | do find the Court's

approach to be a suitable starting point. Gilmer bal-

anced the public policy in favor of arbitration against

the public policy underlying the Statutory claim at

issue. In doing so, the Court examined the Statutory

language and congressional intent to determine whether

Congress intended “‘to preclude a waiver of judicial

remedies for the statutory rights at issue.” Gilmer. 500

US 26 (citation omitted). Similarly, | will consider the

legislative intent behind the Michigan Civil Rights Act.

But, more importantly, because civil rights received pro-

found consideration by the Michigan Constitutional

Convention™ and preeminent status in the 1963 Consti-

tution itself,’ | would first consider the people's intent

when they adopted the Michigan Constitution.

Pre-1963 Private Judicial Remedies

To understand what occurred in 1963. it is important

to remember what brought us to that point. Michigan

was at the forefront in the development of civil rights

long before the Civil Rights Act was enacted. Early on,

22 See | Official Record, Constitutional Convention 1961, pp

739-752.

23° Const 1963, art 1. § 2.

A-16

the right to pursue private judicial remedies has been

recognized as fundamental to the enforcement of civil

rights. Ferguson v Gies, 82 Mich 358; 46 NW 718 (1890),

was a watershed decision by which Michigan parted

company from majority rule. The Ferguson Court

rejected the “separate but equal” theory six years

before the United States Supreme Court adopted it in

the infamous Plessy v Ferguson, 163 US 537; 16S Ct 1138;

41 L Ed 256 (1896). More important for us in the instant

case is that Ferguson held that a black man who had

been aggrieved by unlawful discrimination had a right

to pursue private judicial relief.

At issue in Ferguson was whether a statutory provi-

sion, which penalized racial discrimination as a misde-

meanor, precluded a separate private civil suit for

damages. The Court held that it did not. The Court

stated:

The general rule, however, is that where a

statute imposes upon any person a specific duty

for the protection or benefit of others, if he

neglects or refuses to perform such duty, he is

liable for any injury or detriment caused by such

neglect or refusal, if such injury or hurt is of the

kind which the statute was intended to prevent;

nor is it necessary in such a case as this to

declare upon or refer to the statute. The

common law as tt existed in this State before the

passage of this statute, and before the colored

man became a citizen under our Constitution and

laws, gave to the white man a remedy against any

unjust discrimination to the citizen in all public

places. It must be considered that, when this suit

was planted, the colored man, under the common

law of this State, was entitled to the same rights

and privileges in public places as the white man,

and he must be treated the same there; and that

his right of action for any injury arising from an

unjust discrimination against him is just as perfect

hey he tac, slp llati

A-17

and sacred in the courts as that of any other cit-

izen. This statute is only declaratory of the

common law, as | understand it now to exist in

this State. [/d. at 365 (emphasis added). |

Ferguson began to establish that, in Michigan, when-

ever a particular equal protection right is recognized,

whether by constitution, statute, or common law, then

fused to that right is the right to pursue judicial relief.”

In other words, adhering to the substantive right is “a

remedy against any unjust discrimination.” /d In

Ferguson, the substantive right recognized was that

black men were entitled to equal access to public

accommodations.

The right to pursue a private civil action has been

reaffirmed many times. Even in the absence of a

common-law remedy and in the absence of a statutory

remedy, our Court long ago held that there was a pri-

vate civil remedy for violations of a civil rights statute.

Bolden v Grand Rapids Operating Corp, 239 Mich 318,

328: 214 NW 241 (1927). In 1944, this Court reaffirmed

Bolden in St John vy General Motors Corp, 308 Mich 333,

336: 13 NW2d 840 (1944). St John held that a penal

statute®® that prohibited gender wage discrimination

included a private civil remedy. “The statute estab-

lishes specified personal civil rights and if there has

been discrimination between sexes in the instances

at bar the remedy by action at law is available to

claimants.” /d

As the Legislature has expanded the scope of civil

rights over the years, the right to pursue judicial reme-

24 Incidently, arbitration was a recognized form of dispute

resolution long before 1890. See syllabus for Chicago & Michigan

LSR Co v Hughes, 28 Mich 186 (1873), recapping arbitration

principles.

25 1919 PA 239, reenacted by 1931 PA 328, § 556 (1940 CL I7115-

556; MSA 28.824).

A-18

dies has been coupled with the expansion.” In 1955, the

Fair Employment Practices Act (FEPA) was enacted,

26 Justice Adams recapped the Ferguson rule and the Michigan

statutory history of civil rights in Beech Grove Investment Co v Civil

Rights Comm, 380 Mich 405, 434-435; 157 NW2d 213 (1968):

When Gies undertook to conduct a public business, he

did so subject to the requirement that the business be car-

ried on without “unjust discrimination.” Ferguson's remedy,

even though statutorily stated, stemmed from the common

law. Ferguson's right was the right not to be discriminated

against because of religion, race, color or national origin.

As a corollary of that right he was entitled to receive the

same treatment anyone else would receive — no better, no

worse.

* * *

The public policy with regard to civil rights in laws

enacted by the legislature has been to ban discrimination.

It has been summarized in |Cramton,| The Powers of the

Michigan Civil Rights Commission, |63 Mich L R 5, 25-26

(1964)| ... , as follows ... :

“Other civil rights relating to racial, religious, and

ethnic discrimination have been created by the legisla-

ture over the past hundred years. The first civil rights

legislation was enacted in 1867; it prohibited racial

segregation in public education. In 1869, a statute pro-

hibited life insurance companies that were doing busi-

ness within the State from making any distinction or

discrimination between white and colored persons.

The ban against miscegenation was removed in 1883.

In 1885, criminal sanctions were provided for denial

of equal treatment in public places of accommoda-

tion, amusement, and recreation; racial discrimination

in the selection and qualification of jurors was prohib-

ited in the same year. The Michigan Supreme Court

rejected the ‘separate but equal’ doctrine in 1890, and

held that a civil action for damages could be brought

for discriminatory treatment in a public accommoda-

tion. The public accommodations statute was strength-

ened in 1937, 1952, and 1956; the 1952 amendment

extended coverage to ‘government housing.’ Finally, in

1955, the fair employment practices act created ‘a civil

right’ in ‘the opportunity to obtain employment

without discrimination because of race, color, religion,

national origin or ancestry’ and established remedies

for the enforcement of this right. Domestic help and

employers with less than eight employees were

excluded from the coverage of the act.”

Rote nee

A-19

which created a civil right to equal opportunity in the

pursuit of employment” in the private sector, as well as

the public sector.28 Pompey v General Motors Corp, 385

Mich 537, 551-552; 189 NW2d 243 (1971), explained that

this was the first time that the right to be free from

unlawful discrimination extended to private employ-

ment. Even though the statute did not create a private

civil action, Pompey held that a statutorily created civil

right included a private action for civil damages in addi-

tion to any statutory enforcement mechanism. /d. at

560. The Court explained:

In 1955, the fair employment practices act cre-

ated a civil right in the opportunity to obtain

employment without discrimination because of

race, color, religion, national origin or ancestry.

Defendant contends, and we agree, that prior to

the passing of this important legislation in 1955,

there was in Michigan no recognized legal remedy

for acts of discrimination based on race in private

employment. While a right of action was recog-

nized for racial discrimination in public accommo-

dation (Ferguson v Gies [1890], 82 Mich 358) and in

the enjoyment of various other civil rights, the

right to be free from discrimination on account of

race in private employment was not rewarded as a

civil right entitled to protection of the law.

27 The opportunity to obtain employment without discrimina-

tion because of race, color, religion, national origin or ancestry is

hereby recognized as and declared to be a civil right. [1955 PA 251,

§ I, MCL 423.301; MSA 17458(1), repealed by 1976 PA 453, § 804

(Michigan Civil Rights Act). |

28 “Employer” was defined as:

[t]he state ar any political or civil subdivision thereof,

any person employing 8 or more persons within the state

and any person acting in the interest of an employer,

directly or indirectly. [1955 PA 251, § 2(b).|

The FEPA excluded from covered employees “any individual

employed in the domestic service of any person.” Section 2(c).

A-20

We recognize that the fact that there was no

preexistent common-law remedy for racial dis-

crimination in private employment is generally

highly significant in determining the exclusive-

ness of the statutory remedy. The general rule,

in which Michigan is aligned with a strong

majority of jurisdictions, is that where a new

right is created or a new duty is imposed by

statute, the remedy provided for enforcement of

that right by the statute for its violation and

nonperformance is exclusive. Correlatively, a

statutory remedy for enforcement of a

common-law right is deemed only cumulative.

But courts have forged exceptions to these

general rules when the statutory rights infringed

were civil rights. Although there is some

authority to the contrary most decisions have

held that a person aggrieved by the violation of

a civil rights statute is entitled to pursue a

remedy which will effectively reimburse him for

or relieve him from violation of the statute,

notwithstanding the statute did not expressly-

give him such right or remedy. [/d. at 551-553

(citations omitted). ]

Turning to the argument of the General Motors Corpo-

ration that there was no private cause of action,

Pompey rejected the argument and restated the rule:

Our Court unqualifiedly rejected such an argu-

ment when dealing with civil rights statutes, con-

cluding that the aggrieved person may maintain

an action for damages for injuries suffered by

the violation of the civil rights statute despite

the fact that the statute made no express provi-

sion for such recovery. We cited as the control-

ling principle:

“‘In cases where there has been illegal

discrimination the person aggrieved has

A-21

clearly a civil right of action for damages,

and this is true although the provision for

the enforcement of a civil rights statute

under which the complainant claims redress

provides for a criminal prosecution only.

This right accrues by virtue of the general

rule that where a statute imposes upon any

person a specific duty for the protection or

benefit of others, neglect or refusal to per-

form the duty creates a liability for any

injury or detriment caused by such neglect

or refusal, if the injury or hurt is of the kind

which the statute was intended to prevent.”

[(/d. at 555-556 (citations omitted). ]

196.3 Michigan Constitution

In 1963, the people of Michigan took another signifi-

cant step when they adopted the new Michigan Consti-

tution. The constitution provides:

No person shall be denied the equal protec-

tion of the laws; nor shall any person be denied

the enjoyment of his civil or political rights or

be discriminated against in the exercise thereof

because of religion, race, color or national origin.

The legislature shall implement this section by

appropriate legislation. [Const 1963, art 1, § 2.]

The Address to the People explained that a primary

mission of this provision was to ensure equai opportu-

nity in the pursuit of employment.”® By doing so, this

provision “elevated an employee's statutory right under

29 The Address to the People was the drafters’ explanation of

what they believed the provisions meant. It stated:

The convention record notes that “the principal, but not

exclusive, areas of concern are equal opportunities in

employment, education, housing and public accommoda-

tions.” [2 Official Record, Constitutional Convention 1961,

p 3363. |

A-22

the FEPA to the status of a constitutional right ... .”

Boscaglia v Michigan Bell Telephone Co, 420 Mich 308,

314, n8; 362 NW2d 642 (1984). Although the provision is

self-executing with respect to state action,” the people

left it up to the Legislature to implement the constitu-

tional provision with respect to private discrimination.”

However, once the Legislature acts, as it has with

respect to gender discrimination in private employment,

the scope and the availability of remedies for unlawful

discrimination are vital to effectuating the intent of the

people and of the Legislature.

In 1963, the people did not leave the enforcement of

the equal protection provision to chance when they

constitutionally created the Michigan Civil Rights Com-

mission.

There is hereby established a civil rights com-

mission .... It shall be the duty of the commis-

sion in a manner which may be prescribed by

law to investigate alleged discrimination against

any person because of religion, race, color or

national origin in the enjoyment of the civil

rights guaranteed by law and by this constitu-

tion, and to secure the equal protection of such

civil rights without such discrimination. .. .

The commission shall have power, in accor-

dance with the provisions of this constitution

and of general laws governing administrative

agencies, to promulgate rules and regulations for

its own procedures, to hold hearings, administer

oaths, through court authorization to require the

attendance of witnesses and the submission of

records, to take testimony, and to issue appro-

30 See Civil Rights Dep’t ex rel Forton v Waterford Twp Dep’t of

Parks & Recreation, 425 Mich 173, 186; 387 NW2d 821 (1986).

31 Boscaglia, 420 Mich 314, n&. citing "ompey, 385 Mich 559,

n 20, and Cramton, n 27 supra, p 30.

cm kN

eel

A-23

priate orders. The commission shall have other-

powers provided by law to carry out its pur-

poses. Nothing contained in this section shall be

construed to diminish the right of any party to

direct and immediate legal or equitable remedies

in the courts of this state.

Appeals from final orders of the commission,

including cease and desist orders and refusals to

issue complaints, shall be tried de novo before

the circuit court having jurisdiction provided by

law. [Const 1963, art 5, § 29 (emphasis added). }

The purpose of the highlighted sentence is funda-

mental in resolving the instant issue. An instructive

article written by Professor Roger Cramton has been

relied on by this Court many times. See Cramton, The

powers of the Michigan Civil Rights Commission. 63 Mich

LR 5 (1964). Professor Cramton discussed the creation

of the Civil Rights Commission and its effect on judicial

remedies.

The third sentence of the second paragraph of

article V, section 29 provides: “Nothing contained

in this section shall be construed to diminish

the right of any party to direct and immediate

legal or equitable remedies in the courts of this

State.” This sentence, referred to as the “judicial

remedies provision,” was the subject of much

confusion and debate in the convention, but its

purport is reasonably clear. The convention did

not intend to confer exclusive jurisdiction in the

civil rights field on the Commission. Remedies in

the courts, including both those existing at the

time and those subsequently created by legislative

enactment or judicial decision, are not affected by

the civil rights commission provision. Thus, an

individual who has been subjected to illegal dis-

Criminatory treatment in a place of public

accommodation may bring a damage action in

the circuit court against the business engaged in

A-24

such discrimination; and the legislature may

create new civil and criminal remedies for acts

of private discrimination and may vest juris-

diction in the courts. [/d. at 22-23 (emphasis

added). }!34!

As Professor Cramton observed, the judicial remedies

clause was the subject of much debate. While the

debates accompanying the adoption of the Michigan

Constitution are not controlling, they may be helpful in

interpreting it. Beech Grove Investment Co v Civil Rights

Comm, 380 Mich 405, 427: 157 NW2d 213 (1968) (opinion

of Adams, J.). The debates accompanying the develop-

ment of the judicial remedies clause reveal that the role

of the judiciary in enforcing civil rights was to remain

supreme.

On March 29, 1962, the delegates considered the Don-

nelly Amendment,** which would be the precursor to

the sentence that was eventually adopted. In offering

the proposal, Miss Donnelly stated:

The desire to protect citizens should be most

vital to us all, the most important thing, in my

opinion, the constitutional convention may do —

not taxation, not reapportionment, but rights of

citizens and humans who are under this state

and who wish to live here. Anyone who suggests

32 In a footnote, Professor Cramton observed:

The discussion of the “judicial remedies” provision may

be found in 2 [Official Record, Constitutional Convention

1961, pp] 1999-2001, 2192-96, 2756-62. The debate clearly

indicates that the primary intent was to preserve judicial

jurisdiction in the civil rights field. [/d. at 23, n76.]

33° The amendment would insert the sentence:

These provisions shall not be construed to deny, or

enable or allow the denial of, any direct and immediate

legal or equitable remedy in the courts of this state, to any

person affected thereby. [2 Official Record, Constitutional

Convention 1961, p 1999.]

EERE. tel te re Te Perit Oe ar 2. Serta.

pill ast ts

A-25

and that a commission will not abuse people

that the courts of this state will abuse people

quite frankly horrifies me. To me the last source

of strength and relief of any free people is in the

courts of any country, and without such provi-

sion giving the courts of this state some right to

act, | believe that they cannot act, and they

cannot aid any citizen who is feeling abuse, or

who is wanting immediate direct relief.

This is constitutional language that we have

spelled out. We have left very little to the legisla-

ture. For a court to act they must find their

authority, in my opinion, in the constitution.

Therefore, | feel that if we really wish to protect

all citizens from all abuse and we really believe

that this is a high point, we must build in this a

check and a balance, as we have in all other con-

Stitutional documents. | therefore urge the sup-

port of this amendment. [2 Official Record,

Constitutional Convention 1961, p 1999 (emphasis

added). }

Miss Donnelly later added:

l intend that any individual who wants imme-

diate legal or equitable remedy in the courts of

the state should be able to go there immediately

and directly, if that’s what they want. / feel this is

a civil right of every person. {Id. at 2000 (empha-

sis added). }

The opponents of the Donnelly Amendment urged

that there should be an exhaustion of administrative

remedies requirement. In contrast, the supporters of

the amendment stressed the importance of access to

the courts in the civil rights arena. For example, Mr.

Habermehl stated:

I have always been of the opinion that people's

constitutional rights have been a long time accruing

to each individual; that those rights are expressed

A-26

in a document we call a constitution. That we have a

court or judicial system set up which has a primary

purpose of enforcing and safeguarding those rights.

If the intention here is to create a commission that

would deprive or even unduly delay the rights of the

individual to any legal remedy that he might have, |

suggest you are doing far more to harm civil rights

than you are doing to help it. Certainly we cannot

deprive persons, whether plaintiff or defendant, of

insisting upon legal rights guaranteed to them. To

do so would be a backward step in civil rights, not a

forward one. I support the Donnelly amendment.

[/d. at 2001. ]

The Donnelly Amendment passed by a vote of seventy-

eight yeas to thirty-six nays.

On April 6, 1962, the Committee of the Whole consid-

ered the Garvin Amendment, which would have deleted

the previously adopted Donnelly Amendment. In the

amendment’s place, it would have substituted an elec-

tion of remedies requirement, which would have pro-

vided that if either party initiated action in the agency,

there would be an exhaustion of administrative reme-

dies requirement before the courts could act. /d. at

2192-2196. This amendment was defeated by a vote of

sixty-nine nays to forty-two yeas.

On April 24, 1962, the issue came up again with

another proposed amendment that would delete the

judicial remedies sentence. /d. at 2756-2759. The sup-

porters of the amendment argued that the Civil Rights

Commission should be given the same treatment that

all other administrative agencies would receive, in par-

ticular, that all agencies would be shielded from judicial

interference by an exhaustion of administrative reme-

dies requirement. /d. at 2756-2758. Miss Donnelly again

defended her judicial remedies sentence:

If my memory serves me, this is the third time

that | have defended this sentence or something

teh Sat OE a tain, att Ae

ee ee

A-27

similar thereto. ... The difference between this

commission and all other commissions is this is

the only constitutionally created one. ... This is

an instance where we are setting something up

in the constitution. ... Where we're going to put

something in the constitution, you've got to be

sure it’s broad enough to protect all and it will

not derogate downward. The legislature cannot

subtract this, in my opinion.

Therefore, in order to preserve the civil rights of

any citizen to go to the courts of this state for their

direct and immediate remedy, there is only one

place we can do it, and that’s here. And | believe

that all the citizens should be protected in this right

more than almost any other right we've ever gotten

and ever had in our whole life. | submit that the

only place that any rights have ever been protected

have been in the courts of this land, and when you

start saying the courts of the land may not act, then

| am wondering what direction you really want to

go, and do you really believe in the democracy and

freedom of people or do you want a complete

police state? Therefore, | am highly opposed to this

amendment and suggest that it is being attacked in

a rather dubious method. {/d. at 2758 (emphasis

added). |

ee a ee

The final speaker before the vote on the amendment

was Mr. Ford, who supported the amendment. He stated

in part:

[T]here is no question, and there shouldn't be

in the mind of any lawyer in this convention that

we are making it impossible for the legislature to

provide a system of procedure that would

require certain matters to be taken before the

commission before they were taken into the

court. And that’s what the effect of Miss

Donnelly’s language is. | know that this is the

effect and | believe that this is what she intends,

A-28

because I worked with her trying to perfect this,

and you may remember that we passed over this

matter once before, trying to clean up this

language.

Now, when we were cooperating with her, |

thought we were trying to say that nothing in

this section should be in derogation of the

person's rights otherwise provided by the law.

But what we are really saying here, and the

effect of this last sentence is, when it says

“Nothing contained in this section shall be con-

strued to diminish the right of any party to

direct and immediate legal or equitable” relief,

we are forestalling the legislature from saying

that certain types of cases must be followed in a

certain procedural pattern before you go to the

court. [/d.]

However, Mr. Ford’s concerns were disregarded by the

majority when it defeated the amendment by a vote of

seventy-seven nays to thirty-seven yeas. Three more

amendments™ were offered that would weaken the lan-

34 One proposal would have changed the language to provide as

follows:

Nothing contained in this section shall prohibit the legis-

lature from enacting law granting any party the right to a

direct and immediate legal or equitable remedy in the

courts of this state. [/d. at 2759.]

A second proposal was to change the sentence to provide:

Nothing contained in this section shall be construed to

diminish the right of any party to direct and immediate

legal or equitable remedies in the courts of this siate,

unless otherwise provided by law. [/d.]

The third proposal would have provided:

Nothing contained in this section shall be construed to

diminish the right of any party to direct and immediate

legal or equitable remedies in the courts of this state after

exhaustion of all administrative remedies that may be pro-

vided by law. [/d. at 2761.]

a ee eT

———————E SNURLO Beh OLN eth OAR hI Re Kacinc OER ieee

ee wutaeeest

A-29

guage of the judicial remedies sentence and all three

were defeated. /d. at 2759-2762. Later that same day, the

final language of the sentence was adopted by a vote of

110 yeas to nine nays.

Expanding Civil Rights

As the scope of the equal protection provision has

expanded, it has always included the private right to

judicial remedies, whether expressly provided by

statute or inferred by the judiciary.** The Legislature

has done nothing in the subsequent history to impair

or restrict the aggrieved individual's access to judicial

remedies. Nor could it under Const 1963, art 5, § 29.

In 1976, the Michigan Civil Rights Act consolidated

the existing civil rights statutes into one statute and,

more importantly, expanded the scope of protection

against discriminatory actions. House Legislative

Analysis, HB 4055 (Second Analysis), December 30, 1976.

Entwined with the new expanded rights was the right to

bring a civil action in circuit court. MCL 37.2801; MSA

3.548(801).%

In Boscaglia, we found that the Civil Rights Act

extended Pompey. We noted:

The FEPA, enacted in 1955, declared that the

opportunity to obtain employment without dis-

crimination because of race, color, religion,

national origin, oy ancestry is a civil right, and

stated a definition of an “unfair employment

practice.” In Pompey [at 560] ... this Court

35 The private civil remedy includes the right to jury. King v

General Motors Corp, 136 Mich App 301, 308-309; 356 NW2d 626

(1984).

36 “A person alleging a violation of this act may bring a civil

action for appropriate injunctive relief or damages, or both.” Sec-

tion 801(1). Additionally, we have previously found that the Civil

Rights Act expanded the types of remedies beyond those provided

by any of its predecessor statutes. Eide, n 17 supra at 35-36.

A-30

declared that an employee “can maintain a civil

damage action for redress of his statutorily cre-

ated right to be free from [racial] discrimination

in private employment, and that this remedy

may be pursued in addition to the remedial

machinery provided by [the FEPA].”

The civil rights act, enacted in 1976, prohibits

an employer from discriminating against a

person on the basis of religion, race, color,

national origin, age, sex, height, weight, or mar-

ital status. The act extended “this Court's deci-

sion in Pompey by expressly providing for direct

access to circuit court for an aggrieved party.”

Holmes v Haughton Elevator Co, 404 Mich 36, 44;

272 NW2d 550 (1978) (Moody, J., concurring).

This “direct access” provision states tbat a

person alleging a violation of the act may bring a

civil action for appropriate injunctive relief “or

damages, or both,” and that the term “damages”

means “damages for injury or loss caused by

each violation of this act, including reasonable

attorney's fees.” [Boscaglia, 420 Mich 314-315

(citations omitted). |

V

| would find that the judicial remedies provision in

Const 1963, art 5, § 29, along with the tone of the

debates that produced that provision, reveal that an

aggrieved individual's access to judicial remedies is

inseparably interwoven with the substantive civil rights

and was intended by the people of Michigan to be the

lifeblood of keeping those substantive civil rights alive.

When the civil liberty at stake is equal opportunity in

the pursuit of employment, | believe that the Michigan

Constitution prevents us from granting the defendant's

request to surgically sever the constitutional right to a

judicial forum. In short, | would find that an aggrieved

individual’s access to a judicial forum to remedy viola-

————

A-31

tions of his nonnegotiable, constitutionally guaranteed,

and legislatively articulated civil rights, is also a non-

negotiable state right. Accordingly, | would find that the

people of Michigan and the Legislature intended to pre-

clude prospective waivers of judicial remedies.

The defendant's amici curiae contend that both the

FAA and the MAA apply and that the public policy

favoring arbitration directs us to enforce a prospective

arbitration agreement. Even if either statute does apply,

| would follow Gilmer’s lead and hold that the public

policy favoring arbitration can be outweighed by con-

trary constitutional or legislative intent. | have deter-

mined that in the instant case it is outweighed by the

public policy expressed in the Michigan Constitution

guaranteeing aggrieved individuals direct access to a

judicial forum and by subsequent legislative intent.”

37 | find persuasive the reasoning of the Colorado Supreme

Court in Lambdin v Dist Court In & For the 18th Judicial Dist, 903

P2d 1126 (Colo, 1995). Lambdin held that clear legislative intent

could preclude prospective waivers of a statutory right to pursue

judicial remedies. Id. at 1131. There, the legislative intent was

expressed in a statutory provision that provided: “Any agreement,

written or oral, by any employee purporting to waive or to modify

his rights in violation of this article shall be void.” /d. at 1129,

quoting Colorado's Wage Claim Act, 3B Colo Rev Stat 8-4-125

(1986). The court held that this provision included statutory judicial

remedies. Colorado has adopted the Uniform Arbitration Act (UAA).

By comparison, the MAA is Michigan's version of the same UAA.

Lambdin stated:

We hold that the UAA cannot breathe life into an arbitra-

tion agreement that the Wage Claim Act deems void. Thus,

notwithstanding the general validity of arbitration agree-

ments under the UAA, the clear mandate of section 84-125

is that an employee may not waive the rights the General

Assembly created in the Wage Claim Act by means of an

arbitration agreement. |/d. at 1130.|

Likewise, | would hold that even if the MAA applies, it cannot over-

ride a clear state constitutional mandate that rights secured by the

Michigan Civil Rights Act are nonnegotiable. Betty, 446 Mich 282.

Those rights include an aggrieved individual's interwoven right to

direct access to a judicial forum.

A-32

Additionally, | note that we have previously held that

an employee's substantive civil rights are not for sale.

Betty, 446 Mich 282. Along those same lines, there is

another reason for not enforcing a prospective waiver

of access to a judicial forum. The defendant argues that

an employee is free to seek employment elsewhere if he

does not wish to waive prospectively his right to a judi-

cial forum. However, this argument is based on the erro-

neous assumption that job opportunities are fungible

and readily available. In contrast, | believe that rights

secured by our constitution and the Michigan Civil

Rights Act should not rise or fall on an employee's eco-

nomic ability to walk away from employment. Further, |

find that the notion that an employer can require an

employee, as a condition of employment, to “sell” his

constitutionally guaranteed right to direct access to a

judicial forum to enforce his Michigan civil rights

against that same employer is repugnant to the long-

standing Michigan public policy that holds dear civil

liberties, such as the pursuit of employment.

VI

In conclusion, with respect to equal opportunity in

the pursuit of civil liberties, such as employment, |

believe that the right to be free from unlawful discrimi-

nation is of highest priority and too important to jeop-

ardize. I further believe that the constitutionally

guaranteed direct access to a judicial forum is so inter-

woven with the enforcement of civil rights in Michigan

that we cannot separate them without potentially

harming substantive civil rights. Accordingly, | would

hold that the Michigan Constitution and our long-

standing public policy preclude the enforcement of

prospective arbitration agreements in employment

contracts.

Finally, | would assert that | am not backing away

from the public policy favoring alternative means of dis-

pute resolution. For aggrieved individuals seeking to

A-33

pursue remedies for claims that have already accrued,

arbitration may present a quicker and cheaper means of

receiving relief, and | fully support the parties’ volun-

tary intent in those cases. | would limit this opinion to

the arbitration agreements in employment contracts

entered into before any claim for unlawful discrimina-

tion has accrued.

vil

Finding no enforceable agreement to arbitrate this

claim, we reverse the decision of the Court of Appeals

and remand for further proceedings.

LEVIN and MALLETT, JJ., concurred with CAVANAGH, J.

CONCURRING OPINION

BOYLE, J. (concurring).

I agree with parts I, Il, and VII of the lead opinion that

the handbook language at issue in this case did not

create a valid agreement to arbitrate civil rights claims. |

express no opinion regarding whether or when an agree-

ment to arbitrate might be found to be enforceable.

BRICKLEY, €.1., and RILEY and WEAVER, JJ., concurred

with BOYLE, J.

Heurtebise v Reliable Business Computers, Inc

Goodman, Eden, Millender & Bedrosian (by Christopher

R. Holliday and Julia Sherwin) {3000 Cadillac Tower,

Detroit, MI 48226] for the plaintiff.

Shapack, McCullough & Kanter, PC. (by Alan M. Kanter, .

Michael R. Shpiece, and Michael L. Geller) {4190 Tele-

graph Road, Ste. 3000, Bloomfield Hills, MI 48302], and

Walton & Stafford, PC. (by Jonathan T Walton, Jr, and ,

Laura §S. Stafford) {1515 Penobscot Building, Detroit, MI

48226], for the defendant.

A-34

Amici Curie:

Frank J. Kelley, Attorney General, Thomas L. Casey,

Solicitor General, and Rebekah F Visconti, Assistant

Attorney General [1890 Michigan Plaza Building, 1200

Sixth Avenue, Detroit, MI 48226], for Michigan Depart-

ment of Civil Rights.

Stewart R. Hakola [315 South Front Street, Marquette, MI

49855] and Gayle C. Rosen [29200 Vassar Blvd., Suite

901, Livonia MI 48152-2181] for the Michigan Protec-

tion & Advocacy Service.

Sachs, Waldman, O'Hare, Helveston, Bogas & Mclntosh,

PC. (by Mary Katherine Norton and Elizabeth A. Cabot)

[1000 Farmer Street, Detroit, MI 48226], for Michigan

State AFL-CIO, International Union UAW, National

Employment Lawyers Association. and Michigan

Employment Lawyers Association.

Jeanne M. VanderHeide and Jeanne Mirer [555 S. Wood-

ward Ave., Suite 700, Birmingham, MI 48009] for National

Lawyers Guild, Detroit Chapter.

Stark & Gordon (by Sheldon J. Stark and Carol A.

Laughbaum) [217 South Woodward Ave., Suite 202,

Royal Oak, MI 48067-2444] for the Association of Trial

Lawyers of America, Michigan Trial Lawyers Associa-

tion, American Civil Liberties Union of Michigan, and

Wolverine Bar Association.

Clark, Hill, PL.C. (by Duane L. Tarnacki, J. Walker Henry, and

Patricia S. Bordman) {1600 First Federal Building, Detroit,

MI 48226], for Michigan Manufacturers Association.

Amberg, McNenly, Zuschlag, Firestone & Lee, PC (by Joseph

H. Firestone) [24300 Southfield Road, Suite 101, South-

field, MI 48075], for Michigan Education Association.

Vercruysse, Metz & Murray (by Diane M. Soubly and

David B. Calzone) [31780 Telegraph, Suite 200,

Bingham Farms, MI 48025] for American Society of

Employers, American Automobile Manufacturers Asso-

ciation, Greater Detroit Chamber of Commerce, and

Michigan Chamber of Commerce.

A-35

OPINION

(State of Michigan — Court of Appeals)

(Submitted July 14, 1994, at Detroit:

Decided October 17, 1994, at 9:30 a.m.

Leave to appeal sought.)

(HEURTEBISE v RELIABLE BUSINESS COMPUTERS. INC. —

Docket No. 152041)

Before: NEFF, P.J., and MCDONALD and M. WARSHAWSKY,” JJ.

PER CURIAM

Defendant appeals by leave granted from an April 16,

1992, order denying its motion to dismiss or compel

arbitration in this action filed by plaintiff pursuant to

the Civil Rights Act, MCL 37.2101 ef seq.; MSA 3.548(101)

et seq.; alleging discriminatory treatment in her dis-

charge from her employment with defendant. We

reverse.

Plaintiff was hired by defendant in May 1989, at which

time she received a copy of defendant's employee hand-

book. The handbook stated employment with defendant

could be terminated at any time with or without cause.

The handbook also provided a mechanism by which an

employee whose employment was terminated could

seek internal review of the decision. The handbook

stated an employee who followed the internal review

procedure and was dissatisfied with the result could

seek arbitration of the dispute. The handbook stated

“any dispute, matter or controversy involving claims of

monetary damages and/or employment related matters

- including, but not limited to. any and all claims

relating to termination of employment” would be arbi-

trated pursuant to the rules of the American Arbitration

Association. Plaintiff signed a document acknowledging

“ Circuit Judge, sitting on the Court of Appeals by assignment.

i a,

A-36

receipt of the handbook and agreeing to conform to the

procedures, rules, and regulations set forth therein.

Following her termination from employment, plaintiff

filed the instant action in circuit court. Defendant filed a

motion to dismiss or, in the alternative, to compel arbi-

tration. Defendant argued pursuant to the procedure

outlined in the employee handbook, plaintiff was

required to arbitrate the dispute. The trial court denied

defendant's motion, apparently finding the provision in

the handbook requiring arbitration to be ambiguous

and contrary to public policy. We disagree.

The provision requiring arbitration is not ambiguous.

The clause plainly states that claims for money dam-

ages must be submitted to arbitration. Likewise, there is

no valid question that plaintiff's claims for discrimina-

tory termination fall within the scope of the arbitration

clause. The claims are indisputably “employment

related.”

The trial court appears to have denied defendant's

motion in part because it found there was no “meeting

of the minds” between plaintiff and defendant with

regard to the arbitration clause. The record does not

support such a finding. Before beginning employment,

plaintiff signed an acknowledgment form that stated

that she agreed to conform to the various procedures,

rules, and regulations of the company as set forth in the

handbook. Moreover, even were the record devoid of

plaintiff's express acceptance of the handbook’s provi-

sions, it is well established under michigan law that

mutual assent to a term of employment is not required.

In re Certified Question, 432 Mich 438; 443 NW2d 112

(1989); Carlson v Hutzel Corp of Michigan, 183 Mich App

908; 455 NW2d 335 (1990); Toussaint v Blue Cross & Blue |

Shield of Michigan, 408 Mich 579; 292 NW2d 880 (1980).

Plaintiff’s argument that the handbook specifically

States that it does not create an enforceable contract is

misguided. The provision plaintiff relies on addresses

A-37

the at-will nature of plaintiff's employment, not the

handbook in its entirety.

Finally, we find no “public policy” prohibition against

the enforcement of a valid arbitration agreement that

provides for meaningful arbitration in matters involving

civil rights questions. See Gilmer vy. Interstate/Johnson

Lane Corp, 500 US 20: 111 S Ct 1647; 114 L Ed 2d 26

(1991). To the contrary, arbitration has long been a

favorable method of dispute resolution. Detroit vy AW

Kutsche & Co, 309 Mich 700; 16 NW2d 128 (1944). Thus,

arbitration clauses are to be liberally construed with

any doubts to be resolved in favor of arbitration.

Chippewa Valley Schools v Hill, 62 Mich App 116; 233

NW2d 208 (1975). Contrary to the plaintiff's suggestion,

arbitration of plaintiff's claims will not result in the loss

of her rights under the Civil Rights Act, but, instead,

merely constitutes enforcement of an agreement to have

those rights determined in a different forum. Arbitration

does not impair the remedies afforded under the

statute.

The trial court erred in denying defendant's motion to

compel arbitration.’ Reversed and remanded for further

proceedings consistent with this opinion. We do not

retain jurisdiction.

1 Defendant's failure to address on appeal the issue whether the

trial court erred in denying defendant’s motion to dismiss waives

review of the issue. We note, however, that matters of procedural

arbitrability (i.e. compliance with the procedural requirements of

the arbitration clause or grievance procedure) are for the arbitrator

to decide. Bennett v Shearson, Lehman-American Express, Inc, 168 Mich

App 80; 423 NW2d 911 (1987).

A-38

EXCERPTS FROM DEFENDANT-APPELLEE’S BRIEF ON APPEAL

(State of Michigan — Supreme Court)

(Dated: December 5, 1996 [sic, 1995})

(THERESA A. HEURTEBISE, Plaintiff/Appellant, vs. RELIABLE

BUSINESS COMPUTERS, INC., a Michigan Corporation,

Defendant/Appellee — Supreme Court No. 102109: Court

of Appeals No. 152041; Lower Court No. 91-131165-CZ)

x *

TABLE OF CONTENTS*

TARE OF CORTES on orvcrrensvossesssovensevigurtinaneatinessiesieeecc. i

COUNTER-STATEMENT OF QUESTIONS PRESENTED ............. iv

INDEX OF AUTHORITIES ...........ccssscscesssessecsssssssseesoeeessecesc..., Vii

COUNTER-STATEMENT OF THE JUDGMENT

AND RELIEF SOUGHT ........:0.cescecsecsessecsecsereessesseseesces....... XiV

COUNTER-STATEMENT OF FACTS ......scccccsessssssosseceseeeeseccceenn. l

ARGUMENT: 4

A. THE COURT OF APPEALS CORRECTLY HELD THE

RELIABLE ACKNOWLEDGMENT FORM TOGETHER

WITH THE HANDBOOK CONSTITUTES AN EN-

FORCEABI F. “CREEMENT TO ARBITRATE. ......... 8

1. Heurtebise’s Contention That There Is No

Enforceable Arbitration Agreement Be-

cause The Handbook Disclaims Creation Of

A Contract Is, In The Words Of The Court

Of Appeals, “Misguided” oo... 9

Heurtebise’s Elliott-Larsen Claim Is En-

compassed by the Reliable Arbitration

IE eit et 10

ho

* [Printer’s Note]: Page numbers are to original pagination.

i a ne eee

D.

A-39

THE COURT OF APPEALS CORRECTLY HELD THAT

THE ARBITRATION PROVISION IS NOT AMBIGUOUS ..

THE COURT OF APPEALS CORRECTLY DE-

TERMINED THAT, UNDER MICHIGAN LAW

HEURTEBISE’S EXPRESS ACCCEPTANCE OF THE

MANDATORY ARBITRATION PROVISION ES-

TABLISHED BY RELIABLE IN ITS EMPLOYMENT

HANDBOOK IS AN ENFORCEABLE TERM OF

12

cose cg RE CT 15

1.

no

The Court Of Appeals Correctly Held, And

Undisputed Facts Prove, That There Was

A Meeting Of The Minds ..............c.ccccccc00000..... 15

Even Were Expressed Mutual Assent

Lacking, The Provisions Of The Reliable

Employment Handbook Give Rise To En-

forceable Terms of Employment .................... 17

3. The Agreement To Arbitrate Was Not A

Contract Of Adhesion o.......ccecccccccccececeececeeses... 21

THE COURT OF APPEALS CORRECTLY HELD THAT

MICHIGAN PUBLIC POLICY FAVORS ENFORCEMENT

OF THE RELIABLE ARBITRATION PROVISION ........... 24

1.

The Court Of Appeals Correctly Held That

The Public Policy Favoring Arbitration

Applies To The Elliott-Larsen Civil Rights

Act Claims Brought By Heurtebise .........__. 24

a. There Is No Legislative Prohibition

Against Arbitration Of Civil Rights

RRO RC aI contr Ue ee 26

b. The United States Supreme Court Sup-

ports Arbitration Of Statutory Claims ... 28

c. An Expansive Body Of Recent Federal

And State Jurisprudence Favors The

Arbitration Of Statutory Claims ............. 31

A Civil Litigant May Waive Trial By Jury ...... 33

The Arbitration Provision Does Not Strip

The Circuit Courts Of Their Jurisdiction ...... 37

A-40

4. The Arbitration Provision Does Not Divest _

The EEOC, the MCRC or the MDRC of Their

Jurisdiction Over Civil Rights Claims ............ 38

5. Case Law Cited By Heurtebise Involves

inapplicable Factual And Legal Settings

And Does Not Establish Any Error By The

00S GE FONE cece 40

a. Unlike In The Instant Case, The Pru-

dential Plaintiffs Claimed They Had

Been Misled Concerning The Arbitra-

eo Pe ee 40

b. Cases Declining To Require Arbitration

Of Civil Rights Claims In A Collective

Bargaining Context Are Inapplicable .... 43

E. THE COURT OF APPEALS CORRECTLY HELD THAT

AN AGREEMENT TO ARBITRATE CIVIL RIGHTS

QUESTIONS IS VALID IF IT PROVIDES “MEAN-

TUR, ADEN TRAE MG cotcersusnncinma 44

CONTAIN. sascs-ssocamartunaeasgedie eee te

RELIES SOUND .....ccccccsoseekaneieeee Ce 48

COUNTER-STATEMENT OF JURISDICTION

Defendant-Appellee Reliable Business Computer Sys-

tems, Inc. (“Reliable”) concurs in the statement of juris-

diction by plaintiff-appellant Theresa Heurtebise

(“Heurtebise”).

COUNTER-STATEMENT OF QUESTIONS PRESENTED

1. Whether the Court of Appeals’ decision that the

Reliable Employment Handbook (“Handbook”) dis-

claimer addresses only the at-will nature of Heurte-

bise’s employment and, thus, does not preclude

enforcement of the arbitration agreement, accu-

rately interpreted the parties’ contract.

Plaintiff-Appellant answers: “NO”

The trial court answered: “NO”

‘4

=)

A-41

The Court of Appeals answered: “YES”

Defendant-Appellee answers: “YES”

Whether the Court of Appeals’ correctly determined

that the arbitration provision at issue, which

covered “any dispute,” unambiguously covered

Heurtebise's discrimination claim?

Plaintiff-Appellant answers: “NO”

The trial court answered: “NO”

The Court of Appeals answered: “YES”

Defendant-Appellee answers: “YES”

Whether the Court of Appeals properly found the

triat court’s holdings of no mutual assent or a

meeting of the minds to be clearly erroneous where

undisputed facts showed Heurtebise’s express agree-

ment to the terms of the Reliable Handbook?

Plaintiff-Appellant answers: “NO”

The trial court answered: “NO”

The Court of Appeals answered: “YES”

Defendant-Appellee answers: “YES”

Whether the Court of Appeals followed controlling

Michigan law, e.g. Touissant v Blue Cross and Blue

Shield of Michigan, 408 Mich 979; 292 NW2d 880

(1980) in determining that the dispute resolution

arbitration procedure established by Reliable in its

Handbook is enforceable?

Plaintiff-Appellant answers: “NO”

The trial court answered: “NO”

The Court of Appeals answered: “YES”

Defendant-Appellee answers: “YES”

Whether the Court of Appeals’ adhered to well-

established authority, e.g. Gordon Sel-Way, Inc v

Spence Bros. Inc., 438 Mich 488; 475 NW2d 704

(1991) and Detroit v AW Kutsche & Co, 309 Mich 700;

16 NW2d 128 (1944), in determining that Michigan

law and public policy favor arbitration as a method

of forum selection?

A-42

Plaintiff-Appellant answers: “NO”

The trial court answered: “NO”

The Court of Appeals answered: “YES”

Defendant-Appellee answers: “YES”

6. Whether the Court of Appeals’ was correct in

holding that arbitration of statutory claims merely

constitutes enforcement of an agreement to have

such claims determined in a chosen forum, and

does not impair substantive rights?

Plaintiff-Appellant answers: “NO”

The trial court answered: “NO”

The Court of Appeals answered: “YES”

Defendant-Appellee answers: “YES”

7. Whether the Court of Appeals complied with estab-

lished legal-authority, including Gilmer v Interstate/

Johnson Lane Corp, 500 US 20; 111 S Ct 1647; 114 L ED

2d 26 (1991) in ruling that “there is no public policy

prohibition against the enforcement of a valid arbi-

tration agreement that provided for meaningful arbi-

tration in matters involving civil rights questions”?

Plaintiff-Appellant answers: “NO” |

The trial court answered: “NO” |

The Court of Appeals answered: “YES” |

Defendant-Appellee answers: “YES”

8. Whether the Court of Appeals’ properly held that

the Reliable Handbook provides for “meaningful

arbitration” (i) where the arbitration provision at

issue meets all requirements of fairness, pursuant to

Renny v Port Huron Hosp, 427 Mich 415; 398 NW2d

327 (1986), and (ii) where Heurtebise never chal-

lenged the provision’s procedural fairness?

Plaintiff-Appellant answers: “NO”

The trial court did not address this issue.

The Court of Appeals answered: “YES”

Defendant-Appellee answers: “YES” -

2 @ ©

ee ee

A-43

ARGUMENT

Heurtebise sought leave to appeal on essentially one

ground — she claimed as her “primary issue” that the

Court of Appeals was wrong in holding that she “know-

ingly waived” a right to pursue her Elliott-Larsen claim in

court. Plaintiff-Appellee’s Application for Leave to Appeal

(hereinafter “Application”) at 1. Despite the fact that this

is the only issue Heurtebise has fairly preserved for

appeal, her brief on appeal to this Court presents

numerous “red herring” issues which, not only were not

preserved for appeal but, for the most part, were never

at issue in this case even at the trial court level.

For example, in her brief on appeal Heurtebise takes

the position for the first time since her complaint was

filed, that: (1) the Michigan Arbitration Act, MCL

§ 600.5001, et seg; MSA § 27A 5001, et seq (the “MAA”),

only permits parties to prospectively agree to arbitrate

only breach of contract claims: (2) the arbitration con-

tract at issue is an unconscionable contract of adhe-

sion; and (3) the arbitration contract at issue

impermissibly divests the Michigan Civil Rights Com-

mission (“MCRC”), the Michigan Department of Civil

Rights (“MDCR”) and the Equal Employment Opportu-

nity Commission (“EEOC”) of their jurisdiction over

civil rights claims. Although it is Reliable’s position that

none of these issues are property before this Court.

Reliable will nevertheless respond to Heurtebise’s argu-

ments to demonstrate their lack of merit.?

As stated above, the one issue which is fairly before

this Court is whether the Court of Appeals was correct

in holding that Heurtebise knowingly assented to arbi-

trate her Elliot-Larsen claim. That holding was based

on: (1) the Court of Appeals’ determination that

3 Reliable’s response to these newly raised, and largely irrele-

vant, issues should not be construed as an admission on Reliable’s

part that these issues are legitimately before this Court.

A-A4

Heurtebise’s signing of the Handbook Acknowledgment

constituted her assent to the terms contained in the

Handbook and created a binding contract of arbitration;

and (2) the Court of Appeals’ determination that the

arbitration contract was unambiguous and covered

Heurtebise’s Elliott-Larsen claims.

The Court of Appeals reached the right result

because Heurtebise has never disputed that she volun-

tarily signed an agreement to conform to the Hand-

book’s terms — which include the arbitration provision.

Based on this fact, Michigan law (as discussed below)

mandates a finding of mutual assent, and the trial court

holding to the contrary was clearly erroneous on this

front. Second, in holding the language of the arbitration

provision unambiguous, the Court of Appeals correctly

exercised its powers of de novo review of the trial

court's legal conclusions to reach the only sensible

result.

Heurtebise challenges the Court of Appeals’ holding

by attempting to place the burden of demonstrating a

knowing waiver on Reliable. However, this Court has

established that “the burden of proving nonarbatrability

is assigned to the party seeking to avoid such an agree-

ment and not to the party seeking to enforce such an

agreement.” McKinstry v Valley OB-GYN Clinic, PC,

428 Mich 167, 184; 405 NW2d 88 (1987). Therefore,

Heurtebise, the party seeking to avoid arbitration pur-

suant to the agreement, bears the burden of proving an

excuse, such as coercion, mistake, duress or fraud, once

a showing is made that an arbitration agreement was

entered by the parties. /d. at 181. Heurtebise has never

attempted to make such a claim,‘ and, as the Court of

4 Heurtebise previously argued that she is entitled to “dis-

cover[] and present evidence regarding the facts and circumstances

surrounding the signing of [the] agreement.” (Application at 11)

Heurtebise never advanced this argument in earlier briefing and her

(concluded on page A45)

ee 2

A-45

Appeals correctly held, she Cannot avoid the enforce-

ment of her agreement.

With respect to public policy, Heurtebise has previ-

ously conceded that the Court of Appeals “accurately

States that there is no public policy prohibition against

the enforcement of a valid arbitration agreement that

provides for meaningful arbitration in matters involving

civil rights (sic).” (emphasis added) (Application at 12)

Heurtebise has never disputed that the Reliable arbitra-

tion procedure comports with elementary fairness in

every respect. Indeed, Heurtebise has previously

admitted that she “does not argue that an agreement

between an employer and an employee to arbitrate civil

rights claims can never be valid.” (emphasis added)

(Application at 2).

Despite these admissions in her Application,

Heurtebise, in her brief on appeal, has relied almost

entirely on arguments based on her notions of fairness

and public policy which, again, have not been pre-

served for appeal. It is clear that Heurtebise’s repetitive

intonation of catch-phrases such as “public policy” and

“fundamental rights” is an attempt to mischaracterize

the Court of Appeals’ holding, which was based purely

on basic issues of contract law, as a Sinister threat to

basic civil liberties. However, substantive rights under

Elliott-Larsen are simply not at risk in this case. All

potential statutory remedies that exist in the judicial

forum to protect those rights under Elliott-Larsen are

similarly available in the arbitral forum contemplated by

the Reliable policy. As this Court specifically recognized

(continued from page A44)

failure to file an affidavit to support an excuse or absence of a

knowing and voluntary waiver, is, itself, grounds for dispo-

sition. McCart v ] Walter Thompson, Inc, 437 Mich 109, 116; 469

NW2d 284 (1991) (“a party opposing a motion for summary dispo-

sition is required to respond with affidavits or other evidentiary

materials to show the existence of a factual dispute ...”) Id. at 115.

(emphasis added).

A-46

in McKinstry v Valley OB-GYN Clinic, PC, supra, arbitra-

tion does not undermine a party’s due process or sub-

stantive rights; “A party’s voluntary decision to

arbitrate neither involves the complete relinquishment

of a constitutional right nor raises the specter of proce-

dural due process violations ... .” 428 Mich 167, 182; 405

NW2d 88 (1987).

This view is confirmed by the United States Supreme

Court in Gilmer v Interstate/Johnson Lane Corp, supra,

which decided that “by agreeing to arbitrate a statutory

claim, a party does not forego the substantive rights

afforded by the statute; it only submits to their resolu-

tion in an arbitral forum, rather than a judicial forum.”

500 US at 21; 111 S Ct at 1652; 114 L Ed2d 26 (1991)

quoting Mitsubishi Motors Corp v Soler Chrysler-Plymouth,

Inc, 473 US 614, 628, 105 S Ct 3346, 3354, 87 L Ed2d 444

(1985). Thus, any allegation that a substantive right is at

risk in the arbitral forum is unfounded. Heurtebise’s

contention that her civil rights have been violated is an

inflammatory mischaracterization of the issues in this

case.

This is not a case where either elementary fairness is

at issue or where, in response to a motion for summary

disposition, the litigant has established a defense to the

signing of an arbitration agreement. To the contrary,

Heurtebise: (i) conceded, in her Application, that there

is no public policy issue raised here; (ii) did not dis-

pute, in the Court’s below, that the arbitration proce-

dures are fundamentally fair; and (iii) acknowledged

before the trial court and the Court of Appeals that she

voluntarily agreed to abide by her employer’s proce-

dures, including arbitration of “any and all” termination

disputes. Therefore, reversal by this Court is unwar-

ranted. Furthermore, as explained in the pages that

ioliow, reversing the Court of Appeals would, in effect,

require that this Court dismantle long-standing and

well-settled Michigan law.

x kek

the «. jl ————— ia

A-47

[D][1]b. The United States Supreme Court Supports

Arbitration Of Statutory Claims

When interpreting Elliott-Larsen, courts of this state

rely for guidance on federal precedent on analogous

questions. Matras v Amoco Oil Co, 424 Mich 675; 385

NW2d 586 (1986). The US. Supreme Court's holding in

Gilmer v Interstate/Johnson Lane Corp, supra, per-

Suasively supports ordering Heurtebise’s claim to

arbitration.

In Gilmer, the Supreme Court upheld arbitration of an

employee’s chkeim under the Age Discrimination in

Employment Act of 1967, 29 USC 621, et. seq., (“ADEA”)

and articulated the public policy in favor of such arbi-

tration. The plaintiff in Gilmer, a registered stock

broker, sued his employer, a brokerage firm, alleging

that the firm discharged him in violation of ADEA.

The firm filed a motion to compel arbitration of the

ADEA claim, relying upon an arbi‘ration agreement in

the plaintiff's registration application, as well as the

Federal Arbitration Act (“FAA”) 9 USC § 1, et seg. As a

condition of his employment, the plaintiff had to sign

the Standard Application for Securities Industry Regis-

tration Form (“U-4 Form”) used for registration of per-

sons dealing in securities. The U-4 Form provided in

part: “‘[I] agree to arbitrate any dispute, ... [that may

arise between me any my firm] ... that is required

to be arbitrated under the rules ... of the organiza-

tions with which I register.” (Emphasis added) 111 S Ct

at 1650.

The rule at issue in Gilmer was New York Stock

Exchange (“NYSE”) Rule 347 which provides for arbitra-

tion of: “Any controversy between a registered represen-

tative and any member or member organization arising

out of the employment or termination of employment of

such registered representative .. .” (Emphasis added)

Id. At 1651. Neither the securities form nor the NYSE Rule

A-48

referred specifically to civil rights claims." The Supreme

Court held, however, that a statutory claim, such as an

ADEA claim, “can be subjected to compulsory arbitra-

tion pursuant to an arbitration agreement ... .” Gilmer

at 1652. Furthermore, in challenging the waiver of a judi-

cial forum for ADEA claims, the Supreme Court stated

that: “questions of arbitrarily must be addressed with a

healthy regard for the federal policy favoring arbitra-

tion.” Gilmer at 1652.

The Supreme Court's reasoning in Gilmer applies in

all respects to the instant case. The agreement to arbi-

trate in Gilmer arose out of the employment relation-

ship, and, as is true for the instant case, was not

contained in a separate written instrument. Arbitration

was upheld nevertheless. The Gilmer arbitration provi-

sion also did not specifically list all potentially arbi-

trable claims. Gilmer confirms that this factor is no

obstacle to arbitration.

Gilmer also deals with Heurtebise’s objection that

arbitration forces her to forego due process rights

under Elliott-Larsen. Heurtebise in the instant case,

echoing the plaintiff in Gilmer, argues that compulsory

arbitration is improper because it deprives claimants of

substantive rights provided for by statute. Gilmer

rejects that notion: “by agreeing to arbitrate a statutory

claim, a party does not forego the substantive right

afforded by the statute; it only submits to their resolu-

tion in an arbitral, rather than a judicial, forum.” Gilmer

at 1652.

Gilmer also reinforced the U.S. Supreme Court's pre-

vious holdings that arbitration as a means of dispute

resolution is not foreclosed merely because a particular

statute embodies a judicial enforcement process: “it is

10 This fact is significant in view of Heurtebise’s argument that

a “knowing waiver” is one which specifies that civil rights claims are

to be arbitrated. No such requirement was demanded by the

Supreme Court in Gilmer.

A-49

by now clear that statutory claims may be the subject of

an arbitration agreement .. .” (Emphasis added) Gilmer

at 1642. Arbitration does not diminish or otherwise

affect Heurtebise’s substantive righ_s under Elliott-

Larsen. The arbitration provision deals only with forum

selection.

Also paralleling the facts in Gilmer, selection of com-

petent, impartial arbitrators are provided in the Reliable

Handbook, assuring fair arbitration proceedings. Fur-

thermore, the instant arbitration clause came about as

a result of a private two-party agreement to arbitrate.

“Having made the bargain to arbitrate. the partfies]

should be held to it ... .” Gilmer at 1652.

Heurtebise, recognizing that Gilmer is fatal to her

public policy arguments, vainly attempts to distinguish

it from her case. She points out that the arbitration pro-

vision in Gilmer was contained in a securities registra-

tion application and not an employment contract.

However, that is a meaningless distinction. The impor-

tance of the Gilmer holding is that the United Siates

Supreme Court determined that Statutory civil rights

claims are arbitrable.

c. An Expansive Body Of Recent Federal And State Juris-

prudence Favors The Arbitration Of Statutory Claims

Overwhelming federal and state court precedent simi-

larly hold that compulsory arbitration agreements are

binding for employment discrimination claims. For

example, in Scott v Farm Family Life Ins Co, 827 F Supp

76 (D Mass, 1993), claims of sex, marital status and

pregnancy discrimination brought pursuant to Title VII

and the Massachusetts Equal Rights Act were held sub-

ject to mandatory arbitration based on an ai bitration

clause contained in an agent contract providing that “ail

disputes arising under this agreement ... shall be

resolved by binding arbitration pursuant to the rules of

the American Arbitration Association.” Id at 77.

(emphasis added)

A-50

Mago v Shearson Lehman Hutton, Inc, supra applied

Gilmer to a Title VII claim and held that the terms of

Shearson’s employment application required arbitration

of any controversy concerning compensation, employ-

ment or termination of employment.

In Dancu v Coopers & Lybrand, 778 F Supp 832 (ED Pa,

1991), aff'd 972 ED. 1330 (CA 3, 1992), plaintiff executed

a partnership agreement containing an arbitration provi-

sion applying to any claims or controversies arising out

of the agreement or the practices and affairs of the firm.

The court enforced the mandatory arbitration of plain-

tiff’s age discrimination claim brought pursuant to

ADEA.

Hull v NCR Corp, 826 F Supp 303 (ED MO, 1993), held

enforceable the arbitration of plaintiff's claims of dis-

crimination in vioiation of Title VII, the Missouri Human

Rights Act and the ADEA based on an employment con-

tract containing the following arbitration provision: “any

controversy or claim arising out of or relating to this

contract, or breach thereof, shall be settled by arbitra-

tion in accordance with the rules of the American Arbi-

tration Association, and judgment upon the award

rendered by the arbitrator may be entered in any court

having jurisdiction thereof.” /d at 304. (emphasis

added).

In DiCrisci v Lyndon Guar Bank, 807 F Supp 947 (WD

NY, 1992), claims brought pursuant to Title VII alleging

gender discrimination, sexual harassment and hostile

work environment held arbitrable under the FAA pur-

suant to a written employment contract providing that

the parties “agree[d] that any dispute between them or

claim by either of them against the other or any agent

or affiliate of the other shall be resolved by binding

arbitration ...” /d at 949.

In Williams v Katten, Muchin & Zavis, 837 F Supp 1430

(ND Illinois, ED, 1993) a law firm partner alleging dis-

crimination on the basis of race, sex and religion pur-

a

A-51

Suant to Title VII and § 1981 ordered to arbitrate dis-

pute pursuant to FAA based on partnership agreement

providing that “[a]ny controversy or claim arising out

of or relating to any provision of this Agreement or any

other document or agreement referred to herein...

shall be resolved by arbitration .. .” /d at 1432. See,

McNulty v Prudential-Bache Securities, Inc, 87 F Supp 567

(ED NY, 1994) (claims of retaliatory discharge for

missing 13 days work in serving on a federal grand jury

pursuant to the Jurors’ Act are arbitrable); See also

Cook v Barratt American, Inc, 219 Cal App 3d 1004; Cal

Rptr 629 (1990) cert den 500 US 932, 111 S Ct 2052, 114 L

Ed2d 458 (1991); and Sacks v Richardson Greenshield

Securities, Inc, 781 F Supp 1475 (ED Cal, 1991), both

enforcing arbitration agreements with respect to state

law claims of sex discrimination.

In non-employment contexts as well, the Supreme

Court has repeatedly adhered to the principle that statu-

fory rights are arbitrable. See Mitsubishi Motors Corp v

Soler Chrysler-Plymouth, Inc, 473 US 614; 105 S Ct 3346:

87 L Ed 2d 444 (1985) (finding claims under the

Sherman Act arbitrable); Shearson/American Exp, Inc v

McMahon, 482 US 220: 107 S Ct 2332; 96 L Ed 2d 185

(1987) (finding claims under the civil provisions of RICO

and § 10(b) of the Securities Exchange Act arbitrable):

Rodriguez De Quijas v Shearson/American Exp, Inc, 490

US 477; 109 S Ct 1917; 104 L Ed2d 526 (1989) (finding

claims under the Securities Act of 1933 arbitrable). All

these cases involve important and fundamental prop-

erty and other rights, yet arbitration was upheld

because of the public policy in favor of alternative dis-

pute resolution.

2. A Civil Litigant May Waive Trial By Jury

Heurtebise relies on Barbour v Dept of Soc Ser, 172

Mich App 275; 431 NW2d 482 (1988) and Schafke v

Chrysler Corp, 147 Mich App 751: 383 NW2d 14] (1986),

for the proposition that she is “guaranteed” a trial by

A-52

jury for her civil rights claims. Yet, neither of these

cases either mandates a trial by jury or concerns the

arbitral forum. The fact that the circuit court may be

the only proper judicial forum for handling an Elliott-

Larsen claim does not preclude enforcement of private,

voluntary arrangements to resolve discrimination

claims in an arbitral forum rather than a courtroom.

Contrary to Heurtebise’s assertion that “fundamental”

rights are abridged or at risk, a choice of forum deci-

sion deals purely with matters of procedure rather than

substance because it is directed to the mechanisms for

resolving the underlying disputes. See Berkovitz v Arbib

& Houlberg, Inc, 230 NY 261, 270; 130 NE 288, 190 (1921)

(“arbitration is a form of procedure whereby differences

may be settled. It is not a definition of the rights and

wrongs out of which differences grow.” — J.Cardozo)

(holding the New York arbitration statute of 1920, from

which the Federal Arbitration Act was copied, to be

purely procedural).

Heurtebise argues that the enforcement of the arbitra-

tion provision will strip her of her “fundamental consti-

tutional and statutory rights to court access, a jury trial

and administrative relief.” (Appellant's brief, p. 30). It is

certainly true that one who contracts to submit

prospective claims to binding arbitration waives his or

her right to court access and a jury trial. There is

nothing alarming about that, as those rights may be

waived by mere inadvertence — ie., failing to file a

timely jury demand, or letting the statute of limitations

run on a cause of action. Similarly, a plaintiff loses the

right to file a complaint with the MCRC if the filing is

not timely. See MCL 423.307(b)."" Heurtebise is not the

first plaintiff, however, to attempt to avoid mandatory

ll Many rights can be waived merely by the litigant’s failure to

properly or timely assert or preserve them, including: 1) right to

raise a constitutional question; 2) attorney-client privilege; 3) privi-

lege against self-incrimination; and 4) right to appeal an issue.

<<

A-53

arbitration by positing that she is being unfairly

deprived of a constitutional right. However, this Court,

in McKinstry, observed that:

We do not infuse constitutional concerns

equivalent to those in a criminal proceeding into

a civil litigant’s contractual choice-of-forum deci-

sion. A party’s voluntary decision to arbitrate

neither involves the complete relinquishment of

a constitutional right nor raises the specter of

procedural due process violations ... The right

to a jury trial in a civil action is therefore per-

missive, not absolute.

428 Mich at 183.

Heurtebise seems to take the position that the right to

court access and a jury trial are more inviolate where

Elliott-Larsen or other Statutory civil rights claims are

involved. Heurtebise offers fragmented language taken

Out of context to support this contention. For example,

she states, citing Constantinoff v Bixby Hosp, 111 Mich

App 575, 577; 314 NW2d 698 (1981): “Michigan law has

recognized a strong policy ‘favoring direct and imme-

diate access to the courts’ for civil rights claims.”

(Appellant's brief, p. 31). However, as this Court

explained in Holmes v Haughton Elevator Co, 404 Mich 36,

42; 272 NW2d 550 (1978), “direct access to the courts”

merely means that a plaintiff is not required to file a

complaint with the MCRC, either as a sole remedy or

as a precondition to filing a complaint in circuit court.

We additionally predicated our decision upon

our conviction that the constitutional delegates

did not intend, in creating the Civil Rights com-

mission, to vest it with exclusive jurisdiction

over civil rights cases.

Heurtebise also stresses the importance of the “cumu-

lative remedies” available under Elliott-Larsen and Title

VII, but does not explain how an arbitration agreement

will affect the number of remedies available. “Cumula-

A-54

tive remedies” refers, both in federal cases discussing

Title VII and Michigan cases discussing Elliott-Larsen, to

the fact that the administrative remedies available with

the EEOC and the CRC are not a plaintiff's exclusive

remedies, as they do not supplant a plaintiff's right to

file a claim in circuit court. (See, e.g. Alexander v

Garnder-Denver, 415 US 36; 94 S Ct 1011, 1020; 39 L Ed2d

147 (1974) (“Title VII was designed to supplement,

rather than supplant, existing laws and institutions

relating to employment discrimination). Nor, it seems,

would the administrative remedies, as non-exclusive

remedies, supplant a plaintiff’s right to have a civil

rights claim arbitrated.

Heurtebise relies on Moore v Fragatos, 116 Mich App

179; 321 NW2d 781 (1982), for the proposition that arbi-

tration involves waiver of a constitutional right that can

only be accomplished if the arbitration agreement

expressly lists the particular claims. (Application at 9)

Once again, controlling law refutes her position. In Mc-

Kinstry, supra, this Court specifically disagreed with the

holding of Moore “to the extent that it places the

burden on the defendant to prove by clear and con-

vincing evidence that the plaintiff knowingly, intelli-

gently, and voluntarily waived [her] right to court

access.” McKinstry at 182. The McKinstry court held:

(i) the right to a jury trial in a civil action is permissive,

not absolute; and (ii) as a result, waiver of a jury trial in

a civil case is “not tantamount to deprivation of a fun-

damental constitutional right.” /d. at 183. Based on

these conclusions, McKinstry upheld the presumption

established in the Michigan Medical Arbitration Act,

MCL 600.5040, et seg; MSA 27A.5040 ef seq, that arbitra-

tion agreements signed in accordance with the Act are

valid. Furthermore, as McKinstry also held, “Michigan

law further presumes that one who signs a written

agreement knows the nature of the instrument so exe-

cuted and understands its contents.” /d.

While Heurtebise attempts to place the burden of

demonstrating voluntariness on Reliable, McKinstry

A-55

establishes that the party seeking to avoid the agree-

ment, in this case Heurtebise, bears the burden of

proving an excuse, such as coercion, mistake, duress or

fraud. McKinstry at 181. Heurtebise has never attempted

to make such a claim, and cannot avoid the enforce-

ment of her agreement.

The US. Constitution does not confer such an unwaiv-

able right to a jury trial in state court civil cases. /d at

183. Similarly, the Michigan Constitution provides that

such a right is “waived in all civil cases unless

demanded” by a party. /d., citing Mich Const 1963, Art 1

§ 14. Indeed, since the right to a jury trial in a civil case

is permissive, not absolute, it may be waived as part of

an arbitration agreement without resulting in an uncon-

Stitutional deprivation. This being so, there is no legal

impediment to waiver by a litigant of the right to a jury

trial by agreeing to arbitrate claims.

3. The Arbitration Provision Does Not Strip the Circuit Courts

of Their Jurisdiction

Heurtebise argues that arbitration of her Elliott-

Larsen claim divests the circuit courts of their jurisdic-

tion over civil rights claims. She points to language

contained in the statute to defend her argument that no

Elliott-Larsen claim can ever be decided anywhere but

in circuit court: “An action commenced pursuant to sub-

section (1) may be brought in the circuit court for the

county where the alleged violation occurred, or for the

county where the person against whom the civil com-

plaint is filed resides or has his principal place of busi-

ness.” MCL 37.2801; MSA 3.548(801).

In interpreting this language as prohibiting an Elliott-

Larsen claim from being arbitrated, Heurtebise cites

Baxter v Gates Rubber Co, 171 Mich App 588; 431 NW2d

81 (1988) for the proposition that “MCL 37.2801 vests

the circuit courts of this state with exclusive jurisdic-

tion over Elliott-Larsen claims.” (Heurtebise’s brief on

appeal, at 31-32). However, that case did not deal with

A-56

arbitration of an Elliott-Larsen claim, Rather, in Baxter,

the plaintiff alleged damages in an amount less than

$10,000 — over which claims the district courts have

jurisdiction — but brought suit under Elliott-Larsen —

over which claims the circuit court have jurisdiction.

When faced with the tension between the two jurisdic-

tional statutes, the Court of Appeals determined that

the circuit courts should retain jurisdiction of the case

despite the insufficiency of the amount in controversy.

Baxter, therefore, involved a dispute between two

judicial forums. The Baxter court’s determination that

the circuit court has exclusive jurisdiction over Elliott-

Larsen claims only dealt with a conflict between the dis-

trict and circuit courts. Baxter has no application to the

instant case.

Furthermore, any time parties decide to arbitrate an

otherwise triable issue, the case is necessarily “taken

away” from a court. Heurtebise’s use of the pejorative

term “stripped of their jurisdiction” is an inelegant

attempt to portray arbitration as an overreaching

usurpation of the judiciary’s authority that the MAA

and numerous judicial decisions conclusively refute.

4. The Arbitration Provision Does Not Divest The EEOC.

The MCRC or the MDRC of Their Jurisdiction

Over Civil Rights Claims

Heurtebise, again raising an issue which has nothing

to do with this case, argues that:

[T]he Court of Appeals has given employers free

reign to oust the Equal Employment Opportunity

Commission, the Michigan Civil Rights Commis-

sion, the Michigan Department of Civil Rights,

the Board of Workers’ Disability Compensation

Magistrates ... of their long-established jurisdic-

tion over Michigan employees’ claims.

» mv

(Appellant’s brief on appeal, p. 53).

A-57

This argument, which is echoed in an amicus brief

filed by the MCRC and the MCRC, has no relevance to

the instant case. The MCRC and the MCRC have never

been involved in this case. Heurtebise never pursued

the administrative remedies available to her with those

agencies, and Reliable has never asserted that the arbi-

tration agreement arising from Heurtebise’s acceptance

of the Handbook divests any State or federal agency of

their constitutionally- or Statutorily-conferred police

powers. As such, these issues have nothing to do with

this case, and the Court of Appeals’ decision has no

impact on the scope of authority of any such agency. It

is clear that Heurtebise has raised these issues in an

attempt to escalate her run-of-the-mill contract case

into a constitutional issue, and thereby unfairly portray

the Court of Appeals’ decision as a threat to administra-

tive agency jurisdiction.

Following Heurtebise’s argument to its necessary con-

clusion, if arbitration of a civil rights claim equals an

impermissible “ousting” of the MCRC, MDRC, EEOC,

etc., then civil rights claims may never be arbitrated.

Therefore, virtually any terminated employee may

escape a binding contract of arbitration by merely

including in his or her complaint a count alleging a civil

rights violation. Surely the public policy favoring arbi-

tration of disputes would abhor such a result. In truth,

excepting any class of dispute from arbitration could

have a chilling effect on the availability of such an alter-

native forum, since a creative framing of the issues by a

clever plaintiff or defendant could work to defeat arbi-

tration time and again - much as parties are frequently

impermissibly joined in lawsuits to defeat federal diver-

sity jurisdiction.

A more realistic view of the relationship between

arbitration and the administrative agencies is that they

are concurrent remedies; the arbitral forum offers, in

stead of a courtroom, a place for a plaintiff to have his

or her claim for damages decided. The administrative

A-58

agencies simultaneously discharge a policing function.

The agencies are not affected in any way by the agree-

ment between Heurtebise and Reliable to have civil

rights damage claims decided by an arbitrator rather

than by a judge.

Heurtebise has created a “tempest in a teapot” to

make the ramifications of the Court of Appeals’ holding

appear dire and alarming. In reality, no substantive con-

stitutional or statutory rights are being abridged, and

no administrative agency is being divested of its power.

This Court should refuse to reverse the Court of

Appeals on those grounds.

5. Case Law Cited By Heurtebise Involves Inapplicable

Factual And Legal Settings And Does Not Establish Any

Error By The Court of Appeals

a. Unlike In The Instant Case, The Prudential Plaintiffs

Claimed They Had Been Misled Concerning

The Arbitration Agreement

In a last gasp attempt to resuscitate her claim, Heur-

tebise latches onto Prudential Ins Co v Lai, 42 F3d 1299

(CA 9, 1994). In particular, Heurtebise claims that

because the Prudential arbitration provision did not

specifically state that discrimination claims were sub-

ject to arbitration, the provision was not enforceable.”

Heurtebise’s dependence on Prudential is misplaced

because of the crucial factual distinctions between the

facts in that case and those of the instant case. In Pru-

dential, the plaintiffs were employed as sales represen-

tatives. They claimed they were victims of sexual

harassment by the supervisor. Prudential sought to

compel arbitration of their claims based on the arbitra-

tion clause incorporated into the U-4 Form signed by

12 Heurtebise also raises Title VII’s legislative history which is

completely irrelevant to this case. Congress’ intent in passing a fed-

eral statute has no bearing on the interpretation of the Michigan

legislature’s intent under Elliott-Larsen.

init eereerieeeeeeeemseminiiaitiiiuusiael

ae ee a Ail

A-59

plaintiffs when applying for their positions. This is the

same form at issue in Gilmer, supra, and contains the

same agreement “to arbitrate any dispute, claim or con-

troversy that ... is required to be arbitrated under the

rules, constitutions or by-laws of the organizations with

which I register.” /d at 1301 (emphasis added).

However, unlike the plaintiff in Gilmer, supra, who sub-

sequently registered with the NYSE and became subject

to Rule 347 mandating arbitration of “any controversy. . .

arising out of the employment or termination of

employment ... .” the Prudential plaintiffs subsequently

registered with the National Association of Securities

Dealers (“NASD”) whose manual simply states that dis-

putes ‘arising in connection with the business” of its

members must be arbitrated. Prudential at 1302.

The Prudential plaintiffs also alleged that when they

signed the U-4 Forms, they were told only that they

were applying to take a test which was required for

their employment by Prudential, and that they were

simply directed to sign in the relevant place without

being given an opportunity to read the forms. /d at 1303.

The plaintiffs further agreed that they were never given

a copy of the NASD manual which contains the actual

terms of the arbitration agreement. /d. Thus, the Pruden-

tial plaintiffs claimed they (i) were unaware they signed

a document containing an arbitration clause; (ii) were

not on notice that they agreed to arbitrate employment

disputes; and (iii) the NASD provision does not cover

employment disputes. /d.

would not enforce arbitration of the claims asserted

A-60

because the NASD provision did not encompass

employment-related disputes. Prudential at 1304.

The NASD language stands in stark contrast to the

language found in Gilmer and the language of the Reli-

able Handbook in the instant case. In Gilmer, the com-

parable provision required arbitration of “any

controversy ... arising out of employment .. :. The

Reliable provisions required arbitration of “any and all

claims related to termination of employment .. .” Both

the Gilmer and Reliable provisions are all-encompassing

and undeniably include employment-related disputes, as

the Court of Appeals correctly held. Pursuant to the lan-

guage of both the Gilmer and Reliable arbitration proce-

dures, no possible claim can be considered exempt,

neglected, forgotten, omitted or eliminated.

The U.S. Supreme Court held that the Gilmer all-

encompassing language — bereft of particularization,

absent a description of the nature and scope of the cov-

ered claims, and missing any specification or identifica-

tion of discrimination claims — satisfies the minimum

requirements for enforceability of an agreement to arbi-

trate statutory civil rights claims. No more than this is

needed. Prudential did not involve such all-encom-

passing language and there was an issue raised as to

whether the employees knew even the nature of what

they had signed. Accordingly, Prudential provides no

guidance here.

Moreover, Heurtebise fails to acknowledge that other

courts of appeals have upheld arbitration based on the

same NASD language as was rejected by the Prudential

court. In Kidd v Equitable Life Assur Soc, 32 FD. 516 (CA

ll, 1994), the Eleventh Circuit compelled arbitration of

the Title VII race discrimination claims brought by the

securities broker’s former sales representatives pur-

suant to the same NASD language considered by the

Prudential court. See also, Benefits Communications Corp

v Klieforth, 642 A2d 1299 (DC App, 1994) (compelling

A-61

arbitration of a sex discrimination claim brought pur-

suant to the District of Columbia Human Rights Act

(“Act”) pursuant to NASD arbitration provision despite

claimant’s contention that she would be deprived of the

right to jury trial because the court found no basis in

the Act intending to bar voluntary agreements to arbi-

trate employment discrimination claims); and Scher v

Equitable Life Assur Soc, 866 F Supp 776 (SD NY, 1994).

Accordingly, in view of contrary holdings by other

federal courts, and the factual distinctions noted above,

Heurtebise’s reliance on Prudential does not (i) advance

her case; (ii) undermine the Court of Appeals decision

(iii) or raise an issue of major significance to the state's

jurisprudence.

x* * *

A462

EMPLOYEE ACKNGWLEDGMENT

(Dated May 25, 1989)

| acknowledge receipt of the Reliable Business Com-

puters, Inc. Employee Handbook. I agree to conform to

the various procedures, rules and regulations of the

Company, as set forth therein, and as may be promul-

gated by the Company in the future, and further under-

stand that my employment and compensation can be

terrainated with, or without cause, and with or without

notice at any time, at the option of either me or the

company. | further understand that no employee, other

than the President or his designee, in a duly executed

written document, has any authority to enter into any

agreement for employment for any specified period of

time, or to make any arrangements contrary to or dif-

ferent from what is provided in this Handbook.

/s/ Theresa A. Heurtebise

EMPLOYEE'S SIGNATURE

Dated: 5/25/89

Witness:

/s/ [Ilegible}

A-63

EXCERPT FROM PLAINTIFF-APPELLANT’S

SUPPLEMENTAL APPENDIX

(State of Michigan — Supreme Court)

RELIABLE BUSINESS COMPUTERS, INC.

EMPLOYEE HANDBOOK

~ PAGES 64-71 -

x * *

Vil

TERMINATION AND DISMISSAL

GENERAL

As indicated earlier, an employee’s employment and

compensation may be terminated with or without

cause, with or without advance notice at any time, at

the option of either the employee or the COMPANY. No

employees of the COMPANY except the President, in a

duly executed written document, has any authority to

enter into any agreement for employment for any speci-

fied period of time, or to make any arrangement with

employee contrary to, or different from the provisions

set forth in this handbook. None of the policies, prac-

tices, procedures, or other matters set forth herein

create any employment or personal contract, express or

implied.

INTERNAL REVIEW OF EMPLOYEE DISMISSAL

An employee whose employment has been terminated

by the COMPANY who disagrees with the propriety of

the dismissal must request higher level review of the

dismissal as a precondition to seeking and obtaining

any relief outside of the COMPANY. The employee must

act within ten (10) days after the date of dismissal, but

has the option to employ the EMPLOYEE COMPLAINT PRO-

CEDURES set forth in Section II, or may make formal

written request to the President of the COMPANY that

A-64

the dismissal be reviewed by the COMPANY’s Executive

Committee (which consists of the President and three

(3) of the COMPANY'’s other executive officers or direc-

tors). Upon receipt of the employee’s formal written

request for review, the President will schedule a formal

review date for the employee to meet with the Execu-

tive Committee and discuss the dismissal.

The review by the Executive Committee will afford the

employee an opportunity to present whatever evidence

and argument the employee believes appropriate, as

well as an opportunity to rebut the testimony of others

as it pertains to any issues relating to the dismissal.

The employee may be accompanied by a representative

or legal counsel provided the employee has provided at

least ten (10) days advance written notice of his intent

to be represented at the review, specifying the identity,

relationship, and purpose of any persons accompanying

employee to the review, and may present the testimony

of witnesses provided the employee has provided at

least ten (10) days advance written notice of the iden-

tity of the witnesses, and a general statement relative to

the matters as to which each is expected to testify. The

COMPANY shall have the right to present the testimony

of rebuttal and other witnesses. During the period of

time between the dismissal, and the review, the

employee will be considered suspended without com-

pensation or benefits. However, if the Executive Com-

mittee determines to reinstate the employee, the

COMPANY will pay the employee part or all back pay and

benefits depending upon the specific facts and condi-

tions.

Within ten (10) days after the Executive Committee

completes the review, it will render a written final deci-

sion which will resolve issues of fact and provide as to

whether or not the employee will be offered reinstate-

ment of employment and if so, will specify the condi-

tions under which the offer of reinstatement is made.

A-65

ARBITRATION OF DISMISSAL

Notwithstanding that employees are employed by the

COMPANY “at will” and that an employee's employment

may be terminated by the employee or the COMPANY. at

any time, (without notice and without cause). An

employee who has followed the internal review proce-

dure for review by the Executive Committee, (specified

above), and who is not satisfied with the results of the

review and who feels compelled to seek redress from a

source outside the COMPANY may challenge the pro-

priety of the dismissal outside the COMPANY, only

through arbitration as hereinafter described. Such arbi-

tration shall be the final arena of dispute resolution and

the decision of the arbitrator(s) shall be final and

binding upon both the COMPANY and the employee.

Federal law requires that most employers sponsoring

group health and dental! plans offer terminating

employees and their families the opportunity for a tem-

porary extension of these coverages at group rates in

instances where coverage under the plan would other-

wise terminate. Upon termination. employees partici-

pating will be provided with an application to continue

applicable group benefits as required by law, at the

employee's own cost and expense.

VIII

ARBITRATION OF DISPUTES

If any dispute, matter or controversy involving claims

of monetary damages and/or employment related mat-

ters should arise between an employee and the COM-

PANY, including, but not limited to, any and all claims

relating to termination of employment (regardless of

whether or not the employee has exhausted the various

mandatory procedures for internal review of complaints

and dismissals), then such dispute, matter or contro-

versy shall be referred for binding arbitration under the

A-66

laws of the State of Michigan to the American Arbitra-

tion Association (hereinafter “AAA”) under the rules of

such AAA, to be decided by a three (3) member arbitra-

tion panel, except that the COMPANY shall have the right

to select one arbitrator, the employee shall have the

right to select one arbitrator, and the two arbitrators so

selected shall select a third arbitrator. A decision or

award of the AAA shall be accepted as final and conclu-

sive and shall be binding upon both the employee and

the COMPANY, their respective successors, heirs and

legal representatives, and if necessary, appropriate

orders or judgment may be entered in an appropriate

court of record, incorporating and enforcing terms of

any such award. The arbitration proceeding shall afford

the COMPANY and the employee with opportunities to

present and rebut evidence relative to the applicable

issues. Nothing herein relative to arbitration, however,

shall prevent either employee or COMPANY from seeking

and obtaining equitable relief on a temporary or perma-

nent basis from a court of competent jurisdiction by

instituting a legal action or other court proceeding in

order to protect or enforce the rights of either or to

prevent irreparable harm and injury. However, the

court's jurisdiction over any such matter between the

COMPANY and the employee shall be expressly limited

only to the equitable issues and relief sought, and all

issues involving monetary damages between the COM-

PANY and the employee shall be determined through

arbitration as described above.

L/D7 reliable.hbk

A-67

AFFIDAVIT OF THOMAS RIDDLE

(State of Michigan — Court of Appeals)

(Dated May 6, 1993)

(CHRISTINE M. RUSHTON, Plaintiff-Appellee, vs. MEIJER,

INC., Defendant-Appellant — Court of Appeals Case

No. ; LC No. 92-13127-CZ; Hon. Valdemar Washington)

STATE OF MICHIGAN

COUNTY OF KENT — ss.

THOMAS RIDDLE, being first duly sworn, deposes and

says that:

1. I currently hold the position of Vice President of

Associate Services/Communication of Defendant Meijer,

Inc., and am authorized to make this affidavit on its

behalf in support of its Application for Leave to Appeal

and Motion for Immediate Consideration and/or Stay.

2. | have personal knowledge of the matters recited

herein and am competent to testify as to these matters.

3. Meijer, Inc., is a retail grocery and general mer-

chandise chain with over seventy stores throughout

Michigan and Ohio. The company buys and sells a sub-

stantial amount of goods which move in interstate com-

merce. The company also receives goods that move in

interstate commerce at its Michigan warehouse facilities

and ships those goods to its stores in Ohio.

4. My responsibilities include management of the

Associate Services Department, which is part of the Per-

sonnel Department. My duties include administration of

Step 1 of Meijer’s Termination Appeal Procedure. Those

duties involve conducting an independent review of the

company’s decision to discharge employees who file

claims under the Termination Appeal Procedure and

answering the employee's compalint.

A-68

5. The Meijer Associate Handbook for Meijer office,

management and professional employees, became effec-

tive on November 15, 1986. This Handbook was distrib-

uted to all office, management and professional

employees then employed at Meijer, Inc. Since then, the

Handbook is provided to all employees at hire.

6. The company’s Termination Appeal Procedure is

described in the Meijer Associate Handbook. The

description in the Handbook specifically advises

employees that the Procedure is intended to be an

exclusive, final and binding method to resolve claims

relating to terminations, and that failure to use the Pro-

cedure may preclude an employee from pursuing legal

rights in court or other forums.

7. A copy of the full Termination Appeal Procedure

is available at any time upon request from an

employee’s unit manager or from the Associate Services

Department. A copy of the full Procedure was attached

as Exhibit 2 in support of Meijer, Inc.’s Motion For Sum-

mary Or Partial Summary Disposition. The full Termina-

tion Appeal Procedure description also specifically

advises employees that it is intended to be the sole and

exclusive remedy and forum for termination claims and

that the award of an arbitrator under Step 2 is intended

to be final and binding, and enforceable in court. It also

specifically informs employees that if a court should

determine that the Termination Appeals Procedure is

not the sole and exclusive remedy, or that an arbi-

trator’s award is not final and binding, then exhaustion

of the Termination Appeal Procedure is intended to be

a condition precedent to institution of any other pro-

ceeding in court or any other forum with respect to ter-

mination claims.

8. The arbitration hearing under Step 2 of the Termi-

nation Appeal Procedure is conducted in accordance

with the Voluntary Labor Arbitration Rules of the Amer-

A-69

ican Arbitration Association (AAA), as modified by the

provisions of the Termination Appeal Procedure.

9. Since its institution in 1986, 142 employees have

used the Termination Appeal Procedure. In 12 of those

cases, the company reversed its decision after the Step

1 investigation and offered to bring the employee back

to work. There are currently 14 appeals pending at var-

ious stages of the Termination Appeal Procedure.

10. Meijer currently employs approximately 9,100

employees under the Meijer Associate Handbook for

Meijer office, management and professional employees

and the Termination Appeal Procedure contained in the

Handbook.

ll. The decision by the Genesee County Circuit Court

regarding the Termination Appeals Procedure leaves

Meijer, Inc. in extreme uncertainty regarding its employ-

ment policies, since its throws into question not only

the finality of the decisions made under the Termination

Appeals Procedure, but also the Termination Appeal

Procedure itself. Meijer is now left with an ADR proce-

dure which has been endorsed by the Court of Appeals,

but invalidated by a trial court. and leaves it uncertain

as to whether it or its employees can have any confi-

dence in the continuing efficacy of the Procedure, or

whether the Procedure should be completely jettisoned,

and the understandings under which a substantial

majority of its employees have either been employed or

hired into in the last six years be abandoned. This state

of affairs works substantial harm on Meijer and its

ability to carry on employee relations and human

resources functions.

12. The decision by the Genesee County Circuit Court

regarding the Termination Appeal Procedure calls into

question the finality of all breach of employment con-

tract claims made under the Procedure during the

Statutory limitations period (six years) for such claims.

During that time period, at least 135 such claims were

A-70

made. Fifty-six of those claims were settled with a

release signed by the claimant, leaving the company

potentially exposed to at least 79 de novo breach of

employment contract claims in circuit court.

13. The decision by the Genesee County Circuit Court

regarding the Termination Appeal Procedure also calls

into question the finality of all discrimination claims

made under the Procedure during the statutory limita-

tions period (three years) for such claims. During that

period, at least 41 such claims were made. Nineteen of

those claims were settled with a release signed by the

claimant, leaving the company potentially exposed to at

least 22 de novo discrimination claims in circuit court.

Further deponent sayeth not.

/s/ Thomas Riddle

(Certification Omitted) ;

A-71 ~

MICHIGAN CONSTITUTION 1963,

ART 1, § 14

§ 14. Jury trials

Sec. 14. The right of trial by jury shall remain, but

shall be waived in all civil cases unless demanded by

one of the parties in the manner prescribed by law. In

all civil cases tried by 12 jurors a verdict shall be

received when 10 jurors agree.

Convention Comment

No change from Sec. 13, Article Il, of the present

[1908] constitution, except for the addition of a second

sentence which permits verdicts in Civil (not criminal)

actions when at least 10 jurors agree.

~This change is consistent with the practice adopted

in recent years in 23 other States. The new provision is

designed to reduce costs resulting frm retrial of civil

matters and to safeguard both parties involved against

possibly unjust compromise verdicts or settlements.

A-72

MICHIGAN STATE FAIR EMPLOYMENT PRACTICES ACT

PA. 1955, No. 251 — M.S.A. 17458 ET SEQ.

PUBLIC AND LOCAL ACTS OF THE LEGISLATURE

OF THE STATE OF MICHIGAN

-PASSED AT THE REGULAR SESSION OF 1955-

* * *

(No. 251]

AN ACT to promote and protect the welfare of the

people of this state by prevention and elimination of

discriminatory employment practices and policies

based upon race, color, religion, national origin or

ancestry; to create a state fair employment practices

commission, defining its functions, powers and duties;

and for other purposes.

The People of the State of Michigan enact:

423.301 Fair employment practice act;

purpose; civil right. [M.S.A. 17458(1) |

Sec. 1. The opportunity to obtain employment

without discrimination because of race, color, religion,

national origin or ancestry is hereby recognized as and

declared to be a civil right.

423.302 Same; definitions. [M.S.A. 17458(2) ]

Sec. 2. When used in this act:

(a) The term “person” includes 1 or more individ-

uals, partnerships, associations, organizations, corpora-

tions, legal representatives, trustees, trustees in

bankruptcy, receivers or other organized groups of per-

sons.

(b) The term “employer” includes the state or any

political or civil subdivision thereof, any person

employing 3 or more persons within the state and any

A-73

person acting in the interest of an employer, directly or

indirectly.

(c) The term “employee” does not include any indi-

vidual employed in the domestic service of any person.

(d) The term “labor organization” includes any orga-

nization which exists for the purpose, in whole or in

part, of collective bargaining or of dealing with

employers concerning grievances, terms or conditions

of employment, or for other mutual aid or protection in

relation to employment.

(e) The term “employment agency” includes any

person undertaking with or without compensation to

procure opportunities to work or to procure, recruit.

refer or place employees.

(f) The term “commission” means the state fair

employment practices commission created by this act.

(g) The term “discriminate” includes segregate or

separate.

423.303 Unfair employment practices. [M.S.A. 17.458(3) ]

Sec. 3. It shall be an unfair employment practice:

(a) For any employer, because of the race. color, reli-

gion, national origin or ancestry of any individual, to

refuse to hire or otherwise to discriminate against him

with respect to hire, tenure, terms, conditions or privi-

leges of employment, or any matter, directly or indi-

rectly related to employment, except where based on a

bona fide occupational qualification.

(b) For any employment agency to fail or refuse to

classify properly, refer for employment or otherwise to

discriminate against any individual because of his race,

color, religion, national origin or ancestry, or to con-

duct business under a name which directly or indirectly

expresses or connotes any limitation, specification or

discrimination as to race, creed, ancestry or national

A-74

origin, except that any presently operating agency

bearing a name which directly or indirectly expresses

or connotes any such limitation, specification or dis-

crimination may continue to use its present name: Pro-

cided, That it display under such name, wherever it

appears, a statement to the effect that its services are

rendered without limitation, specification or discrimina-

tion as to race, creed, color, ancestry or national origin.

(c) For any labor organization to discriminate

against any individual or to limit, segregate or qualify

its membership in any way which would tend to deprive

such individual of employment opportunities, or would

limit his employment opportunities or otherwise

adversely affect his status as an employee or as an

applicant for employment, or would affect adversely his

wages, hours or employment conditions, because of

such individual's race, color, religion, national origin or

ancestry.

(d) Except where based on a bona fide occupational

qualification, for any employer, employment agency or

labor organization, prior to employment or admission

to membership, to: (1) Elicit any information concerning

the race, color, religion, national origin or ancestry of

an applicant for employment or membership; (2) make

or keep a record of the race, color, religion, national

origin or ancestry of any applicant for employment or

membership; (3) use any form of application for employ-

ment, or personnel or membership blank seeking to

elicit information regarding race, color, religion, national

origin or ancestry; (4) print or publish or cause to be

printed or published any notice or advertisement

relating to employment or membership indicating any

preference, limitation, specification or discrimination,

based upon race, color, religion, national origin or

ancestry; (5) establish, announce or follow a policy of

denying or limiting, through a quota system or other-

wise, employment or membership opportunities of any

group because of the race, color, religion, national

eS |

A-75

origin or ancestry of such group; and (6) utilize in the

recruitment or hiring of individuals any employment

agency, placement service, training school or center,

labor organization or any other employee-referring

source known by such person to discriminate against

individuals because of their race, color, religion,

national origin or ancestry.

(e) For any individual seeking employment to pub-

lish or cause to be published any advertisement which

specifies or in any manner indicates his race, color, reli-

gion, national origin or ancestry, or expresses a limita-

tion or preference as to the race, color, religion,

national origin or ancestry of any prospective employer.

(f) For any employer, employment agency or labor

organization to discriminate in any manner against any

person because he has opposed or Supported any prac-

tice forbidden by this act, or because he has made a

charge, testifies, assisted or participated in any manner

in any investigation, proceeding or hearing under this

act.

(g) For any person, whether or not an employer,

employment agency, labor organization or employee, to

aid, abet, incite, compel or coerce the doing of any act

declared by this section to be an unfair employment

Practice, or to obstruct or prevent any person from

complying with the provisions of this act or any order

issued thereunder, or to attempt directly or indirectly

to commit any act declared by this section to be an

unfair employment practice.

423.304 Public contracts: nondiscrimination clauses.

[M.S.A. 17.458(4) |

Sec. 4. Every contract to which the State or any of

its political or civil subdivisions is a party shall contain

a provision requiring the contractor and his subcontrac-

tors not to discriminate against any employee or appli-

cant for employment, to be employed in the

A-76

performance of such contract, with respect to his hire,

tenure, terms, conditions or privileges of employment,

or any matter directly or indirectly related to employ-

ment, because of his race, color, religion, national origin

or ancestry. Breach of this covenant may be regarded

as a material breach of the contract.

423.305 Fair employment practice commission;

bipartisan membership, appointment,

vacancies, quorum, removal, compensation,

expenses, policies. [M.S.A. 17458(5) ]

Sec.5. (a) There is hereby created a state fair

employment practices commission, to consist of 6 mem-

bers to be appointed by the governor, by and with the

advice and consent of the senate. The commission shall

annually elect its own chairman.

(b) Members of the commission shall hold office for

terms of 3 years, except that of those first appointed,

the terms shall expire as follows: Two on December 31,

1956; 2 on December 31, 1957; and 2 on December 31,

1958; Provided, That the members shall serve until the

appointment and qualification of their successors.

Vacancies shall be filled for the unexpired term in the

same manner as is provided for appointment in the first

instance. Not more than 3 members of the commission

shall be of the same political party, the remainder shall

be of the opposite major party.

Four members of the commission shall constitute a

quorum for the purpose of conducting the business

thereof. A vacancy in the commission shall not impair

the right of the remaining members to exercise all the

powers of the commission.

Any member of the commission may be removed by

the governor for misfeasance, malfeasance or nonfea-

sance in office after being given a written statement of

the charges and an opportunity to be heard thereon.

The members of the commission shall be entitled to per

A-77

diem of $25.00 for time actually spent and their

expenses actually and necessarily incurred by them in

the performance of their duties.

All salaries and expenses authorized by this act shall

be paid in the same manner as the salaries and

expenses of other state officers and employees are paid.

The commission shall not provide for the payment of

Salaries and for the incurring of expenses beyond the

appropriation made therefor by the legislature.

(c) The commission shall formulate policies to effec-

tuate the purposes of this act and may make recommen-

dations to agencies and officers of the state government

in aid of such policies and purposes.

423.306 Same; powers and duties. [M.S.A. 17458(6) }

Sec. 6. The commission shall have the following

powers and duties:

Offices.

(a) To establish and maintain a principal office in

the city of Lansing and such other offices within the

State as it may deem necessary;

Meetings.

(b) To meet and function at any place within the

State;

Attorneys, hearing examiners, other employees.

(c) To appoint such attorneys, hearing examiners

and other employees and agents as it may deem neces-

sary;

Rules.

(d) To adopt, promulgate, amend and rescind rules

and regulations to effectuate the provisions of this act

and the policies and practices of the commission in

connection therewith. All rules, regulations, policies and

practices of the commission shall be adopted in accor-

dance with and shall comply with Act No. 88 of the

Public Acts of 1943, as amended, being sections 24.71 to

’

A-78

24.82, inclusive, of the Compiled Laws of 1948, and Act

No. 197 of the Public Acts of 1952, as amended, being

sections 24.101 to 24.110, inclusive, of the Compiled Laws

of 1948;

Investigations.

(e) To receive, investigate and pass upon charges of

unfair employment practices;

Hearings, witnesses, subpoenas.

(f) To hold hearings, administer oaths, take testi-

mony under oath and the commission and any person

under investigation shall have the right to request in

writing appearance and testimony of witnesses, request

in writing the production of books and records, and

upon the refusal of witnesses to appear and/or testify,

or on the refusal of persons to submit their books and

records after request therefor, the commission and per-

sons under investigation shall have the right to apply to

the circuit court of the state of Michigan in any county

wherein the alleged unfair employment practice, which

is the subject of the commission's inquiry, was com-

mitted, or wherein any potential respondent subject to

investigation, resides or transacts business, for a sub-

poena or subpoena duces tecum. Such circuit courts

shall issue such subpoenas upon reasonable grounds

being shown for the necessity of the issuance of such

subpoenas;

Volunteers.

(g) To utilize voluntary and uncompensated services

of private individuals and organizations as may, from

time to time, be offered and needed;

Advisory agencies.

(h) To create such advisory agencies, local or

statewide, as will aid in effectuating the purposes of

this act. The commission may itself recommend formal

or informal programs of education, or it may empower

these agencies to: (1) Study the problems of discrimina-

tion in all or specific fields of human relationships when

A-79

based on race, color, religion, national origin or

ancestry; and (2) foster through community effort or

otherwise good will among the groups and elements of

the population of the state. Such agencies may make

recommendations to the commission for the develop-

ment of policies and procedure in general:

Publications.

(i) To issue such publications and such results of

investigations and research as, in its judgment, will tend

to promote good will and minimize or eliminate discrim-

ination because of race, color, religion, national origin

or ancestry;

Annual survey.

(j) To make at least annually a survey of the exis-

tence and effect of discrimination because of race. reli-

gious creed, national origin or ancestry on the

enjoyment of civil rights by persons within the state:

and

Reports, recommendations.

(k) From time to time, but not less than once a year,

to report to the legislature and the governor, describing

the investigations, proceedings and hearings it has con-

ducted and their outcome, the decisions it has ren-

dered and the other work performed by it, which report

shall include a copy of the survey prescribed in subdi-

vision (j) of this section, and shall include the recom-

mendation of the commission as to remedial action,

legislative and otherwise.

423.307 Prevention of unfair employment practices;

persuasion, conciliation. [M.S.A. 17458(7) }

Sec. 7. (a) The commission is empowered and

directed, as hereinafter provided, to prevent any person

from engaging in unfair employment practices. Provided,

That before instituting the formal hearing authorized by

this section it shall attempt, by informal methods of

A-80

persuasion and conciliation, to induce compliance with

this act.

Complaint; contents.

(b) Any individual claiming to be aggrieved by an

alleged unlawful employment practice may, by himself

or his agent, make, sign and file with the board, within

90 days fter the alleged act of discrimination, a verified

complaint in writing, which shall state the name and

address of the person, employer, labor organization or

employment agency alleged to have committed the

unlawful employment practice complained of, and which

shall set forth the particulars thereof and contain such

other information as may be required by the board. Any

employer whose employees, or some of whom, refuse or

threaten to refuse to cooperate with the provisions of

this act, may file with the board a verified complaint

asking for assistance by conciliation or other remedial

action.

Same; filing, investigation.

(c) After the filing of any complaint setting forth

unlawful employment practice, the chairman of the

board shall designate 1 of the commission members to

make, with the assistance of the commission's staff,

prompt investigation in connection therewith; and if

such member shall determine after such investigation

that probable cause exists for crediting the allegations

of the complaint, he shall immediately endeavor to elim-

inate the unlawful employment practice complained of

by conference, conciliation and persuasion. The mem-

bers of the commission and its staff shall not disclose

what has transpired in the course of such endeavors.

Same; service, notice of hearing.

(d) Whenever a charge has been made by any indi-

vidual hereinafter referred to as the complainant, that

any employer, employment agency, labor organization

or person, hereinafter referred to as the respondent,

has engaged in or is engaging in any unfair employment

A-81

practice, the commission shall have the power to issue

and cause to be served upon such respondent a com-

plaint stating the charges in that respect and containing

a notice of hearing before the commission or a member

thereof, or a hearing examiner, at a place therein fixed

to be held not less than 10 days after the service of

said complaint.

Same; amendment, answer.

(e) Any such complaint may be amended by the

commission or a member thereof or its agents con-

ducting the hearing, at any time prior to the issuance of

an order based thereon. The respondent shall have the

right to file an answer to the Original and amended

complaint and to appear at such hearing in person or

by attorney or otherwise to examine and cross-examine

witnesses and the complainant.

Same; parties, interveners.

(f) The complainant shall be a party to the pro-

ceeding and, in the discretion of a member conducting

the hearing or of the commission, any person may be

allowed to intervene therein.

Same; testimony, criterion for employment.

(g) The testimony taken at the hearing shall be

under oath and shall be reduced to writing and filed

with the commission. Thereafter, in its discretion, the

commission upon notice may take further testimony or

hear argument which may tend to prove the existence

of a predetermined pattern of employment or member-

ship. Provided, That nothing herein contained shall be

construed to authorize or require any employer or

labor organization to employ or admit applicants for

employment or membership in the proportion which

their race, color, religion, national origin or ancestry

bears to the total population, or in accordance with any

criterion other than the individual qualifications of the

applicant.

A-82

Same; finding of commission, order to cease, declara-

tory order.

(h) If, upon the preponderance of the evidence on

the record considered as a whole, the commission shall

determine that the respondent has engaged in or is

engaging in any unfair employment practice, the com-

mission shall state its findings of fact and shall issue

and cause to be served on such respondent an order

requiring such respondent to cease and desist from

such unfair employment practice and to take such fur-

ther affirmative or other action as will effectuate the

purposes of this act, including, but not limited to,

hiring, reinstatement or upgrading of employees with or

without back pay, or admission or restoration to union

membership, including a requirement for reports of the

manner of compliance. Upon the submission of such

reports of compliance, the commission may issue a

declaratory order stating that respondent has ceased to

engage in unfair employment practices.

Same; order of dismissal; copies.

(i) If the commission shall find that no probable

cause exists for crediting the charges or if, upon all the

evidence, the commission shall find that a respondent

has not engaged in any unfair employment practice, it

shall state its findings of fact and shall issue and cause

to be served on the complainant an order dismissing

the said complaint as to such respondent. A copy of the

order shall be delivered in all cases to the attorney gen-

eral and such other public officers as the commission

deems proper.

Same; modification of orders.

(j) Until a transcript of the record in a case shall be

filed in a court as hereinafter provided, the commission

may at any time, upon reasonable notice and in such

manner as it shall deem proper, modify or set aside in

whole or in part any findings or order made by it.

a a ne ne

A-83

423.308 Final order: review by circuit court,

jurisdiction. [M.S.A. 17458(8) ]

Sec. 8. (a) Any complainant, intervener or respon-

dent claiming to be aggrieved by a final order of the

commission, including a refusal to issue a complaint,

may appeal to the circuit court of the State of Michigan

within any county wherein the unfair employment prac-

tice, which is the subject of the commission's order, was

committed, or wherein any respondent required in the

order to cease and desist from an unfair employment

Practice, or to take other affirmative action, resides or

transacts business and such appeal shall be tried de

novo before said circuit court.

Petition; transcript of record; temporary relief.

(b) Such proceeding shall be initiated by the filing of

a petition in such court and the service of a copy of the

said petition upon the commission and upon all parties

who appeared before the commission. Thereupon, the

commission shall file a transcript of the record upon

the hearing before it. The court shall have jurisdiction

of the Proceeding and of the questions determined

therein, and shall have power to grant such temporary

relief or restraining order as it deems just and proper,

and to make and enter upon the pleadings, testimony

and proceedings set forth in such transcript an order

enforcing, modifying and enforcing as so modified, or

setting aside in whole or in part, the order of the com-

mission.

Objections reviewable.

(c) An objection that has not been urged before the

commission shall not be considered by the court,

unless the failure or neglect to urge such objection shall

be excused because of reasonable grounds shown.

Motion to remit case to commission.

(d) Any party may move the court to remit the case

to the commission in the interests of justice for the pur-

pose of adducing additional specified and material evi-

A-84

dence and seeking findings thereon. Provided, That he

shows reasonable grounds for the failure to adduce

such evidence before the commission.

Jurisdiction of court.

(e) The jurisdiction of the court shall be exclusive

and its judgment and order shall be final, subject to

appellate review as provided by law.

Petition, hearing, transcript of record.

(f) The commission's copy of the testimony shall be

available at all reasonable times to all parties without

cost for examination and for the purposes of judicial

review of the order of the commission. The petition

shall be heard on the transcript of the record without

requirement of printing.

Commission, appearance in court.

(g) The commission may appear in court by the

attorney general or such assistants of the attorney gen-

eral as may be assigned to the commission.

Petition for enforcement of commission's unappealed

order.

(h) If no proceeding to obtain judicial review is insti-

tuted by a complainant, intervener or respondent

within 30 days from the service of an order of the com-

mission pursuant to section 7 (h) hereof, the commis-

sion may obtain a decree of the court for the

enforcement of such order upon showing that respon-

dent is subject to the commission's jurisdiction and

resides or transacts business within the county in

which the petition for enforcement is brought.

423.309 Posted notice of act;

violation. [M.S.A. 17458(9) ]

Sec. 9. Every employer, employment agency and

labor union, subject to this act, shall post in a conspic-

uous place or places on his premises a notice to be pre-

pared or approved by the commission which shall set

forth excerpts of this act and such other relevant infor-

eGVC“~Ooo

A-85

mation which the commission deems necessary to

explain the act. Any employer, employment agency or

labor union refusing to comply with the provisions of

this section shall be punished by a fine of not less than

$ 100.00 nor more than $500.00.

423.310 Construction of act. [M.S.A. 17458(10) }

Sec. 10. (a) The provisions of this act shall be con-

Strued liberally for the accomplishment of the purposes

thereof, and any law inconsistent with any provision

hereof shall not apply. Nothing contained in this act

shall be deemed to repeal any of the provisions of any

law of this state relating to discrimination because of

race, color, religion, national origin or ancestry.

Employers; hiring and firing; labor organizations.

membership.

(b) This act shall not be construed as limiting the

rights of employers to hire and fire, and of labor organi-

zations to determine their membership, as long as such

rights are not exercised in violation of the provisions of

this act.

Jury trial.

(c) This act shall be so construed that section 13 of

article 2 of the constitution of the state of Michigan

Shall apply in any circuit court to any Case or action

arising under this act and every party or respondent in

such case or action shall be deemed to have demanded

the rights reserved to him under said section 13 of

article 2 unless, subsequent to his appearance in such

case or action, such demand is waived in writing or in

open court.

423.311 Short title of act. [M.S.A. 17458(11)}

Sec. ll. This act may be cited as the “Michigan state

fair employment practices act.” Approved June 29, 1955.

A-86

ELLIOTT-LARSEN CIVIL RIGHTS ACT

Act No. 453, Public Acts of 1976

Approved by Governor January 13, 1977

As amended by: Act 162, Public Acts of 1977;

Act 153, Public Acts of 1978; Act 446, Public Acts of 1978;

Act 93, Public Acts of 1980; Act 170, Public Acts of 1980;

Act 202, Public Acts of 1980; Act 45, Public Acts of 1982;

Act 512, Public Acts of 1982; Act 11, Public Acts of 1991

AN ACT to define civil rights; to prohibit discrimina-

tory practices, policies, and customs in the exercise of

those rights based upon religion, race, color, national

origin, age, sex, height, weight, or marital status; to pre-

serve the confidentiality of records regarding arrest,

detention, or other disposition in which a conviction

does not result; to prescribe the powers and duties of

the civil rights commission and the department of civil

rights; to provide remedies and penalties; and to repeal

certain acts and parts of acts.

The People of the State of Michigan enact:

ARTICLE 1

Sec. 101. This act shall be known and may be cited

as the “Elliott-Larsen Civil Rights Act.”

Sec. 102. (1) The opportunity to obtain employ-

ment, housing and other real estate, and the full and

equal utilization of public accommodations, public ser-

vice, and educational facilities without discrimination

because of religion, race, color, national origin, age, sex,

height, weight, or marital status as prohibited by this

act, is recognized and declared to be a civil right.

(2) This section shall not be construed to prevent

an individual from bringing or continuing an action

ar’sing out of sex discrimination before July 18, 1980

which action is based on conduct similar to or identical

to harassment.

A-87

Sec. 103. As used in this act:

(a) “Age” means chronological age except as other-

wise provided by law.

(b) “Commission” means the civil rights commission

established by section 29 of article 5 of the state consti-

tution of 1963.

(c) “Commissioner” means a member of the com-

mission.

(d) “Department” means the department of civil

rights or its employees.

(e) “National origin” includes the national origin of

an ancestor.

(f) “Person” means an individual, agent, association,

corporation, joint apprenticeship committee, joint stock

company, labor organization, legal representative,

mutual company, partnership, receiver, trust, trustee in

bankruptcy, unincorporated organization, the state or a

political subdivision of the state or an agency of the

State, or anv other legal or commercial entity.

(g) “Political subdivision” means a county, city, vil-

lage, township, school district, or special district or

authority of the state.

(h) Discrimination because of sex includes sexual

harassment which means unwelcome sexual advances,

requests for sexual favors, and other verbal or physical

conduct or communication of a sexual nature when:

(i) Submission to such conduct or communication

is made a term or condition either explicitly or

implicitly to obtain employment, public accom-

modations or public services, education, or

housing.

(ii) Submission to or rejection of such conduct or

communication by an individual is used as a

factor in decisions affecting such individual's

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employment, public accommodations or public

services, education, or housing.

(iii) Such conduct or communication has the pur-

pose or effect of substantially interfering with an

individual's employment, public accommoda-

tions or public services, education, or housing,

or creating an intimidating, hostile, or offensive

employment, public accommodations, public ser-

vices, educational, or housing environment.

ARTICLE 2

Sec. 201. As used in this article:

(a) “Employer” means a person who has 1 or more

employees, and includes an agent of that person.

(b) “Employment agency” means a person regularly

undertaking with or without compensation to procure,

refer, recruit, or place an employee for an employer or

to procure, refer, recruit, or place for an employer or

person the opportunity to work for an employer and

includes an agent of that person.

(c) “Labor organization” includes:

(i) An organization of any kind, an agency or

employee representation committee, group,

association, or plan in which employees partici-

pate and which exists for the purpose, in whole

or in part, of dealing with employers concerning

grievances, labor disputes, wages, rates of pay,

hours, or other terms or conditions of employ-

ment.

(ii) A conference, general committee, joint or

system board, or joint council which is subordi-

nated to a national or internationa

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