NOTICE Decision filed 09/22/04. The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same. |
NO. 5-03-0805
IN THE
FIFTH DISTRICT
JOANN MELENA, Plaintiff-Appellee, v. ANHEUSER-BUSCH, INC., Defendant-Appellant. | ) ) ) ) ) ) ) ) ) | Appeal from the Circuit Court of Jefferson County. No. 03-L-38 Honorable |
PRESIDING JUSTICE CHAPMAN delivered the opinion of the court:
In May 2003, the plaintiff, JoAnn Melena, filed a complaint, alleging that heremployer, the defendant, Anheuser-Busch, Inc., had terminated her employment in retaliationfor a claim she had filed pursuant to the Workers' Compensation Act (820 ILCS 305/1 et seq.(West 2002)). The defendant appeals an order denying its motion to dismiss her claim andcompel arbitration or, in the alternative, to stay the proceedings and compel arbitration. Wefind that the arbitration agreement violates the public policy of this state by purporting toremove a retaliatory discharge claim from judicial consideration without the employee'sknowing and voluntary consent. We therefore affirm the trial court's order and remand forfurther proceedings.
In February 1999, the plaintiff began working for the defendant as a nonunion hourlyemployee in its promotional products group distribution center in Mt. Vernon, Illinois. Thedefendant subsequently instituted a new dispute resolution policy, which included anarbitration provision. In February 2000, the defendant mailed materials to employees,including the plaintiff, informing them of the new policy. A representative of the defendant'shuman resources department gave a presentation at the promotional products groupdistribution center, and posters explaining the program were displayed in the building. Employee handbooks including the dispute resolution program were not distributed untilApril 2001, however. On April 27, 2001, the plaintiff signed an acknowledgment formincluded in the April 2001 employee handbook.
On September 11, 2002, the plaintiff suffered a work-related injury. On that date orshortly thereafter, she filed a claim for workers' compensation with the Illinois IndustrialCommission and began receiving temporary total disability benefits. On March 23, 2003,while the plaintiff was receiving temporary total disability benefits, the defendant terminatedher employment.
On May 8, 2003, the plaintiff filed the instant complaint, alleging retaliatorydischarge. See 820 ILCS 305/4(h) (West 2002). On June 27, 2003, the defendant filed amotion to dismiss and compel arbitration or, in the alternative, to stay the proceedings andcompel arbitration. On November 24, 2003, the court heard arguments on the motion, whichit denied by a docket entry the following day. On December 18, 2003, the court entered awritten order summarily denying the defendant's motion. On December 23, 2003, thedefendant filed a notice of interlocutory appeal pursuant to Illinois Supreme Court Rule307(a)(1) (188 Ill. 2d R. 307(a)(1)).
The defendant contends that the only issue before this court is whether there was anagreement to arbitrate and whether the parties' dispute falls within the scope of thatarbitration agreement. See Travis v. American Manufacturers Mutual Insurance Co., 335Ill. App. 3d 1171, 1175, 782 N.E.2d 322, 325 (2002). The plaintiff, however, argues that theagreement was unenforceable because (1) agreements to arbitrate claims for retaliatorydischarge violate Illinois public policy (see Midgett v. Sackett-Chicago, Inc., 105 Ill. 2d 143,150-51, 473 N.E.2d 1280, 1284 (1984)), (2) the employee handbook containing thedefendant's dispute resolution policy expressly stated that it was not a contract, and (3) theagreement was not supported by consideration because the plaintiff had already worked forthe defendant for more than a year when the dispute resolution policy went into effect.
The defendant urges us to disregard the plaintiff's arguments because she did not raisethem before the trial court. The record on appeal does not contain either a transcript of thehearing on the defendant's motion to dismiss or a bystander's report of those proceedings,which the defendant had the option of including pursuant to Illinois Supreme Court Rule323(c) (166 Ill. 2d R. 323(c)). Thus, we do not know what arguments were made to the trialcourt or what the judge considered in ruling on the motion. However, we may affirm thetrial court on any basis appearing in the record. In re Marriage of T.H., 255 Ill. App. 3d 247,259, 626 N.E.2d 403, 411 (1993). The record in this case supports the trial court's decision.
Midgett, cited by the plaintiff, was a consolidated appeal involving employees coveredby collective bargaining agreements containing arbitration clauses. The defendant employersargued that the statutory remedy for retaliatory discharge applied only to at-will employeeswho otherwise would have no redress because they did not have grievance procedures undera collective bargaining agreement to protect them. Thus, the employers contended, theirdischarged employees were limited to the grievance procedures available under theirrespective collective bargaining agreements. Midgett, 105 Ill. 2d at 149, 473 N.E.2d at 1283. In rejecting this contention, the Illinois Supreme Court emphasized the importance ofIllinois's strong public policy interest in protecting the rights afforded employees by theWorkers' Compensation Act by deterring retaliatory discharges. Midgett, 105 Ill. 2d at 150,473 N.E.2d at 1284. More than " 'purely private interests' " are at stake in cases involvingthose claims. Midgett, 105 Ill. 2d at 151, 473 N.E.2d at 1284 (quoting Midgett v. Sackett-Chicago, Inc., 118 Ill. App. 3d 7, 9, 454 N.E.2d 1092, 1094 (1983)). The court pointed outthat under the collective bargaining agreements at issue there, the remedies available to theemployees would be limited to reinstatement and back pay. Midgett, 105 Ill. 2d at 150, 473N.E.2d at 1284. The court then explained, "If there is no possibility that an employer canbe liable in punitive damages, not only has the employee been afforded an incompleteremedy, but there is no available sanction against a violator of an important public policy ofthis State." Midgett, 105 Ill. 2d at 150, 473 N.E.2d at 1284.
The defendant employers in Midgett argued, much as the defendant does here, thata federal policy favoring arbitration as a means of resolving labor disputes required the courtto find that the grievance procedure was the exclusive means of redressing the employees'retaliatory discharge claims. Midgett, 105 Ill. 2d at 151, 473 N.E.2d at 1284. The courtrejected this argument, noting that the United States Supreme Court had repeatedly ruled thatunion members were not bound by the arbitration provisions in their collective bargainingagreements when their claims were based on allegations of statutory violations by theiremployers. Midgett, 105 Ill. 2d at 151-52, 473 N.E.2d at 1284 (citing McDonald v. City ofWest Branch, 466 U.S. 284, 80 L. Ed. 2d 302, 104 S. Ct. 1799 (1984), Barrentine v.Arkansas-Best Freight System, Inc., 450 U.S. 728, 67 L. Ed. 2d 641, 101 S. Ct. 1437 (1981),and Alexander v. Gardner-Denver Co., 415 U.S. 36, 39 L. Ed. 2d 147, 94 S. Ct. 1011(1974)).
The primary concern raised by the Midgett court is not implicated here. Thedefendant's dispute resolution policy expressly authorizes the arbitrator to award any remedythat would be available in a court of law. Presumably, that would include punitive damages. This leaves us to consider whether the strong public policy in favor of enforcing retaliatorydischarge claims under the Workers' Compensation Act, standing alone, is sufficient groundsto find the arbitration agreement at issue unenforceable, at least under the circumstancespresented.
The Midgett court, as noted, pointed to federal cases holding that a federal policyfavoring arbitration in labor disputes was outweighed by the federal policy in favor of thejudicial enforcement of statutory rights. At the time Midgett was decided, courts werereluctant to extend this favor for arbitration beyond the collective bargaining context tononunion employment settings. See Cole v. Burns International Security Services, 105 F.3d1465, 1475 (D.C. Cir. 1997). Although all the cases cited by the Midgett court are still goodlaw, the notion that statutory rights cannot be arbitrated because arbitration is an inadequateforum for their vindication has, to a great extent, been eroded by the more favorable view ofarbitration that has evolved under more recent cases. Gilmer v. Interstate/Johnson LaneCorp., 500 U.S. 20, 34 n.5, 114 L. Ed. 2d 26, 42 n.5, 111 S. Ct. 1647, 1656 n.5 (1991)(citing Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 231-32, 96 L. Ed. 2d185, 197, 107 S. Ct. 2332, 2340 (1987), and Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626-27, 87 L. Ed. 2d 444, 455, 105 S. Ct. 3346, 3354 (1985)). Like federal courts, the courts of Illinois have a strong policy favoring theenforcement of arbitration agreements. See Acme-Wiley Holdings, Inc. v. Buck, 343 Ill. App.3d 1098, 1103, 799 N.E.2d 337, 341 (2003). We must therefore determine whether, in lightof this shift, the Illinois Supreme Court's holding in Midgett precludes the enforcement ofthe arbitration agreement under the circumstances presented. Because no Illinois courts haveaddressed the precise issue with which we are faced, we look to federal decisions forguidance. Our review of relevant federal cases demonstrates that courts have continued toweigh the competing policies of providing a public forum to enforce statutory rights andenforcing arbitration agreements in determining when employers may require employees toprospectively agree to arbitrate statutory claims.
The Ninth Circuit Court of Appeals addressed the issue in Prudential Insurance Co.of America v. Lai, 42 F.3d 1299 (9th Cir. 1994). The court explained: "The issue *** is notwhether employees may ever agree to arbitrate statutory employment claims; they can. Theissue here is whether these particular employees entered into such a binding arbitrationagreement ***." Lai, 42 F.3d at 1303. There, the plaintiffs were required, as a condition oftheir employment, to sign a document called a "U-4 form". The form contained a provisionrequiring them to arbitrate any claim or dispute required to be arbitrated under the rules ofthe organizations with which they register. The plaintiffs registered with the NationalAssociation of Securities Dealers as a part of their employment. That organization requiresthat registered dealers submit disputes " 'arising in connection with the business' " of itsmembers to arbitration. Lai, 42 F.3d at 1301. They later filed complaints alleging sexualharassment and employment discrimination in violation of provisions of Title VII of the CivilRights Act of 1964 (42 U.S.C.