Melena v. Anheuser-Busch, Inc.

• Decision Date: 22 September 2004
• Docket Number: No. 5-03-0805.,5-03-0805.
• Citation: 352 Ill. App.3d 699,816 N.E.2d 826,287 Ill.Dec. 859
• Court: United States Appellate Court of Illinois
• Parties: Joann MELENA, Plaintiff-Appellee, v. ANHEUSER-BUSCH, INC., Defendant-Appellant.

816 N.E.2d 826

352 Ill. App.3d 699

287 Ill.Dec. 859

Joann MELENA, Plaintiff-Appellee, v. ANHEUSER-BUSCH, INC., Defendant-Appellant.

No. 5-03-0805.

Appellate Court of Illinois, Fifth District.

September 22, 2004.

Lisa K. Franke, Dede K. Zupanci, Burroughs, Hepler, Broom, MacDonald, Hebrank & True, LLP, Edwardsville, for Appellant.

Gary L. Bement, Bement & Stubblefield, P.C., Belleville, for Appellee.

Presiding Justice CHAPMAN delivered the opinion of the court:

In May 2003, the plaintiff, JoAnn Melena, filed a complaint, alleging that her employer, the defendant, Anheuser-Busch, Inc., had terminated her employment in retaliation for a claim she had filed pursuant to the Workers' Compensation Act (820 ILCS 305/1 et seq. (West 2002)). The defendant appeals an order denying its motion to dismiss her claim and compel arbitration or, in the alternative, to stay the proceedings and compel arbitration. We find that the arbitration agreement violates the public policy of this state by purporting to remove a retaliatory discharge claim from judicial consideration without the employee's knowing and voluntary consent. We therefore affirm the trial court's order and remand for further proceedings.

In February 1999, the plaintiff began working for the defendant as a nonunion hourly employee in its promotional products group distribution center in Mt. Vernon, Illinois. The defendant subsequently instituted a new dispute resolution policy, which included an arbitration provision. In February 2000, the defendant mailed materials to employees, including the plaintiff, informing them of the new policy. A representative of the defendant's human resources department gave a presentation at the promotional products group distribution center, and posters explaining the program were displayed in the building. Employee handbooks including the dispute resolution program were not distributed until April 2001, however. On April 27, 2001, the plaintiff signed an acknowledgment form included in the April 2001 employee handbook.

On September 11, 2002, the plaintiff suffered a work-related injury. On that date or shortly thereafter, she filed a claim for workers' compensation with the Illinois Industrial Commission and began receiving temporary total disability benefits. On March 23, 2003, while the plaintiff was receiving temporary total disability benefits, the defendant terminated her employment.

On May 8, 2003, the plaintiff filed the instant complaint, alleging retaliatory discharge. See 820 ILCS 305/4(h) (West 2002). On June 27, 2003, the defendant filed a motion to dismiss and compel arbitration or, in the alternative, to stay the proceedings and compel arbitration. On November 24, 2003, the court heard arguments on the motion, which it denied by a docket entry the following day. On December 18, 2003, the court entered a written order summarily denying the defendant's motion. On December 23, 2003, the defendant filed a notice of interlocutory appeal pursuant to Illinois Supreme Court Rule 307(a)(1) (188 Ill.2d R. 307(a)(1)).

The defendant contends that the only issue before this court is whether there was an agreement to arbitrate and whether the parties' dispute falls within the scope of that arbitration agreement. See Travis v. American Manufacturers Mutual Insurance Co., 335 Ill.App.3d 1171, 1175, 270 Ill.Dec. 128, 782 N.E.2d 322, 325 (2002). The plaintiff, however, argues that the agreement was unenforceable because (1) agreements to arbitrate claims for retaliatory discharge violate Illinois public policy (see Midgett v. Sackett-Chicago, Inc., 105 Ill.2d 143, 150-51, 85 Ill.Dec. 475, 473 N.E.2d 1280, 1284 (1984)), (2) the employee handbook containing the defendant's dispute resolution policy expressly stated that it was not a contract, and (3) the agreement was not supported by consideration because the plaintiff had already worked for the defendant for more than a year when the dispute resolution policy went into effect.

The defendant urges us to disregard the plaintiff's arguments because she did not raise them before the trial court. The record on appeal does not contain either a transcript of the hearing on the defendant's motion to dismiss or a by-stander's report of those proceedings, which the defendant had the option of including pursuant to Illinois Supreme Court Rule 323(c) (166 Ill.2d R. 323(c)). Thus, we do not know what arguments were made to the trial court or what the judge considered in ruling on the motion. However, we may affirm the trial court on any basis appearing in the record. In re Marriage of T.H., 255 Ill.App.3d 247, 259, 193 Ill.Dec. 370, 626 N.E.2d 403, 411 (1993). The record in this case supports the trial court's decision.

Midgett, cited by the plaintiff, was a consolidated appeal involving employees covered by collective bargaining agreements containing arbitration clauses. The defendant employers argued that the statutory remedy for retaliatory discharge applied only to at-will employees who otherwise would have no redress because they did not have grievance procedures under a collective bargaining agreement to protect them. Thus, the employers contended, their discharged employees were limited to the grievance procedures available under their respective collective bargaining agreements. Midgett, 105 Ill.2d at 149, 85 Ill.Dec. 475, 473 N.E.2d at 1283. In rejecting this contention, the Illinois Supreme Court emphasized the importance of Illinois's strong public policy interest in protecting the rights afforded employees by the Workers' Compensation Act by deterring retaliatory discharges. Midgett, 105 Ill.2d at 150, 85 Ill.Dec. 475, 473 N.E.2d at 1284. More than "`purely private interests'" are at stake in cases involving those claims. Midgett, 105 Ill.2d at 151, 85 Ill.Dec. 475, 473 N.E.2d at 1284 (quoting Midgett v. Sackett-Chicago, Inc., 118 Ill.App.3d 7, 9, 73 Ill.Dec. 843, 454 N.E.2d 1092, 1094 (1983)). The court pointed out that under the collective bargaining agreements at issue there, the remedies available to the employees would be limited to reinstatement and back pay. Midgett, 105 Ill.2d at 150, 85 Ill.Dec. 475, 473 N.E.2d at 1284. The court then explained, "If there is no possibility that an employer can be liable in punitive damages, not only has the employee been afforded an incomplete remedy, but there is no available sanction against a violator of an important public policy of this State." Midgett, 105 Ill.2d at 150, 85 Ill.Dec. 475, 473 N.E.2d at 1284.

The defendant employers in Midgett argued, much as the defendant does here, that a federal policy favoring arbitration as a means of resolving labor disputes required the court to find that the grievance procedure was the exclusive means of redressing the employees' retaliatory discharge claims. Midgett, 105 Ill.2d at 151,85 Ill.Dec. 475,473 N.E.2d at 1284. The court rejected this argument, noting that the United States Supreme Court had repeatedly ruled that union members were not bound by the arbitration provisions in their collective bargaining agreements when their claims were based on allegations of statutory violations by their employers. Midgett, 105 Ill.2d at 151-52,85 Ill.Dec. 475,473 N.E.2d at 1284 (citing McDonald v. City of West Branch, 466 U.S. 284, 104 S.Ct. 1799, 80 L.Ed.2d 302 (1984),Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981), and Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974)).

The primary concern raised by the Midgett court is not implicated here. The defendant's dispute resolution policy expressly authorizes the arbitrator to award any remedy that would be available in a court of law. Presumably, that would include punitive damages. This leaves us to consider whether the strong public policy in favor of enforcing retaliatory discharge claims under the Workers' Compensation Act, standing alone, is sufficient grounds to find the arbitration agreement at issue unenforceable, at least under the circumstances presented.

The Midgett court, as noted, pointed to federal cases holding that a federal policy favoring arbitration in labor disputes was outweighed by the federal policy in favor of the judicial enforcement of statutory rights. At the time Midgett was decided, courts were reluctant to extend this favor for arbitration beyond the collective bargaining context to nonunion employment settings. See Cole v. Burns International Security Services, 105 F.3d 1465, 1475 (D.C.Cir.1997). Although all the cases cited by the Midgett court are still good law, the notion that statutory rights cannot be arbitrated because arbitration is an inadequate forum for their vindication has, to a great extent, been eroded by the more favorable view of arbitration that has evolved under more recent cases. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 34 n. 5, 111 S.Ct. 1647, 1656 n. 5, 114 L.Ed.2d 26, 42 n. 5 (1991) (citing Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 231-32, 107 S.Ct. 2332, 2340, 96 L.Ed.2d 185, 197 (1987), and Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626-27, 105 S.Ct. 3346, 3354, 87 L.Ed.2d 444, 455 (1985)). Like federal courts, the courts of Illinois have a strong policy favoring the enforcement of arbitration agreements. See Acme-Wiley Holdings, Inc. v. Buck, 343 Ill.App.3d 1098, 1103, 278 Ill.Dec. 619, 799 N.E.2d 337, 341 (2003). We must therefore determine whether, in light of this shift, the Illinois Supreme Court's holding in Midgett precludes the enforcement of the arbitration agreement under the circumstances presented. Because no Illinois courts have addressed the precise issue with which we are faced, we look to federal decisions for guidance. Our review of relevant federal cases demonstrates that courts have continued to weigh the competing policies of providing a public forum to enforce statutory rights and enforcing arbitration agreements in...