Opposition Brief — Reliable Business Computers v. Heurtebise

No. 96-998 | FEB 24 (997

CLERK

In The

Supreme Court of the United States

+

October Term, 1996

RELIABLE BUSINESS COMPUTERS,

Petitioner,

vS.

THERESA A. HEURTEBISE,

Respondent.

On Petition for a Writ of Certiorari to the

Michigan Supreme Court

RESPONDENT?’S BRIEF IN OPPOSITION

ERNEST GOODMAN

Counsel of Record

JULIA SHERWIN

Attorneys for Respondent

3000 Cadillac Tower

Detroit, Michigan 48226

(313) 965-0050

utz

wor (800) 3 APPEAL + (800) 5 APPEAL « (800) BRIEF 21 a

llate

Ss ervices, inc.

i

QUESTIONS PRESENTED

I. Whether this Court lacks jurisdiction under 28 U.S.C.

§ 1257, where Petitioner has failed to raise any federal question

in the courts below, and the Michigan Supreme Court’s decision

in Heurtebise v. Reliable Business Computers, Inc., 452 Mich.

405, 550 N.W. 2d 243 (1996), was based on state law, which

was both independent of any federal question and adequate to

support the judgment?

II. Whether Michigan law does not conflict with, and is

not preempted by, the Federal Arbitration Act, 9 U.S.C. § 1 et

seq., where arbitration requires a contract under both Michigan

and federal law, and no contract existed in this case?

TABLE OF CONTENTS

Questions Presented .......scceeeeeeeeeerseeeees

Table of CORES occ crccccsccesscoccseeseenevecs

Table of CIAHIORS .. oc ccccccccccccccccesceecccces

Opinions Below .........seeeeeeeeeeeeeeeeeeeees

Statement of Jurisdiction .........-.ceeeeeeeeeeees

Statement of the Case ........-cceecceeceeeecress

Misstatements of Fact and Law in the Petition .......

Reasons for Denying the Writ .......--s+eeeeeeees

lL This Court Lacks Jurisdiction Over This Case

Under 28 U.S.C. § 1257, Because Petitioner

Failed To Raise Any Federal Question In The

Courts Below, And The Michigan Supreme

Court’s Decision Was Based On State Law, Which

Was Both Independent Of Any Federal Question

And Adequate To Support The Judgment. ....

A. Peititoner Never Raised the Equal Protection

Clause or the Contract Clause of the United

States Constitution in the Lower Courts. .

B. Petitioner Failed to Raise the Federal

Arbitration Act or Federal Preemption in the

Lower Courts. =. ....ccccccccccccocees

Page

10

iii

Contents

C. The Michigan Supreme Court's Decision

Was Based on State Law, Which Is Both

Independent of Federal Law and Adequate

to Support the Judgment. ..............

1. Arbitration Requires a Contract, Which

Cannot be Unilaterally Imposed on

EN “Sddudcudbvcesexuvees«

2. The Michigan Supreme Court Properly

Held that Petitioner's Employee

Handbook Was NOT a Contract. ....

3. Petitioner Improperly Asks this Court to

Review Questions of State Law, and

Incorrectly Interprets State Law. .....

Il. Even If The Federal Arbitration Act Applied To

This Case, There Is No Conflict Preemption, And

This Court Should Not Review The Michigan

Supreme Court's Decision. .................

A. The Federal Arbitration Act Requires a

MT thesudessconcenseibihedecees

B. The Goals and Policies of the FAA Are

Furthered, Rather than Undermined, by the

Michigan Supreme Court’s Decision. ....

MING nade doce cb uk crtibwdienidtoccd sks

Page

13

14

15

17

21

21

24

iv

Contents

Page

TABLE OF CITATIONS

Cases Cited:

Allied-Bruce Terminix Companies, Inc. v. Dobson, as

U.S. _, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995)

cceveceoboense audabnetbbe OKs CRUEL Té reek cs 22

Board of Directors of Rotary Int'l v. Rotary Club, 481

U.S. 537, 107 S. Ct. 1940, 95 L. Ed. 2d 474 (1987)

oC CN eSe MEOH L SED DORE sbibb 0 JNMS 6 dekud 6 cdc cue 12, 13

California v. Freeman, 488 U.S. 1311, 109 S. Ct. 854,

OU Te TA, 36 GOP CONUI ikk oie edbitesnckcc. 17

Carlson v. Hutzel Corp. of Michigan, 183 Mich. App.

508, 45S N.W. 24 335 (1990) .......cccccccce., 19

Clark v. Jeter, 486 U.S. 456, 108 S. Ct. 1910, 100 L.

Oe, TO OD idee cb inxs wk 13

Coleman v. Thompson, 501 U.S. 722, 111 S. Ct. 2546,

115 L. Ed. 2d 640 (1991), reh. denied, 501 U.S. 1277,

CES DA BP GN ok vedvccivivctiiesct... 14

Dumas v. Auto Club Ins. Ass’n., 437 Mich. 521, 473

Five ee ND ds vadivindcciubur es CoS 19, 20

Ehresman v. Bultnyck & Co., 203 Mich. App. 350, 511

Fe ON POND debs ensccndvihecheeki sa oa

:

Contents

Page

First Options of Chicago, Inc. v. Kaplan, __ U.S. _,

115 S. Ct. 1920, 131 L. Ed. 2d 485 CIPO dside Ss 23

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20,

111 S. Ct. 1647, 114 L. Ed. 2d 26 (1991) ........ 10, 11

Hess v. West Bloomfield Twp., 439 Mich. 550, 486 N.W.

Oe Ee GND 5 bbbe6hecncksidedcdcc ek 13

Heurtebise v. Reliable Business Computers, Inc., 207

Mich. App. 308, 523 N.W. 2d 904 i Pe 1,4

Heurtebise v. Reliable Business Computers. Inc., 452

Mich. 405, 550 N.W. 2d 243 (1996) ..... i, 1, 6, 8, 14, 16

Horn v. Cooke, 118 Mich. App. 740, 325 N.W. 2d 558

GUUTEE Sele Capac natiithiis ile be, Sie ee as 15

In re: Certified Question, Bankey v. Storer Broadcasting

Company, 432 Mich. 438, 443 N.W. 2d 112 (1989)

CUO RRERND CEE DEddadEd ba EEéeLbed ede iedid es 19, 20

Lear, Inc. v. Adkins, 395 U.S. 653, 89 S. Ct. 1902, 23 L.

ee Ce ED Bis ad de cexkcaceihds dieks dy 5

Monks v. New Jersey, 398 U.S. 71, 90 S. Ct. 1563, 26 L.

eS ep es eee ae 9

Overall Supply Co. v. Peloquin Enterprises, 414 Mich.

Wey ee Bere MB MD wdc dcckdrcowscéoiccs 14

vi

Contents

Page

Renny v. Port Huron Hospital, 427 Mich. 415, 398 N.W.

BG FEY CGD viincdvedeeveb odes escemim 18

Rood v. General Dynamics Corp., 444 Mich. 107, 507

Pew BOGOR GUO dseive diss fideo 15, 16, 19

Rowe v. Montgomery Ward, 437 Mich. 627, 473 N.W.

BO Bee CPE nce sccvcvencessacadzseurne 20

Scholz v. Montgomery Ward & Co., 437 Mich. 83, 468

en We SO OOD CINE 6 Si. Sen cbathculesnde tn 20, 21

Shearson/American Express, Inc. v. McMahon, 482 U.S.

220, 107 S. Ct. 2332, 96 L. Ed. 2d 185 (1987) ... 22

Toussaint v. Blue Cross & Blue Shield of Michigan, 408

Mich. 579, 292 N.W. 2d 880 (1980) ... 17, 18, 19, 20, 21

Webb v. Webb, 451 U.S. 493, 101 S. Ct. 1889, 68 L. Ed.

BS IS GE ven ciccecctévtiestdeiviet: 9, 10, 12, 13

Volt Information Sciences v. Board of Trustees of Stanford

University, 489 U.S. 468, 109 S. Ct. 1248, 103 L.

Be SO RES GID svevccrcceecsvedsbeddsaiies 22, 23

Yee v. City of Escondido, 503 U.S. 519, 112 S. Ct. 1522,

BOD Sv Ge ee OO CIIUED ccecccccdicdisecetbe, 9

Statutes Cited:

WU GEO bnéccinccccedudkcvacsucnnu i, 8, 11

vii

Contents

Page

We ED Staves cecdevddvddebVececcvecccceens 21

EEE: Wild chaddaecvadivendobecs i, 1, 8,9, 14

Ee a WEE bauatatsbadiusédceviteccccetee: 11

M.S.A. § 27A.5001(2), ef Seg... . 6c cece cece cccees 8, 15

M.S.A. § 3.548(101), ef Seg. ........ccccccccccece 3

DEC. § 37.2101, CF O08. 2.6 cccccccccccs es 3

BEC L. § GODSOD1, 66 0G. oc cccccccsccccccccecs 10

UE BUSS 0s dbsesdecvecweceescs< 8, 15

United States Constitution Cited:

GH SD © dS bebehecdadcaWhe cd cdeucwbddeccvces 9

Ge RN Ne VecWn eNO coh eb eb dbehencddedcedeles 9

Rules Cited:

Michigan Court Rule 2.113(F) ..................0. 3

Michigan Court Rule 7.316(A)(4) ..............00. 5,7

ee GOs MO BED occ ccccccccccccevecccscs 6

viii

Contents

APPENDIX

Appendix A — Excerpts from Employee Handbook . .

Appendix B — Affidavit of Christopher R. Holliday .

Page

3a

1

OPINIONS BELOW

| The Michigan Supreme Court's decision is reported at 452

Mich. 405, 550 N.W. 2d 243 (1996).

The Michigan Court of Appeals’ decision, which the

Michigan Supreme Court reversed, is reported at 207 Mich. App.

308, 523 N.W. 2d 904 (1994).

The trial court’s opinion and order denying Defendant-

Petitioner’s motion to compel arbitration is contained in

Plaintiff-Appellant’s Appendix in the Michigan Supreme Court,

pp. 51a-70a.

STATEMENT OF JURISDICTION

This Court lacks jurisdiction to review this case under 28

U.S.C. § 1257. Respondent failed to raise any federal question

in the courts below, and the Michigan Supreme Court’s decision

is grounded in Michigan law, which is both independent of

federal law and aderuate to support the judgment.

STATEMENT OF THE CASE

Respondent Theresa Heurtebise (“Respondent”), began

working for Petitioner Reliable Business Computers, Inc.

(“Petitioner”), in May 1989. When she began her employment,

Ms. Heurtebise received an employee handbook that expressly

stated, “None of the policies, practices, procedures, or other

matters set forth herein create any employment or personal

contract, express or implied.” Respondent’s Appendix, (hereafter

“Resp. App.”), at 2a.

The non-contractual employment handbook included a

provision requiring binding arbitration of “any dispute, matter

2

or controversy involving claims of monetary damages and/or

employment related matters ... including any and all claims

relating to termination of employment.” Pet. App. at A-65 -

A-66.

At the time she received the handbook, Ms. Heurtebise was

required to sign an “Employee Acknowledgment” form,

acknowledging receipt of the employee handbook. The

acknowledgment form stated that the employee agreed “to

conform to the various procedures, rules and regulations of the

company as set forth in the handbook.” Pet. App. at A-62.

Petitioner asserts that Respondent’s signature on this

acknowledgment form constituted an agreement to arbitrate

Respondent’s civil rights claim. However, arbitration requires a

contract, and the very first page of the Employee Handbook

makes clear that nothing contained in the handbook is a contract.

Petitioner’s Employee Handbook states on page 2:

It is important to recognize and clarify

that the Policies specified herein do not

create any employment or personal

contract, express or implied ...

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 discretion, and

as future conditions warrant.

Resp. App. at la.

Theresa Heurtebise was discharged from her employment

on or about July 20, 1990, after she and a male co-worker

3

allegedly returned late from lunch. However, Ms. Heurtebise’s

male co-worker was not discharged. On November 25, 1991,

Ms. Heurtebise commenced a sex discrimination lawsuit under

Michigan’s Elliott-Larsen Civil Rights Act, M.C.L. § 37.2101

et seq., M.S.A. § 3.548(101) et seq., against Petitioner in Wayne

County Circuit Court. Appendix, pp. 1a-6a.'

In response to the Complaint, Petitioner filed a motion

seeking to enforce the handbook arbitration clause under

Michigan law. Appendix, pp. 7a-23a.

Pursuant to Michigan Court Rule (MCR) 2.113(F),

Petitioner was required to attach “a copy of the instrument [upon

which it relies] or its pertinent parts” to its motion. Petitioner

did not attach the complete handbook or all of the “pertinent

parts” to its motion. Rather, Petitioner submitted only the

“Employee Acknowledgment” form and pages 64 through 71

of the Employee Handbook. Appendix, pp. 24a-32a. Page 64 of

the submitted portion of the handbook states that none of the

policies, practices, or procedures contained therein create a

contract. Appendix, p. 25a.

Ms. Heurtebise had misplaced her copy of the employee

handbook, and her counsel did not have it to provide to the court.

See Affidavit of Christopher R. Holliday, Resp. App. at 3a-9a.

Petitioner never produced the complete handbook, despite

Respondent’s proper requests for it.?

1. In this Brief, Respondent will cite to Plaintiff-Appellant’s Appendix

(“Appendix”), which was filed in the Michigan Supreme Court. Plaintiff-

Appellant’s Supplemental Appendix filed with that court contains the complete

employee handbook.

2. See Plaintiff’s motion to amend the record in the Michigan Supreme

Court, and the Exhibits attached thereto.

4

At the hearing on Petitioner’s motion, Judge Cynthia D.

Stephens properly ruled that Petitioner had not met its burden

of proving that it was entitled to arbitration, finding: (1) the

requirement that employees arbitrate “any and all claims relating

to termination of employment” vioiates public policy; (2) the

employee handbook is ambiguous; and (3) the parties did not

have a meeting of the minds concerning the alleged agreement

to arbitrate claims under the Elliott-Larsen Civil Rights Act.

Appendix, pp. 64a-65a.

Judge Stephens accordingly denied Petitioner’s motion on

April 16, 1992. Appendix, pp. 69a-70a.

Without seeing the complete employee handbook, the

Michigan Court of Appeals granted leave to appeal, and reversed

the trial court’s denial of Petitioner’s motion to compel

arbitration. Heurtebise v. Reliable Business Computers, Inc., 207

Mich. App. 308, 523 N.W. 2d 904 (1994).

The Michigan Court of Appeals opined: (1) the arbitration

provision in the employee handbook is unambiguous; (2) the

record does not support the trial court’s finding that there was

no meeting of the minds concerning the arbitration provision;

(3) even if the parties’ minds did not meet, “mutual assent to a

term of employment is not required;” (4) the “no contract”

provision of the employee handbook does not address the

handbook in its entirety, but only the at-will employment

provisions in the handbook; and (5) public policy does not

prohibit enforcement of a “valid arbitration agreement” requiring

arbitration of civil rights claims. 207 Mich. App. at 310-311.

The Court of Appeals denied Respondent’s motion for

rehearing. Respondent then sought leave to appeal to the

Michigan Supreme Court on January 24, 1995, which was

granted on December 28, 1995.

5

After briefs were filed in the Michigan Supreme Court,

Respondent’s counsel received a copy of the entire Employee

Handbook from a former employee of Petitioner. The very first

page of the Employee Handbook, which Petitioner never

submitted to the lower courts, makes clear that nothing

contained in the handbook is 2 contract:

It is important to recognize and clarify that

the Policies specified herein do not create any

employment or personal contract, express or

implied ...

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 discretion, and as future

conditions warrant.

Resp. App. at la. Accordingly, neither the arbitration provision

nor any other provision in Petitioner’s handbook is a contract.

The Michigan Supreme Court granted Respondent’s motion

to amend the record pursuant to MCR 7.316(A)(4). Respondent

submitted a supplemental appendix containing Petitioner’s

complete employee handbook.’ See Piaintiff-Appellant’s

Supplemental Appendix.

3. Petitioner complains that the Michigan Supreme Court should not

have considered the first page of the employee handbook, because it was not

available until the case was in the Michigan Supreme Court. However, the

court properly granted Respondent's motion to enlarge the record, to include

the complete handbook when Respondent's counsel procured a copy. MCR

7.316(A)(4). Since the Michigan Supreme Court treated the first page of the

handbook as an important part of the record, this Court is free to consider it.

Lear, Inc. v. Adkins, 395 U.S. 653, 657 n. 1, 89 S. Ct. 1902, 1904 n.1, 23 L.

Ed. 2d 610 (1969).

6

On July 16, 1996, the Michigan Supreme Court reversed

the decision of the Court of Appeals, because the language on

the first page of Petitioner’s handbook denied the existence of a

contract. 452 Mich. 405 (1996). The Michigan Supreme Court

unanimously held:

* (1) It is undisputed that an arbitration

agreement is unenforceable if it is not a

binding contract;

* (2) Petitioner’s language on the first page of

the handbook demonstrates that Petitioner

did not intend to be bound to any provision

contained in the handbook;

* (3) Therefore, the handbook did not create

an enforceable arbitration agreement.

452 Mich. at 413-414.

On September 16, 1996, the Michigan Supreme Court

denied Petitioner’s motion for rehearing. On December 13, 1996,

Petitioner filed its Petition for Writ of Certiorari to the Michigan

Supreme Court, which contains many misstatements of fact and

law, and raises federal issues for the first time in this case.

MISSi ATEMENTS OF FACT AND LAW

IN THE PETITION

Pursuant to Rule 15.2 of this Court, Respondent must

illuminate several misstatements of both fact and law in the

Petition for Writ of Certiorari.

Petitioner erroneously states, “Plaintiff’s counsel had a

complete copy of the entire handbook at all times and could

have supplied it before the trial, but did not.” Petition, p. 3. As

7

noted in the affidavit of Christopher R. Holliday (Resp. App. at

6a), and Plaintiff-Appellant’s motion to amend the record, Ms.

Heurtebise had misplaced her copy of the employee handbook.

After initial briefs were filed in the Michigan Supreme Court,

Respondent’s counsel received a copy of the complete employee

handbook from another former employee of Petitioner. Resp.

App. at 6a.

Petitioner argues that, in granting Respondent’s motion to

amend the record, the Michigan Supreme Court violated its own

court rules on motion practice. Petition at 2. To the contrary,

MCR 7.316(A)(4) permits the court to amend the record by

adding matters which should have been included.

Petitioner erroneously states that the Michigan Supreme

Court refused to enforce the arbitration policy simply because

Ms. Heurtebise “asserted an employment discrimination claim

under a state statute.” Petition at 9, 28. In fact, the Michigan

Supreme Court refused to compel Ms. Heurtebise to arbitrate

her claim because the court correctly found that no arbitration

contract exists in this case.

Petitioner alleges that the Michigan Supreme Court singles

out arbitration as a suspect class of contracts, holding arbitration

up to a higher standard of contract formation, in violation of

Michigan’s arbitration statute. Petition at 8, 10, 22. In reality,

the Michigan Supreme Court merely followed the well-settled

law that arbitration, including statutory arbitration, requires a

contract. Based on Petitioner’s own statements in its handbook,

it is clear that none of the handbook provisions were contractual.

Petitioner further asserts that Respondent’s remedies in this

case are based on Petitioner’s handbook, and the Michigan

Supreme Court held other provisions of the employee handbook

enforceable, while refusing to enforce the arbitration provision.

8

Petition at 14, 29. To the contrary, Respondent’s rights in this

case are based on Michigan law governing employment

discrimination claims. The Michigan Supreme Court did not

enforce any provision of the handbook, as it found that “the

defendant did not intend to be bound to any provision contained

in the handbook.” 452 Mich. at 414 (emphasis added).

Petitioner asserts that the decision below conflicts with state |

law, and must therefore be vacated. Petition at 21-23. As noted )

infra, the Michigan Supreme Court’s decision was consistent |

with both Michigan and federal law. Furthermore, even if the |

decision conflicted with Michigan law, this Court could not

vacate it as “conflict preempted.”

Petitioner boldly asserts: “Even an agreement to arbitrate

discrimination claims allegedly unilaterally imposed by the

employer as a condition of employment is enforceable under

the statvte.” Petition at 17 (emphasis in original). As discussed

infra, arbitration under both the Michigan Arbitration Act

(MAA), M.C.L. § 600.5001(2), M.S.A. § 27A.5001(2), et seq.,

and the Federal Arbitration Act (FAA), 9 U.S.C. § 1, et seq.,

require mutuality of assent, and arbitration cannot be unilaterally

imposed by one party on another party.

Finally, Petitioner repeatedly, falsely asserts that it properly

raised the issues of federal preemption and the Federal

Arbitration Act’s application to this case in the state courts. See,

e.g., Petition at 4, 6, 9-10. In fact, Petitioner never discussed

any federal issue until it filed its brief in the Michigan Supreme

Court. See § I(B), infra.

Because this Court lacks jurisdiction over this case under

28 U.S.C. § 1257, and the Michigan Supreme Court’s decision

does not conflict with any federal law, the Petition for Writ of

Certiorari should be denied.

eee

9

REASONS FOR DENYING THE WRIT

I.

THIS COURT LACKS JURISDICTION OVER THIS

CASE UNDER 28 U.S.C. § 1257, BECAUSE PETITIONER

FAILED TO RAISE ANY FEDERAL QUESTION IN THE

COURTS BELOW, AND THE MICHIGAN SUPREME

COURT’S DECISION WAS BASED ON STATE LAW,

WHICH WAS BOTH INDEPENDENT OF ANY FEDERAL

QUESTION AND ADEQUATE TO SUPPORT THE

JUDGMENT.

A. Petitioner Never Raised the Equal Protection Clause or

the Contract Clause of the United States Constitution in the

Lower Courts.

This Court wil) not decide federal constitutional issues

which are raised for the first time in this Court. Yee v. City of

Escondido, 503 U.S. 519, 533, 112 S. Ct. 1522, 1531, 118 L.

Ed. 2d 153 (1992); Webb v. Webb, 451 U.S. 493, 499, 101 S. Ct.

1889, 1893, 68 L. Ed. 2d 392 (1981); Monxs v. New Jersey, 398

U.S. 71, 90 S. Ct. 1563, 26 L. Ed. 2d 54 (1970).

In its Petition for Writ of Certiorari, Petitioner raises federal

Equal Protection and Contract Clause claims for the very first

time. United States Constitution, Am. XIV, §1, United States

Constitution, Art. I, § 10. Petitioner’s Equal Protection and

Contract Clause claims were never even mentioned in the courts

below, and they are not properly before this Court.

Even if Petitioner’s Equal. Protection and Contract Clause

claims were properly before this Court, those claims would have

no merit. The Michigan Supreme Court in this case merely

decided that (1) arbitration requires a contract, and (2) there

10

was no arbitration contract in this case. This decision makes no

classification in violation of the Equal Protection Clause, and it

does not impair the enforcement of any contracts.

B. Petitioner Failed to Raise the Federal Arbitration Act or

Federal Preemption in the Lower Courts.

“At the minimum, ... there should be no doubt from the

record that a claim under a federal statute or the Federal

constitution was presented in the state courts and that those

courts were apprised of the nature or substance of the federal

Claim at the time and in the manner required by the state law.”

Webb, 451 U.S. at 501, 101 S. Ct. at 1894 (emphasis added and

emphasis in original).

Contrary to Petitioner’s assertions in its petition, it did not

raise the issues of (1) federal preemption, or (2) the applicability

of the Federal Arbitration Act to this case, in the lower courts.

Throughout its motion and brief in the trial court, Petitioner

sought to enforce its arbitration provision under “the Michigan

Uniform Arbitration Act, M.C.L. § 600.5001 et seq. and

Michigan Common Law.” Appendix, pp. 8a. Petitioner never

even mentioned the FAA. Appendix at 7a-36a.

In the appellate courts, Petitioner continued its reliance on

Michigan law. However, Petitioner began to discuss Gilmer v.

Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S. Ct. 1647,

114 L. Ed. 2d 26 (1991), as a federal case on an “analogous”

question to the case at bar.

Petitioner mentioned the FAA only as it discussed the facts

of Gilmer in its briefs in the Michigan Court of Appeals and the

Michigan Supreme Court. In Gilmer, the plaintiff registered as

a securities broker with the New York Stock Exchange (NYSE).

1]

His securities registration application and NYSE rules required

arbitration of any claims between a registered representative and

a member organization arising out of the termination of

employment. 111 S. Ct. at 1650-1651. Mr. Gilmer was

discharged from his employment, at the age of 62, and

subsequently filed a claim under the Age Discrimination in

Employment Act (ADEA), 29 U.S.C. § 621. This Court found,

pursuant to the FAA, that the arbitration agreement in the

registration application compelled Mr. Gilmer to arbitrate his

age discrimination claim.

However, this Court expressly limited its holding to the facts

in Gilmer. This Court noted that § 1 of the FAA provides that

“nothing herein contained shall apply to contracts of

employment of seamen, railroad employees, or any other class

of workers engaged in interstate commerce.” 111 S. Ct. at 1651-

1652 n.2. This Court explicitly observed that the arbitration

agreement in Gilmer was not contained in a contract of

employment. The agreement was contained in a securities

registration application, which was a contract with the securities

exchanges, not with Mr. Gilmer’s employer.‘

While Gilmer was decided under the FAA, Petitioner in this

case did not argue that the FAA applied here. Rather, Petitioner

relied on Michigan law, and the Michigan Arbitration Act.

Indeed, in its brief in the Michigan Court of Appeals, Petitioner

argued that the FAA’s exclusion for employment contracts “is

not an issue in the case at bar since the Michigan UAA [Uniform

Arbitration Act] does not have an exception for employment

contracts as in the FAA.” Defendant’s Brief on Appeal, Michigan

Court of Appeals, p. 28, n.6.

4. While no arbitration agreement exists in this case, if there were such

an agreement, it would be contained in a contract of employment, to which

Gilmer and the FAA would not apply.

12

Petitioner did not even mention federal preemption, or

assert that the FAA applied to this case, until it filed its Brief

on Appeal in the Michigan Supreme Court. In that brief,

Petitioner stated in a footnote:

Construing the MAA [Michigan Arbitration

Act] as limiting arbitration to certain types

of claims would also run afoul of the doctrine

of federal preemption under the Federal

Arbitration Act, 9 U.S.C. §§ 1-5, (“FAA”).

The FAA states an overriding federal

mandate for broad construction of arbitration

agreements that prohibits states [sic] statutes

or court decisions that might limit arbitration

agreements.

Defendant-Appellant’s Brief on Appeal, Michigan Supreme

Court, p. 12, n.6.

Petitioner only squarely raised the FAA and federal

preemption in its motion for rehearing in the Michigan Supreme

Court. That motion was denied without comment.

When “the highest state court has failed to pass upon a

federal question, it will be assumed that the omission was due

to want of proper presentation in the state courts, unless the

aggrieved party in this Court can affirmatively show the

contrary.” Webb v. Webb, 451 U.S. 493, 495, 101 S. Ct. 1889,

1891, 68 L. Ed. 2d 392 (1981). Petitioner cannot make such a

showing here.

In Board of Directors of Rotary Int'l. v. Rotary Club, 481

U.S. 537, 107 S. Ct. 1940, 95 L. Ed. 2d 474 (1987), the

appellants, like Petitioner in the case at bar, did not present

federal constitutional issues squarely to the state courts until

13

their petition for rehearing with the Court of Appeals, which

denied the appellant’s petition without opinion. This Court held

that the appellants failed to show that they adequately presented

the federal issues to the state courts. 481 U.S. at 550, 107 S. Ct.

at 1948.

In the present case, Petitioner did not squarely present the

issue of federal preemption until it filed its motion for rehearing

with the Michigan Supreme Court. The Michigan Supreme Court

denied Petitioner’s motion without opinion, and Petitioner

cannot show that it properly presented the issue below.

Under Michigan law, by the time Petitioner raised federal

issues for the first time in its motion for rehearing, those issues

had not been preserved for appeal, and were therefore not

properly before the Michigan Supreme Court. Hess v. West

Bloomfield Twp., 439 Mich. 550, 557 n.6, 486 N.W. 2d 628

(1992) (preemption issue which was not raised in the trial court

was not preserved for review by the Michigan Supreme Court).

This Court therefore should deny certiorari. Webb and Rotary,

supra. See also Clark v. Jeter, 486 U.S. 456, 459-460, 108 S.

Ct. 1910, 1913-1914, 100 L. Ed. 2d 465 (1988) (this Court will

not review issue of federal preemption of state law when

petitioner did not expressly assert that state law was preempted

in state court).

Given Petitioner’s failure to present any federal question in

the lower courts, this Court should deny the Petition for Writ of

Certiorari.

C. The Michigan Supreme Court’s Decision Was Based on

State Law, which Is Both Independent of Federal Law and

Adequate to Support the Judgment.

Even if Petitioner had properly presented a federal question

14

in the lower courts, this Court would have no jurisdiction over

this case. This Court has no jurisdiction to review a state court

judgment which is based on state law that is “independent of

the federal question and adequate to support the judgment.”

Coleman v. Thompson, 501 U.S. 722, 729, 111 S. Ct. 2546, 2553-

2554, 115 L. Ed. 2d 640 (1991), reh. denied, 501 U.S. 1277,

112 S. Ct. 27 (1991).

When this Court reviews a state court decision pursuant to

28 U.S.C. § 1257, it is reviewing a judgment. If resolution of

the federal question cannot affect the judgment, “there is nothing

for the Court to do.” 501 U.S. 730, 111 S. Ct. 2554.

In the case at bar, this Court’s resolution of any federal

question cannot affect the judgment of the Michigan Supreme

Court for two reasons. First, the Michigan Supreme Court

properly found that, under Michigan law, arbitration requires a

contract, and Petitioner’s employment handbook expressly stated

that nothing in it was a contract. Second, as discussed in Point

II, infra, even under the FAA, arbitration requires a contract,

and Petitioner’s handbook does not meet that requirement.

1. Arbitration Requires a Contract, Which Cannot Be

Unilaterally Imposed on Employees.

It is well settled in Michigan that arbitration requires a

contract. Arrow Overall Supply Co. v. Peloquin Enterprises, 414

Mich. 95, 98, 323 N.W. 2d 1 (1982); Ehresman v. Bultnyck &

Co., 203 Mich. App. 350, 353-354, 511 N.W. 2d 724 (1994).

The Michigan Supreme Court therefore properly held that “an

arbitration provision is unenforceable if it is not a binding

contract.” Heurtebise, 452 Mich. at 413.

Before ordering a party to arbitration, courts must first

determine whether a valid arbitration contract exists. “ “The

15

determination of whether an arbitration contract exists is for

the courts to decide, applying general contract principles.’ ”

Horn v. Cooke, 118 Mich. App. 740, 744-745, 325 N.W. 2d 558

(1982) (citations omitted).

Petitioner’s assertion that an arbitration agreement under

the Michigan Arbitration Act need only be an “instrument in

writing” provides it no help. Petition, p. 22. The “instrument in

writing,” in order to be an enforceable arbitration agreement

under the Michigan Arbitration Act, must be a contract. M.C.L.

§ 600.5001(2), M.S.A. § 27A.5001(2).

Petitioner also incorrectly asserts that it may unilaterally

impose arbitration on its employees. “Contractual liability is

consensual. A basic requirement of contract formation is that

the parties mutually agree to be bound.” Rood v. General

Dynamics Corp., 444 Mich. 107, 118, 507 N.W. 2d 591 (1993).

“No contract to arbitrate can arise except upon the expressed

mutual assent of the parties.” Horn, 118 Mich. App. at 744-745.

The Michigan Supreme Court correctly held that arbitration

requires a contract.

2. The Michigan Supreme Court Properly Held that

Petitioner’s Employee Handbook Was NOT a Contract.

In the case at bar, the opening statement of Petitioner’s

employee handbook states:

It is important to recognize and clarify that

the Policies specified herein do not create any

employment or personal contract, express or

implied. ...

From time to time, the COMPANY

16

specifically reserves the right, and may make

modifications to any or all of the Policies

herein, at its sole discretion, and as future

conditions may warrant.

Resp. App. at la. In addition, the handbook contains similar

language denying the existence of a contract on page 64:

None of the policies, practices, procedures,

or other matters set forth herein create any

employment or personal contract, express or

implied.

Resp. App. at 2a.

The Michigan Supreme Court properly held, regardless of

the employee acknowledgment form signed by Ms. Heurtebise,

that the language on the first page of the employee handbook

meant what it said — “the defendant did not intend to be bound

by any provision contained in the handbook.” 452 Mich. at 414.

Petitioner now asserts that its language denying the

existence of any contract, express or implied, was merely an

“at-will disclaimer” denying only the existence of a contract to

discharge for cause.

However, courts “follow the objective theory of assent,

focusing on how a reasonable person in the position of the

promisee would have interpreted the promisor’s statements or

conduct.” Rood at 119. In the case at bar, Petitioner’s handbook

stated that its policies did not create any contract, and none of

its policies, practices, procedures or other matters created any

contract. Resp. App. at la-2a.

Petitioner essentially seeks to bind its employees to an

17

arbitration provision in its employee handbook, while itself

remaining free of any contractual obligation under any provision

in the handbook. However, Petitioner’s requested interpretation

of its handbook lacks mutuality:

A contract lacks mutuality when one party

is obligated to perform, but not the other. . . .

Where a contract obligates only one party to

perform, while exempting the other party

from any obligation to do so, it lacks

mutuality and is void for want of

consideration. Commercial Movie Rental v.

Larry Eagle, Inc., 738 F.Supp. 227, 229-230

(W.D. Mich 1989).

The Michigan Supreme Court correctly concluded that nothing

in Petitioner’s handbook was a contract.

3. Petitioner Improperly Asks this Court to Review

Questions of State Law, and Incorrectly Interprets State Law.

Petitioner asks this Court to grant a writ of certiorari,

because the Michigan Supreme Court’s decision allegedly

contradicts Michigan statutory and common law. However,

“[ijnterpretations of state law by a State’s highest court are, of

course, binding upon this Court.” California v. Freeman, 488

U.S. 1311, 1313, 109 S. Ct. 854, 856, 102 L. Ed. 2d 957 (1989).

In addition, the Michigan Supreme Court’s decision is consistent

with Michigan law.

Petitioner incorrectly asserts that, under Toussaint v. Blue

Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W. 2d

880 (1980), Petitioner may unilaterally impose arbitration on

its employees by including an arbitration policy in its non-

contractual employment handbook.

18

In Toussaint, the Michigan Supreme Court held generally

that (1) an employer may enter into a contract with its

employees to terminate the employment only for cause; and (2)

an employer’s ‘just cause termination’ statements in employment

handbooks may create “legitimate expectations” in its

employees that they will only be discharged for cause, making

the policy statements enforceable against the employer. 408

Mich. at 610, 613-614. The parties need not mutually agree for

these handbook provisions to bind the employer. 408 Mich. at

614-615.

If an employer imposes upon itself a policy to discharge

for cause only, the court in Toussaint observed that the employer

could avoid jury review of a wrongful discharge case under that

agreement by providing for binding arbitration. 408 Mich. at

624. See also, Renny v. Port Huron Hospital, 427 Mich. 415,

439-430, 432, 398 N.W. 2d 327 (1986). When an employer

bestows the benefit of a just-cause employment relationship upon

its employees, the employer has the right to determine the forum

in which employees’ claims under the just-cause policy may be

heard. 408 Mich. at 624.

Petitioner argues that mutual assent to an arbitration contract

in this case was not required, relying on the “legitimate

expectations” leg of Toussaint and its progeny. However, the

very first page of Petitioner’s Employee Handbook negates any

application of the Toussaint legitimate expectations analysis in

this case. Petitioner’s handbook states: “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

discretion, and as future conditions warrant.” Resp. App. at

la.

Under Toussaint, an employer’s statement that its personnel

policies are subject to unilateral change by the employer prevents

19

employees from relying on the legitimate expectations analysis.

“Employers can make known to their employees that personnel

policies are subject to unilateral changes by the employer.

Employees would then have no legitimate expectation that any

particular policy will continue to remain in force.” Toussaint,

408 Mich. at 619; In re: Certified Question, Bankey v. Storer

Broadcasting Company, 432 Mich. 438, 453, 443 N.W. 2d 112

(1989).

Moreover, Toussaint “legitimate expectations” analysis

does not apply to arbitration agreements. Arbitration is a

matter of contract, and the legitimate expectations analysis

operates outside contract law.

Indeed, the Michigan Supreme Court has repeatedly

emphasized that the “legitimate expectations” leg of Toussaint

does not involve traditional contract law. Dumas v. Auto Club

Ins. Ass’n., 437 Mich. 521, 529 n.4, 531, 473 N.W. 2d 652

(1991); Rood, supra, 444 Mich. at 13 (“the legitimate

expectations theory of Toussaint is not based on traditional

contract analysis”); In Re: Certified Question, 432 Mich. at 453

(the enforceability of written personnel policies under the

legitimate expectations leg of Toussaint is not based on

traditional contract law); Carlson v. Hutzel Corp. of Michigan,

183 Mich. App. 508, 513, 455 N.W. 2d 335 (1990).

Furthermore, the legitimate expectations analysis only

applies to claims for wrongful discharge based on employment

handbooks. In Dumas, Justice Riley observed that Toussaint

should not be extended “ ‘beyond wrongful discharge into every

facet of the employment relationship. . . . [I]t would be prudent

and wise to leave to the Legislature the public policy decision

whether, or to what extent, Toussaint should be extended beyond

wrongful discharge.’ ” 437 Mich. at 532 (citation omitted). In

20

Dumas, the Michigan Supreme Court refused to apply legitimate

expectations analysis to an alleged promise to freeze renewal

commissions. Such a promise must be tested under traditional

contract principles, which require an objective manifestation of

mutual assent. 437 Mich. at 542.

In the case at bar, Respondent’s claim is a civil rights claim,

which is independent of Petitioner’s employment handbook. An

arbitration policy is, of course, not a wrongful discharge claim,

and Toussaint does not make Petitioner’s policy enforceable.

In addition, handbook “policies” like Petitioner’s arbitration

policy, are not contracts, especially where the employer

explicitly denies the existence of a contract. In Rowe v.

Montgomery Ward, 437 Mich. 627, 645-646, 473 N.W. 2d 268

(1991), the Michigan Supreme Court distinguished “policy”

language from contractual language: “Harryman’s words were

couched in general terms, more akin to stating a policy as

opposed to offering an express contract.” “A ‘policy’ is

commonly understood to denote a flexible framework for

operational guidance, and not a perpetually binding

contractual obligation.” Jn Re: Certified Question, 432 Mich.

at 456.

In support of its position, Petitioner cites Scholz v.

Montgomery Ward & Co., 437 Mich. 83, 468 N.W. 2d 845

(1991), a wrongful discharge breach of contract case. The court

in Scholz stated that the “sole issue” in that case was whether

the plaintiff had a contract not to be discharged for refusing to

work Sundays. 437 Mich. at 85-86.

In Scholz, the plaintiff argued that her employer agreed not

to make her work Sundays. The employer issued a new handbook

setting forth an at-will policy, and had the plaintiff execute a

sign-off sheet. The Michigan Supreme Court held that, even

21

assuming the plaintiff had an earlier contract not to be discharged

for refusing to work Sundays, the sign-off sheet qualified as an

enforceable written modification of that contract. Jd. at 86, 90

n.7, 93. In this case, the handbook itself provides that no

arbitration or other contract exists. Plaintiff’s signature on

an Employee Acknowledgment form did not create any contract.

Petitioner’s clear purpose in employing language denying

the existence of any contract and reserving the right to

unilaterally modify the handbook provisions was to avoid

application of Toussaint and its progeny to any of the handbook

provisions. Petitioner cannot be permitted to avoid application

of Toussaint liability, and at the same time apply Toussaint to

restrict its employees’ civil rights, which are independent of any

of Petitioner's employment policies.

The Michigan Supreme Court correctly decided on

independent and adequate state law grounds that no arbitration

contract existed in this case. The Petition for Writ of Certiorari

should be denied.

Il.

EVEN IF THE FEDERAL ARBITRATION ACT

APPLIED TO THIS CASE, THERE IS NO CONFLICT

PREEMPTION, AND THIS COURT SHOULD NOT

REVIEW THE MICHIGAN SUPREME COURT’S

DECISION.

A. The Federal Arbitration Act Requires a Contract.

Even if the Federal Arbitration Act applied to this case, the

Michigan Supreme Court’s decision was consistent with the Act.

The Federal Arbitration Act requires that an arbitration provision

be in a contract to be enforceable. 9 U.S.C. § 2.

22

Furthermore, this Court has made clear that the federal

policy in favor of arbitration does not mandate arbitration where

no arbitration contract exists. In Volt Information Sciences v.

Board of Trustees of Stanford University, 489 U.S. 468, 109 S.

Ct. 1248, 103 L. Ed. 2d 488 (1989), this Court noted that the

thrust of the Federal Arbitration Act is that “arbitration is strictly

a matter of contract.” 489 U.S. at 472, 109 S. Ct. at 1252.

In Volt, this Court held that a California law permitting a

court to stay arbitration proceedings pending the resolution of

related litigation was not preempted by the FAA. The FAA

contains no express preemption provision. 489 U.S. at 477, 109

S. Ct. at 1255.

Rather, state law will be preempted by the FAA if it actually

conflicts with the FAA “ — that is, to the extent that it stands as

an obstacle to the accomplishment and execution of the full

purposes and objectives of Congress.” Volt, 489 U.S. at 477,

109 S. Ct. at 1255. The Michigan Supreme Court’s decision in

this case furthers, rather than conflicts with, the goals of the

FAA. Conflict preemption is inapplicable to this case.

B. The Goals and Policies of the FAA Are Furthered, Rather

than Undermined, by the Michigan Supreme Court’s

Decision.

“The FAA was designed to overrule the judiciary’s long-

standing refusal to enforce agreements to arbitrate, and to place

such agreements upon the same footing as other contracts.” Volt,

489 U.S. at 478, 109 S. Ct. at 1255 (emphasis added, citations

omitted). See also, Shearson/American Express, Inc. v.

McMahon, 482 U.S. 220, 225-226, 107 S. Ct. 2332, 2337, 96 L.

Ed. 2d 185 (1987); Allied-Bruce Terminix Companies, Inc. v.

Dobson, __ U.S. _., 115 S. Ct. 834, 838, 130 L. Ed. 2d 753

(1995) (the basic purpose of the FAA is to “overcome courts’

refusal to enforce agreements to arbitrate”).

23

However, the FAA was not intended to allow one party to

force arbitration on another party in the absence of a contract.

As noted by the Court in Volt:

[W]e have recognized that the FAA does

not require parties to arbitrate when they

have not agreed to do so.... the Act was

designed to make arbitration agreements as

enforceable as other contracts, but not more

SO.

Volt, 489 U.S. at 478, 109 S. Ct. at 1255 (emphasis added).

Petitioner incorrectly asserts that arbitration “agreements”

which are unilaterally imposed on employees by their employers

are enforceable under the FAA. Petition at 17. As stated above,

arbitration requires a contract, which requires mutual assent to

be binding. Furthermore, this Court has made clear that

“Arbitration under the Act is a matter of consent, not

coercion.” Volt, 489 U.S. at 479, 109 S. Ct. at 1256.

The Michigan Supreme Court correctly found, based upon

Petitioner’s own words in its handbook, that no arbitration

contract existed in this case under Michigan law. Even under

the FAA, the question whether an arbitration contract exists is

generally governed by state law. First Options of Chicago, Inc.

v. Kaplan, __ U.S. __, 115 S. Ct. 1920, 1924, 131 L. Ed. 2d 485

(1995).

The Michigan Supreme Court, in refusing to order a claim

to arbitration where the parties did not have an arbitration

contract, furthered the policies of the FAA. There is no conflict

with the FAA, and there can be no preemption.

24

CONCLUSION

For the foregoing reasons, Respondent requests that the

Petition for Writ of Certiorari be denied.

Respectfully submitted,

ERNEST GOODMAN

Counsel of Record

JULIA SHERWIN

Attorneys for Respondent

3000 Cadillac Tower

Detroit, Michigan 48226

(313) 965-0050

la

APPENDIX A — EXCERPTS FROM EMPLOYEE

HANDBOOK

INTRODUCTION

This document is intended to establish and clarify certain

employment policies, practices, rules and regulations (hereinafter

collectively referred to as “Policies”) of RELIABLE BUSINESS

COMPUTER, INC., (hereinafter referred to as the

“COMPANY”). Except as may otherwise be provided, the

Policies will apply to all COMPANY employees, and it is each

employee’s responsibility to assure that his/her own conduct is

in conformity with those Policies. It 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 WHATSOEVER, 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 discretion, 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.

*- * *

The Policies set forth in this handbook are currently in effect

and apply to all Full Time, Part Time and Temporary employees,

except as may be specifically provided. Additional policies,

practices, rules and regulations applicable to specified employees

only, may be more restrictive than the Policies set forth herein.

2a

Appendix A

Interpretations of the Policies and exceptions, if any, shall

only be made in writing by the Executive Committee or such

other employees as may be specifically designated by

management. Accordingly, no individual employee has authority

to make representations, promises or statements contrary to or

different from the provisions herein, except the President, and

only in a duly executed written document.

All current COMPANY employees will receive a copy of

this document. New employees will receive a copy of this

document at the time of formal hire. Upon receipt, all employees

will sign the Employee Acknowledgement, acknowledging

receipt of this document.

* * *

VIL.

TERMINATION AND DISMISSAL

GENERAL _s 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 specified 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, practices,

procedures, or other matters set forth herein

create any employment or personal contract,

express or implied.

3a

APPENDIX B — AFFIDAVIT OF CHRISTOPHER R.

HOLLIDAY

IN THE SUPREME COURT

Appeal from the Court of Appeals

Docket No. 102109

Court of Appeals No. 152041

Lower Court No. 91 131 165 CZ

THERESA A. HEURTEBISE, 5

Plaintiff-Appellant,

vs.

RELIABLE BUSINESS COMPUTERS INC., A Michigan

Corporation,

Defendant/Appellee.

CHRISTOPHER R. HOLLIDAY (P-39173)

JULIA SHERWIN (P-50992)

Attorneys for Plaintiff-Appellant

3000 Cadillac Tower

Detroit, Michigan 48226

(313) 965-0050

ALAN M. KANTER (P-30221)

Attorney for Defendant-Appellee

4190 Telegraph Road, Ste. 3000

Bloomfield Hills, Michigan 48302

(810) 644-2800

4a

Appendix B

JOHNATHAN T. Walton (P-32969)

Co-Counsel for Def.-Appellee

1515 Penobscott Building

Detroit, Michigan 48226

(313) 963-8989

AFFIDAVIT OF CHRISTOPHER R. HOLLIDAY

STATE OF MICHIGAN )

COUNTY OF WAYNE ) SS

CHRISTOPHER R. HOLLIDAY, being first duly sworn,

deposes and says as follows:

1. I am an attorney of record for the Plaintiff in the above-

captioned lawsuit.

2. Plaintiff commenced her lawsuit on November 25, 1991.

3. On December 13, 1991, Plaintiff, through her then-

counsel, Niels Eric Hanson, served a request for production of

documents on Defendant, which requested, among other items:

8. Any and all company handbooks, policy

and procedure manuals, rules, and any other

documents relating to Reliable’s procedures

and standards for discipline, layoff and

termination, including, but not limited to,

manuals available to employees and also

those available only to supervisory and/or

management personnel.

Sa

Appendix B

9. Copies of all personnel policies and policy

manuals, for Reliable’s managers and

employees:

(a) Currently in effect; and

(b) Which were in effect between

May, 1989 and July, 1990.

Exhibit A, p.6.

4. On December 19, 1991, Defendant moved to compel

arbitration of Plaintiff’s civil rights claim, based upon language

in Defendant’s Employee Handbook.

5. Defendant did not provide its entire Employee Handbook

in support of its motion. Importantly, Defendant omitted the first

page of the handbook, which page makes clear that nothing in

the handbook, including the arbitration provision, is a contract.

6. I assumed representation of the Plaintiff in this matter

in March 1992, after Plaintiff's previous attorney withdrew due

to a conflict of interest.

7. Defendant’s Motion to Dismiss or Alternatively to

Compel Arbitration was argued before the Court, Judge Cynthia

Stephens presiding, on April 10, 1992.

8. Defendant’s Motion was denied.

9. Defendant sought interlocutory lea to appeal on May

6, 1992.

6a

Appendix B

10. In September 1992, I twice asked Defendant, through

its counsel, to provide the previously requested discovery, which

included Defendant’s Employee Handbook. Exhibit B; Exhibit

eS

11. Despite a promise to provide the requested discovery,

Defendant failed to do so.

12. Defendant has never produced its complete Employee

Handbook, and has only provided the last eight pages of the

handbook, and an Employee Acknowledgement form.

13. My client, Theresa Heurtebise, misplaced her copy of

the employee handbook, and has been unable to locate it

throughout this litigation.

14. On March 20, 1996, my associate, Julia Sherwin,

obtained a copy of Defendant’s Employee Handbook from a

former employee of Reliable Business Computers, Inc., who also

said that the handbook had been involved in a lawsuit in Wayne

County Circuit Court in which he was also involved. Ms.

Sherwin searched the court records and obtained a certified copy

of the Second Amended Complaint in that case. A complete

copy of the handbook was attached to that Complaint. The

Complaint with handbooks is attached to Plaintiff-Appellant’s

Motion to Amend Record as Exhibit D.

15. A copy of that Handbook has been incorporated in

Plaintiff-Appellant’s Supplementary Appendix. The text at p. 2

of that Handbook shows clearly that this document is directly

and materially relevant to Defendant’s claims in this matter and

should have been made a part of this record.

7a

Appendix B

16. The matters set forth in this Affidavit are based on my

own personal knowledge and if called upon to testify concerning

them, I am both competent and willing to do so.

Further, Affiant sayeth not.

s/ CHRISTOPHER R. HOLLIDAY

Subscribed and sworn to before

me this 29th day of March, 1996.

s/ CAROL J. MORIN

Notary Public, Wayne County, MI

My Commission Expires: 9/23/00

8a

Appendix B

STATE OF MICHIGAN

IN THE SUPREME COURT

Appeal from the Court of Appeals

Docket No. 102109

Court of Appeals No. 152041

Lower Court No. 91 131 165 CZ

THERESA A. HEURTEBISE,

Plaintiff-Appellant,

Vs.

RELIABLE BUSINESS COMPUTERS INC., A Michigan

Corporation,

Defendant-Appellee.

CHRISTOPHER R. HOLLIDAY (P-39173)

JULIA SHERWIN (P-50992)

Attorneys for Plaintiff-Appellant

3000 Cadillac Tower

Detroit, Michigan 48226

(313) 965-0050

ALAN M. KANTER (P-30221)

Attorney for Defendant-Appellee

4190 Telegraph Road, Ste. 3000

Bloomfield Hills, Michigan 48302

(810) 644-2800

9a

Appendix B

JOHNATHAN T. WALTON (P-32969)

Co-Counsel for Def.-Appellee

1515 Penobscott Building

Detroit, Michigan 48226

(313) 963-8989

PROOF OF SERVICE

STATE OF MICHIGAN )

COUNTY OF WAYNE ) SS

LINDA S. HALLER, being first duly sworn, deposes and

States that she is employed by the Law Firm of GOODMAN,

EDEN, MILLENDER & BEDROSIAN, and during the course

of said employment, she served a copy of AFFIDAVIT OF

CHRISTOPHER R. HOLLIDAY upon:

MICHAEL L. GELLER JONATHAN T. WALTON

4109 Telegraph Road 1515 Penobscot Bldg.

Suite 3000 Detroit, MI 48226

Bloomfield Hills, MI 48302

by placing same in an envelope addressed to the above

individuals, bearing a return address and sufficient pre-paid

postage thereon and by depositing same in the United States

mail on April 1, 1996.

s/ LINDA S. HALLER

Subscribed and sworn to before

me this 1st day of April, 1996.

s/ CAROL J. MORIN

Notary Public, Wayne County, MI

My Commission Expires: 9/23/00