{"id":33366,"date":"2008-03-26T16:35:41","date_gmt":"2008-03-26T21:35:41","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/uncategorized\/mi-court-of-appeals-rejects-prospective-arbitration-agreements.html"},"modified":"2008-03-26T16:35:41","modified_gmt":"2008-03-26T21:35:41","slug":"mi-court-of-appeals-rejects-prospective-arbitration-agreements","status":"publish","type":"corporate","link":"https:\/\/corporate.findlaw.com\/human-resources\/mi-court-of-appeals-rejects-prospective-arbitration-agreements.html","title":{"rendered":"MI Court of Appeals Rejects Prospective Arbitration Agreements Involving Civil Rights Claims"},"content":{"rendered":"
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In Heurtebise v Reliable Computers, Inc.<\/i>, (1994) the Michigan Court of Appeals ruled that, by placing mandatory arbitration policies in their handbooks, employers could require their employees to arbitrate all<\/u> claims, both wrongful discharge\/alleged discharge without just cause claims, as well as civil rights claims. Not surprisingly, many companies have since adopted such policies. However, as a result of the recent decision in Rushton v Meijer, Inc.,(On Remand)<\/i>, these policies are no longer valid for arbitrating civil rights claims.<\/p>

In Rushton<\/i>, the Court of Appeals overruled Heurtebise<\/i>, concluding that "prospective" arbitration agreements involving civil rights claims are invalid. (A prospective arbitration agreement is one in which the parties agree ahead of time that should any dispute arise, they will submit it for mandatory arbitration.)<\/p>

Heurtebise<\/i> Has Been Challenged Before<\/b> The Michigan Supreme Court had earlier reversed a significant portion of the Heurtebise<\/i> ruling. The court ruled that the arbitration policy in the employer's handbook was not binding on employees because the book included a disclaimer stating that the handbook policies did not<\/u> create a contract. This ruling also raised questions about the enforceability of other handbook provisions containing similar disclaimer language.<\/p>

What the Supreme Court did not fully address, however, was the validity of prospective agreements to arbitrate civil rights claims. Three members of the Supreme Court stated that if<\/u> they were to address that issue, they would rule that a clause prospectively mandating arbitration of civil rights claims violates public policy. These members believed that such a policy is contrary to the civil rights portion of the Michigan Constitution which provides that "[n]othing contained in this section shall be construed to diminish the right of any party to direct and immediate legal or equitable remedies in the courts of this state." But because only three justices joined in this opinion, and four are required for a majority, there was no ruling on the issue at that time.<\/p>

In Rushton<\/i>, the Court of Appeals had originally followed its ruling in Heurtebise<\/i> and upheld a handbook clause mandating arbitration of civil rights claims. The Supreme Court however, after reaching its Heurtebise<\/i> decision, remanded Rushton<\/i> for reconsideration by a special panel of the Court of Appeals. On remand, two of the three panel members held that policies requiring prospective agreements for the arbitration of civil rights claims do<\/u> violate public policy (thereby adopting the rationale made earlier by the three members of the Supreme Court in Heurtebise<\/i>). Thus for now, any prospective mandatory arbitration policies for civil rights claims are invalid. The Rushton<\/i> ruling is binding until reversed or overruled by the Michigan Supreme Court or by a special panel of the Michigan Court of Appeals.<\/p>

We may not have heard the final word on this issue, however. The dissenting opinion in Rushton<\/i> was made by then Judge Clifford Taylor, who has since been appointed to the Michigan Supreme Court. In his dissent, Justice Taylor strongly urged the Michigan Supreme Court to grant leave to appeal this case.<\/p>

Rushton<\/i> Ruling Not All Bad for Employers<\/b> All three Rushton<\/i> panelists agreed that the arbitration agreement was<\/u> valid for the plaintiff's wrongful discharge\/breach of a just cause contract allegation. The Court of Appeals had upheld the policy even though the handbook included a disclaimer allowing the employer to delete or modify its policies. Thus, employers still may argue that non-civil rights wrongful discharge claims are subject to mandatory binding arbitration when an employee signs an agreement to be bound by the terms of a handbook.<\/p>

To ensure compliance with the new limitations placed on handbook arbitration policies, employers should re-examine their current policies. Moreover, they may also want to re-evaluate their rationale for adopting them.<\/p><\/div>","protected":false},"excerpt":{"rendered":"

In Heurtebise v Reliable Computers, Inc., (1994) the Michigan Court of Appeals ruled that, by placing mandatory arbitration policies in their handbooks, employers could require their employees to arbitrate all claims, both wrongful discharge\/alleged …<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_categories":[6487,6486],"class_list":["post-33366","corporate","type-corporate","status-publish","hentry","corporate_categories-human-resources__employment-laws","corporate_categories-human-resources"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate\/33366","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=33366"}],"wp:term":[{"taxonomy":"corporate_categories","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_categories?post=33366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}