The Massachusetts Supreme Judicial Court recently heard arguments in a case involving the tension between an individual’s right to a jury trial in an employment bias case, and the strong public policy favoring enforcement of arbitration agreements.
In St. Fleur v. WPI Cable Systems/Mutron (SJC No. 09961), the court will decide if an employee waived her right to a jury trial by signing her employer’s arbitration agreement – even where she says she was only presented with the signature page and never saw the entire agreement.
“[B]efore [the employee] can be charged with reading the arbitration agreement, she must be provided with a copy of it,” wrote Howard I. Wilgoren of Boston, who represents the employee. “The undisputed fact that [she] did not know what the term arbitration meant until more than three years after she signed the one page document … negates any conclusion she knowingly and voluntarily waived her right to a jury trial.”
However, the employer’s Boston lawyer, Joseph F. Hardcastle, said that directly above her signature in bold capital letters was an acknowledgment she had carefully read the agreement, had entered into it voluntarily and had been given the opportunity to discuss it with counsel.
“The very reason that you put language like that in an agreement is to avoid situations like this where someone comes back and says they never read it,” he said. “As a matter of Massachusetts law, when you sign an acknowledgment, you can’t come back later and make that kind of argument.”
In an amicus brief filed by the New England Legal Foundation, Benjamin G. Robbins said the Federal Arbitration Act preempts an employee from raising a knowing-and-voluntary-waiver defense to avoid arbitration.
“Recognition of [the employee’s] defense would not only usurp Congress’s exclusive authority to limit the FAA’s scope but it would also threaten the enforceability of arbitration policies adopted by employers throughout the Commonwealth,” he wrote. “A decision in [her] favor would upset Massachusetts employers’ settled expectations under the FAA and expose their arbitration agreements to the kind of subjective challenge presented here. Any such sea change … must emanate from Congress and not from a state court.”

The new deal

The defendant, WPI Cable Systems/Mutron, operates an assembly plant in Chelsea, Mass. In 2000, WPUI hired the plaintiff, Olga St. Fleur, as an inspector.
In 2001, WPI’s office manager received instructions the company’s New Jersey-based headquarters that a new arbitration policy should be distributed to all employees. The arbitration agreement said certain employment discrimination claims must be resolved by arbitration including those involving “race, sex, sexual orientation, religion, national origin, age [or] marital status.”
While most employees immediately signed the agreement, St. Fleur did not. She reportedly told her supervisor that she wanted a chance to review it more thoroughly.
The company sent a memorandum to those employees who had not responded, asking them to sign and return the signature page of the arbitration agreement or send back a different form confirming their refusal to do so.
That same day, St. Fleur signed the page after it was delivered to her by a supervisor. Although the parties disagreed on whether she had been given a copy of the actual agreement detailing the arbitration provision, both sides agreed she had signed it.
St. Fleur claimed she never talked with any supervisor about the arbitration policy and had never been told she could consult with an attorney.
She said WPI’s general manager simply required her “to sign the one page document. … I was never told by any representative of [the company] that I could refuse to sign [it].”
When she asked what she was signing, St. Fleur claimed the general manager replied: “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.”
After questioning why she was only being given the one page to sign, St. Fleur said she was told “the office manager was working on [the rest of the document], don’t worry about.”
In May 2004, WPI fired St. Fleur. In response, she filed a complaint at the Massachusetts Commission Against Discrimination, alleging, in part, that she had been discriminated against based on gender, race and national origin.
She also claimed to have been retaliated against for engaging in activities protected under M.G.L. c.151B. When the MCAD dismissed her complaint based on a lack of probable cause, she filed suit in the Massachusetts Superior Court.
Seeking to enforce the new arbitration provision, WPI moved to dismiss.
After a hearing, Judge Leila R. Kern denied WPI’s motion to compel arbitration, finding that an employer bears the risk of an employee’s ignorance in the area of employment discrimination law. In response, WPI filed an interlocutory appeal.

Letter of the law

In seeking to reverse the lower court, Hardcastle said the terms of the written agreement clearly subjected the employee’s claims to mandatory arbitration, a position affirmed in Robbins’ amicus brief – one of three filed in the case.
“[The employee’s] proposed defense is not a recognized, generally applicable contract defense in Massachusetts and therefore contravenes … the FAA,” wrote Robbins. “Moreover, [the employee’s] proposed defense fails because it would burden arbitration agreements while not affecting other contract provisions.”
And with such an arbitration provision in place, Hardcastle noted that state and federal law reflected a strong preference in favor of enforcement.
In response to the employee’s argument that she felt she had no choice but to sign the signature page after a supervisor told her to do so, Hardcastle said in his brief that she “felt no such lack of choice when she refused to sign a warning notice given to her in connection with her chronic tardiness.”
He wrote: “As for cases involving claims, such as those asserted [here] … this Court has held that agreements to arbitrate such claims are to be enforced so long as the agreement minimally identifies such employment claims as within its scope, as [the employer] clearly has done in this case.”
While he asked the SJC to send the case directly to arbitration, Hardcastle said the parties should at least be required to conduct an evidentiary hearing on the discrepancies surrounding the signing of the agreement.
“If there is a factual dispute regarding the circumstances under which an agreement was entered into, one thing that may have to be decided is whether there needs to be a full blown evidentiary hearing on that issue,” he said. “That didn’t happen at the trial court level in this case, and it’s our position that, at a minimum, you need to at least have that hearing before you can send a case through the court system.”

False pretenses

But Wilgoren, who could not be reached for comment, countered in his brief that the employee “did nothing more than sign an ambiguous untitled one page document after obtaining a false description of the impact of the document from [her supervisor].”
Contrary to the employer’s claim, Wilgoren said his client first learned what arbitration entailed when she filed an affidavit in opposition to WPI’s motion to compel.
“Significantly, at the time she signed the paper [she] did not know what the word arbitration meant,” he wrote. “To the extent that [the employer] was attempting to bind [the employee] to an agreement to arbitrate, it should bear the risk of her ignorance.”
And where one of the claims was brought under Chapter 151B, Wilgoren cited to precedent from the 1st Circuit and the SJC that jury trials are available to employees as a matter of law.
“Given Congress’s concern that agreements to arbitrate employment discrimination claims should be enforced only where ‘appropriate,’ [the company] should be required to bear the risk of the [the employee’s] ignorance,” he said.