Lichon v. Morse
| Decision Date | 20 July 2021 |
| Docket Number | No. 159493,No. 159492,Calendar No. 2,159492 |
| Citation | 507 Mich. 424,968 N.W.2d 461 |
| Parties | Samantha LICHON, Plaintiff-Appellee, v. Michael MORSE and Michael J. Morse, PC, Defendants-Appellants. Jordan Smits, Plaintiff-Appellee, v. Michael Morse and Michael J. Morse, PC, Defendants-Appellants. |
| Court | Michigan Supreme Court |
Fieger, Fieger, Kenney & Harrington PC (by Geoffrey N. Fieger and Sima G. Patel) for Samantha Lichon and Jordan Smits.
Honigman LLP, Detroit (by Robert M. Riley and I. W. Winsten ) and Starr, Butler, Alexopoulos & Stoner, PLLC, Bloomfield Hills (by Joseph A. Starr ) for Michael Morse and Michael J Morse, PC.
McClelland & Anderson, LLP, Lansing (by Melissa A. Hagen ) for Home Builders Association of Michigan, amicus curiae.
Linderman Law PLLC, Ann Arbor (by Marla A. Linderman ) for Michigan Association for Justice, amicus curiae.
BEFORE THE ENTIRE BENCH (except Welch, J.)
In these cases, the Court must determine whether plaintiffs’ claims fall within the scope of arbitration agreements limited to matters that are "relative to" plaintiffs’ employment. Whether plaintiffs’ allegations of sexual assault, and the multiple claims stemming from those allegations, are relative to plaintiffs’ employment is resolved by asking whether the claims can be maintained without reference to the contract or relationship at issue. Because the lower courts did not have the benefit of this framing, we vacate the decision of the Court of Appeals and remand these cases to the circuit courts for reconsideration of whether plaintiffs’ claims are subject to arbitration. Because plaintiffs also did not have the benefit of this framing when filing their claims, plaintiffs may seek to amend their complaints before the circuit courts make this determination.
Plaintiffs Samantha Lichon and Jordan Smits both worked for defendant Michael J. Morse, PC, doing business as the Mike Morse Law Firm (the Morse firm). Upon their hire, each plaintiff signed the Morse firm's "Mandatory Dispute Resolution Procedure" agreement (MDRPA). Defendant Michael Morse was the sole shareholder of the firm and exercised significant control over its operations, serving as its president, secretary, treasurer, and director. Both plaintiffs sued Morse and the Morse firm, alleging that Morse sexually assaulted them.
Lichon started working at the Morse firm as a receptionist in September 2015. Lichon alleges that "[t]hroughout the course of her employment," she was "continuously and periodically sexually harassed" by Morse. Morse "sexually assaulted" her "when he groped her breasts without invitation, permission, or inducement on multiple occasions." Morse "touched his groin to her rear while audibly stating sexual comments, including but not limited to, ‘you make me so hard’ and ‘I want to take you into my office,’ " on multiple occasions, without invitation, permission, or inducement. Lichon complained to her superiors at the Morse firm and to the human resources department, but no action was taken, and the sexual harassment and sexual assaults continued. On March 29, 2017, Lichon was placed on "Final Warning Status" for poor performance, and she was fired on April 7, 2017. On May 15, 2017, Lichon was contacted by Derek Brackon, an attorney at the Morse firm, who asked Lichon if she was going to sue Morse and "pressured and/or coerced and/or intimidated and/or attempted to persuade" her not to take any action against Morse or the Morse firm.
Lichon filed suit against both defendants alleging workplace sexual harassment in violation of the Elliott-Larsen Civil Rights Act (ELCRA), MCL 37.2101 et seq. ; negligent and intentional infliction of emotional distress; and negligence, gross negligence, and wanton and willful misconduct. She also alleged sexual assault against Morse. Lichon filed an amended complaint adding an allegation of civil conspiracy based on defendants’ efforts to intimidate her to not file a lawsuit.
In lieu of filing an answer, defendants moved to dismiss and compel arbitration under MCR 2.116(C)(7), arguing that the MDRPA required Lichon to arbitrate her claims. Lichon responded that the MDRPA's scope was limited to matters which "arise out of her employment," and because her claims were related to the sexual assault they did not "arise out of her employment" at the Morse firm. She also argued that the MDRPA was unenforceable as a matter of law because it is unconscionable, illusory, and contrary to public policy. The trial court granted defendants’ motion, finding that the MDRPA was "a valid and enforceable arbitration agreement" and that Lichon's claims were "inextricably intertwined and therefore all f[e]ll within the arbitration agreement and the workplace policies." Lichon appealed in the Court of Appeals.
Smits worked at the Morse firm as a paralegal, and in December 2015, she attended an office Christmas party. She alleged that Morse sexually assaulted her at the party. Morse approached her from behind and grabbed her breasts. She immediately grabbed his arms and yanked them away from her. Multiple guests witnessed the assault. When Smits reported the assault to the firm's human resources department, the firm's representative told Smits that the "number one priority [was] to protect Morse's reputation." When Smits expressed her concerns to an attorney employed at the Morse firm who witnessed the assault, he said, "[W]hat was I supposed to do, you know how Michael is." Smits resigned by e-mail in February 2016. She was offered two weeks of severance pay if she would sign a nondisclosure agreement, but she declined. An employee of the Morse firm warned her to be careful because Morse "knows a lot of people in the legal community," and he "could make it difficult for [Smits] to get a job."
Smits first filed suit on May 30, 2017. She alleged workplace sexual harassment in violation of the ELCRA; negligent and intentional infliction of emotional distress; and negligence, gross negligence, and wanton and willful misconduct against both defendants. Smits also alleged sexual assault against Morse. In lieu of an answer, defendants moved to dismiss and compel arbitration under MCR 2.116(C)(7).1 Like Lichon, Smits argued that her claims of sexual assault were not related to her employment, so they were not governed by the MDRPA. She also argued that the arbitration provision was unenforceable because it is procedurally and substantively unconscionable and illusory, that defendants forfeited enforcement of the MDRPA by failing to adhere to its process, and finally, that Morse could not invoke the MDRPA because he is not a party to the agreement. The trial court granted defendants’ motion, finding that the MDRPA is "a valid and enforceable agreement, supported by consideration and mutuality of obligation," and that Smits's claims were related to her employment and therefore subject to arbitration. Smits appealed in the Court of Appeals.
On July 25, 2017, Smits filed a second complaint against only Morse, alleging sexual assault and battery; negligent and intentional infliction of emotional distress; and negligence, gross negligence, and willful and wanton misconduct. The trial court granted a motion to dismiss under MCR 2.116(C)(7), concluding that the action was precluded by res judicata and compulsory joinder. Smits appealed in the Court of Appeals.
Before discussing the Court of Appeals’ analysis, it's important to set out the relevant texts. The MDRPA signed by both plaintiffs states in pertinent part:
The Court of Appeals summarized the process required by the MDRPA:
[F]irst, within one year an employee must file with a direct supervisor a "request for review of your concern stating your disagreement or concern and the action you request the Firm to take." The supervisor will date the request, provide the employee with a copy, and then "generally schedule a meeting with [the employee] to hear [the employee's] concerns and will provide [the employee] with a written decision within" 15 business days. Second, if the dispute is not resolved to the employee's satisfaction, a written request for review must be filed directly with Morse within 15 days. Morse, or his...
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...933 N.W.2d 506. Additionally, the Supreme Court of Michigan vacated the Court of Appeals’ decision in Lichon . Lichon v. Morse , 507 Mich. 424, 446–447 (IV), 968 N.W.2d 461 (2021). The plaintiffs have pointed to no Georgia cases finding any category of arbitration agreements void as against......
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