Phillips v. Cigna Investments, Inc.

• Decision Date: 23 November 1998
• Docket Number: No. 3:98CV1173 (GLG).,3:98CV1173 (GLG).
• Citation: 27 F.Supp.2d 345
• Parties: Myrna PHILLIPS, Plaintiff, v. CIGNA INVESTMENTS, INC., and Cigna Corporation, Defendants.
• Court: U.S. District Court — District of Connecticut

27 F.Supp.2d 345

Myrna PHILLIPS, Plaintiff, v. CIGNA INVESTMENTS, INC., and Cigna Corporation, Defendants.

No. 3:98CV1173 (GLG).

United States District Court, D. Connecticut.

November 23, 1998.

Johnathan B. Orleans, Zeldes, Needle & Cooper, Bridgeport, CT, Jeffrey L. Liddle, Allan S. Bloom, Liddle & Robinson, New York City, for Plaintiff.

Kimberly A. Mango, Shipman & Goodwin, LLP, Hartford, CT, for Defendants.

OPINION

GOETTEL, District Judge.

The defendants CIGNA Investments, Inc., and CIGNA Corporation (collectively "CIGNA") have moved this Court, pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq., to compel arbitration of plaintiff Myrna Phillips' employment discrimination claims based upon CIGNA's internal arbitration policy. The plaintiff has objected to arbitration, claiming that she never agreed to this arbitration policy, which was unilaterally implemented by CIGNA after she had commenced her employment with CIGNA. Alternatively, she asserts that this arbitration policy is unenforceable insofar as it requires all Title VII claimants to submit their claims to mandatory arbitration, in derogation of their statutory right to litigate their claims in federal court.

In her complaint, the plaintiff has alleged statutory claims for race discrimination under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., the Civil Rights Act of 1866, 42 U.S.C. § 1981, the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 ("ERISA"), and the Connecticut Wage Law, C.G.S.A. § 31-71a et seq., and state common-law causes of action for breach of implied contract, quantum meruit, and breach of the covenant of good faith and fair dealing. For purposes of this motion, the specifics of her claims are unimportant. Thus, we include only the facts relevant to the issue of arbitration.

BACKGROUND FACTS

The plaintiff is an African-American female, who was an employee-at-will with CIGNA Investments, Inc., a subsidiary of CIGNA Corporation, from May, 1995, through January, 1998. The plaintiff's position was Vice President, Fixed Income Research Analyst, in CIGNA's Bloomfield, Connecticut office.

The plaintiff alleges that, beginning in May, 1997, two of her supervisors embarked on a campaign to interfere with and undermine her success and performance as an employee. She protested this treatment to the Human Resources Department but, nevertheless, was placed on a sixty-day timetable to improve her performance. Following this sixty-day period, notwithstanding what the plaintiff describes as her "positive performance," CIGNA presented her with "the Hobson's choice" of being placed on two months' probation or resigning immediately. She was further warned that, if she chose to remain in CIGNA's employ, she would be fired immediately if she was not, based upon CIGNA's unilateral determination, meeting the terms of her probationary period. On November 21, 1997, the plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"). On January 9, 1998, CIGNA terminated her employment. After receiving a right-to-sue letter from the EEOC, the plaintiff commenced this action.

CIGNA's Arbitration Policy

During the course of the plaintiff's employment, CIGNA sent out two general distributions to all employees regarding CIGNA's new "Employment Dispute Arbitration Policy." The first memorandum was dated August 3, 1995, and was addressed to "All CIGNA Investment Management Employees." It advised that, effective September 1, 1995, the policy of CIGNA's Investment Management Division will be that any employee with an employment-related disagreement or problem, who is dissatisfied with the results of the internal portion of the Employment Dispute Resolution Program and who wishes to pursue the matter, must process the dispute in accordance with the mediation/arbitration policy, which was attached to the memorandum. On September 11, 1996, a second interoffice memo was sent to "All CIM Employees" regarding "Positive Workplace Initiatives." The memorandum mentioned the arbitration policy that had been adopted in 1995 and stated that "an updated copy" of the Arbitration Policy was attached for the employees' information.

The updated arbitration policy provides in relevant part:

A. STATEMENT OF POLICY

In the interest of fairly and quickly resolving employment-related disagreements and problems, and applying the important public policies expressed in the Federal Arbitration Act, 9 U.S.C. § 1 et seq., CIGNA Investment Management Division's policy is that arbitration by a neutral third-party is the required and final means for the resolution of any serious disagreements and problems not resolved by the Division's internal dispute resolution processes. Both the Division and the employee will be bound by any decision made by a neutral arbitrator. If the employee or the Division do not abide by the arbitrator's decision, either party may go to court to enforce the arbitrator's decision, but arbitration must be used before going to court. This policy is intended to prevent an employee from going to court over employment related disputes, it is not intended to take away any other rights.

. . . . .

This policy is part of the employment relationship between an employee and CIGNA Investment Management Division. It is not, however, a guarantee that employment will continue for any specified period of time or end only under certain conditions.

Nothing contained in this policy limits in any way an employee's right to resign from employment with any CIGNA company at any time for any reason or any CIGNA company's right to terminate employment at any time for any reason.

B. SCOPE OF THE ARBITRATION PROCEDURE

This policy covers only serious employment-related disagreements and problems, which are those that concern a right, privilege or interest recognized by applicable law. Such serious disputes include claims, demands or actions under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Civil Rights Act of 1991, the Equal Pay Act, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of 1974, the Fair Labor Standards Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act, the Family and Medical Leave Act, and any other federal, state or local statute, regulation or common law doctrine, regarding employment discrimination, conditions of employment or termination of employment. This policy is intended to substitute final and binding arbitration, which is quick, inexpensive and fair, for going to court, which is slow and expensive.

. . . . .

This policy does not require that CIGNA Investment Management Division start the arbitration process before taking disciplinary action of any kind, including termination. This policy does, however, require that an employee who disagrees with any disciplinary action or other adverse employment decision, demand arbitration in accordance with the Division's Arbitration Rules and Procedures rather than go to court, if the matter has not been resolved under the Division's internal dispute resolution process.

(Underlining in original).

CIGNA also states that a copy of the policy was hand-delivered to each employee's individual office, and, on August 8, 1996, the arbitration policy was posted on eleven bulletin boards located in the common areas of the building in which the plaintiff worked. The former Director of CIGNA's Human Resources Department has also testified that he personally discussed the arbitration policy with the plaintiff. The plaintiff concedes that she was aware of this policy. However, she maintains that she never agreed to be bound by it and that she never signed any writing containing the arbitration policy nor did she even acknowledge receipt of it. CIGNA does not dispute the fact that she never agreed in writing to be bound by this policy.

DISCUSSION

The Federal Arbitration Act

The Federal Arbitration Act ("FAA") provides in relevant part that "[a] written provision in ... a contract evidencing a transaction involving commerce¹ to settle by arbitration a controversy thereafter arising out of such contract ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. The FAA reflects a strong federal policy favoring arbitration as an alternative dispute resolution mechanism to the complications of litigation. Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); Wilko v. Swan, 346 U.S. 427, 431, 74 S.Ct. 182, 98 L.Ed. 168 (1953); Doctor's Associates, Inc. v. Stuart, 85 F.3d 975, 981 (2d Cir.1996). Any doubts regarding the scope of arbitrable issues should be resolved in favor of arbitration. Moses H. Cone, 460 U.S. at 24-25, 103 S.Ct. 927.

Section 4 of the FAA directs a federal court to compel arbitration if there has been a "failure, neglect, or refusal" of any party to honor the agreement to arbitrate, 9 U.S.C. § 4, and section 3 provides for a stay of a suit or proceedings where the court is satisfied that the issue before it is "referable to arbitration under an agreement in writing." 9 U.S.C. § 3.

In interpreting the FAA, the courts have made clear that "the ancient judicial hostility to arbitration is a thing of the past." Halligan v. Piper Jaffray, Inc., 148 F.3d 197, 200 (2d Cir.1998) (citations omitted). The FAA "leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." WorldCrisa Corp. v. Armstrong, 129 F.3d 71, 74 (2d Cir.1997) (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985)) (emphasis in original). However, as the Second Circuit recently noted, despite this...