Holloman v. Circuit City, 53, September Term, 2005.

• Decision Date: 13 March 2006
• Docket Number: No. 53, September Term, 2005.,53, September Term, 2005.
• Citation: 894 A.2d 547,391 Md. 580
• Parties: La'Tia HOLLOMAN v. CIRCUIT CITY STORES, INC., et al.
• Court: Court of Special Appeals of Maryland

Page 547

894 A.2d 547

391 Md. 580

La'Tia HOLLOMAN v. CIRCUIT CITY STORES, INC., et al.

No. 53, September Term, 2005.

Court of Appeals of Maryland.

March 13, 2006.

Brian J. Markovitz (Timothy F. Maloney, Jay P. Holland, Joseph, Greenwald & Laake, P.A., on brief), for petitioner.

Heather A. Mullen (Susan Childers North of Kaufman & Canoles, P.C., Norfolk, VA, Lauri E. Cleary, Jennifer S. Thomas, Lerch, Early & Brewer, Chtd. of Bethesda, Teri C. Miles, Director & Asst. Gen. Counsel, on brief, Richmond, VA), for respondents.

Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA and GREENE, JJ.

BATTAGLIA, J.

This case presents us with the task of delineating the scope and application of our decision in Cheek v. United Healthcare of the Mid-Atlantic, Inc., 378 Md. 139, 835 A.2d 656 (2003), to an arbitration agreement between Circuit City Stores, Inc. ("Circuit City") and one of its former employees, La'Tia Holloman ("Holloman"), which governed all disputes that arose during their employment relationship, in which Circuit City reserved the right to alter or rescind the arbitration agreement on a single day of the year after thirty-days notice of the impending change. Holloman also asks this Court to consider whether she "knowingly and voluntarily" waived her constitutional right to a jury trial and her substantive rights under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., Maryland Code (1957, 2003 Repl.Vol.), Art. 49B, which prohibits discrimination in employment, and the pertinent provisions of the Prince George's County Code when she signed the arbitration agreement. Because we determine that the terms of the arbitration agreement provide consideration, we hold that the arbitration agreement is enforceable under Cheek. Moreover, we find that the Court of Special Appeals did not err in concluding that Holloman waived her constitutional right to a jury trial and that Holloman's submission of her statutory claims to arbitration did not deprive Holloman of her rights thereunder. Therefore, we affirm the judgment of the Court of Special Appeals.

Background

In September of 2001, Holloman applied for a job at Circuit City's store in Marlow Heights, Maryland. The first page of her employment application listed several "selection tools" that Circuit City uses to determine which applicants to hire. One such prerequisite to employment was Circuit City's "Dispute Resolution Agreement" ("arbitration agreement"), which was described on the employment application as "requir[ing] you and Circuit City to arbitrate certain legal disputes related to your application for employment or employment with Circuit City." The application then added, "Circuit City will consider your application only if this agreement is signed."

The arbitration agreement contained the following language pertinent to the case sub judice:

If you wish to be considered for employment you must read and sign the following agreement. You will be considered as an applicant when you have signed the Agreement. Included with this application is the Circuit City Dispute Resolution Rules and Procedures. You should familiarize yourself with these rules and procedures prior to signing the Agreement. If the Rules and Procedures are not included in this booklet you must request a copy from a Circuit City representative prior to signing the Agreement. You will note that if you sign at this time you do have three (3) days to withdraw your consent. You may, of course, take the package with you and return with it signed, if you wish to continue your application process.

* * *

[B]oth Circuit City and I agree to settle any and all previously unasserted claims, disputes or controversies arising out of or relating to my application or candidacy for employment, employment and/or cessation of employment with Circuit City, exclusively by final and binding arbitration before a neutral Arbitrator. . . .

I understand that if I do file a lawsuit regarding a dispute arising out of or relating to my application or candidacy for employment, employment or cessation of employment, Circuit City may use this Agreement in support of its request to the court to dismiss the lawsuit and require me instead to use arbitration.

* * *

I further agree that if I commence an arbitration, it will be conducted in accordance with the "Circuit City Dispute Resolution Rules and Procedures."

I understand that neither this Agreement nor the Dispute Resolution Rules and Procedures form a contract of employment between Circuit City and me. I further understand that my signature to this Agreement in no way guarantees that Circuit City will offer me employment. If Circuit City does offer me employment and I become employed at Circuit City, this Agreement in no way alters the "at-will" status of my employment. I understand that my employment, compensation and terms and conditions of employment can be altered or terminated, with or without cause, and with or without notice, at any time, at the option of either Circuit City or myself.

Holloman initialed the page on which those provisions appear. At the top of the next page, which Holloman signed at the bottom, the arbitration agreement provided:

The Dispute Resolution Agreement and the Dispute Resolution Rules and Procedures affect your legal rights. By signing this Agreement, you acknowledge receipt of the Dispute Resolution Rules and Procedures. You may wish to seek legal advice before signing this Dispute Resolution Agreement.

* * *

This Agreement will be enforceable through the application process, my employment, and thereafter with respect to any such claims arising from or relating to my application or candidacy for employment, employment or cessation of employment with Circuit City. We then must arbitrate all such employment-related claims, and we may not file a lawsuit in court.

A Circuit City representative signed the arbitration agreement on the company's behalf.

The nineteen Dispute Resolution Rules and Procedures appear in a separate twelve-page document contained within Circuit City's application packet. Holloman's argument on appeal focuses on Rule 19, which at the time Holloman was hired¹ provided:

Rule 19. TERMINATION OR MODIFICATION OF DISPUTE RESOLUTION AGREEMENT OR DISPUTE RESOLUTION RULES AND PROCEDURES.

Circuit City may alter or terminate the Agreement and these Dispute Resolution Rules and Procedures on December 31 of any year upon giving 30 calendar days written notice to Associates, provided that all claims arising before alteration or termination shall be subject to the Agreement and corresponding Dispute Resolution Rules and Procedures in effect at the time the Arbitration Request Form and accompanying filing fee, or Request for Waiver of Filing Fee is received by the Company. Notice may be given by posting a written notice by December 1 of each year at all Circuit City locations (including locations of affiliated companies). A copy of the text of any modification to the Agreement or Rules and Procedures will be published in the Applicant Packet, which will be available at such locations after December 31 of each year.

Subsequent to her decision to terminate her employment relationship with Circuit City in August of 2002, Holloman filed charges of sexual harassment with the EEOC and received a "right to sue" letter. She then filed a six-count complaint in the Circuit Court for Prince George's County in December of 2003 alleging sexual discrimination, to which Circuit City responded by motion to compel arbitration of Holloman's claims. The Circuit Court granted Circuit City's motion, ordering arbitration and staying the judicial proceedings.

Holloman thereafter initiated arbitration against Circuit City and filed a notice of appeal and a motion to stay the arbitration proceedings pending the appeal, which Circuit City opposed. After a hearing, the Circuit Court granted Holloman's petition for a stay pending appeal.

The Court of Special Appeals, in a reported opinion, held that the notice requirement in Circuit City's arbitration agreement materially distinguished the arbitration agreement at issue from the agreement in Cheek, 378 Md. 139, 835 A.2d 656 (2003), because Circuit City's obligation to give Holloman thirty-days notice prior to changing the terms of the arbitration agreement provided consideration for its enforcement and because it effectively bound Circuit City to its agreement to arbitrate for at least thirty days. Holloman v. Circuit City Stores Inc., 162 Md. App. 332, 338-40, 873 A.2d 1261, 1265 (2005). The Court of Special Appeals also concluded that there was no merit in Holloman's contention that she did not knowingly and voluntarily waive her rights to a jury trial or to relief under the relevant provisions of Title VII of the Civil Rights Act of 1964, the Maryland Code, or the Prince George's County Code.

On June 20, 2005, Holloman filed a petition for writ of certiorari with this Court and presented the following questions for our consideration:

1. Whether the Court of Special Appeals incorrectly created an exception to the holding of the Court of Appeals in Cheek v. United Healthcare of the Mid-Atlantic, Inc., 378 Md. 139, 835 A.2d 656 (2003)?

2. Whether the Court of Special Appeals incorrectly determined that an applicant can give a knowing and voluntary waiver of his or her constitutional rights and substantive rights under discrimination statutes even when an employer fails to provide the applicant with the arbitration rules, which govern the arbitration agreement?

On August 10, 2005, we granted the petition and issued the writ. Holloman v. Circuit City, Inc., 388 Md. 404, 879 A.2d 1086 (2005). Because we determine that consideration exists to support the arbitration agreement, we hold that the arbitration agreement is enforceable. Moreover, we find that the Court of Special Appeals did not err in concluding that Holloman waived her constitutional...