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GALLOS v. FIC AMERICA CORP.

United States District Court, Northern District of Illinois


April 10, 2003

GALLOS
v.
FIC AMERICA CORP.

The opinion of the court was delivered by: Zagel, Judge

OPINION

This case arises out of plaintiff Irene Gallos' claims of sex discrimination under Title VII of the Civil Rights Act of 1964, as amended. Defendant moves to compel arbitration and dismiss the case, arguing that the parties are bound by an arbitration clause in defendant's Employee Handbook. On or about November 27, 2001, defendant gave Ms. Gallos a copy of this Employee Handbook ("the Handbook"), at which time she signed an Employee Acknowledgment Form ("EAF"). Ms. Gallos does not dispute that she received the Handbook and signed the EAF; rather, she argues that no enforceable agreement to arbitrate was formed.

The Handbook states the following:

All claims, disputes or controversies arising out of or relating to any application for employment, employment and/or cessation of employment with the Company will be settled by final and binding arbitration before a neutral arbitrator under the rules of the American Arbitration Association then in effect. By way of example only, such claims include claims under federal, state and local statute or common law, such as the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act and the law of contract and tort.
The EAF states the following:

I acknowledge that this handbook is neither a contract of employment nor a legal document. I have received the handbook, and I understand that it is my responsibility to read and comply with the policies contained in this handbook and any revisions made to it.
While agreements requiring arbitration of statutory claims, including discrimination claims brought under Title VII, are generally enforceable under the Federal Arbitration Act, Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361, 362 (7th Cir. 1999), and courts should compel arbitration "unless . . . the arbitration clause is not susceptible of an interpretation that covers the asserted dispute," Kiefer Specialty Flooring, Inc. v. Tarkett, Inc., 174 F.3d 907, 909 (7th Cir. 1999), I find that the EAF does not represent an enforceable agreement to arbitrate. Defendant relies primarily on two cases to support its argument that the EAF represents an enforceable arbitration agreement: Bauer v. Morton's of Chicago, 2000 WL 149287 (N.D.Ill. 2000), and Medina v. Hispanic Broadcasting Corp., 2002 WL 389628 (N.D.Ill. 2002). However, in Bauer, the employee signed an Arbitration Policy Receipt, and in Medina, the Receipt and Acknowledgment of Employee Handbook form signed by the employee specifically stated that the employee agrees to submit all disputes to arbitration. In the present case, all the EAF indicates is that the employee received the Handbook, and one could read the language in the EAF as an agreement for the employee to read the Handbook sometime in the future. In other words, the EAF does not clearly indicate that the employee is acknowledging that he or she has even read the Handbook yet, and under the most basic of contract formation principles, it is untenable to believe that such a document could represent an enforceable agreement to abide by something that the signer has not even read.

Furthermore, although the default employment relationship in Illinois is an at-will relationship, that presumption can be overcome by an employee handbook. See Duldulao v. Saint Mary of Nazareth Hospital Ctr., 505 N.E.2d 314, 318 (Ill. 1987). The EAF language quoted above appears to attempt avoidance of this established case law by stating that the Handbook does not create any contractual rights. While defendant is free to do this, defendant cannot then turn around and assert that the Handbook is a binding employment contract-in short, defendant cannot have its cake and eat it too.

Therefore, I find that no enforceable arbitration agreement was formed and deny defendant's motion to compel arbitration and dismiss.

20030410

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