COMMONWEALTH OF MASSACHUSETTS

Supreme Judicial Cour t

NO. SJC-09961

MIDDLESEX COUNTY.

OLGA ST. FLEUR,

PLAINTIFF-APPELLEE ,

V .

WPI CABLE SYSTEMS/MUTRON, a/k/a WIREPRO, a/k/a WPI-BOSTON DIVISION, I N C . ,

DEFENDANT-APPELLANT .

ON APPEAL FROM AN ORDER OF THE SUPERIOR COURT.

Brief of the Defendant-Appellant

JOSEPH F. HARDCASTLE BBO No. 559479

CINTRA S. SHOBER BE0 No. 560120

HARDCASTLE & SHOBER 50 Congress Street,

Boston, MA 02109 Suite 314

(617) 2 4 8 - 2 2 4 0

T a b l e of Contents

Page

Issues Presented. . . . . . . . . . . . . . . . . .1

Statement of the Case. . . . . . . . . . . . . . . 2

Statement of Facts. . . . . . . . . . . . . . . . . 9

Summary of Argument. . 2 1

Argument. . . . . . . . . . . . . . . . . . . . . 2 3

1. THE FEDERAL ARBITRATION ACT REQUIRES THAT AGREEMENTS TO ARBITRATE EMPLOYMENT CLAIMS BE ENFORCED. . . . . . . . . . . . . . . . . 23

A. The Federal Arbitration Act Reflects A Strong P o l i c y In Favor Of Enforcement Of Agreements To Arbitrate And Applies To This Action. . . . . . . . . . . . . 23

B. The Trial Court Judge Mistakenly Concluded That Agreements To Arbitrate Claims Arising Out Of G.L. c. 151B Only May B e Enforced Following A Determination That It Would Be "Appropriate" To Do So. . . . . . . . . 27

11. BECAUSE ST. FLEUR SIGNED THE ARBITRATION AGREEMENT AND EXPRESSLY ACKNOWLEDGED THAT SHE READ AND UNDERSTOOD IT, IT WAS ERROR FOR THE TRIAL COURT TO DENY WPI'S MOTION TO COMPEL ARBITRATION. . . . . . . . . . . . . .3,4

111. THE FACTUAL DISPUTES RAISED BY ST. FLEUR REGARDING THE CIRCUMSTANCES UNDER WHICH SHE SIGNED THE ARBITRATION AGREEMENT ARE NOT GROUNDS FOR DENIAL OF WPI'S MOTION TO COMPEL ARBITRATION. . . . . . . . . . . . . .37

A . A P a r t y Cannot Avoid Arbitration Simply By Alleging Fraud In Connection With The Formation Of A Contract That Contains An Arbitration Provision. . . .37

i

Page

B . If There Is A Factual Dispute As To Whether An Agreement To Arbitrate Exists, An Evidentiary Hearing Must Be Held Before A Motion To Compel Arbitration CanBe Denied. . .

Conclusion. . . . . . . . . . . . . . . Addendum

* .

. . 40

4 3

ii

T a b l e of Authorities

Page

Cases

Anastos v. Sable, 443 Mass. 146 (2004). . . . . . . . . . . . . . . 2 6

A / S Custodia v. Lessin International, Inc., 503 F . 2 d 318 (2d Cir. 1974). . . . . . . . . . 40-41 Bernhardt v. Polygraphic Co. of America, 350 U . S . 198 (1956). . . . . . . . . . . . . . . -24

Campbell v. General Dynamics Gov' t Systems Corp . , 407 F.3d 546 (1st Cir. 2 0 0 5 ) . . . . . . . . . . . 26

Carpenter v. Pomerantz, 36 Mass. App. C t . 627 (1994). . . . . . . . . . . 25

Circuit C i t y Stores, Inc. v. Adams, 532 U . S . 105 (2001). . . . . . . . . . . . . . . - 2 5

Friedman v. Fife, 262 A.D.2d 167, 692 N.Y.S.2d 6 1 (N.Y. App. Div. 1999). . . . . . . . . . . . . . - 3 7

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991). . . . . . . . . . . . 28, 29, 30

Gonzalez v. GE Group Administrators, Inc., 321 F. Supp. 26 165 (D. Mass. 2 0 0 4 ) . . . . . . . . 3 6

Hanslin Builders, Inc. v. Britt Development Corp., 15 Mass. App. Ct. 319 (1983). . . . . . . . . .26-27

Kremer v. Chemical Construction Corp . , 456 U.S. 461 ( 1 9 8 2 ) . . . . . . . . . . . . . . . - 3 3

Large v. Conseco F i n . Servicing Corp., 292 F.3d 49 (1st Cir. 2002). . . . . . . . . . . - 3 8

iii

Page

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 ( 1 9 8 5 ) . . . . . . . . . . . . . 2 9

Moses H. Cone Mem'l Hosp. v. Mercurv Constr. CorD., 460 U.S. 1 ( 1 9 8 3 ) . . . . . . . . . . . . . . . . - 2 4

Mugnano-Bornstein v. Crowell, 42 Mass. App. Ct. 347 (1997). . . . . 25, 26 , 28, 33

Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, 7 F .3d 1110 (3d Cir. 1993). . . . . . . . . . - 2 4 - 2 5

Quirk v. Data Terminal Systems, Inc., 379 Mass. 762 (1980). . . . . . . . . . . . . . . 38

Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 170 F.3d 1 (1st Cir. 1999). . . . . . . . . . passim

Spencer Furniture, I n c . v . Media Arts Group, Inc., 349 F. Supp. 2 6 49 (D. Mass. 2003). . . . . . . . 38

Thomson McKinnon Secur., Inc. v. Cucchiella, 32 Mass. App. Ct. 698 (1992). . . . . . . . . . . 41

T i f f a n y v. Sturbridge Camping Club, Inc., 32 Mass. App. Ct. 173 (1992). . . . . . . . . .35-36

Weston Securities Corp. v. Aykanian, 46 Mass. App. Ct. 72 (1998). . . . . . . . . . . - 2 7

iV

Page

S t a t u t e s

9u.s.c. 5 1 . . . . . . . . . . . . . . . . . . - 2 3

9 U.S.C. § 2 . . . . . . . . . . . . . . . . . 23, 24 9u.s.c. § 3 . . . . . . . . . . . . . . . . . . . 25

9 U.S.C. § 4 . . . . . . . . . . . . . . . . . 40. 41

9 U . S . C . § 16 . . . . . . . . . . . . . . . . . . . 26 29 U.S.C. 5 621 . . . . . . . . . . . . . . . . . . 29 42 U.S.C.S. § 2000e (Title VII) . . . . . . . .passim G.L. c . 151B . . . . . . . . . . . . . . . . . passim G.L. c . 251, 5 1 . . . . . . . . . . . . . . . . . 2 5

G.L. c . 251, 5 2 . . . . . . . . . . . . . 25, 40, 41

G.L. c . 251, § 18 . . . . . . . . . . . . . . .26. 27

Other Authorities

S u p e r i o r Court Rule 9A(c) ( 2 ) . . . . . . . . . . . . 7

Issues Presented.

1. Did the trial court err in denying

defendant/appellant WPI-Boston Division, Inc. d/b/a

WPI Cable Systems/Mutron's ("WPI") motion to compel

arbitration of plaintiff/appellee Olga St.

("St. F l e u r " ) employment discrimination claims,

where such claims are expressly covered by a written

arbitration agreement that St. Fleur acknowledged

reading and understanding?

Fleur's

2 . Did the trial court err in denying WPI's

motion to compel arbitration on the grounds that

"arbitration agreements are only enforced where

appropriate" in employment discrimination cases and

that in such cases "defendants bear the r i s k of

plaintiff's ignorance?"

3. Should St. Fleur's allegation of f r a u d in

the inducement of the contract containing the

arbitration obligation itself be resolved in

arbitration, where the subject agreement provides

that the arbitrator has exclusive authority to

resolve disputes relating to the interpretation,

applicability, enforceability, or formation of the

agreement?

4. Should St. Fleur be estopped from claiming

that the arbitration agreement is not enforceable

because she did not read or understand it, where

there is an acknowledgement in bold capital letters

directly above her signature acknowledging that she

carefully read the agreement, understood its terms,

entered into the agreement voluntarily, and had the

opportunity to discuss t h e agreement with legal

counsel?

5. If there is a factual dispute as to the

existence of an arbitration agreement, is an

evidentiary hearing to resolve the dispute required

before a court can decide the issue?

Statement of the Case.

N a t u r e of the C a s e .

This case involves a dispute over whether St.

F l e u r must be required to arbitrate the employment

discrimination claims she asserted under G.L. c.

151B i n t h e Superior Court a f t e r the same claims

were dismissed by the Commonwealth of Massachusetts

Commission Against Discrimination (the "MCAD")

following an investigation and finding of lack of

probable cause for the claims. It is undisputed

that (i) the terms of the written arbitration

2

agreement at issue in this case provide that the

claims asserted by St. F l e u r in the Superior C o u r t

a r e subject to mandatory arbitration, and (ii) St.

F l e u r executed the signature page of the arbitration

agreement, which contains her acknowledgment that

she carefully read the agreement, understood its

terms, entered into the agreement voluntarily, and

had the opportunity to discuss the agreement with

legal counsel.

Following commencement of St. Fleur's Superior

C o u r t action, WPI moved to compel arbitration and to

s t a y or dismiss the pending action. In s u p p o r t of

its motion, WPI submitted three affidavits, along

with supporting exhibits, showing that the claims at

issue were governed by the arbitration agreement,

that St. Fleur had been given a copy of the

arbitration agreement, along with other company

documents regarding the newly enacted arbitration '

policy, and that St. F l e u r had signed the

arbitration agreement after initially declining to

do so.

St. Fleur responded to the motion to compel

arbitration with her own affidavit, in which she

acknowledged signing the signature page of the

3

arbitration agreement, but otherwise largely

disputed the veracity of the affidavits submitted by

WPI. Notwithstanding the acknowledgments printed

directly above her signature on the arbitration

agreement, St. Fleur in her affidavit expressly

denied that she had r e a d the arbitration agreement,

denied that she understood what arbitration meant,

and denied t h a t she had been provided an opportunity

to review the agreement or discuss it with counsel.

A hearing was held on W P I f s motion to compel

arbitration, at which the t r i a l court judge

indicated that, b a s e d on t h e conflicting affidavits,

and because the court could n o t decide issues of

credibility on the affidavits, an evidentiary

h e a r i n g o r mini-trial may b e necessary t o decide

whether arbitration s h o u l d be compe l l ed . A f t e r

taking the matter under advisement, however, the

trial court issued a ruling denying WPI's motion.

This appeal followed.

P r i o r Proceedings.

On or about June 9, 2004, St. Fleur f i l e d a

complaint with t h e MCAD alleging that she had been

subjec ted by WPI and certain of its employees to

harassment, discrimination, a hostile work

4

environment, and wrongful termination based on her

gender, race, and color and national origin, and

also alleging that she had been retaliated against

for engaging in activities protected under G.L.

151B. (A. 4 3 ; Crowley Aff. at Exh. F (MCAD

c .

Memorandum)).’ Following an investigation of St.

F l e u r ’ s complaint, on or about September 20, 2004,

the MCAD issued a summary of its factual findings

and dismissed St. Fleur’s complaint based on a

determination of lack of probable cause for t h e

claims asserted. (A. 41-44).

On or about February 3, 2005, St. Fleur f i l e d

the underlying Superior Cour t action, in which she

continued her prosecution of the employment claims

against WPI initially presented in the MCAD action. 2

(A. 01; Docket Entry 1). In her Complaint, St.

Fleur asser t s three claims against WPI pursuant to

1 References to page numbers of the Record Appendix are designated ”A. . ” Where appropriate, citation also will be made inthe Brief to specific paragraphs or sections of pleadings or exhibits, e . g . , “A.

* did not include as defendants the individual defendants named in the MCAD complaint.

; Crowley Aff. at ¶ _. I f -

In the Superior Court action, however, St. F l e u r

5

G.L. c. 151B. In Count One of her Complaint, St.

Fleur alleges unlawful sex discrimination in the

form of termination of her employment because she

"is a member of several protected classes pursuant

to G.L. c. 151B, to wit: female, black , and

Caribbean Islander." (A. 06; Complaint at ¶ ¶ 36-

37). In Count Two of her Complaint, St F l e u r

a l l e g e s a "hostile work environment.'' (A. 07-08;

Complaint at ¶ ¶ 39-53). In Count Three of h e r

Complaint, St. F l e u r alleges unlawful retaliation in

violation of G.L. c. 151B. ( A . 08; Complaint at ¶ ¶

54-57).

On or about May 9, 2005, WPI filed its Motion

to Compel Arbitration and Dismiss Complaint or, in

the Alternative, to Stay Proceedings, along with its

supporting affidavits and exhibits and St. Fleur's

opposition to the motion and her affidavit. (A. 01;

Docket E n t r y 4). In its motion, WPI requested that

St. F l e u r be directed to a r b i t r a t e her claims

because she signed a written agreement specifically

providing that employment claims such as those

asserted in this action be resolved through

arbitration. (A. 10-11) a

6

With its motion papers, WPI also filed a

Request f o r Hearing pursuant to Superior Court Rule

9A(c) ( 2 ) , in which it suggested that an evidentiary

hearing may be appropriate in light of the

"affidavits setting f o r t h conflicting versions of

the circumstances under which the subject

arbitration agreement was signed by the p l a i n t i f f . "

( A . 5 3 ) .

On July 21, 2005, a hearing on WPI's motion to

compel arbitration was held. (A. 59; Hearing

Transcript). At the hearing, the court (Kerns, J.)

noted the factual conflicts between the respective

affidavits submitted by t h e parties, emphasized that

"clearly this court cannot decide issues of

credibility on the basis of affidavits," and

questioned whether "we have a mini-trial first on

t h i s issue and on t h e basis of the mini-trial decide

first as s o r t of a stage one, do I compel

arbitration." (A. 63). WPI argued that,

notwithstanding the factual disputes raised in the

affidavits, an evidentiary hearing was not required

to compel a r b i t r a t i o n because, based upon St.

Fleur's concession t h a t "she did put pen to paper

and sign at least the signature page," she should be

7

held to the acknowledgments on t h a t piece of p a p e r

that she reviewed the entire agreement, understood

the agreement, and had the opportunity to c o n s u l t

counsel. (A. 64). WPI also emphasized to the

court, however, that if the court believed

consideration of the circumstances surrounding the

signing of the document was necessary in order for

the court to compel a r b i t r a t i o n , then an evidentiary

hearing must be conducted because of the need to

resolve finally the issue of whether arbitration is

required before proceeding to the merits of t h e

case. (A. 66-67). At t h e end of the hearing, the

court took the motion under advisement. (A. 77).

On August 9, 2005, the trial court's Memorandum

and Order denying WPI's motion to compel arbitration

was entered on the d o c k e t . (A. 01; Docket Entry 5).

In the Memorandum and Order, the trial c o u r t (Kerns,

J.) stated that "given plaintiff's allegations

concerning the circumstances surrounding the signing

of the arbitration agreement in this case,

defendants bear the risk of plaintiff's ignorance

for employment discrimination cases and arbitration

agreements a r e only enforced where appropriate."

(A. 55).

On September 8, 2005, WPI filed its Notice of

Appeal of the Order denying its motion to compel

arbitration. (A. 02; Docket Entry 7). On November

18, 2005, the parties' J o i n t Motion to S t a y

Proceedings During Pendency of Interlocutory Appeal

was allowed by the trial court (Sanders, J.). (A.

02; Docket Entry 9 ) .

Statement of Facts.

The "facts" of this case are in certain

important areas undisputed, b u t in other areas,

particularly concerning t h e circumstances

surrounding St. Fleur's execution of the subject

arbitration agreement, they are the subject of very

different accounts. In this statement of facts, WPI

first will present the undisputed facts. It then

will present i t s account of how St. F l e u r came to

s i g n the arbitration agreement, followed by St.

Fleur's version of events.

The Undisputed Facts.

WPf and St. F l e u r .

WPI operates a Chelsea, Massachusetts assembly

plant for electronic products s o l d nationally and

internationally. (A. 12; Crowley Aff. at ¶l). WPI

is wholly-owned by Wire-Pro, I n c . ("Wire-Pro"), a

9

New Jersey corporation. (A. 12; Crowley Aff. at

¶2). As a general matter, Wire-Pro's corporate

headquarters in New Jersey establishes company

policies with respect to human resource matters.

(Id.). - Nicolletta Crowley ("Crowley") is the office

manager of WPI's Chelsea, Massachusetts facility and

is responsible for coordinating with headquarters in

New Jersey and implementing company policy at the

Massachusetts subsidiary. (Id.). -

St. Fleur was hired by WPI on or about July 31,

2000 to work at the WPI Massachusetts facility (at

that time located in Everett, Massachusetts) as an

inspector in WPI's Quality Control Department. (A.

12, 49; Crowley Aff. at ¶3; St. Flew Aff. at ¶l).

St. Fleur's job consisted of working on the factory

f l o o r inspecting the quality of e l e c t r o n i c p r o d u c t s

being assembled at the plant. (A. 12-13; Crowley

Aff. at ¶3). At the time of her hiring, St. Fleur

was given a copy of WPI's Policies and Procedures

Manual (the "Policy Manual") and acknowledged

receipt in writing. (A. 13, 16; Crowley Aff. at ¶ 3 ,

Exh. A).

Joseph Galli ("Galli") is employed by WPI as

the General Manager of WPI's Chelsea, Massachusetts

10

facility. (A. 45; Galli Aff. at '31). Prior to

September 18, 2001, Galli's duties included acting

as the Supervisor of the Quality Control department

where St. F l e u r worked. (A. 45; Galli Aff. a t ¶ 2 ) .

On September 18, 2001, Sergio Sessa ("Sessa") w a s

hired to be the Supervisor of the Quality Control

department and took over responsibility f o r

supervising S t . Fleur from Galli. (A. 45, 47, 49;

Galli Aff. at ¶2, Sessa Aff. at ¶l; St. Fleur A f f .

at ¶ 2 ) .

WPI terminated St. Fleur's employment on May

26, 2004. (A. 14; Crowley Aff. at ¶lo).

The Arbitration P o l i c y .

In August or September 2001, C r o w l e y received

from N e w Jersey headquarters a package that included

a memorandum addressed to all employees dated August

3, 2001 concerning Wire-Pro's new arbitration

policy, a copy of the Arbitration P o l i c y to be added

to the Policy Manual, with an effective date of

August 23, 2001, and a form Mutual Agreement to

Arbitrate Claims (the "Arbitration Agreement") . (A.

13, 17-28; Crowley Aff. at ¶ 4, Exh. B). The

package Crowley received from headquarters had

enough copies of the memorandum, policy, and

11

Arbitration Agreement to distribute to all of the

employees who worked at the Chelsea facility.

13; Crowley Aff. at !I 5). On September 10, 2001,

Crowley distributed the memorandum, policy, and

Arbitration Agreement to all department supervisors

at the Chelsea facility, including St. Fleur's

(A .

Galli, with

documents to the

. St. F l e u r worked

supervisor at the time, Joseph

instructions to distribute the

workers they supervised. (E

on September 10, 2001. (Id.). -

St. Fleur's Signing of the Arbitration Agreement.

Most employees signed the Arbitration Agreement

either on September 10, 2001 or soon thereafter, b u t

some, including St. Fleur, did not. (A. 13; Crowley

Aff. at ¶6). Crowley periodically received

communications from corporate headquarters noting

that a number of employees had not signed the

Arbitration Agreement and requesting that she find

out if they were willing to sign the agreement. ( A .

13-14; Crowley Aff. at ¶ 6 ) . For example, on J a n u a r y

30, 2002, Crowley received a facsimile from

headquarters with a list of Chelsea employees with

designations identifying whether or not they had

signed the Arbitration Agreement, a l o n g with a

1 2

request that she see if the eight employees,

including St. Fleur, who had not yet signed the

agreement would be willing to sign the document.

(A. 14, 29-32; Crowley Aff. at ¶6, Exh. C ) .

By February 8, 2002, several Chelsea employees,

including St. Fleur, still had not signed the

Arbitration Agreement and Crowley was requested by

headquar t e r s to distribute to those employees a

memorandum dated February 8, 2002 from Wire Pro's

Chief Executive Officer, Henry Barbera. (A. 14, 33-

35; Crowley Aff. at ¶7, Exh. D) . The February 8,

2002 memorandum from Mr. Barbera was directed to

those employees who had not signed the Arbitration

Agreement and required those employees to e i t h e r

sign and return the signature page to the copy of

the Arbitration Agreement previously distributed to

them, or (ii) sign and return a form attached to the

February 8, 2002 memorandum confirming their refusal

to sign the Arbitration Agreement and stating their

reason for not signing the Arbitration Agreement.

(A. 33-35; Crowley Exh. D).

(i)

On February 8, 2002, Crowley gave a copy of Mr.

Barbera's F e b r u a r y 8, 2002 memorandum to Sessa to

pass on to St. F l e u r , (A. 14; Crowley Aff. at ¶ 8 ) .

13

Two employees of WPI refused to sign the Arbitration

Agreement and instead signed the refusal form that

accompanied Mr. Barbera's Febsuary 8, 2002

memorandum. (Id.). St. Fleur signed the signature

page to the Arbitration Agreement on February 8,

2002, the same day Mr. Barbera's memorandum was

issued. (A. 14, 40, 50-51; Crowley Aff. at ¶¶8-9,

-

Exh. E, St. F l e w Aff. at ¶ ¶ 7 - 8 ) . 3

me T e r m s of the Arbitxation Agreement.

The Arbitration Agreement provides that the

parties agree to resolve by arbitration certain

employment related claims, specifically including

"claims f o r discrimination or harassment on bases

which include b u t are not limited to race, sex,

sexual orientation, religion, national origin, age,

marital status . . . whistle blower claims, and claims

St. Fleur has not disputed that the signature dated February 8, 2002 on the signature page of the Arbitration Agreement is hers, although a number of the dates referred to in her affidavit are obviously incorrect. For example, at paragraph seven of her affidavit, she indicates that she was given the signature page to sign on "February 8, 2001," a date well before the arbitration policy even was put in place, and at paragraph eight she indicates that she signed the document that Galli gave her "on February 8, 2005," a date nearly a year after her employment at WPI terminated. (A. 50, 51).

3

14

f o r violation of any federal, state or other

governmental constitution, statute, ordinance,

regulation, or public policy.'' (A. 36). The

Arbitration Agreement excludes from its scope

certain claims and provides that the agreement "does

not preclude an employee from filing a complaint

with a f ede ra l , state or other governmental

administrative agency. r'4 (A. 37). It does make

clear, however, that " [ b l y entering into this

Agreement, the Company and Employee each knowingly

and voluntarily waive any and all rights they have

under law to a trial before a jury." (A. 36). It

also makes clear that "[flor claims covered by this

Agreement, arbitration is the parties' exclusive

remedy." (A. 38).

The Arbitration Agreement specifies that

arbitrations of matters subject to the agreement are

to be conducted under t h e National Rules f o r the

Resolution of Employment Disputes of the American

Arbitration Association ("AAA") I that the arbitrator

For that reason, WPI never suggested t h a t St. Fleur was p r o h i b i t e d from litigating her claims at the MCAD.

15

shall be licensed to practice law and selected in

accordance with AA4 rules, and that the arbitration

hearing shall take place in or near the city where

the employee was last employed by WPI. (A. 37).

With respect to interpretation or enforcement

of the Arbitration Agreement, the agreement itself

specifies that:

The arbitrator, and not any federal, state, or local court or agency, shall have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability o r formation of this Agreement, including but not limited to any claim t h a t all or par t of this Agreement is void or voidable.

(A. 3 7 ) .

The Arbitration Agreement further provides that

the employee will be responsible f o r payment of no

more than $125 .00 toward the arbitration filing fee

and that WPI will pay the remainder of the filing

fee and the arbitrator's fee. (A. 38).

The signature page to the Arbitration Agreement

contains the following language just above the

employee's signature line, in all capital letters

and in bold print:

FACH PARTY TO THIS AGREEMENT ACKNOWLEDGES CAREEWLLY READING THIS AGREEMENT, UNDERSTANDING ITS TERMS, AND ENTERING INTO THIS A G R E M N T VOLUNTARILY AND NOT IN RELIANCE ON ANY PROMISES OR REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS AGREEMENT ITSELF.

16

EACH PARTY F'URTHER ACKNOWLEDGES HAVING THE OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH PERSONAL LE- COUNSEL AND HAS USED THAT OPPORTUNITY TO THE EXTENT DESIRED.

( A . 4 0 ) .

The Disputed Facts.

WI's Version of How St. F l e u r Came to Sign the Arbitration Agreement

On September 10, 2001, copies of the memorandum

from New Jersey headquarters explaining the new

arbitration policy, the policy itself, and t h e

Arbitration Agreement were distributed t o a l l

Massachusetts employees, including St. F l e u r , with

the exception of several employees who were absent

from work that day and who were given the materials

when they returned to work. (A. 13, 4 5 - 4 6 ; Crowley

Aff. a t ¶5; Galli Aff. at ¶ 3 ) . Galli, St. Fleur's

Supervisor at the time, delivered the materials to

St. Fleur that day. (A. 45; Galli Aff. at ¶¶2, 3 ) .

At that time, Galli explained the arbitration policy

to St. Fleur, who informed Galli t h a t she wanted an

opportunity to review the Arbitration Agreement more

thoroughly and that she was not willing t o sign the

agreement until she had a chance to do so. (A. 46;

Galli Aff. at ¶ 3 ) . In response, Galli told St.

1 7 I

Fleur, and other members of the department, that

they did not have to sign the Arbitration Agreement

at that time and that they should feel free to have

a lawyer look at the agreement (Id.). -

Sessa was hired by WPI on September 18, 2001,

and at that time replaced Galli as St. Fleur's

Supervisor. (A. 45, 47; Galli A f f . at ¶2, Sessa

Aff. at ¶1). At the time he was hired, Sessa was

given copies of the company's arbitration policy and

the Arbitration Agreement and signed the Arbitration

Agreement. (A. 47; Sessa A f f . at ¶ 2 ) . On Februa ry

8, 2002, Sessa gave St. Fleur a copy of the February

8, 2002 memorandum from Wirepro's Chief Executive

Officer Henry Barbera, including t h e form to be

completed by any employee not willing to sign the

Arbitration Agreement. (A. 47-48; Sessa Aff. at

¶3). At that time, Sessa let St. F l e u r know t h a t

she had to either sign the Arbitration Agreement or

the form i n d i c a t i n g that she was not willing to sign

the Arbitration Agreement (Id.). - St. Fleur signed

the Arbitration Agreement that same day, February 8,

2002. ( A . 14; Crowley Aff. at ¶ 8 ) .

18

St. Fleur'a Version of How She Came t o S i g n the Arbitration Agreement.

St. Fleur denies that she had any discussion

with G a l l i on September 10, 2001 regarding the

company's new arbitration policy and denies

receiving any of the documents Galli claims to have

given her that day. (A. 49; St. Fleur Aff. at ¶ 3 ) .

St Fleur also denies that she ever had any

discussion with Sessa at any time "pertaining to

Wire Pro's new arbitration policy." (Id. at 50). -

St. Fleur does not dispute t h a t she signed t h e

signature page to the Arbitration Agreement or that

the signature on the' Arbitration Agreement appended

a s Exhibit E t o Crowley's affidavit is her

signature. Instead, she claims that "on or about

February 8, 2001" while she was working, Galli

brought t o her a one-page document and asked her to

sign it, b u t did not tell her that it was an

arbitration agreement. (A. 50; St. Fleur Aff. at

¶ 7 ) . Assuming, as appears to be the case, she is

r e f e r r i n g to the signature page to t h e Arbitration

Agreement, the date obviously is not correct.

Notably, however, although Galli was St. Fleur' s

Supervisor in February of 2001, when she says he

19

gave her the document to sign, and on September 10,

2001, when copies of the Arbitration Agreement were

distributed to WPI employees, he was no longer St.

Fleur's Supervisor in February of 2002, when St.

Fleur actually signed the signature page to the

Arbitration Agreement. In her affidavit, St. Fleur

also refers to Galli requiring her \\to sign the one

page document on February 8, 2005." (A. 51; St.

F l e u r Aff. at ¶ 8 ) . As that date is more than three

years a f t e r Galli stopped being St. Fleur's

supervisor, and nearly a year after St. Fleur's

employment at WPI ended, it also cannot be accurate.

Notwithstanding the bold, capitalized language

on the Arbitration Agreement signature page directly

above St. Fleur's signature acknowledging "THE

OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH PERSONAL

LEGAL COUNSEL," St. Fleur claims that "I was never

told by any representative of Wire Pro that I had

the right to consult with a lawyer." (A. 40, 51;

St. Fleur Aff. at ¶ 9 ) . 5

Interestingly, St. Fleur also states that had she 5

known what she was being asked to sign, she "would have consulted with a lawyer to learn t h e impact such an agreement would have on me." (A. 50).

20

Further, notwithstanding the bold, capitalized

language on the Arbitration Agreement signature page

signed by St. Fleur acknowledging that s h e was

"ENTERING INTO THIS AGREEMENT VOLUNTARILY I II St.

Fleur claims that "I was never told by any

representative of Wire Pro that I could r e fuse to

sign the document." (A. 51; St. Fleur Aff. at ¶lo) .6

Summary of Argument.

The Federal Arbitration Act (the "FAA")

reflects a policy strongly in favor of enforcing

agreements to arbitrate disputes, including disputes

of employment discrimination claims. ( A r g . at pp.

2 3 - 2 7 ) . The trial court's reliance on federal court

caselaw in the F i r s t Circuit to deny WPI's motion to

compel arbitration is misplaced because the case

relied upon by the lower c o u r t in this action is (i)

limited in scope to arbitration of claims asserted

St. F l e u r in h e r affidavit claims that because Galli t o l d her to sign the document "1 had no choice but to sign it." ( A . 51; St. F l e w Aff. At ¶ 8 ) . It is worth noting that while St. Fleur now finds it helpful to claim that she had "no choice" but to sign the Arbitration Agreement signature page because she was told to do so, she felt no such lack of choice when s h e refused to sign a warning notice given her in connection w i t h h e r chronic tardiness. (A. 43; MCAD Findings).

21

under certain f ede ra l discrimination statutes, and

(ii) actually rejects the argument that significant

limitations be placed on the ability to arbitrate

federal discrimination claims. (Arg. at pp. 27-32).

As f o r cases involving claims, such as those

asserted by St. Fleur in this action, under G.L. c.

151B, 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 WPI clearly has done

in this case. (Arg. at pp. 32-34).

Because St. Fleur admitted signed the signature

page of the arbitration agreement at issue here,

which contains an acknowledgement directly above h e r

signature in bold capital letters that she had read

and understood the agreement, she should be estopped

as a matter of law from disclaiming knowledge of the

terms of the agreement. (Arg. at pp. 34-37). St.

Fleur's argument that she should be relieved of her

obligations under the agreement she signed because

there was fraud in the inducement prope r ly is

addressed in arbitration rather than by the court

because disputes as to enforcement of the contract

must themselves be arbitrated. (Arg. at pp. 37-39).

22

Finally, to the extent that the conflicting

affidavits submitted in this action r a i s e a dispute

as to whether an arbitration agreement between the

parties even exists, an evidentiary hearing would be

required to comply with the statutory mandate to

reso lve the dispute before a c o u r t can either compel

arbitration or deny a motion to compel arbitration.

(Arg. at pp. 40-42).

Argument.

I. THE FEDERAL ARBITRATION ACT REQUIRES THAT AGREEMENTS TO ARBITRATE EMPLOYMENT CLAIMS BE ENFORCED.

The Federal Arbitration Act, 9 U . S . C . § 1, et -

s ~ q . , (the "FM'') evidences a federal policy

f a v o r i n g arbitration and the enforcement of

agreements to arbitrate that has been recognized and

followed by the courts in this Commonwealth,

including with respect to contractual agreements to

arbitrate statutory employment discrimination and

harassment claims.

A. The Federal Arbitration Act Reflects A St rong Policy In Favor Of Enforcement Of Agreements To Arbitrate And Applies To This Action.

The FAA provides that a written agreement to

arbitrate a dispute is enforceable. 9 U.S.C. 5 2 .

2 3

The FAA "creates a body of federal substantive law

of arbitrability, applicable to any arbitration

agreement within the coverage of the Act." Moses H.

Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U . S .

1, 24 (1983). The FAA provides for the

enforceability of written arbitration provisions in

any maritime transaction or in "a contract

evidencing a transaction involving commerce." 9

U.S.C. 5 2. The FAA "commerce" requirement is met

if there is any connection to interstate commerce,

including employment in connection with goods to be

sold in interstate commerce. I_ See, e . g . , Bernhardt

v. Polygraphic Co. of America, 350 U.S. 198, 200-201

(1956)(employment contract would evidence a

transaction involving commerce within the meaning of

the FAA if employee in performing duties was

producing goods for commerce) . 7 In this case, the

' The FAA defines commerce as meaning interstate, international, or inter-territorial commerce, bu t specifically excludes from the definition of commerce "contracts of employment of seamen, railroad employees, and any other class of workers engaged in foreign or interstate commerce." 9 U . S . C . 5 1. That language had been interpreted by some circuits to mean that all employment contracts are excluded from the scope of the FAA. - See, e.g., Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, 7

(continued ... )

2 4

FAA applies without question because St. Fleur

worked at an assembly plant f o r electronic products

sold nationally and internationally. (A. 12-13;

Crowley Aff. at '31, 3 ) .

The FAA governs the arbitrability of disputes

in state or federal court. Carpenter v. Pomerantz,

3 6 Mass. App. Ct. 627, 628 n.3 (1994). 8 Courts

addressing the issue of whether a p a r t y should be

( . .continued)

F.3d 1110, 1119-1120 (3d Cir. 1993) ("contracts of employment are explicitly exempted from the FAA" and "the FAA by its own terms does not apply to employment contracts"). The United States Supreme Court, however, has resolved the dispute among the circuits on the issue, holding that "Section 1 exempts from the FAA only contracts of employment of transportation workers." Circuit C i t y Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001).

a The Massachusetts Arbitration Act (the "MAA"), G.L. c. 251, § 1 et seq., may also apply to this dispute, but the FAA will govern in the event of any conflict between the FAA and MAA. See. Muanano- A

Bornstein v. Crowell, 42 Mass. App. Ct. 347, 350 n . 7 (1997)(review denied, 425 Mass. 1102). Because there is little if- any substantive difference the two statutory schemes for termination of litigation commenced in violation of an enforceable agreement to arbitrate, there is no need to address any conflict between the statutes. Compare, 9 U.S.C. 5 3 (stay of proceedings where issue referable to arbitration); G.L. c. 251, 5 2 (d) ( s t a y of proceedings where issue referable to arbitration).

2 5

required to submit a dispute to arbitration must

consider the federal policy favoring arbitration as

an alternative to litigation and must resolve any

doubts in favor of arbitration. Mugnano-Bornstein

v. Crowell, 42 Mass. A p p . Ct. 347, 351 (1997).

Although ordinarily appeal of an interlocutory

order must await final judgment in a case, policy

favoring enforcement of arbitration agreements also

is reflected in the right to immediately appeal the

d e n i a l of a motion to compel arbitration in order to

avoid having to litigate a matter on the merits in

court before being ab le to seek appellate review of

the denial of a motion to compel arbitrations. Both

the FAA and the MAA provide that denial of a motion

to compel arbitration is immediately appealable. 9

U . S . C . 5 16(a) (1) ( A ) ; G . L . c . 251, 5 18(a) (l).' - See

also, Hanslin Builders, Inc. v. Britt Development

Further, because the trial court's order denying WPI's motion to compel arbitration rests on l e g a l conclusions, this court's review of the order is de novo. Anastos v. Sable, 443 Mass. 146, 149 (2004) (judge's legal conclusions are reviewed de novo). See also, Campbell v. General Dynamics Gov't Systems Corp., 407 F.3d 546, 551 (1st Cir. 2005) (order denying motion to stay proceedings and compel arbitration "reflects an essentially legal conclusion and, thus, warrants plenary review").

--

2 6

Corp., 15 Mass. App. Ct. 319, 322 (1983) (denial of

motion to compel arbitration immediately appealable

under G.L. c. 251, 518 (a) (1) ) ; Weston Securities

Corp. v. Aykanian, 46 Mass. App. Ct. 72, 75-76

(1998) (provisions in G.L. c. 251, 518 regarding

timing of appeal procedural in nature and therefore

govern motions asserted in state c o u r t under FAA).

B. The T r i a l Court Judge Mistakenly Concluded That Agreements To Arbitrate Claims Arising Out Of G.L. c. 151B Only May Be Enforced Following A Determination That It Would Be "Appropriate" To Do So.

In its Memorandum and Order denying WPI's

motion to compel arbitration, the trial court relied

on Rosenberg v. Merrill Lynch, Pierce, Fenner &

Smith, Inc., 170 F.3d 1 (1st Cir. 1999) for t h e

propositions that in an employment discrimination

case "defendants bear the risk of plaintiff's

ignorance" of the nature of an arbitration agreement

and that "arbitration agreements are enforced only,

where appropriate." (A. 55). This reliance is

misplaced and inappropriate because (i) Rosenberg is

limited to consideration of language unique to

federal discrimination statutes, and (ii) the

analysis in Rosenberg relied on by the t r i a l court

addresses only the question of whether the language

2 7

in an arbitration agreement is sufficient to put the

employee on notice that federal employment

discrimination claims are subject to a r b i t r a t i o n .

170 F.3d at 21. With respect to the arbitrability

of claims asserted under G.L. c. 151B, this Court in

the Mugnano-Bornstein case held that as long as the

arbitration agreement in question minimally

identifies employment discrimination claims as among

the claims subject to arbitration, arbitration is

required. 42 Mass. App. Ct. at 352-53.

The significance of the Rosenberg case in the

development of the law applicable to arbitration of

employment discrimination claims is its holding

rejecting the argument that language in the Civil

Rights Act of 1991 (the "1991 CRA") ba r s enforcement

of agreements mandating arbitration of claims

asserted under federal discrimination statutes. 170

F.3d at 4. The starting point in understanding the

Rosenberg holding is the United States Supreme Court

decision in Gilmer v. Interstate/Johnson Lane Corp.,

500 U.S. 20 (1991). Having previously concluded

that statutory claims may be the s u b j e c t of an

arbitration agreement, the Supreme Court in Gilmer

held that claims under the Age Discrimination in

2 8

Employment A c t of 1967 ("ADEA"), 29 U . S . C . § 621, et

=., are subject to arbitration under the FAA

because "nothing in the text of the ADEA or its

legislative history explicitly precludes

arbitration. 500 U.S. at 26. In Gilmer, the

Supreme Court also emphasized that in agreeing to

arbitrate a statutory claim, "a p a r t y does not forgo

the substantive rights afforded by the statute; it

only submits to their resolution in an arbitral,

rather than a judicial, forum." Id. (citing

Mitsubishi Motors Corp. v. S o l e r Chrysler-Plymouth,

Inc., 473 U.S. 614, 628 ( 1 9 8 5 ) ) .

-

Notwithstanding the holding in Gilmer, at the

time Rosenberg was decided there remained some

question as to whether language in the 1991 CRA,

which amended Title VI1 of the Civil Rights Act of

1964 ( " T i t l e VII"), 42 U.S.C.S. 5 2000e, et seq.,

precluded mandatory arbitration of Title VI1 claims.

In Rosenberg, the First Circuit reviewed a district

court ruling "that in Title VII, in contrast to the

ADEA, Congress intended to preclude pre-dispute

arbitration clauses.'' 170 F.3d at 6. The 1991 CRll

language relied upon by the district court to

conclude that the statutory language and legislative

-

2 9

history "unambiguously reject mandatory arbitration

agreements,'' provides that:

where appropriate and to the extent authorized by law, the use of alternative means of dispute resolution, including . . . arbitration, is encouraged to resolve disputes arising under the Acts or provisions of Federal law amended by this title.

- Id. at 8. In Rosenberg, the First Circuit rejected

the analysis of the district court and held that the

language of t h e 1991 CRA does not preclude mandatory

arbitration of Title VI1 claims. lo I_ Id. at 4.

Although it concluded that mandatory

arbitration of Title VI1 claims is not barred by the

language of the 1991 CRA, the First Circuit in

Rosenberg nevertheless held that the particular

arbitration agreement at issue i n the case was not

"appropriate" within the meaning of that term in the

1991 CRA. 170 F.3d at 20. The First Circuit based

that conclusion on the fact that the arbitration

agreement in question did not itself "define the

range of claims subject to arbitration" or identify

lo The district court reasoned that the legislative history suggested that "to the extent authorized by law" was intended to refer "to the law as kt existed p r i o r to Gilmer," and thus precluded mandatory arbitration. Rosenberg, 170 F.3d at 8.

3 0

that employment discrimination claims were

included.'' Id. at 19. The court also emphasized,

however, that had the written agreement in question

"provided for arbitration of all disputes, or given

explicit notice that employment disputes were

subject to arbitration, we would have had little

difficulty in finding that Rosenberg had agreed to

arbitrate her employment discrimination claims

within the meaning of the 1991 CRA."

-

Id. at 18.12

The arbitration agreement in Rosenberg provided that the employee, a financial consultant, agreed to arbitrate a l l disputes between her and her firm or a customer that were required to be arbitrated under the rules of certain organizations, including the New York Stock Exchange ("NYSE") . 170 F.3d at 4. It was undisputed that (i) the employee was not provided with the rules of the NYSE, which at the time required arbitration of all employment disputes, (ii) no one explained that the arbitration agreement included employment disputes she might have with her employer, and (iii) there was no reference to arbitration of employment disputes in Merrill Lynch' s "voluminous" employment handbook provided to the employee. Id. at 5-6.

l2

the dispute, the First Circuit in Rosenberg a l s o emphasized that "[tlhere is no contention here that the parties agreed that an arbitrator should decide questions of arbitrability." 170 F. 3d at 19 11.14. In contrast, as discussed in section 1II.A. below, this case does involve an arbitration agreement that requires arbitration of any dispute as to enforcement, interpretation, or formation of the Arbitration Agreement. (A. 3 7 ) ..

In reaching its conclusion as to arbitrability of

31

The Rosenberg court also emphasized that its

ho ld ing is limited to consideration of the scope of

the language of the 1991 CRA and does not address

broader questions of enforceability of arbitration

clauses "when the 1991 CRA and ADEA are not

involved." 170 F.3d at 19. The court specifically

noted that its holding does not concern situations

"where the claims involved are n o t employment

discrimination claims under the federal civil rights

laws." - Id. at 21 .

Had St. Fleur asserted claims in this action

under Title VII, Rosenberg would provide little help

to her e f f o r t to avoid arbitration in light of the

clear language in the Arbitration Agreement calling

for arbitration of employment discrimination claims.

Because her claims in this action are for alleged

violations of G.L. c. 151 rather than under federal

discrimination law. Rosenberu has no application to ' 2

13 the case.

l3 There is a procedural relationship c. 151B and Title VII. Where a state

between G . L . has

antidiscrimination laws similar to Title VII, a claimant must first pursue state administrative remedies and may elect to bring a civil action in court under either state law or Title VI1 after

( cont inued ...I

32

This Court has held that, under the FAA,

statutory remedies such as t h e right to a trial by

jury that a re available with respect to claims

arising under G.L. c . 151B, including harassment and

discrimination claims, may be waived by an agreement

to arbitrate the claims. Mugnano-Bornstein, 42

Mass. App. Ct. at 352. Indeed, the Appeals Court

made c lea r that to effectively require arbitration

of Chapter 1 5 1 B claims an arbitration agreement need

o n l y refer generally to required arbitration of

employment claims, and need not contain a list of

specific claims or causes of action, a requirement

the Appeals Court suggested would be "unreasonable

and impractical." Id. at 352-353. Thus, even if

Rosenberg is viewed as requiring a heightened

identification of the nature of Title VI1 employment

claims subject to arbitration, no such requirement

( . .continued)

initially pursuing the administrative remedy. Kremer v. Chemical Construction Corp., 456 U . S . 461, 468-69 (1982). If, as is the case here, a claimant elects to pursue the state law claims in court, principles of res judicata bar relitigation of the same claims under Title VII. Id. at 481. -

3 3

applies to Chapter 151B claims. In any event, the

Arbitration Agreement here identifies the scope of

covered employment claims with such specificity t h a t

there could be no basis f o r a contention that

discrimination claims are not sufficiently

identified under any standard. l4 As such, it was

error for the trial court to deny WPI's motion to

compel arbitration based on its interpretation of

the Rosenberg case.

11. BECAUSE S T . FLEUR SIGNED THE ARBITRATION AGREEMENT AND EXPRESSLY ACKNOWLEDGED THAT SHE READ AND UNDERSTOOD IT, IT WAS ERROR FOR THE TRIAL COURT TO DENY WPI'S MOTION TO COMPEL ARBITRATION.

Had St. Fleur asserted claims under Title VI1

in this action, and had the Arbitration Agreement

not clearly included employment discrimination

claims within its scope, the Rosenberg case might

have provided some support for the lower court's

l4 The Arbitration Agreement provides that the parties agree to resolve by arbitration certain employment related claims, specifically including "claims for discrimination or harassment on bases which include b u t are not limited to race, sex, sexual orientation, religion, national origin, age, marital status . . . whistle blower claims, and claims f o r violation of any federal, state or other governmental constitution, statute, ordinance, regulation, or public policy." (A. 36).

34

conclusion that the Arbitration Agreement is not

enforceable in this case.

however, provides no support for refusing to compel

arbitration in this case on the ground t h a t St.

F l e u r did not read or understand the Arbitration

Agreement whose signature page she signed.

The Rosenberg case,

Indeed, in Rosenberg, the First Circuit noted

that an employee cannot avoid an obligation to

arbitrate simply by contending that she has not read

written arbitration provisions. 170 F.3d at 21

n.17. There, t h e court expressly rejected any

"assumption that women and minorities, otherwise

competent to enter contracts, were somehow disabled

and in need of such special protections where t h e

subject of the contract was an agreement to

arbitrate." Id. In stating its rejection of an

argument that the employee had not read o r

understood written arbitration provisions as a

defense to arbitration, the First Circuit relied on

Massachusetts caselaw setting f o r t h "the traditional

rule of contract law that a party to a contract is

assumed to have read and understood the terms of a

contract s h e signs." Id. (citinq Tiffany v.

-

-

35

Sturbridge Camping Club, Inc., 32 Mass. A p p . Ct.

1 7 3 , 175 n . 5 ( 1 9 9 2 ) ) .

Further, not only can one who signs a contract

not avoid her obligations by claiming not to have

read or understood the contract, she cannot succeed

on a claim that she only saw the signature page and

not the terms of the agreement when t h e signature

page contains an express acknowledgement t h a t the

signing party has reviewed the agreement. In

Gonzalez v. GE Group Administrators, Inc., 321 F.

Supp. 2 6 165 (D. Mass. 2 0 0 4 ) , the court rejected the

employee's contention that he should not be required

to arbitrate a claim because he did not get a copy

of the terms of the arbitration policy or understand

the effect of his signing a document. In rejecting

the employee's argument, the court emphasized that

the one-page document he signed contained an

and reviewed"

at 168-169.

t. Fleur's

acknowledgement that he had "received

the arbitration policy document. Id. -

For the same reason, the language on

signature page acknowledging that she had read and

understood t h e Arbitration Agreement should be

sufficient to estop her from disclaiming knowledge

of the terms of the agreement she signed. See also,

3 6

Friedman v. F i f e , 262 A . D . 2 d 1 6 7 , 168, 692 N.Y.S.2d

61, 62 (N.Y. A p p . Div. 1999) ("Plaintiff will not be

heard to claim that he received only a signature

page f o r the stock restriction agreement, since he

was bound to know and read what he signed").

111. THE FACTUAL DISPUTES RAISED BY ST. FLEUR REGARDING THE CIRCUMSTANCES UNDER WHICH SHE SIGNED THE ARBITRATION AGREEMENT ARE NOT GROUNDS FOR DENIAL O F WPI'S MOTION TO COMPEL ARBITRATION.

A . A Party Cannot Avoid Arbitration Simply By Alleging Fraud In Connection With The Formation Of A Contract That Contains An Arbitration Provision.

By contending against overwhelming evidence to

the contrary that she was improperly induced to sign

the contract at issue, St. Fleur may have raised an

issue for the arbitrator to consider, but her

contention does not allow her to avoid arbitration

and have the merits of her claims decided in a

court. To the contrary, courts addressing t h i s

issue under the FAA or the MAA have held that, at

least where arbitration language is sufficiently

broad to include arbitration of disputes regarding

enforcement of the arbitration agreement itself, a

claim of fraud in the inducement of the contract

containing the arbitration requirement is one for

37

arbitration. See Large v. Conseco Fin. Servicing

Corp., 292 F.3d 49, 53 (1st Cir. 2002) (under the

-

FAA, a broad arbitration clause will be held to

encompass a r b i t r a t i o n of a claim that the contract

containing the arbitration obligation was induced by

f r a u d ) ; Quirk v. Data Terminal Systems, Inc., 379

Mass. 762, 767-768 (1980) (under the MAA, a claim of

fraud in the inducement of a contract as a whole

presents a question which, must be decided by

arbitration). Were the rule otherwise, “any

arbitration clause could easily be avoided simply by

alleging fraud in the formation of the contract,

which would defeat the strong federal policy

favoring arbitration.” Spencer Furniture, Inc. v.

Media Arts Group, Inc., 349 F. Supp. 2d 49, 52 (D.

Mass. 2 0 0 3 ) .

The Arbitration Agreement here p l a i n l y is broad

enough to encompass arbitration of the contention

raised by St. Fleur that she should not be required

to arbitrate her claims because she improperly was

induced to sign the contract containing the

arbitration obligation. The agreement specifically

provides that:

38

The arbitrator, and not any federal, state, or l o c a l court or agency, s h a l l have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement, including b u t not limited to any claim that all or part of this Agreement i s void or voidable.

(A. 37) (emphasis added) .

Based on the strong policy in f a v o r of

arbitration, in circumstances such as those

presented in this case it is f o r an arbitrator to

decide whether fraud in the inducement of the

contract precludes a r b i t r a t i o n of the merits of the

claims at issue. If such fraud is found by the

arbitrator, the merits of the claims will be

litigated in court rather than in arbitration. The

alternative, i.e., forcing the parties to litigate

the matter in court simply because f r a u d in the

inducement was alleged, would frustrate the

legislative intent of the FAA by allowing a party

who does not wish to arbitrate t o maintain the

litigation in the courts merely by alleging fraud in

the inducement.

3 9

E. If There Is A Factual Dispute As To Whether An Agreement To Arbitrate Exists, An Evidentiary Hearing Must Be Held Before A Motion To Compel Arbitration Can Be Denied

If there is a dispute as to whether an

arbitration agreement exists at all, as opposed to a

dispute as to whether there was fraud in the

inducement of a contract that includes arbitration

requirements, a court properly may, and indeed must,

resolve that dispute before allowing or denying a

motion

(court

to compel arbitration. See 9 U.S.C. § 4

requi red to compel arbitration if satisfied

that there is an arbitration agreement); G.L. c.

251, 5 2 (a) (same) . The procedural rules that would a p p l y if this

matter was in federal court make clear that if a

determination cannot be made by the c o u r t on the

submissions of the parties as to whether there is an

agreement to arbitrate, then a t r i a l on the question,

is required before deciding whether the merits of a

claim must be arbitrated or, alternatively,

litigated in court. 9 U.S.C. 5 4 (if there is a

factual dispute as to the existence of an

arbitration agreement, "the court shall proceed

summarily to the trial thereof"). See also, A/S

4 0

Custodia v. Lessin International, Inc., 503 F . 2 d

318, 320 (2d Cir. 1974) (if there is a factual issue

as to whether an arbitration agreement has been

made, 9 U . S . C . 5 4 requires that the issue not be

decided on affidavits, but through a full trial of

the issue). However, while substantive principles

of the FAA apply to cases covered by the FAA that

are pending in Massachusetts, the issue of whether

the procedures set forth in 9 U.S.C. § 4 are

applicable to state court proceedings "remains an

open question. " Thomson McKinnon Secur. I Inc. v.

Cucchiella, 32 Mass. App. Ct. 698, 701 ( 1 9 9 2 ) .

The MAA does not provide the procedural

specificity of the FAA as to how a court should deal

with a factual dispute as to the existence of an

arbitration agreement, but does r equ i r e that if a

party opposing a motion to compel arbitration denies

the existence of t h e agreement to arbitrate,

court shall proceed summarily to the determination

of the issue so raised and shall, if it f i n d s for

the applicant, order arbitration; otherwise, the

application shall be denied." G.L. c. 251, § 2 ( a ) .

Logically, if "determination of the issue" cannot be

made on affidavits due to f a c t u a l disputes,

"the

an

41

evidentiary hearing would be required to comply with

t h e statutory mandate to r e so lve the dispute.

Therefore, if this Court concludes that t h e r e

is a factual dispute as to whether an arbitration

agreement between the parties exists, the matter

should be remanded f o r an evidentiary hearing or

preliminary trial on the i s sue . That should,

however, not be necessary because t h e undisputed

evidence in this case compels the conclusion that

there does exist an agreement, signed by St. Fleur,

to a r b i t r a t e St. F l e u r ' s employment claims a g a i n s t

WPI. While St. Fleur raises some question

concerning the circumstances under which s h e e n t e r e d

into the agreement, that question is for

arbitration.

42

Conclusion.

For the foregoing reasons, this Court should

reverse the Superior Court's Order denying WPI's

motion to compel a r b i t r a t i o n of St. Fleur's

employment discrimination claims and remand t h e

matter for an order compelling arbitration of St.

Fleur's employment discrimination claims and s t a y i n g

further proceedings d u r i n g the pendency of the

arbitration.

Respectfully submitted

JOSEPH F. HARDCASTLE CINTM S. SHOBER HARDCASTLE & SHOBER 50 Congress Street Boston, MA 02109

( 6 1 7 ) 248-2240

Certification Under Mass. R. App. P. 16(k)

I hereby certify that this brief complies with a l l applicable rules of court that p e r t a i n to t h e filing of briefs.

F. Hardcastle

43