Britto v. Prospect Chartercare Sjhsri, LLC, 18-1422

• Decision Date: 30 November 2018
• Docket Number: No. 18-1422,18-1422
• Citation: 909 F.3d 506
• Parties: Sylvester J. BRITTO, Jr., Plaintiff, Appellant, v. PROSPECT CHARTERCARE SJHSRI, LLC; Prospect Chartercare, LLC ; Sandra Nastari; Addy Kane, Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

909 F.3d 506

Sylvester J. BRITTO, Jr., Plaintiff, Appellant,

v.PROSPECT CHARTERCARE SJHSRI, LLC; Prospect Chartercare, LLC ; Sandra Nastari; Addy Kane, Defendants, Appellees.

No. 18-1422

United States Court of Appeals, First Circuit.

November 30, 2018

Richard A. Sinapi, with whom Joshua D. Xavier and Sinapi Law Associates, LTD., Warwick, RI, were on brief, for appellant.

Jillian S. Folger-Hartwell, with whom Alexsa A. Marino and Littler Mendelson, P.C., Providence, RI, were on brief, for appellees.

Before Howard, Chief Judge, Selya and Thompson, Circuit Judges.

THOMPSON, Circuit Judge.

We are asked to referee yet another arbitration controversy "in which the parties are litigating whether or not they should be litigating."¹ Rejecting Sylvester Britto's claims about the (supposed) unenforceability of the arbitration agreement before us, we affirm the district judge's order sending his case to arbitration.

Setting the Stage

Arbitration Agreement

The key facts are undisputed and easily stated. Britto is an African-American. In March 1987, when he was 26, he began working as an at-will employee for St. Joseph Health Services of Rhode Island ("St. Joseph," to save keystrokes). Decades later, in June 2014, Prospect Chartercare SJHSRI, LLC and Prospect Chartercare, LLC (collectively called "Prospect," following Britto's convention) acquired St. Joseph.² During the transition, Prospect gave Britto an offer letter outlining the terms for his continued at-will employment.³ Among its many provisions, the letter noted that Prospect could "change the terms of [his] employment, including compensation and benefits, at any time." The letter also instructed him, as a condition of his continued employment, to sign on a line in the letter below the words "ACCEPTED AND AGREED TO"—which would "acknowledge [his] acceptance of the above terms of employment"—and to sign two "additional documents" included with the letter, one of which was an arbitration agreement.

As relevant here, the arbitration agreement said that it was subject to the Federal Arbitration Act (the "FAA" from now on). And the agreement declared that "[t]o the fullest extent allowed by law, any controversy, claim or dispute between [Britto] and [Prospect] ... relating to or arising out of [Britto's] employment or the cessation of that employment will be submitted to final and binding arbitration." Taking a belt-and-suspenders approach, the agreement added that it "cover[ed] all employment-related claims including, but not limited to, claims for ... violation of public policy, discrimination, harassment, or any other employment-related claim under any state or federal statutes or laws relating to an employee's relationship with his/her employer." In its penultimate sentence, the arbitration agreement said:

BY AGREEING TO THIS BINDING MUTUAL ARBITRATION PROVISION, BOTH YOU AND THE COMPANY GIVE UP ALL RIGHTS TO A TRIAL BY JURY.

And the agreement's last sentence proclaimed:

BY SIGNING BELOW, I CONFIRM THAT I HAVE READ, UNDERSTAND AND AGREE TO THIS ARBITRATION AGREEMENT.

Prospect's employee handbook also emphasized that it "reserve[d] the right to revise, modify, delete or add to any and all policies, procedures, work rules or benefits stated in this [h]andbook or in any other document, except for the policy of at-will employment set forth herein." The handbook also mentioned arbitration, explaining that "[a]ll employees are required to sign an agreement to arbitrate their employment disputes as a condition of employment."

Complying with Prospect's instructions, Britto signed the pertinent papers at the end of a five-minute meeting with his supervisor.⁴ The supervisor never asked him to read the documents, never discussed the significance of the arbitration agreement, and never said he could have an attorney look the documents over (Britto had no lawyer with him at the meeting, by the way). The company's vice-president of human resources also signed the arbitration agreement.

Lawsuit

A few months later, in January 2015, Prospect fired Britto for (supposedly) violating the company's policies concerning workplace violence and harassment. He was 54 at the time. Prospect replaced him (allegedly) with a younger, non-African-American worker.

Not willing to take this turn of events lying down, Britto filed charges of age and race discrimination with the appropriate state and federal civil-rights commissions. And after getting right-to-sue letters from them, he filed this federal-court lawsuit against the defendants named in our caption, alleging that his discharge violated a mix of federal and state laws—specifically, the Age Discrimination in Employment Act, 29 U.S.C. §§ 621, et seq. ; Title VII of the Civil Rights Act, 42 U.S.C. §§ 2000e, et seq. ; the Rhode Island Fair Employment Practices Act, R.I. Gen Laws §§ 28-5-1, et seq. ; and the Rhode Island Civil Rights Act, R.I. Gen. Laws §§ 42-112-1, et seq.

Arbitration Fight

Insisting that the arbitration agreement was valid and covered Britto's claims, the defendants invoked the FAA and moved to dismiss the complaint and compel arbitration. A mini paper blizzard followed, principally on the issue of whether a valid agreement to arbitrate existed—an issue controlled by Rhode Island contract law, as all agree. See, e.g., Campbell v. Gen. Dynamics Gov't Sys. Corp., 407 F.3d 546, 552 (1st Cir. 2005) (explaining that "arbitration is a matter of contract, and for the most part, general principles of state contract law control the determination of whether a valid agreement to arbitrate exists") (citations omitted) (quoting AT&T Techs., Inc. v. Comm'cns Workers, 475 U.S. 643, 648, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) ).

In his papers opposing the motion, Britto pressed two main points. First he argued that the defendants should be collaterally estopped from using the arbitration agreement, telling the judge that a different district judge in the same court—in a case called Conduragis v. Prospect CharterCare, LLC, No. CV 17-272-JJM-PAS, 2017 WL 5997417 (D.R.I. Dec. 1, 2017) —held the same arbitration agreement unenforceable for lack of consideration. Conduragis, Britto noted, deemed Prospect's promise to arbitrate illusory because the offer letter gave Prospect the right to tweak employment terms (of which arbitration was one) whenever it pleased. And, Britto added, Conduragis also deemed Prospect's offer of continued at-will employment illusory because Prospect could fire him at any time. Next Britto argued that even if collateral estoppel did not apply, the arbitration agreement was still "unenforceable for lack of legal consideration" for the same reasons given in Conduragis. Plus, he wrote, the "procedural process" Prospect used to get him to sign the arbitration agreement made the agreement "unconscionable" and thus "unenforceable" as well.

The defendants responded that collateral estoppel was inapplicable because his case and Conduragis involved dissimilar issues and parties. The defendants also claimed that the arbitration agreement was a "separate, standalone" agreement, and so the offer letter's reservation of rights did not cover the arbitration agreement—which, according to the defendants, pulled the rug out from under Britto's illusory-promise theory premised on the letter's reserving Prospect's right to revise employment terms at will. But even if this were not so, the defendants asserted that the arbitration agreement was still enforceable because Britto's continued employment provided independent consideration for the agreement. And the defendants said that they saw no unconscionability problem, because nothing indicates either that Britto "lacked a meaningful choice or the requisite mental capacity" or that "the circumstances leading up to [his] signing" the arbitration agreement were "oppressive."

Judge's Decision

Ruling on the papers, the district judge held that a valid and enforceable arbitration agreement existed between the parties. In reaching this result, the judge first chose not to follow Conduragis. Unlike the Conduragis judge, the judge here concluded that the arbitration agreement was separate from the offer letter, meaning the letter's "reservation of rights [did] not cover the [a]greement" and thus Prospect's promise to arbitrate was not illusory. Also unlike the Conduragis judge—who relied on a Rhode Island superior court decision, D. Miguel & Son Co. v. Barbosa, No. C.A. 84-3186, 1985 WL 663146 (R.I. Super. Ct. Mar. 11, 1985) (" D. Miguel," for simplicity)—our judge relied on a Rhode Island Supreme Court case, Oken v. Nat'l Chain Co., 424 A.2d 234, 237 (R.I. 1981), in holding that Britto's agreement "to continue to work in exchange for [d]efendants' promise to continue to employ and compensate him for his services ... [was] consideration sufficient to render the [a]greement enforceable." And having done so, the judge granted the defendant's motion to compel arbitration and dismissed Britto's suit without prejudice.

From this adverse ruling Britto appeals.

Outlining the Standard of Review

We review the judge's legal decision to compel arbitration with fresh eyes—i.e. , "de novo ," to put it in legalese. See, e.g., Soto-Fonalledas v. Ritz-Carlton San Juan Hotel Spa & Casino, 640 F.3d 471, 474 (1st Cir. 2011). That means we can affirm his ruling on any ground supported by the record, even one he did not rely on. See id.; see also Lang v. Wal-Mart Stores East, L.P., 813 F.3d 447, 454 (1st Cir. 2016) (explaining what de novo review means).

Summarizing the Arguments

Britto attacks the district judge's ruling on multiple grounds. Rehashing the litany of arguments that the judge heard and rejected, he reminds us that the offer letter explicitly reserved to Prospect the right to change employment terms "at any time," a point "[r]einforced" in the employee handbook. And, he continues, because submitting certain disputes to arbitration was a required term of his employment, Prospect had the right to revamp the arbitration agreement...