St. Fleur v. Wpi Cable Systems/Mutron

• Decision Date: 04 January 2008
• Docket Number: SJC-09961.
• Citation: 450 Mass. 345,879 N.E.2d 27
• Parties: Olga ST. FLEUR v. WPI CABLE SYSTEMS/MUTRON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

879 N.E.2d 27

450 Mass. 345

Olga ST. FLEUR v. WPI CABLE SYSTEMS/MUTRON.

SJC-09961.

Supreme Judicial Court of Massachusetts, Middlesex.

Argued November 5, 2007.

Decided January 4, 2008.

Joseph F. Hardcastle, Boston, for the defendant.

Howard I. Wilgoren, Boston, for the plaintiff.

The following submitted briefs for amici curiae:

Beverly I. Ward, Boston, for Massachusetts Commission Against Discrimination.

Robert S. Mantell, Boston, & Patti A. Prunhuber, Northampton, for Massachusetts Employment Lawyers Association & another.

Ben Robbins, Boston, Martin J. Newhouse, & Jo Ann Shotwell Kaplan for New England Legal Foundation.

Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, COWIN, CORDY, & BOTSFORD, JJ.

SPINA, J.

WPI Cable Systems/Mutron (WPI) appeals pursuant to G.L. c. 251, § 18(a )(1), from the denial of its motion to dismiss the discrimination complaint of Olga St. Fleur, a former employee, and to compel arbitration of that complaint, where the subject matter of her complaint was covered expressly by an arbitration agreement. We transferred the case to this court on our own motion. We now vacate the order denying WPI's motion and remand this case to the Superior Court for a hearing to determine whether the parties entered into an agreement to arbitrate.

Background. In July, 2000, WPI hired St. Fleur to work at its assembly plant in Chelsea. In February, 2002, she was asked to sign a document under conditions that are hotly disputed.

St. Fleur presented an affidavit in which she asserts that the general manager of the WPI facility approached her in February, 2002.¹ He asked her, "Can you please sign this for me?" "What is this?" she replied. He answered, "It is nothing. It is just something if we have a disagreement by signing this it tells you that you agree to sit down and discuss it with us." The general manager gave her a single page to sign, and St. Fleur asked him where the rest of the document was. He said that the office manager was working on it, and he told St. Fleur, "Don't worry about it. I will put the paper you signed with the rest of the papers that [the office manager] is working on." He also told her, "The papers [the office manager] is working on say what I just told you," and "Everybody is getting the same thing and you have to sign it." The page that St. Fleur signed does not contain the word arbitration,² and the general manager did not tell her that she was signing an arbitration agreement.

WPI, on the other hand, presented an affidavit from Joseph Galli, St. Fleur's supervisor at the time, asserting that, in September, 2001, he delivered to St. Fleur the company's new arbitration policy, a memorandum explaining the new policy, and the arbitration agreement itself. Her supervisor also explained that St. Fleur should feel free to have a lawyer look at the agreement. WPI presented, in addition, an affidavit from Nicolletta Crowley, a WPI human resources administrator, asserting that most WPI employees signed the arbitration agreement in September, 2001. St. Fleur, however, did not. To employees who had not yet signed the arbitration agreement, WPI sent in February, 2002, a memorandum asking them either to sign the arbitration agreement or to confirm their refusal to sign the arbitration agreement. Two of St. Fleur's colleagues confirmed their refusal to sign, but St. Fleur chose to sign the arbitration agreement.

The arbitration agreement provides that the parties to the agreement waive all rights to a jury trial and agree to resolve through arbitration any claims against WPI arising out of the employee's employment with or termination from WPI.³ The agreement specifically states that the parties are to resolve through arbitration any claims of discrimination or harassment based on race, sex, or national origin.

In June, 2004, St. Fleur filed a complaint with the Massachusetts Commission Against Discrimination (MCAD) alleging that, on account of her race, sex, and national origin, she had suffered discrimination and harassment at WPI. Specifically, she claimed that she was subjected to "harassment, disparate terms and conditions of employment, a hostile work environment, and wrongful termination." MCAD dismissed her complaint for lack of probable cause.

Thereafter, St. Fleur filed her complaint in the Superior Court alleging claims of discrimination and harassment based on her race, sex, and national origin. WPI moved to dismiss the complaint and compel arbitration or, alternatively, to stay proceedings (WPI's motion) on the ground that St. Fleur had agreed to arbitrate her claims of employment discrimination and harassment. St. Fleur contends that the alleged arbitration agreement was unenforceable because her supervisor had induced her to sign the agreement by misrepresenting the nature and contents of the agreement.

After a nonevidentiary hearing on WPI's motion, a judge in the Superior Court denied the motion, apparently on the grounds that WPI bore the risk of St. Fleur's ignorance and that enforcement of the arbitration agreement would not have been "appropriate." At no time did the judge conduct an evidentiary hearing or trial to determine whether the parties entered into an agreement to arbitrate.

Discussion. WPI seeks to dismiss or stay St. Fleur's discrimination suit and compel arbitration under the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (2006) (Federal Act). St. Fleur, on the other hand, argues that she can avoid submitting her claims to arbitration because she fraudulently was induced to sign her arbitration agreement.

This dispute falls within the scope of the Federal Act because it centers on an agreement to arbitrate controversies arising from employment at WPI and because it is undisputed that WPI is involved in interstate commerce. See 9 U.S.C. §§ 1-2 (disputes involving interstate commerce fall within scope of Federal Arbitration Act); Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001). State courts have jurisdiction, concurrent with Federal courts, to enforce the Federal Act. Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).

The Federal Act, 9 U.S.C. § 2, provides in part:

"A written provision in ... a contract evidencing a transaction involving interstate commerce 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."

By enacting this statute, Congress intended to put arbitration agreements on "the same footing as other contracts." Scherk v. Alberto-Culver Co., 417 U.S. 506, 511, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974), quoting H.R.Rep. No. 96, 68th Cong., 1st Sess. 1, 2 (1924). That is, it sought "to overrule the judiciary's longstanding refusal to enforce agreements to arbitrate," Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 219-220, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985), and to prevent State courts from "singling out arbitration provisions for suspect status." Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996). "While the language [of the statute] might plausibly be read to support a broader construction, consideration of the legislative history reveals that what the Congress intended was merely to overrule by legislation long-standing judicial precedent, which declared agreements to submit judicable controversies to arbitration contrary to public policy ...." American Airlines, Inc. v. Louisville and Jefferson County Air Bd., 269 F.2d 811, 816 (6th Cir.1959). See Volt Info. Sciences, Inc. v. Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 477, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989). The Federal Act preempts State law only to the extent that it conflicts with the Federal Act. See id., quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941) (Federal Act preempts State law "to the extent that it stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress"); Societe Generale de Surveillance v. Raytheon European Mgt. & Sys. Co., 643 F.2d 863, 867 (1st Cir.1981) (Federal Act preempts "only that state law inconsistent with its express provisions").

Similar to the Federal Act, the Massachusetts Act "express[es] a strong public policy favoring arbitration." Home Gas Corp. of Mass., Inc. v. Walter's of Hadley, Inc., 403 Mass. 772, 774, 532 N.E.2d 681 (1989), quoting Danvers v. Wexler Constr. Co., 12 Mass.App.Ct. 160, 163, 422 N.E.2d 782 (1981). The Massachusetts Act, G.L. c. 251, § 1, provides in part:

"A written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties shall be valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract."

Both the Federal and State Acts deem arbitration agreements enforceable "save upon such grounds as exist at law or in equity for the revocation of any contract." Id. 9 U.S.C. § 2. That is, courts may apply generally applicable State-law contract defenses—such as fraud, duress, or unconscionability—to determine the validity of an arbitration agreement. Doctor's Assocs., Inc. v. Casarotto, supra at 687, 116 S.Ct. 1652 (Federal Act). Miller v. Cotter, 448 Mass. 671, 677, 863 N.E.2d 537 (2007) (Massachusetts Act). See Perry v. Thomas, 482 U.S. 483, 492 n. 9, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987).

St. Fleur alleges that she fraudulently was induced to sign the arbitration agreement. Because fraudulent inducement is a generally applicable State-law contract defense,⁴ a judge applies those State-law contract principles to determine whether it should invalidate the agreement. See Doctor's Assocs., Inc. v. Casarotto, supra; Perry v. Thomas, supra (Fede...