Michelle L. Michalski v. Circuit City Stores, Inc.

177 F.3d 634, 1999 WL 274514
CourtCourt of Appeals for the Seventh Circuit
DecidedJune 4, 1999
Docket98-3023
StatusPublished
Cited by39 cases

This text of 177 F.3d 634 (Michelle L. Michalski v. Circuit City Stores, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Michelle L. Michalski v. Circuit City Stores, Inc., 177 F.3d 634, 1999 WL 274514 (7th Cir. 1999).

Opinions

FLAUM, Circuit Judge.

Circuit City Stores, Inc. (“Circuit City”) appeals from the district court’s denial of its motion to dismiss and to compel arbitration of Michelle Michalski’s discrimination claim under Title VII of the Civil Right Act of 1964 (“Title VII”), 42 U.S.C. §§ 2000 et seq. We now reverse and remand, holding that the arbitration agreement entered into by the parties supersedes Michalski’s right to [635]*635pursue her discrimination claim in federal court.

I. BACKGROUND

Michelle Michalski was employed by Circuit City from 1993 to 1997. In 1995, Circuit City instituted its Associate Issue' Resolution Program (“AIRP”) which asked all employees to agree to have any employment related disputes, including Title VII discrimination suits, decided in binding arbitration instead of litigation. The AIRP automatically applied to all employees unless they sent a special opt-out form to Circuit City headquarters within thirty days of signing an acknowledgment form indicating receipt of the AIRP material. Michalski did not opt out of the program.

On May 21, 1997, Michalski was fired. Claiming her termination was based on the fact that she was pregnant, Michalski filed suit under Title VII in federal court on May 12, 1998. To preserve her rights, she simultaneously filed a request to arbitrate on the same day. In response, Circuit City moved the district court to either stay the proceeding or dismiss Miehalski’s complaint and compel arbitration pursuant to the AIRP and the Federal Arbitration Act. The district court denied Circuit City’s motion, holding that Michalski was not bound by the AIRP because the agreement to arbitrate failed “for want of compliance with basic contract law." Specifically, the district court reasoned that because Circuit City gave up nothing, and promised to do nothing for Michalski in exchange for her agreeing to be bound by the AIRP, there was no consideration sufficient to support a valid contract. Circuit City now appeals.

II. ANALYSIS

As an initial matter, we find jurisdiction for this appeal under section 16(a)(1)(C) of the Federal Arbitration Act (“FAA”), which provides that appeal may be taken from an order denying a motion to compel arbitration. 9 U.S.C. § 16(a)(1)(C); see also Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361, 363 (7th Cir.1999).

This case presents two questions: first, whether employees can agree in advance to arbitrate Title VII claims and second, whether consideration was given by Circuit City in exchange for Michalski’s promise to arbitrate.

A. Arbitration of Title VII claims.

Michalski first asserts that the strong federal policy behind Title VII precludes mandatory arbitration of civil rights claims. However, this argument was explicitly rejected in this circuit by our decision in Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361, 365 (7th Cir.1999), in which we held that Congress did not intend Title VII to preclude enforcement of pre-dispute arbitration agreements such as the one used by Circuit City.

In Koveleskie, the plaintiff, a securities industry analyst, was required as a condition of her employment to sign an agreement to arbitrate all future employment disputes, including Title VII discrimination claims. She challenged the enforceability of the pre-dispute arbitration agreement, as it applied to employment discrimination claims. We found, as have most other circuits, that Congress did not intend to prohibit the use of pre-dispute arbitration agreements for resolution of Title VII claims. Id; see also Seus v. John Nuveen & Co., 146 F.3d 175, 182 (3rd Cir.1998); Patterson v. Tenet Healthcare, Inc., 113 F.3d 832 (8th Cir.1997) (holding that Title VII claims are subject to pre-dispute arbitration agreements under the FAA); Cole v. Burns International Security Services, 105 F.3d 1465 (D.C.Cir.1997) (affirming an order compelling arbitration of Title VII claims where an employee signed a mandatory arbitration agreement as a condition of his employment); Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 39 F.3d 1482 (10th Cir.1994) (holding that Title VII claims are subject to mandatory arbitration); Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698 (11th Cir.1992) [636]*636(holding that Title VII claims are subject to securities industry compulsory arbitration); Willis v. Dean Witter Reynolds, Inc., 948 F.2d 305 (6th Cir.1991); Alford v. Dean Witter Reynolds, Inc., 939 F.2d 229 (5th Cir.1991) (holding that Title VII claims can be subject to compulsory arbitration). Thus, this claim is foreclosed by our recent decision in Koveleskie.

What makes Michalski’s case even less compelling is that, unlike the plaintiff in Koveleskie who was required to sign the arbitration agreement as a condition of her employment, Michalski had an opt-out provision. She was free not to arbitrate; she was given a choice and she chose — by not signing the opt-out provision — to be bound by the AIRP. It does not follow that this court would invalidate an arbitration agreement such as this one, when we have previously held that a nonoptional, mandatory arbitration agreement is valid. Thus, Michalski’s argument that Title VII precludes arbitrations agreements such as the AIRP fails in the face of binding precedent to the contrary.

B. Consideration.

The district court found inadequate consideration to support Michalski’s agreement to arbitrate because Circuit City had not promised to give anything up.

An agreement to arbitrate is treated like any other contract: “In determining whether a valid agreement arose between the parties, a federal court should look to the state law that ordinarily governs the formation of contracts.” Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361, 367-8 (7th Cir.1999) (citing Gibson v. Neighborhood Health Clinics, Inc., 121 F.3d 1126, 1130 (7th Cir.1997)). In the present case, we look to the contract law of Wisconsin, the state where the employment and termination took place. Id. at 368; Gibson,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cooper v. Macy's
S.D. Illinois, 2020
Muhammed v. Dollar Tree
N.D. Illinois, 2020
Matthew Dickson v. Gospel for ASIA, Inc.
902 F.3d 831 (Eighth Circuit, 2018)
Littlejohn v. Timberquest Park at Magic, LLC
116 F. Supp. 3d 422 (D. Vermont, 2015)
Paragon Micro, Inc. v. Bundy
22 F. Supp. 3d 880 (N.D. Illinois, 2014)
Coup v. Scottsdale Plaza Resort, LLC
823 F. Supp. 2d 931 (D. Arizona, 2011)
Soto v. STATE INDUSTRIAL PRODUCTS, INC.
642 F.3d 67 (First Circuit, 2011)
Clutts v. Dillard's, Inc.
484 F. Supp. 2d 1222 (D. Kansas, 2007)
Holloman v. Circuit City Stores, Inc.
894 A.2d 547 (Court of Appeals of Maryland, 2006)
Safranek v. Copart, Inc.
379 F. Supp. 2d 927 (N.D. Illinois, 2005)
Kopple v. Stonebrook Fund Management, LLC
18 A.D.3d 329 (Appellate Division of the Supreme Court of New York, 2005)
Holloman v. Circuit City Stores, Inc.
873 A.2d 1261 (Court of Special Appeals of Maryland, 2005)
Booker v. Robert Half International, Inc.
315 F. Supp. 2d 94 (District of Columbia, 2004)
Ilah M. Tinder v. Pinkerton Security
305 F.3d 728 (Seventh Circuit, 2002)

Cite This Page — Counsel Stack

Bluebook (online)
177 F.3d 634, 1999 WL 274514, Counsel Stack Legal Research, https://law.counselstack.com/opinion/michelle-l-michalski-v-circuit-city-stores-inc-ca7-1999.