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Cunningham v. Henry Ford Health System

United States District Court, E.D. Michigan, Southern Division

November 20, 2017




         On March 30, 2017, Plaintiff Michelle Cunningham filed a complaint alleging retaliatory termination in violation of Title VII, the Michigan Elliott-Larsen Civil Rights Act, and the Americans with Disabilities Act ("ADA"). On September 11, 2017, Defendant Henry Ford Health System ("HFHS") filed a motion to dismiss or stay the proceeding and to compel arbitration. The Court reviewed the briefs and finds that a hearing is unnecessary.E.D. Mich. LR 7.1(f). For the reasons stated below, the Court will grant HFHS's motion.


         Cunningham began working for HFHS on August 25, 2015. She was terminated in May 2016.[1] Prior to her employment with HFHS, Cunningham interviewed with HFHS and completed pre-employment paperwork and training. Cunningham contends that neither the interview process, the job screening questions (ECF 17-3, PgID 115-16), her offer letter (ECF 17-4, PgID 118-19), nor any other physical document "alerted [her] to the fact that a binding arbitration agreement would be a condition for her employment." ECF 17, PgID 95. She further explains that she affixed her physical signature to a number of documents, but not the arbitration agreement.

         Instead, HFHS provided the arbitration agreement online. On August 4, 2015, Cunningham logged into HFHS's "HR 'Connect'" system believing she was "completing ministerial forms and basic employment on-boarding documents." Id. at 96. The process proceeded sequentially and required Cunningham to "complete one step before she could proceed to the next." Id. at 96-97. The system did not provide an opportunity to review the documents collectively or to download any document for review. In fact, Cunningham states that she "does not even recall the Arbitration Agreement [and] so had no knowledge of its import." Id. at 97. She further notes that the arbitration agreement does not contain language advising the employee to consult with an attorney or to review it carefully. Id. After encountering the arbitration agreement on the "gated" HR Connect system, Cunningham clicked on a box accompanied by the following language: "Agreed to and acknowledged by the Employee" and "checking the checkbox above is equivalent to a handwritten signature." ECF 17-8, PgID 135. Based on these facts, Cunningham asserts that the arbitration agreement is unenforceable because she did not knowingly and voluntarily waive her right to a jury trial by entering into an arbitration agreement with HFHS.


         When reviewing a motion to compel arbitration, the Federal Arbitration Act instructs courts to "hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement." 9 U.S.C. § 4. The party opposing arbitration "must show a genuine issue of material fact as to the validity of the agreement to arbitrate." Great Earth Companies, Inc. v. Simons, 288 F.3d 878, 889 (6th Cir. 2002) (citing Doctor's Assocs., Inc. v. Distajo, 107 F.3d 126, 129-30 (2d. Cir. 1997), cert denied, 522 U.S. 948 (1997)). The required showing "mirrors that required to withstand summary judgment[.]" Id. The Court therefore views all facts and reasonable inferences in favor of the non-moving party and must determine whether there is a genuine issue as to any material fact.


         The Federal Arbitration Act ("FAA") provides that a written agreement to arbitrate disputes arising out of a contract involving transactions in interstate commerce "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.[2] The provision establishes "a liberal policy favoring arbitration agreements" unless "overridden by a contrary congressional command." CompuCredit Corp. v. Greenwood, 565 U.S. 95, 98 (2012) (citations omitted).

         When applying the FAA, the Court must determine whether (1) the parties agreed to arbitrate, (2) the claims are within the scope of the agreement to arbitrate, (3) there are any federal statutory claims asserted that Congress intended to be nonarbitrable, and (4) there are any remaining claims that should be stayed pending arbitration. Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir. 2000).

         I. Whether The Parties Agreed To Arbitrate

         The Court must first consider whether the parties agreed to arbitrate. Courts generally apply "ordinary state-law principles that govern the formation of contracts" when analyzing whether the parties agreed to arbitrate. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Under Michigan law, the validity of a contract depends upon whether (1) the parties are competent to contract, (2) the contract involves a proper subject matter, (3) legal consideration exists, (4) mutuality of agreement exists, and (5) mutuality of obligation exists. Thomas v. Leja, 187 Mich.App. 418, 422 (1991). Here, neither party disputes their competency to contract, the propriety of the contract's subject matter, or the existence of legal consideration, mutuality of agreement, or mutuality of obligation. In fact, Cunningham agreed to and acknowledged the arbitration agreement on August 4, 2015 at 7:53 PM by checking an online box "equivalent to a handwritten signature[.]" ECF 17-8, PgID 135; see also Mich. Comp. Laws §§ 450.833 and 450.837 (state laws regarding electronic signatures and their enforceability). There are no facts in the record that create a genuine issue of whether a valid arbitration agreement exists.

         Even if a valid arbitration agreement exists, the "enforceability of an arbitration agreement may . . . turn on whether the employee was given adequate notice and knowingly waived [her] right to litigate claims in court." Rembert v. Ryan's Family Steak Houses, Inc., 235 Mich.App. 118, 161 n.34 (1999) (citing Kummetz v. Tech Mold, Inc., 152 F.3d 1153 (9th Cir. 1998)). Whether an employee knowingly and voluntarily waived her right to jury trial depends upon "(1) the plaintiff's experience, background, and education; (2) the amount of time the plaintiff had to consider whether to sign the waiver, including whether the employee had an opportunity to consult with a lawyer; (3) the clarity of the waiver; (4) consideration for the waiver; as well as (5) the totality of the circumstances." Hergenreder v. Bickford Senior Living Group, LLC, 656 F.3d 411, 420-21 (6th Cir. 2011) (quoting Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 668 (6th Cir. 2003) (en banc)).

         First, Cunningham's experience, background, and education were sufficient to understand the waiver. Cunningham received a high school diploma or a G.E.D., attained an Associate's Degree in Health Care Administration, possessed twenty years of customer service experience, and considered herself "detail oriented, highly ...

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