Arslanian v. Oakwood United Hospitals, Inc.

• Decision Date: 26 June 2000
• Docket Number: Docket No. 189349.
• Parties: Michael ARSLANIAN, Plaintiff-Appellant, v. OAKWOOD UNITED HOSPITALS, INC., d/b/a Heritage Hospital, Cynthia English, Karoline McKinzie, and Donna Levalley, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

618 N.W.2d 380

240 Mich. App. 540

Michael ARSLANIAN, Plaintiff-Appellant, v. OAKWOOD UNITED HOSPITALS, INC., d/b/a Heritage Hospital, Cynthia English, Karoline McKinzie, and Donna Levalley, Defendants-Appellees.

Docket No. 189349.

Court of Appeals of Michigan.

Submitted January 3, 2000, at Detroit.

Decided April 21, 2000, at 9:00 a.m.

Released for Publication June 26, 2000.

Allen J. Counard, P.C. (by Charles A. Butler), Trenton, for the plaintiff.

Dykema Gossett PLLC (by Debra M. McCulloch and Jennifer J. Howe), Detroit, for the defendants.

Before: MURPHY, P.J., and MICHAEL J. KELLY and GRIBBS, JJ.

ON REMAND

MURPHY, P.J.

In an earlier, unpublished opinion in this case, Arslanian v. Oakwood United Hosps., Inc., issued October 3, 1997 (Docket No. 189349), we held that a previous arbitration proceeding, held pursuant to a collective bargaining agreement, barred plaintiff Michael Arslanian's subsequently filed claims of defamation, intentional infliction of emotional distress, and interference with contract. However, pursuant to Rushton v. Meijer, Inc. (On Remand), 225 Mich.App. 156, 570 N.W.2d 271 (1997), which held that the public policy of this state entitles a plaintiff to direct and immediate review of civil rights claims in the circuit court, we further held that the previous arbitration proceeding did not bar plaintiff's additional claims of retaliatory discharge and gender discrimination under the Civil Rights Act (CRA), M.C.L. § 37.2101 et seq.; MSA 3.548(101) et seq. Defendants sought leave to appeal this ruling, and our Supreme Court, in lieu of granting leave, remanded the matter for our reconsideration in light of Rembert v. Ryan's Family Steak Houses, Inc., 235 Mich.App. 118, 596 N.W.2d 208 (1999), a decision of a special panel of this Court, which in pertinent part abrogated Rushton. 461 Mich. 921, 605 N.W.2d 317 (1999). On reconsideration, we affirm our previous holdings.

Plaintiff worked for defendant Oakwood United Hospitals until an alleged assault on defendant Karoline McKinzie resulted in his discharge. Pursuant to the collective bargaining agreement, plaintiff filed a grievance and an arbitration hearing was held. The arbitrator denied plaintiff's grievance, finding that McKinzie's account of the assault was truthful and that plaintiff was legitimately discharged on the basis of that assault and his prior disciplinary record. Defendants filed a motion for summary disposition in response to plaintiff's subsequently initiated circuit court action, arguing that, as a result of the arbitration proceedings, plaintiff's claims were either barred by res judicata because they were or could have been brought in the arbitration proceedings or were essentially barred by collateral estoppel because the dispositive facts had been determined by the arbitrator. The circuit court granted defendants' motion and, as indicated above, on plaintiff's appeal as of right we affirmed in part and reversed in part.

We are now faced with the question whether Rembert compels a conclusion contrary to our previous decision allowing plaintiff to proceed with his CRA-based discrimination and retaliatory discharge claims. We find that it does not.

In Rembert, the special panel of this Court interpreted an individual employment agreement and held that predispute agreements to arbitrate statutory claims, including CRA-based claims, are not against public policy and can be enforceable. The special panel indicated that such an agreement would be valid if

(1) the parties have agreed to arbitrate the claims (there must be a valid, binding, contract covering the civil rights claims), (2) the statute itself does not prohibit such agreements, and (3) the arbitration agreement does not waive the substantive rights and remedies of the statute and the arbitration procedures are fair so that the employee may effectively vindicate his statutory rights. [Id. at 156, 596 N.W.2d 208.]

Ultimately, the matter was remanded to the trial court for a determination whether the plaintiff's agreement was enforceable in light of those requirements. Id. at 166, 570 N.W.2d 271. Notwithstanding this explicit abrogation of Rushton, which also involved an individual employment contract, a like result is not compelled in this case because here we are concerned with an arbitration clause contained in a collective bargaining agreement.

In reaching its result, the special panel in Rembert analyzed the tension between two Supreme Court cases dealing with arbitration in the context of employment discrimination claims, Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974), and Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). In Alexander, as in the instant case, a union employee exercised the compulsory arbitration provision contained in a collective bargaining agreement. The Supreme Court held that the exercise of this provision did not preclude the employee from subsequently pursuing a title VII claim in court. Resting its decision in part on the then common view that with respect to statutory rights arbitration was inferior to traditional litigation, the Court concluded that the employee could vindicate contractual rights against discrimination at arbitration and could enforce independent statutory rights through litigation. Alexander, supra at 50-52, 94 S.Ct. 1011.

Almost two decades later, the Supreme Court's attitude toward arbitration was decidedly different. In Gilmer, the Court held enforceable an agreement to arbitrate statutory claims contained in an individual employment contract. Carefully distinguishing Alexander, the Court reasoned that the factors that in that case had militated against arbitration of civil rights claims were not applicable to a case that arose under the Federal Arbitration Act (FAA), 9 USC 1 et seq., and in which an individual employment contract was at issue. Gilmer, supra at 34-35, 111 S.Ct. 1647. The Court noted "several important distinctions" between the cases:

First, those cases did not involve the issue of the enforceability of an agreement to arbitrate statutory claims. Rather, they involved the quite different issue whether arbitration of contract-based claims precluded subsequent judicial resolution of statutory claims. Since the employees there had not agreed to arbitrate their statutory claims, and the labor arbitrators were not authorized to resolve such claims, the arbitration in those cases understandably was held not to preclude subsequent statutory actions. Second, because the arbitration in those cases occurred in the context of a collectivebargaining agreement, the claimants there were represented by their unions in the arbitration proceedings. An important concern therefore was the tension between collective representation and individual statutory rights, a concern not applicable to the present case. Finally, those cases were not decided under the FAA, which, as discussed above, reflects a "liberal federal policy favoring arbitration agreements." [Id. at 35, 111 S.Ct. 1647, quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985).]

In reaching the decision that public policy supports enforcing valid arbitration clauses, the special panel of this Court noted that the "critical distinction" between its case and Alexander was the one made salient by Gilmer, the difference between arbitration agreements arising in the context of a collective bargaining agreement and those arising out of individual employment contracts. Rembert, supra at 143, 596 N.W.2d 208. It is that same distinction that compels a contrary conclusion in the instant case.¹

The special panel followed its analysis of Gilmer by discussing the progeny of that case, stating, "[s]ince the Court's landmark decision in Gilmer, the vast majority of federal and state courts that have addressed this issue have followed Gilmer and held that statutory employment discrimination claims are subject to predispute compulsory arbitration by way of employment contracts." Rembert, supra at 148, 596 N.W.2d 208. The special panel noted, however, that in the context of arbitration clauses found in collective bargaining agreements, a question still exists regarding "whether and to what extent [Alexander] remains viable authority." Id. at 151, n. 24, 596 N.W.2d 208. Referencing a few of the cases in which parties have raised this issue, the special panel concluded, "[o]ur decision does not turn on the outcome of this controversy, and we express no opinion concerning the proper application of Gilmer to general arbitration clauses in collective bargaining agreements." Id. at 152, n. 24, 596 N.W.2d 208 (emphasis added). Accordingly, Rembert does not control the outcome of this case. Instead, we turn to those cases so addressing the question of the continuing viability of Alexander.

Though to some degree a split of opinion exists among jurisdictions addressing this question, a clear majority of courts have found that Alexander remains an effective bar to compulsory arbitration of civil rights claims in the collective bargaining context. The minority view is represented by the Fourth Circuit Court of Appeals decision in Austin v. Owens-Brockway Glass Container, Inc., 78 F.3d 875 (C.A.4, 1996). In that case, the court held that a binding arbitration clause in a collective bargaining agreement barred an employee from pursuing in a judicial forum claims brought under title VII and the Americans with Disabilities Act. Id. at 885-886. The court thus extended Gilmer, noting the difference presented by the fact that a collective bargaining agreement was at issue, but deeming this difference irrelevant. Id. at 885. A strong dissent was authored by Judge Hall, who stated that "[t]he majority fails to recognize, however, that the only difference makes all the difference." Id. at 886. Judge Hall noted that the Supreme Court...