Ex parte McNaughton

CourtSupreme Court of Alabama
Citation728 So.2d 592
PartiesEx parte Cindy L. McNAUGHTON. (Re Cindy L. McNaughton v. United Healthcare Services, Inc., et al.).
Decision Date28 August 1998

728 So.2d 592

Ex parte Cindy L. McNAUGHTON.
(Re Cindy L. McNaughton v. United Healthcare Services, Inc., et al.)


Supreme Court of Alabama.

August 28, 1998.

Rehearing Denied March 5, 1999.

728 So.2d 593
W. Lewis Garrison, Jr., and Ashley M. Taylor of Jackson, Garrison & Sumrall, P.C., Birmingham, for petitioner

Edward S. Allen, Marcel L. Debruge, and Miriam Gibson Harris of Balch & Bingham, L.L.P., Birmingham; and Nathan R. Norris of Engel, Hairston & Johanson, P.C., Birmingham, for respondents.

SEE, Justice.

Cindy L. McNaughton, the plaintiff in an action pending in the Jefferson Circuit Court, petitions for a writ of mandamus directing the circuit court to vacate its order compelling the arbitration of her claims against the defendant United Healthcare Services, Inc. ("United"). McNaughton maintains that arbitration is inappropriate because the arbitration clause contained in her employee handbook and relied on by the trial court is not part of a legally binding contract. In the alternative, McNaughton argues that the arbitration clause is void under the doctrine of unconscionability/mutuality of remedy. Because we hold that the arbitration clause was contained in a binding contract, and because we reject application of the doctrine of unconscionability/mutuality of remedy, we deny the petition.


In July 1996, United hired McNaughton as an account service coordinator to work in United's Montgomery office. In accordance with a standard United employment policy, United issued McNaughton an employee handbook and required her to sign a form acknowledging that she had received it. As a condition of employment, United requires all employees to resolve employment claims against United through binding arbitration. Thus, each employee handbook contains an acknowledgement form that incorporates an arbitration agreement. As a condition of her employment, McNaughton signed one of these acknowledgement forms that incorporates United's arbitration policy.

In February 1997, McNaughton requested a transfer from the Montgomery office to United's Birmingham office. United subsequently interviewed her for a position in Birmingham. McNaughton alleges that after the interview process, United offered her a position in Birmingham, that she left her

728 So.2d 594
position with United in Montgomery, and that, relying on that offer, she relocated to Birmingham. However, United then notified McNaughton that it had hired another person for the Birmingham position. By that time, McNaughton's former position in the Montgomery office had also been filled

In April 1997, McNaughton sued United in a two-count complaint claiming (1) fraud based on an alleged promise by United to transfer her from United's Montgomery office to its Birmingham office, and (2) claiming intentional interference with business relations. The trial court granted United's motion to stay the proceedings and to compel arbitration. McNaughton filed this mandamus petition.


A writ of mandamus is an extraordinary remedy that requires the showing of: (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty on the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court. Ex parte Edgar, 543 So.2d 682, 684 (Ala.1989). Although mandamus relief is rarely appropriate, it is available when a party demonstrates that he has been compelled to arbitrate a claim that he did not agree to arbitrate.1 Ex parte Beasley, 712 So.2d 338, 339-40 (Ala. 1998).

Section 2 of the Federal Arbitration Act ("FAA") provides:

"A written provision in any ... contract evidencing a transaction involving interstate commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable...."

9 U.S.C. § 2 (emphasis added).2 Consistent with the FAA, trial courts are required to stay or dismiss proceedings and compel arbitration when the parties have entered into a valid contract containing an arbitration agreement. Moreover, the Supreme Court of the United States has stated that the FAA establishes a strong federal policy favoring arbitration:

"The [Federal] Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability."

Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). These principles provide the framework within which we must determine whether the trial court erred in requiring McNaughton to arbitrate the claims arising out of her employment.3

A. Binding Agreement to Arbitrate

McNaughton first argues that the acknowledgement form she signed when she accepted

728 So.2d 595
employment with United did not create a binding agreement to arbitrate her employment claims. The acknowledgment form contains the following pertinent language
"At-Will Employment
"I understand that the provisions in this Handbook are guidelines and, except for the provisions of the Employment Arbitration Policy, do not establish a contract or any particular terms or condition of employment between myself and [United].
"I understand that the employment relationship is `at will' and is based upon the mutual consent....
"Specific Acknowledgements
". . . .
"Internal Dispute Resolution/Employment Arbitration Policy....
"These policies provide the opportunity for prompt and objective review of employment concerns. I understand that arbitration is the final, exclusive and required forum for the resolution of all employment related disputes which are based on a legal claim. I agree to submit all employment related disputes based on a legal claim to arbitration under [United's] policy."

(Emphasis added.)

McNaughton argues that, because of the "at-will" nature of her employment and because of the provision expressly stating that the policies contained in the employee handbook are not binding, this Court should not construe the arbitration policy incorporated into the acknowledgement form to be a binding agreement. We disagree.

When one party proposes a standard contract to another party, the parties may, of course, agree to be bound by certain of the clauses in the proposed contract and not to be bound by others. For example, in Crown Pontiac, Inc. v. McCarrell, 695 So.2d 615, 618-19 (Ala.1997), this Court held that an arbitration clause in a retail buyer's order was not binding because the buyer did not sign in the space provided under the arbitration clause, while he did sign in the spaces provided under other clauses of the retail buyer's order. Those clauses under which the buyer signed, indicating his agreement, were binding, but the clause under which the buyer did not sign, failing to indicate his agreement, was not binding. See id.

McNaughton's signed acknowledgement form indicates that the parties agreed to be bound by one provision of the employee handbook—the arbitration policy—but not by other provisions of the handbook. Under McCarrell, 695 So.2d at 618-19, the provision of the employee handbook to which McNaughton agreed to be bound—"I agree to submit all employment related disputes based on a legal claim to arbitration under [United's] policy"—is binding.4 And the other provisions of the employee handbook to which McNaughton did not agree to be bound—"I understand that the provisions in this Handbook are guidelines and, except for the provisions of the Employment Arbitration Policy, do not establish a contract"—are not binding. Id. Given the clear precedent of McCarrell, to hold otherwise would treat arbitration clauses differently from other provisions of a contract, in contravention of the express holding of the Supreme Court of the United States. See Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996) ("Courts may not, however, invalidate arbitration agreements under state laws applicable only to arbitration provisions.... By enacting § 2 [of the Federal Arbitration Act] ..., Congress precluded States from singling out arbitration provisions for suspect status, requiring instead that such provisions be placed `upon the same footing as other contracts.'") (citations omitted).

Further, under clear Alabama contract law, United's providing at-will employment to McNaughton constituted sufficient consideration in exchange for McNaughton's agreement to arbitrate her employment disputes under United's arbitration policy. This

728 So.2d 596
Court has consistently held that an employer's providing continued at-will employment is sufficient consideration to make an employee's promise to his employer binding. For example, in Condelles v. Alabama Telecasters, Inc., 530 So.2d 201, 204 (Ala.1988), this Court stated that "continued [at-will] employment is sufficient consideration for signing a noncompetition agreement." (Citing Daughtry v. Capital Gas Co., 285 Ala. 89, 93, 229 So.2d 480, 483 (1969).) Similarly, United's provision of new at-will employment to McNaughton was sufficient consideration to make McNaughton's promise to arbitrate employment disputes under United's arbitration policy a binding agreement.

These conclusions are supported by Kelly v. UHC Management Co., 967 F.Supp. 1240 (N.D.Ala.1997), in which the United States District Court for the Northern District of Alabama held that an acknowledgment form signed upon receipt of an employee handbook and that contained language identical to the language of the acknowledgment form signed by McNaughton created a binding contract to arbitrate employment disputes. Just as with the acknowledgment form signed by McNaughton, the acknowledgement form signed in Kelly, 967 F.Supp. at 1243,...

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