1. This Court has personal jurisdiction
over the parties to this action, and
subject matter jurisdiction over
the claims asserted in this action.
2. Plaintiff was employed by Defendant Duke
University as an employee-at-will during
all times relevant to this action.
3. Pursuant to
Walker v. Westinghouse
Electric Corp., 77 N.C. App. 253, 335
S.E.2d 79 (1985), Duke University's
unilaterally promulgated Personnel
Policy Manual, submitted by Defendants
as evidence of a contract between Duke
University and Plaintiff to submit
disputes such as those at issue in this
action to binding arbitration, is not a
part of Plaintiff's employment contract
and is therefore not a contract as a
matter of law.
4. The document entitled “Duke University
Transfer/Upgrade Request” is not a
contractual agreement in any sense, is
not a part of Plaintiff's employment
contract and is therefore not a contract
as a matter of law.
The trial court denied defendants' motions to dismiss and to stay
proceedings pending arbitration.
[1]/A HREF>Ordinarily, this appeal would be interlocutory because
it does not determine all of the issues between the parties and
directs some further proceeding preliminary to a final judgment.
Futrelle v. Duke University, 127 N.C. App. 244, 247, 488 S.E.2d
635, 638,
disc. review denied, 347 N.C. 398, 494 S.E.2d 412
(1997). However, an order denying arbitration is immediately
appealable because it involves a substantial right, the right to
arbitrate claims, which might be lost if appeal is delayed.
Burke v. Wilkins, 131 N.C. App. 687, 688, 507 S.E.2d 913, 914
(1998).
[2]On appeal, defendants contend that the grievance
procedure was a part of plaintiff's employment contract and that
this was evidenced by her signing of the transfer/upgrade
request. Plaintiff argues that the grievance procedure andpolicy manual were not part of her employment contract and that
the transfer/upgrade request did not constitute a supplement to
her employment contract because there was no mutuality of assent
to the agreement and there was no voluntary waiver of plaintiff's
rights to judicial process.
At the outset, we note that “North Carolina has a strong
public policy favoring the settlement of disputes by
arbitration.”
Johnston County v. R.N. Rouse & Co., 331 N.C. 88,
91, 414 S.E.2d 30, 32 (1992). Our review confirms this position
is consistent with other jurisdictions including “a liberal
federal policy favoring arbitration agreements.”
Moses H. Cone
Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 74
L. Ed. 2d 765 (1983);
Gilmer v. Interstate/Johnson Lane Corp.,
500 U.S. 20, 114 L. Ed. 2d 26 (1991). Our Supreme Court has held
that where there is any doubt concerning the existence of an
arbitration agreement, it should be resolved in favor of
arbitration.
R.N. Rouse & Co., 331 N.C. at 92, 414 S.E.2d at 32.
The validity of an arbitration agreement is determined by the
application of basic contract law principles.
Futrelle, 127 N.C.
App. 244, 488 S.E.2d 635;
Doctor's Associates, Inc. v. Casarotto,
517 U.S. 681, 134 L. Ed. 2d 902 (1996).
The dispositive issue here is whether the plaintiff, in her
contract of employment with Duke, agreed to arbitration of her
claims in accordance with the procedure set forth in the
Personnel Policy Manual.
The trial court in its denial of defendants' motion, cited
Walker v. Westinghouse Electric Corp., 77 N.C. App. 253, 335S.E.2d 79 (1985),
disc. review denied, 315 N.C. 597, 341 S.E.2d
39 (1986) where the plaintiff employee alleged he was wrongfully
discharged by his employer and claimed that an employee handbook
was part of his employment contract which the employer had
violated. Under the facts of that case, this Court held that the
handbook was not part of the plaintiff's at-will employment
contract.
Id. There was no issue regarding how the dispute
would be resolved. This Court quoted extensively from the
employee handbook and concluded that the handbook “did not become
an understanding binding on the employer.”
Id. at 260, 335 S.E.2d
at 84. However,
Walker is inapposite here as there is evidence
beyond the promulgation of the policy manual that indicates the
grievance procedure was made part of plaintiff's employment
contract.
In this case, we examine a number of factors to determine if
plaintiff's contract of employment included an agreement to
arbitrate her claims. First, plaintiff had worked for Duke since
1990 and the Personnel Policy Manual containing the grievance
procedure had existed since 1994. Also, in her complaint,
plaintiff asserted she had a contract of employment with Duke
although she denied in her affidavit the grievance procedure was
ever explained to her. However, she does not claim that she was
unaware of the grievance procedure, and, in fact, plaintiff
availed herself of the grievance procedure and began proceedings
prior to the initiation of this action. Further, plaintiff
sought a transfer to another department and signed the
transfer/upgrade request which contained an explicitcertification that any dispute or controversy arising out of or
related to her employment or termination by Duke would be subject
to resolution through the applicable grievance or dispute
resolution procedure.
An employment-at-will contract may be supplemented by
additional agreements which are enforceable.
Walker, 77 N.C.
App. at 261, 335 S.E.2d at 84. Before a valid contract can
exist, there must be a mutual agreement between the parties as to
the terms of the contract.
Normile v. Miller and Segal v.
Miller, 313 N.C. 98, 326 S.E.2d 11 (1985). “If a question arises
concerning a party's assent to a written instrument, the court
must first examine the written instrument to ascertain the
intention of the parties.”
Routh v. Snap-On Tools Corp., 108
N.C. App. 268, 273, 423 S.E.2d 791, 795 (1992). If the language
of the contract is “clear and unambiguous,” the court must
interpret the contract as written.
Robbins v. Trading Post, 253
N.C. 474, 117 S.E.2d 438 (1960).
The transfer/upgrade request, which plaintiff signed, is a
“clear and unambiguous” certification of her willingness to
submit disputes arising from her employment with Duke to the
grievance procedure. As the language in the agreement is
unambiguous, we need not look beyond the writing itself to
determine whether there was mutual assent to the agreement.
Furthermore, plaintiff's execution of this document charges her
with knowledge and assent to the contents of the agreement.
Biesecker v. Biesecker, 62 N.C. App. 282, 302 S.E.2d 826 (1983).
In this State it is held that one who signs
a paper writing is under a duty to ascertainits contents, and in the absence of a showing
that he was wilfully misled or misinformed by
the defendant as to these contents . . . he
is held to have signed with full knowledge
and assent as to what is therein contained.
Gas House, Inc. v. Southern Bell Telephone Co., 289 N.C. 175,
180, 221 S.E.2d 499, 503 (1976)(
quoting Harris v. Bingham, 246
N.C. 77, 97 S.E.2d 453 (1957) and
Williams v. Williams, 220 N.C.
806, 18 S.E.2d 364 (1941)),
overruled on other grounds, State ex
rel. Utilities Comm. v. Southern Bell, 307 N.C. 541, 299 S.E.2d
763 (1983).
Moreover, the agreement to arbitrate does not fail for lack
of consideration. Mutual binding promises provide adequate
consideration to support a contract.
Casualty Co. v. Funderburg,
264 N.C. 131, 140 S.E.2d 750 (1965);
Kirby v. Board of Education,
230 N.C. 619, 55 S.E.2d 322 (1949). Where each party agrees to
be bound by an arbitration agreement, there is sufficient
consideration to uphold the agreement.
See Johnson v. Circuit
City Stores, 148 F.3d 373 (4th Cir. 1998).
Other jurisdictions have held that arbitration agreements
evidenced by similar circumstances as here are enforceable. In
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 114 L. Ed.
2d 26 (1991), the plaintiff was required by his employer to
register as a securities representative with several securities
exchanges including the New York Stock Exchange. Included in the
registration materials was a requirement that the plaintiff agree
to arbitrate any disputes that arose between him and his employer
and which were required to be arbitrated by the rules of the
stock exchange.
Id. After the plaintiff was terminated by hisemployer at the age of 62, he sued under the Age Discrimination
in Employment Act and the employer moved to compel arbitration.
Id. The Supreme Court affirmed the Fourth Circuit Court of
Appeals and held that the claim was arbitrable under the
agreement signed by the plaintiff with the stock exchange.
Id.
In
O'Neil v. Hilton Head Hospital, 115 F.3d 272 (4th Cir.
1997), the plaintiff, while on leave from work, signed an
acknowledgment form when she received an employee handbook from
the new owners of the defendant hospital.
Id. at 273. The
acknowledgment form contained an agreement to arbitrate all
claims arising out of plaintiff's employment.
Id. The plaintiff
argued that the arbitration agreement failed for lack of mutual
assent claiming that the hospital had not agreed to be bound.
The Fourth Circuit Court of Appeals disagreed and held that by
submitting the arbitration policy to plaintiff, the defendant
hospital had implicitly agreed to be bound by the policy.
Id. at
275. Noting the strong federal policy supporting arbitration of
disputes, the trial court reversed and remanded the case for a
stay pending arbitration.
Id. at 276.
Similarly, in
Patterson v. Tenet Healthcare, Inc., 113 F.3d
832 (8th Cir. 1997), plaintiff was employed at a hospital owned
by defendant, and, when she received a copy of Tenet's employee
handbook, she signed an arbitration clause set out on the last
page of the handbook.
Id. at 834. The trial court found that
the signed arbitration clause constituted a contract and
dismissed the plaintiff's complaint.
Id. On appeal, Patterson
argued that Missouri law ordinarily did not consider an employeehandbook part of an employment contract because it lacks the
usual prerequisites to a contract.
Id. at 835. However, the
Eighth Circuit Court of Appeals found that although the employee
handbook was not a contract, the arbitration clause formed a
separate contract because it was separate and distinct from the
remainder of the handbook.
Id. Thus, the arbitration agreement
was enforceable for all claims that the plaintiff brought against
the hospital.
In
Johnson v. Circuit City Stores, 148 F.3d 373 (4th Cir.
1998), the plaintiff applied for a job with defendant and signed
her job application which contained an arbitration agreement
whereby any claims arising out of her application or her
employment with defendant would be submitted to arbitration. The
district court held that the agreement was not enforceable for
lack of consideration and denied defendant's motion for summary
judgment.
Id. at 377. Pursuant to their earlier decision in
O'Neil, the Fourth Circuit Court of Appeals reversed the trial
court holding that where both parties agree to be bound by the
arbitration, there was sufficient consideration to enforce the
contract.
Id. at 379.
In each of the above cases, the court held the plaintiff
was bound by an arbitration agreement which was proffered by an
employer, prospective employer, or a regulating body and which
was not part of a formal employment contract. Here, plaintiff
alleged in her complaint that she had an employment contract with
Duke during her seven years of employment. The grievance
procedure had been included in the Personnel Policy Manual since1994. With this additional background, it is apparent that
plaintiff signed the transfer/upgrade request document knowing
that any claim arising out of her employment would be subject to
resolution pursuant to the grievance procedure. Moreover,
plaintiff took advantage of the grievance procedure by initiating
the internal review of her termination and seeking reinstatement.
Thus, the grievance procedure as set out in the Personnel Policy
Manual became a part of plaintiff's employment contract.
The plaintiff cites
Routh, 108 N.C. App. 268, 423 S.E.2d
791, in support of her contention that there was no agreement.
In
Routh, the plaintiff signed an agreement which terminated the
business relationship between the parties and which also included
an arbitration agreement.
Id. However, an additional term to
the agreement had been placed at the end of the standard form and
plaintiff only signed on the line after the added term, not on
the original line designated for his signature.
Id. This Court,
in affirming the trial court's holding that the arbitration
agreement was invalid, held that there was no meeting of the
minds by the parties with regard to the agreement to arbitrate.
Id. at 274, 423 S.E.2d at 795. We reasoned that an ambiguity
existed in the agreement because of the added term and the
signature after the added term and that extrinsic evidence was
properly admitted to interpret the contract.
Id. at 273, 423
S.E.2d at 795. The extrinsic evidence indicated that the parties
had not agreed on the term requiring arbitration.
Id. There is
no such ambiguity in the agreement signed by the plaintiff and
she makes no such contention. Plaintiff also contends that the agreement was not
enforceable because she did not make a voluntary waiver of her
rights to judicial process and cites
Prudential Ins. Co. of
America v. Lai, 42 F.3d 1299 (9th Cir. 1994),
cert. denied, 516
U.S. 812, 133 L. Ed. 2d 24 (1995) as authority. In
Lai, the
Ninth Circuit Court of Appeals held that a plaintiff must make a
knowing and voluntary waiver of her right to litigate a claim
brought under Title VII for sexual discrimination.
Id. Lai is
distinguishable, however, because it deals specifically with
federal statutory claims arising out of the employment. Further,
the agreement only required those claims selected by the employer
to be arbitrated. In this case, plaintiff's claims are not
statutorily based nor were they selected by the employer to be
arbitrated. The parties' agreement to abide by the grievance
procedure includes all claims arising out of the employment
relationship. Moreover, as noted above, plaintiff is charged
with knowledge of and assent to the agreement which she signed.
See Biesecker, 62 N.C. App. 282, 302 S.E.2d 826.
We conclude that plaintiff's employment contract included an
agreement to arbitrate plaintiff's claims which she now asserts.
For the reasons stated herein, we reverse the order of the trial
court denying defendants' motions to dismiss and to stay the
proceedings pending final arbitration and remand for entry of an
order staying proceedings pending final arbitration.
Reversed and remanded.
Judges LEWIS and TIMMONS-GOODSON concur.
*** Converted from WordPerfect ***