Ora J. Berkley v. Dillard's Inc.

The issue is whether claims that arose prior to an employers imposition of a mandatory arbitration provision are still subject to arbitration.

Benton, Circuit Judge.

Berkley, an African-American, began working in August 2000 for Dillards, Inc. According to her, in 2001 some coworkersincluding supervisor Kim Georgiebegan to harass her. On May 23, 2001, Berkley filed complaints against Dillards with the EEOC and the Missouri Commission on Human Rights (MCHR), alleging racial harassment.

On June 16, 2001, Dillards implemented an arbitration program. The same day, Dillards distributed two documents describing the program to Berkley and other employees. The Rules of Arbitration document says: Arbitration applies to any claim that could be made in a court of law, including harassment on the basis of race and retaliation for . . . exercising your protected rights under any statute. The second document, The Dillards Fairness in Action Program, summarizes the policy, specifying how an employee can accept it. That document says that by accepting or continuing employment with Dillards, you have agreed to accept the Program known as the Agreement to Arbitrate Certain Claims. The document also reiterates that the arbitration program covers racial harassment and retaliation claims.

A few days later, Dillards asked its employees to sign an Acknowledgment of Receipt of Rules for Arbitration. That document states: Employees are deemed to have agreed to the provisions of the Rules by virtue of accepting employment with the Company and/or continuing employment therewith. The document has a signature line where the employee can acknowledge receipt of the rules of arbitration and the agreement to arbitrate certain claims. Berkley refused to sign. Dillards advised her that refusing to sign had no effect on the applicability of the arbitration agreement because it applied automatically to all employees who continued their employment.

After receiving notice of right to sue from the EEOC and the MCHR, Berkley sued in the district court on February 19, 2002. On March 8, Dillards fired her. Berkley then amended the complaint to add a claim of retaliation.

Dillards moved to compel arbitration and stay the district court proceedings. The court granted the motion, finding that Berkleys claims were covered by the arbitration program. Following arbitration, the court dismissed with prejudice each of Berkleys claims.

A dispute must be submitted to arbitration if there is a valid agreement to arbitrate and the dispute falls within the scope of that agreement.

Berkley argues that the district court erred in enforcing the arbitration agreement. In particular, Berkley asserts that the district court had no basis for the conclusion that the Dillards arbitration program was part of a larger offer of a unilateral contract of at-will employment that could be accepted by Ms. Berkleys continuing her preexisting employment with Dillards.

In contrast, The Dillards Fairness in Action Program document is contractual, not merely informational. It states that, by accepting or continuing employment with Dillards, you have agreed to accept the Program known as the Agreement to Arbitrate Certain Claims.

Berkley next contends that, even if there was a valid offer to arbitrate, she rejected it by refusing to sign the acknowledgment form. However, the acknowledgment formmuch like The Dillards Fairness in Action Program documentstates that employees are deemed to have agreed to the provisions of the Rules by virtue of accepting employment with the Company and/or continuing employment therewith. Further, after Berkley refused to sign, Dillards informed her that her refusal did not affect the arbitration agreement, which applied automatically to all employees who continued their employment. By continuing her employment, Berkley accepted the terms of the arbitration program.

Berkley further argues that her claims do not fall within the scope of the arbitration agreement, because most of them arose before Dillards implemented the Program. However, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. The plain language of the arbitration agreement includes any claim that could be made in a court of law. The arbitration agreement does not exclude pending administrative complaints. Berkleys claims are within the scope of the arbitration agreement.

The district courts judgment is affirmed.

Case Commentary

The 8th Circuit ruled that the adoption of an arbitration program may encompass all claims deemed arbitrable whether they occur before or after the date the program came into existence.

Case Questions

1. Do you agree with the courts decision?
2. If a case has been filed in court and then mandatory arbitration has been imposed, could the case be dismissed in favor of arbitration?
3. Why should an existing employee be subject to termination if he or she refuses to sign an agreement to arbitrate?