Tinder v. Pinkerton Security

Decision Date17 September 2002
Docket NumberNo. 01-3876.,01-3876.
Citation305 F.3d 728
PartiesIlah M. TINDER, Plaintiff-Appellant, v. PINKERTON SECURITY, Defendant-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

Paul A. Kinne (argued), Gingras, Cates & Luebke, Madison, WI, for plaintiff-appellant.

Amy O. Bruchs (argued), Michael, Best & Friedrich, Madison, WI, for defendant-appellee.

BEFORE: MANION, ROVNER, and WILLIAMS, Circuit Judges.

MANION, Circuit Judge.

The principal issue presented in this appeal is what constitutes sufficient consideration to support an agreement in Wisconsin to arbitrate between an employer and an at-will employee. The appellant, Ilah M. Tinder, sued her former employer, Pinkerton Security, for employment discrimination and retaliation under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. Citing what it claimed was an enforceable agreement to arbitrate the dispute, Pinkerton moved the district court under the Federal Arbitration Act ("FAA") to stay the trial proceedings and compel Tinder to arbitrate her dispute. The district court granted the motion, concluding that the agreement was enforceable. Later, after Pinkerton prevailed at arbitration, the district court confirmed the arbitrator's award in favor of Pinkerton, and Tinder appeals. Because the district court correctly concluded that the agreement was enforceable under Wisconsin law and compelled arbitration, we affirm.

I.

Tinder began employment with Pinkerton on October 21, 1996, and was assigned to work as a security officer at a General Motors facility in Janesville, Wisconsin. The following day, Tinder received a copy of Pinkerton's employee handbook and signed an "Employee Acknowledgment Form." The first paragraph made clear that the form was a contract for employment at-will:

My employment by Pinkerton is strictly an employment at will terminable by either Pinkerton or myself at any time, in either party's sole discretion, without advance notice. No Pinkerton representative has authority to modify this policy. I understand that at no time may I rely on any policies, procedures, customs and/or statements, whether written or oral, to constitute a modification of this express condition of my employment.

The form further provided that the handbook was not to be construed as a supplement to or modification of the employment contract, and that Pinkerton reserved "the right to change its policies, rules `at-will' employment policy as stated in Paragraph 1." When notifying its employees of policy or rule changes, Pinkerton typically inserts a "payroll stuffer" in the envelope with each employee's paycheck. Occasionally, notices of policy or rule changes are accompanied by acknowledgment forms that employees were required to sign and return to management.

In October 1997, Pinkerton issued to all of its employees as a payroll stuffer a color brochure entitled "Pinkerton's Arbitration Program." The brochure announced that Pinkerton was instituting a mandatory arbitration program effective January 1, 1998, broadly covering all legal claims including discrimination under the federal civil rights statutes:

Any claims or controversies ... either Pinkerton may have against you or you may have against the Company or against its officers, directors, employees, or agents in their capacity as such, must be resolved by arbitration instead of the courts, whether or not such claims arise out of your employment (or its termination). The claims covered include, but are not limited to, ... discrimination (including, but not limited to, race, sex, religion, national origin, age, marital status, or medical condition, handicap, or disability); ... and claims for violation of any federal, state or other governmental law, statute, regulation, or ordinance....

This language was clarified elsewhere in the brochure using a question-and-answer format. The brochure emphasized that the arbitration agreement would not bar employees from bringing legal claims, and that both the employees and the company were bound by the policy:

Q. Do I lose any substantive rights under this program?

A. No, your substantive legal rights remain intact. All that changes is that an arbitrator, rather than a judge or jury, will resolve the disputes.

* * * * * *

Q. Is Pinkerton bound by these arbitration provisions?

A. Absolutely. Effective January 1, 1998, Pinkerton will be a binding arbitration company. This means that if Pinkerton has any claims against its employees, or ex-employees, it must also use binding arbitration under the same terms and conditions in Section II of this brochure.

The brochure stated that arbitrators would apply the same legal rules and would be authorized to award the same remedies as any court. Although the program provided that the company and the employee would split the arbitrator's fee, Pinkerton agreed to reimburse prevailing employees for their portion of the fee, or pay the entire fee if the law of the forum prohibited splitting the fee. The brochure also suggested that opting out of the program was not possible if the employee wished to remain on the job past the effective date of the policy:

Q. What if I do not want to be covered by this binding arbitration program?

A. Effective January 1, 1998, all employees, including the CEO, are covered by the program. By remaining employed at Pinkerton through the effective date, you are agreeing to be covered by the program and you waive your right to a court trial.

Near the end of the brochure, in a section captioned "Consideration," was a paragraph restating this answer in more traditional contract language, and providing that the mutual promises by Pinkerton and its employees to submit their claims to arbitration rather than litigation "provide consideration for each other. By remaining employed with Pinkerton through January 1, 1998, you are agreeing to waive your right to have a claim against the Company heard in a court of law." The brochure was not accompanied by an acknowledgment form. As was stated in the brochure, Pinkerton implemented the arbitration program in January 1998.

Tinder did not recall receiving or seeing the arbitration brochure. Pinkerton produced two affidavits stating that Tinder received the brochure, however. The first affidavit, from Director of Employee Relations Kathy Rasmussen, asserted that Pinkerton's central office distributed copies of the brochure to each of its district offices with instructions to insert it as a payroll stuffer in the envelope along with each employee's paycheck. According to Rasmussen, Pinkerton sent a memorandum to its district office managers along with the brochures emphasizing the importance of the program and the need to promptly distribute the brochures. Rasmussen went on to aver that Pinkerton's legal department later issued a second memorandum confirming that the brochure had been distributed to all district offices. In the second affidavit, Mark Cruciani, manager of Pinkerton's district office in Milwaukee, asserted that Tinder was paid through his office; that his office distributed the brochure to all of its employees along with their paychecks on the payday following the date Pinkerton instructed its district offices to circulate the brochure; and that Tinder received her salary by check, not by direct deposit into a bank account.

In May 1998, Pinkerton undertook an internal campaign to remind its employees that the arbitration policy had been implemented. First, Pinkerton featured the program on the cover of the May 1998 issue of its internal monthly magazine, Excellence in Service. The cover story was a one-page article summarizing the reasons why Pinkerton instituted the policy, and reminding employees that the policy was in effect and applied to all employees who continued to work for or joined Pinkerton after January 1, 1998. Pinkerton also distributed a poster for display in all work sites that declared "Arbitration: It's fair, it's convenient, and it's policy." Finally, Pinkerton distributed a payroll stuffer to all of its employees entitled "Settling Disputes Through Arbitration." The stuffer reiterated the terms of the original brochure announcing the program.

In fall 1998, Tinder verbally complained to her supervisor, Bradley Bastain, that she believed she was the victim of gender discrimination on the job. Tinder complained that, unlike her male co-workers, she was required to work overtime, was not promptly paid for her work, and was not reimbursed for her purchase of boots for her uniform. Instead of taking action to remedy Tinder's complaints, Bastain admonished Tinder that he was tired of hearing her "continual complaints to upper management." In November 1998, Bastain informed Tinder that he was removing her from her assigned post, and warned her that her work hours would be reduced if she continued to complain about her work environment. Tinder alleged that after this, Bastain reduced her pay and refused to accommodate her request to take Sundays off so she could attend religious services. She interpreted these actions as retaliation for complaining about discrimination. Shortly after these events, Tinder quit.

Claiming constructive discharge and retaliation in violation of Title VII, Tinder filed charges with the United States Equal Employment Opportunity Commission, received a right-to-sue letter, and timely filed this lawsuit in March 2000. Pinkerton immediately moved to stay proceedings and compel arbitration, asserting that Tinder had agreed by way of a written agreement to arbitrate her claims, and that the agreement constituted an enforceable contract. Tinder denied that the policy was enforceable, arguing that there was no consideration for any agreement by her to forego suing, and that she was unaware of the existence of the policy. The district court agreed with Pinkerton, however, granted the motion to stay, and ordered the parties to...

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