May v. Higbee Co.

• Decision Date: 08 June 2004
• Docket Number: No. 03-60759.,03-60759.
• Citation: 372 F.3d 757
• Parties: Amanda S. MAY, Plaintiff-Appellee, v. HIGBEE COMPANY, doing business as Dillard's; William Carr, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

372 F.3d 757

Amanda S. MAY, Plaintiff-Appellee, v. HIGBEE COMPANY, doing business as Dillard's; William Carr, Defendants-Appellants.

No. 03-60759.

United States Court of Appeals, Fifth Circuit.

June 8, 2004.

Pieter Teeuwissen (argued), Dale Danks, Jr. (argued), Danks, Simon & Teeuwissen, Jackson, MS, for Plaintiff-Appellee.

Jacqueline Marie Stroh (argued), Crofts & Callaway, San Antonio, TX, Louis Hanner Watson, Jr., Watson & Heidelberg, Jackson, MS, for Defendants-Appellants.

Appeal from the United States District Court for the Southern District of Mississippi.

Before KING, Chief Judge, and REAVLEY and EMILIO M. GARZA, Circuit Judges.

KING, Chief Judge:

Plaintiff Amanda May sued her employer Higbee Co. (d/b/a Dillard's) and a supervisor for employment discrimination under Title VII. The defendants moved to compel arbitration and to stay the judicial proceedings. The district court denied the motion, ruling that May had not assented to her employer's arbitration program. Concluding that the district court should have ordered arbitration pursuant to the parties' binding agreement, we reverse.

I. FACTUAL AND PROCEDURAL BACKGROUND

May began working at a Dillard's department store in June 1990, and she later rose to become the sales manager of the store's men's department. May alleges that she was qualified to be promoted to higher managerial positions but was repeatedly passed over in favor of male employees. The particular employment action that precipitated this lawsuit occurred in March 2002, when May was denied a promotion to the position of assistant store manager. According to May, her supervisor, William Carr, refused to promote May into higher-level management positions because she was a woman and a mother. May filed suit in the district court in June 2002, claiming that Dillard's and Carr had discriminated against her on the basis of her sex in violation of Title VII, 42 U.S.C. § 2000e et seq. (2000).

The defendants later filed a motion to compel arbitration and to stay the judicial proceedings. The motion was based on the fact that, in June 2001, the company had instituted a compulsory arbitration program for most employment-related disputes. May admits to receiving two documents relating to the arbitration program. One document, titled "Rules of Arbitration" (the "Rules"), states that both the company and the employee "agree that the procedures provided in these Rules will be the sole method used to resolve any covered dispute arising between them." The Rules go on to list employment discrimination claims as among the covered disputes. Although the Rules state that they apply to disputes that arise between employees and "the Company," the last page of the document defines "the Company" broadly, so that the term includes the corporate entity and its managers and employees, such as Carr.

The second document that May received was a one-page form titled "Acknowledgment of Receipt of Rules for Arbitration" (the "Acknowledgment Form"). The Acknowledgment Form included the following language in readily legible type:

Effective immediately, all employees ... shall be subject to the RULES OF ARBITRATION (the "Rules") described below. Employees are deemed to have agreed to the provisions of the Rules by virtue of accepting employment with the Company and/or continuing employment therewith.

Below this paragraph, and immediately above the signature line, was text stating that "I acknowledge receipt of the agreement to arbitrate certain claims and rules of arbitration." May admits that she signed such an Acknowledgment Form.¹ As a supervisory employee, May was also involved in distributing the documents to lower-level employees and in obtaining their signatures.

May filed a response to the defendants' motion, in which she claimed, inter alia, that she had not actually agreed to arbitrate but had instead only acknowledged that she had received certain documents. Her response further stated that Carr had told her that arbitration would be optional for employees like her and had also told her that the Acknowledgment Form only indicated that she had received the Rules, nothing more.

The district court denied the defendants' motion in a written opinion and order dated August 26, 2003. The court agreed with May that there was no binding agreement to arbitrate because May never assented to be bound by the company's arbitration procedures. While noting that parol evidence is generally inadmissible to vary the terms of a written contract, the district court concluded that parol evidence was allowable in this case because the acknowledgment form was ambiguous. The form was ambiguous, in the district court's view, because it was internally inconsistent: The title of the form and the text immediately above the signature line stated only that May acknowledged receiving the Rules, but the language in the body of the form (language that we quoted above) stated that May agreed to be bound by the Rules. To resolve the ambiguity regarding what May had agreed to, the district court looked to May's evidence about Carr's contemporaneous statements. Since the defendants had not denied May's account of Carr's statements, the district court credited May's evidence and concluded that May had not agreed to compulsory arbitration. The court further held that the defendants' motion to compel arbitration should be denied because an ambiguous agreement should be construed against its drafter, here Dillard's.

The defendants timely filed a notice of appeal and, on the same day, also filed a motion to certify the district court's decision for interlocutory appeal under 28 U.S.C. § 1292(b).² The district court denied the motion to certify an interlocutory appeal. The defendants have argued that the motion to certify was unnecessary and was undertaken only out of caution, since (according to the defendants) they can pursue an interlocutory appeal as of right under 9 U.S.C. § 16(a)(1).³ May has filed a motion to dismiss the appeal for want of appellate jurisdiction.⁴

II. APPELLATE JURISDICTION

Perhaps the most hotly contested issue in this case is the threshold question of whether we have jurisdiction to entertain this appeal. The defendants do not contend that the district court's decision to deny their arbitration motion is a decision that would ordinarily be appealable as a final order. The defendants do point out, however, that Congress has expressly authorized us to hear certain arbitration-related interlocutory appeals. The jurisdictional statute provides, in relevant part:

(a) An appeal may be taken from —

(1) an order —

(A) refusing a stay of any action under section 3 of this title,⁵

(B) denying a petition under section 4 of this title to order arbitration to proceed,⁶ . . .

(3) a final decision with respect to an arbitration that is subject to this title.

(b) Except as otherwise provided in section 1292(b) of title 28, an appeal may not be taken from an interlocutory order —

(1) granting a stay of any action under section 3 of this title;

(2) directing arbitration to proceed under section 4 of this title....

9 U.S.C. § 16 (2000) (emphasis added). Enacted in 1988, section 16 reinforces the congressional policy in favor of arbitration by making anti-arbitration decisions widely appealable even when interlocutory, but making pro-arbitration decisions generally not appealable unless final.⁷ See Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 86, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000); Forsythe Int'l, S.A. v. Gibbs Oil Co. of Tex., 915 F.2d 1017, 1020 (5th Cir.1990); 19 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE ¶ 201.31[3] (3d ed.2004).

The defendants moved the district court to compel arbitration and stay the judicial proceedings under 9 U.S.C. §§ 3 and 4, but the district court denied their motion. That denial is the type of decision for which § 16(a)(1) would appear to confer the right to bring an interlocutory appeal. But May contends that the district court's decision is not immediately appealable, via § 16(a)(1) or otherwise, and she cites in support of her view the recent decision of this court in Cerveceria Cuauhtemoc Moctezuma S.A. de C.V. v. Montana Beverage Co., 330 F.3d 284 (5th Cir.2003) (per curiam).

The parties in Cerveceria had entered into a distributorship agreement. The contract did not contain an arbitration clause, though it did incorporate by reference the entirety of the Texas Beer Industry Fair Dealing Law (BIFDL), TEX. ALCO. BEV.CODE ANN. §§ 102.71-.81 (Vernon 1995). One particular section of the BIFDL provides that certain disputes "may, at the option of either [party]" be submitted to an arbitration panel. A dispute led one of the parties to file suit in the district court, and in response the other party moved the district court to stay the proceedings and compel arbitration under 9 U.S.C. §§ 3 and 4. The district court refused, finding that there was no binding agreement to arbitrate. This court agreed that there was no binding agreement to arbitrate; the court concluded, moreover, that the absence of any such agreement deprived the court of appellate jurisdiction to entertain the interlocutory appeal. 330 F.3d at 287.

Cerveceria was an exceptional case. It appears that there is only one other published decision of this court that has dismissed an appeal of an anti-arbitration ruling for failure to satisfy the requisites of § 16(a)(1). That case was Adams v. Georgia Gulf Corp., 237 F.3d 538 (5th Cir.2001) (per curiam), in which a personal-injury plaintiff who was undisputedly not a signatory to any arbitration agreement sought a stay of litigation pursuant to 9 U.S.C. § 3, relying on an arbitration agreement entered into between the defendant and the defendant's insurer. The district court denied the plaintiff's request for a stay, and the plaintiff appealed. We held that § 3's mandatory stay was unavailable to the plaintiff, as he was plainly not a party to the...