### IN THE COURT OF APP EALS OF TENNESS EE AT NAS HVILLE A ssi gne d on Br ie fs A ugus t 22 , 200 5
SHARON BAI LEY v . AMERICAN GENE RAL LI FE AND ACCIDENT

INSURANCE COMPANY, ET AL 

### . Appeal f romthe Chancer y Court for Davidson Cou nty No. 00-3455-II Car ol McCoy, C hancellor

No. M2003- 01666-COA-R 3-CV - F iled Dece m ber 29, 2005

An unsucc essful party

to an arbitration proce eding appea ls the trial court’s c onfirmation of the arbitration decision. The cha lleng e is based on a lleg ed ambig uities in the agr eeme nt to arbitrate and alleg ed failu re b y t h e arbitrator to disclose potential c onflicts. We affirm the trial court’ s confirmation.

Tenn. R. App . P . 3 Appeal as of Right; Judgme nt of th e Chancer y Court Aff irm ed

P ATR I C I A J. C O T T RE LL , J ., delivere d the opinion of the court, in which W I L L I AM B. C A IN , and F R ANK G. C L EME NT , J R ., J J ., joined.

P e t e r T

. S k e i e , N a s h v i l l e , T e n n e s s e e , f o r t h e ap p e l l a n t , S h ar o n B a i l e y.

Vane ssa Griff

ith, Houston, Texas; Eric Stevens, Nashville, Tenne ssee, f or the a ppellee, A merican G e n e r a l L i f

e a n d A c c i d e n tIn s u r a n c e C o m p a n y.
OP IN ION

Ms. B ailey appea ls on two g rounds the trial court’s failure to vacate an a rbitrator’ s decision that found no merit to he r claims ag ainst America Gene ral Life a nd Acc ident I nsuranc e Company (“A GLA”) . First, Ms. B ailey arg ues that the a

rbitrator’ s decision is of no ef fec t since ther e wa s not an enf orce able a g ree ment to arbitrate betwee n the parties. Second, she arg ues that eve n if the parties
we re re qu ir e d to arb itr a te , th e de c isi on sh ou ld b e va c a te d b e c aus e the arb itr a tor faile d to a de qu a te ly disclose potential conf

licts of interest. We ag ree with the trial court that Ms. Ba iley has not provided sufficie nt gr ounds to disturb the arbitrator’ s decision.E ach em p l o y ee, i nclu d ing M s. B a i l ey, was gi ven a l et t er f rom t he P res i d ent of A G LA and a co p y of t he 1 E m p lo ye e D isp u te R e so lutio n P ro g ra m . T h e lette r fro m the P re sid e n t p ro v id e s in p e rtine n t p a rt:

It is im p o rta n t fo r yo u to k n o w tha t e m p lo ye e s w ill n o t b e w a ivin g a n y su b sta n tive leg a l righ ts und er t hi s new P rogram

. R at her, t he P rogram pro vi d es t hat any s ub st ant i ve l egal i ss ues you m ay have wi l l be res o l ved i n m ed i at i o n or b ef o re a neut ral arbi t rat o r, who se decis i o n wi l l be f i nal and bindi ng
on y ou a n d t h e c om pa n y

. Thi s d oes me a n , h ow e v e r , t h a t u n de r t h e Pr og r a m you w ai ve any (c o n tinu e d ...)
2 I. F A C TS
The mate rial fa cts of this case are not in disput e. During the application process a nd upon her e mploy ment, Ms. Ba iley ag ree d to resolve disputes with AGLA throug h its disput e re solution proce ss. Ms. Bailey

acknow ledg es ag ree ment with severa l documents from AG LA t hat desc ribe the parameters of

the dispute resolution proce ss, which includes a n obligation to arbitrate.

Firs t, inSe p te mb e r

o f 1 9 9 9 , M s

. B a il e y

s ig n e d a n ap p li c a ti o n f o r e mploy ment (“A pplication”) w ith AGLA that discusses dispute re solution and arbitration in the following provision:

EM PL OY EEDI SPU TERES OL UT I ONPRO GR AM : Notwithstanding any

provisions disclaiming the e x istence of a c ontrac tual relationship, an Employ ee D ispute Resolution P rog ram is i n p l ac e at Ame rica n Gene ral. The prog ram requires resolution of any employ ee dispute through inf ormal and formal means, including binding a rbitration. These means a re e x clusive mea ns of re solving disputes. No r ight of cou rt a c tio n e x ist s . T he de ta ils of

the pr og ram, including any

limit ations or exclusions, are furnished to eac h employ ee upon hir e and
c a n b e ob ta ine d b y

app lic a nts up on writt e n r e qu e st, a ndarehe re in i nc or po rate d in to this agre em en t by

ref ere nce. I he r e by a c knowle dge by s ign ing th is a pplic at ion , th at all le ga l dis put e s a r isi ng und e rfede r al, st at e orloc al l aw r e ga r ding this appl ication for em ployme nt (includ ing, b ut not l i mi ted to, c laim s of discrim ination ) wil l be resolved through the Em ployee Dispute Reso l u ti on P rogram , and th at I here by w aive the r ight to procee d in court. I further ackno w l ed g e that if I am hired, a te rmand cond ition of em ployme nt w ith Am e r ic a n G e n e r a l i s t h a t b o t h A m e r i c a n G e n e r a l a n d I a g r e e t o r e s o l ve all
e m plo ym e nt

r e lat e d dis put e s t hr oug h infor m al a nd for m al m e ans , in c ludin g bindi ng a r bit r at ion , t hr oug h t he Em plo ye e Di sput e Re so lut ion P r og r amand th a t b o th p a rt i es w a i v e t h ei r r i g h t t o p ro ce ed i n co u rtp u rs u a n t t o th e Pr o g ra m. (empha sis in original).
Second, Ms. B ailey

acknow ledg es re ceipt of the Employ ee D ispute Resolutio n Prog ram ref ere nced in t h e A p p l i ca t i o n wh i ch d es cr i b es t h e m et h o d s av ai l ab l e t o em p l o y ee s t o re s o l v e dis putes including both informal interven t i o n and formal mediation or ar bitration. First, employ ees a re 1(

. . . con t i n u ed) 1 pr oce dur al r i ght s you h ave t o br i ng a c our t ac t i on and t o a j ur y t ri al co ncerni ng any em p l o y m ent di s put e y ou may ha ve wi t h t he C om pany , i ncl udi ng cl ai ms of di s cr i mi nat i on bas ed on r ace , na t i onal

or i g i n , g e n de r , r e l i g i on , a g e , or di s a bi l i t y u n de r a n y fe de r a l or s t a t e c i v i l r i g h t s s t a t u t e

. S u c h c l a i ms
ar e a mo ng t hos e t hat m us t b e su bm i t t ed t o ar bi t r at i on o nce t he D i s put e R es ol ut i on P r ogr am becom es ef fect i ve.

A co p y of t he new E m p l o y ee D i sput e R esolut i o n P rogram i s encl o sed. E very i nd i vi d ual who

wo rks fo r Am eri can G eneral i s subject t o t he new P rogr am , i ncl ud i ng t he b i nd i ng arbi t rat i o n pro vi si o n,
even i f an em p l o y ee d o es not s i gn t he A ckno wl ed gm ent Fo rm. Y o ur cont i nued em p l o y m ent af t er t he da t e y ou r e c e i v e t h e e n c l os e d d oc u me n t s w i l l c on s t i t u t e y ou r a c c e pt a n c e of t h e Pr og r a m.

W hi l e t he l et t er i s not a par t o f any agr eement wi t h A G LA , i t d oes ref l ect A G LA ’ s effort s t o expl ai n t o i t s empl oy ees t he req uirem en t o f

arb i t rati o n a nd i t s co nse q ue nc es.
3 encour ag ed to speak wi t h t h eir supervisors to resolve proble ms. I f the proble m is not resolved or perta ins to the supervisor, the e mploy ee may g o to an Employ ee R elations Confere nce w ith a disput e

. I f n e ith e r o f th e s e o p ti o n s s a ti s f ie s th e e mp lo y e e , th e n me d iati o n a n d ar b it r a ti on are available . The Prog ram c ontains the following lang uag e:
The AG LA Em p l o y e eD i s p ut e Re so lut ion P r og r amis the so le m e ans of r e so lvi ng em ployme nt-re lated disp utes between you and the com pany or you an d anoth er em ployee, includ ing d ispu tes for le gally prot ect ed rights such as f ree dom from discrim ination , ret aliation, or harassme nt.

You are still free t o consul t o r f i l e a com plain t with an y appropriate state or fede r al agen cy, suc h as th e EEOC , r e ga r dingyo urle ga lly pr ot e c te d r igh ts
. How ever , this Pr ogramm ust be used i nstead of a tr i a l if you are not satisfied with th e r e sult s o f thego ve r nm e nt ag e nc y pr oc e ss. Seeking, accepting, o r c o n ti n u i n g emp l o y men t w i th AG L A me a n s th a t you agree to re solve em ployme nt-re lated claim s against t he com pany or anotherem ployee through this process instead of th ro u g h the court system . Thi s programdoes not alter A GLA’ s at wil l em ployme nt poli cy. (empha sis in original).
When Ms. Bailey

was hire d later that month, on S eptember 20, 1999, she sig ned a third document entitled the Employ ee A cknowledg men t C o n c e rn in g A meric an Ge nera l L ife a nd Acc ident I nsuranc e Company ’s Employ ee D ispute Resolution P rog ra m (“A cknowledg ment”). The Ac kn ow le dg me nt p ro vid e d th a t Ms . B a ile y a c kn ow le dg e d r e c e ipt

of the Emplo y e e Di sp ute Resolution P lan (“ Resolution P lan”). The fina l para g raph of the Acknow ledg ment provides as fo llo ws : By my signature be low, I

acknow ledg e and unde rstand that I am re quired to adhe re to the Employ ee D ispute Resolution P lan and its req u i re m ent for submiss ion of employ ment disputes to a four option pr ocess which may include mediation and/or4

arb itr a tio n. I fu rthe r und e rs ta nd that my e mpl oyme nt or c on tin ue d emp loy me nt w ith the Company

constitutes my

acc eptanc e of the t erms of this provision as a condition of my e mpl oyme nt o r c on tin ue d e mpl oyme nt.

Th e Re s o l u ti o nP l a n r e fe re nc e d inthe Ac kn ow le dg me nt i s th e fo urth d oc ume nt p ro vid e d M s. B a ile y that de sc ri be s th e pa

rt ie s’ ob lig a tio n to arb itr a te . T he Re so lut ionPla n ma kes clear that it applies to virtually all disputes betwee n AGLA and its employ ees inc luding “ all claims amounting to a c o m m o n l aw tort . . . and all cla ims under any fede ral, state, or

local human rights or employ ment rig hts statute . . . including, but not limited to Tit le VI I of the 1964 Civil Ri g hts Act . . . and any

simil ar state statut e. ” Provisions of the Resolution P lan provided Ms. B ailey that are pe rt ine nt t o th is c a se are a s f oll ow s:
4. Resolution of

Dispu tes All Disputes not otherwise settled by the Parties by mutual ag ree ment shall be finally

and conc lusively

re s o l v ed under this Plan and the [AGL A Dispute Resolution Rules, “Rules”] which shall pr ovide the
so le a nde xclu siv e me a ns fo r r e so lut ionof su c h d isp ute s. 8. Appli cable Law
A. The [Fe dera l Arbitration Act, 9 U.S.C. § 1 et. seq. , “A c t” ] sha ll apply to this Plan, the R ules, and any proce eding s under the Plan or the Rules, including any

actions to compel, e nforc e, vacate or confirm proce eding s, awa

rds, orde rs of a

Refer ee, o r s ett lements under the Pla n o r the Rul e s.
10 . Ex c lusi ve Re m e dy

Procee dings under the Plan shall be the ex clusive, final and binding method by

which disputes ar e re solved. Consequently , the institut ion of a pr ocee ding unde r this Plan shall be a condition pre cede nt to the initiation of any lawsuit by the Employ ee a g ainst the Company or any lawsuit by

the Company aga i n st the Employ ee a rising out of

the
e mpl oyme nt o f an E mpl oy e e by the Com pa ny a nda ny su c h la ws uit s sh a ll b e lim ite d to tho se un de r the Ac t.

15 . C ons e nt

Em ploym e nt

o rc o nt in ue d e m pl o y m e nt a ft e rt he Ef

fe c t iv e D a te of t his P lan c ons ti tu te s c onsen t b y b oth t he Em plo ye e and the Co m pany to be bound by this Plan , bo th dur ing th e e m plo ym e nt and af ter ter m ination of em ployme nt. (empha sis origina l).T h e p ro v isio n s o f t h e A G L A L e g a l C o n su ltatio n P la n d o no t ha v e a b e a rin g o n this a p p e a l. 2

T he com pl ai nt al l ege s M s

. B ai l ey was r aped at her hom e b y M r

. Smi t h, a def endan t i n t hi s l aws ui t , wh o was 3

a n e mp l oy e e of

a t e mp or a r y pe r s on n e l ag e n c y , St a f f i n g Sol u t i on s , w h i c h h a d c on t r a c t e d w i t h AGLA t o s u pp l y f u l l t i me t emp orar y wor ker s

. T he al l ega t i ons ag ai ns t AG LA r el at e t o i t s ac t i ons af t er not i ce of

t he al l ege d ra pe.
5 In t h e e v e n tt h e p art i e s ar e u n ab l e t o r e s o l v e a d i s p u t e i n f

o r m a l l y , t h e f

i f t h d o c u m e n tA G LA provided to Ms. Bai l ey , t h e Rules refe renc ed in Section 4 of the Resolution Plan, provide the proce dural fr amewor

k for the f

ormal dispute re solution alternatives of mediat i o n an d arbitration. Whe the r m e diatio n o r a

rb itr a tio n is app lic able is d e te rm ine d a s f oll ow s:

I f the Part ie s a g re e on a

pr oc e du re , [th e Am eri can Arb itr a tio n A sso c ia tio n] w ill implement this ag ree ment to the extent consistent with AAA’s rules upon payment of a ny app licable fee . I f the Part ie s c a nn ot a g re e , o r i f the Part ie s h a ve pr e vio us ly attempted an d fa iled to resolve the D ispute by mediation or anothe r non-binding
me c ha nis m, the Di sp ute sh a ll b e arb itr a te d u nd e r the se Rul e s.

T h e R u l es p ro v i d e t h e m ec h an i s mfo r s el ec t i n g an ar b i t r a t o r b y t h e A AA i n cl u d i n g a require ment th at b efore ac cepting an appointment a pr ospective a rbitrator “ shall disclose any ci rc u m s t an ce s l i k elyto . . . cre ate a presumption of bias.” If thereis such a disclosure , the AAA

“ wi ll e ith e r r e pla c e that pe rs on or co mmu nic a te the inf orma tio n to the pa

rt ie s f or c omm e nt. There afte r, AAAmay

disqualify

that person and its decision sh al l b e conclusive.” Like the Resolution P lan, the Rules provide that judicial review of the a rbitration proc eed i n g s h all be g ov e rn e d b y

the F e de ra l A rb itr a tio n A c t.

I n proce eding s befor e the tria l court, Ms. Bailey acknow ledg ed that the Application, R e s o l u t i o n P r o g r a m , A c k n o w l ed gm en t , R es o l u t i o n P l a n , R e s o l u t i o n R u l e s , t o g e t h e r w i t h t h e A G LA L e g a l Co ns ult a tio n Pl a n are the do c ume nts that “ c on sti tut e , to g e the r o r i n c omb inatio n, ” a po ssi ble 2

c on tr a c t.

On Novembe r 6, 2000, Ms. Bailey filed suit ag ainst AGLA in chanc ery court for violation of the Te nnessee Human Rig hts Act, Tenn. Code A nn. § 4-21-401, re l at i n g to a hostile work environment, a nd for the c ommissi on of vari o u s torts including ne g lige nt infliction of emotional distress and outrag eous conduct. On Februa ry 1, 2001, AGLA fil ed a Motion to Compel Arbitration 3 and Stay Procee dings ba sed upon Ms. Bailey ’s ag ree ment to arbitrate

. O n A u g u s t1 5 , 2 0 0 1 , t h e tr i a l c o u r to r d e r e d M s

. B a i l e y t o ar b i tr a t e h e r

c l a i m s a g a i n s tA G LA and stay ed the trial court’s procee dings pending arbitration. Ms. Bailey did not seek interlocutory appea l of this order.

The p ar ti e s th e n p r o c e e d e d w ith th e ar b it r a to r s e le c ti o n p r o c e s s d e s c r ib e d in th e Pl a n and Rules administered by

AAA. Thro ug h this process B arba ra Moss, a pa

rtner w ith the law firm of Wy att, Tarr ant and Combs, was c onditionallyselec ted b y t h e AA A. On January 11, 2001, AAA notified the parties by

letter of this conditional selection and provide d them Ms. Moss’s disclosure6

statement. This lett er to counsel for Ms. Ba iley

and AGL

A from AA A direc ted the parties as fo llo ws : Any objections to the continued service of the ar bitr at o r based on the above disclosure should be f

iled with this office, c opy in g all other pa rties, on or be fore January 16, 2002 . The AA A will make a de termination on any objections raise d,
a ft e r re c e ivi ng c omm e nts fr om the pa rt ie s, in a c c or da nc e wi th the ru le s. (e mph a sis orig inal).

Th e dis c los ur e pr ov ide d b y Ms. Mo ss andfo rw ard e d to the pa rt ie s p ro vid e d a s f

oll ow s:

I n chec king w ith myfirm member s, I find that we a

re c urre ntly

repr esenting Americ an Ge n er al in one matter in L ouisvill e and another matter in L exington, Ke ntu c ky . He re in N a sh vil le , a fo rm e r m e mbe r o f the fi rm , N a nc y Vi nc e nt, a lso repr esente d Americ an Gene ral from time to time. I assume that the claimant will not consent to this conflict, but let me know.

After rec eiving this disclosure, counsel for Ms. Bailey did not object to the appointment of Ms. Moss and did not ask for further elabor ation. There fore , Ms. Moss wa s selecte d by AAA a nd the ar bitration proce ss proce eded.

The a rbitration hea

ring occur red on A ug ust 20, 2002, and on October 22, 2002 the ar bitrator issued her de cision finding in AG LA’s favor. Two weeks a fter the arbitrator rende red he r dec ision, Ms. B a ile y

fi le d a Mo tio n to Va c a te the Ar

bit ratio n be c aus e thearb itr a tor a lle g e dly faile d to dis c los e actua l and appa

rent c onflicts of intere st. On April 3, 2003, the trial court issued its order de ny ing Ms. B a ile y ’s re qu e st t o v a c a te the arb itr a tio n. Th e tr ia l c ou rt fo un d a s f

oll ow s:
The Ar bitrator disclosed to the parties both an exis ting r elationship betwee n her f irm and American Gener al and a prior re lationship of repre sentation betwe en the
sa me . T he pu rp os e of

arb itr a tio n is to bri ng clo su reto d isp ute s su bmi tte d to thi s forum of alternative dispute resolution. Both fede ral and state law l i m i t the
c ir c ums ta nc e s in wh ic h a

Cou rt ma y int e rv e ne fo llo wi ng su bmi ssi on of a c on tr ov e rs y to arbitration.

I t is the opinio n o f this Court t hat the Plaintiff has not pre sented suff icient proof to justify

the C ourt to intervene in this arbitration. I n the l ast sentenc e of he r dis c los ur e , th e Ar

bit rator state s “ I a ssu me that th e c la imant wil l not co ns e nt to this
co n fl ict, . . .” It is clear that the Arbitrator believed she had disclosed a sufficie nt relationship t o put the Plaintiff on notice not only of a c onflict but also of a reason t o s el ec tan o t h er Arb i tra t o r. T h i s C o u rt d o es n o t fi n d t h e d i s cl o s u re t o b e m i s l ea d i n g. The Arbit

r a to r ’ s d is c lo s u r e w a s s u f f ic ie n t to me e t th e r e q u ir e me n ts o f b o ththe Fe dera l Arbitration Act a nd the Tenne ssee Unif orm Arbitration Act. I t is the opinion of this Court that a rea sonably prudent pe rson would be plac ed on notice t o make7

further inquiry as to any objectionable relationship by virtue of the January 11, 2002 disclosure. B y

selec ting the A rbi t ra tor afte r re ceiving her subjec t disclosure, the Plaintiff waived any objection s he may have ha d as to the Arbitrator’s indepe ndence

. Finding the Plaintiff’s Motion to Discovery to be without merit, t h e C ourt
no w turns to the Pla int if

f’ s Mo tio n to Va c a te the Ar bit rator ’s Aw ard

. F or

thesa me rea sons stated above in denying additional discovery , and viewing all of the e vidence reg arding the re lationship between the Ar b it rator, the Arbitrator ’s firm and A merican Ge ne ra l, i n th e lig ht m os t f a vo ra ble to t he Pla int if

f, thi s Court f

ind s th e reis i n s u ff icient evidenc e to support vac atur of the Arbitrator ’s awa rd under either the F e de ra l A rb itr a tio n A c t or the Te nn e sse e Un if

orm A rb itr a tio n A c t.

The trial c ourt then conf

irmed the a

rbitrator’ s awa

rd pursuant to the Tenne ssee Unif orm Arbitration Act. Te nn. Code Ann. § 29-5- 312.

There afte r, on April 25, 2003, Ms. B ailey asked the court to al t er or ame nd its order. The tr ia l c ou rt de nie d th e re qu e st o n Jun e 25 , 2 00 3 f ind ing a s f

oll ow s: Waiver of the Rig ht to Object to the Arbitrator

The Court has car efully considere d the ar g uments raised by Plaintiff that she did not waive her

rig ht to challeng e the a rbitrator’ s partiality notwithstanding the
arb itr a tor ’s dis c los ur e s at th e ou tse t of the arb itr a tio n. I n c on ne c tio n w iththi s analy sis, the Court has considere d and re viewed a ll of the cases cited by the parties and many others not c ited by the parties. After revie wing these c ases, the Court f inds that the Plaintiff did waive he r rig ht to challeng e the a war d b as ed on alleg ed nondisclosure by

the ar bitrator. The case s consistently hold that a party

who is on notice tha t t h e ar

b i tr at o r h a s a c o n f

l i c t o f i n t e r e s t o r m a y h a v e a c o n f l i c t o f i n t e re st i s ob lig a te d to inq uir e fu rthe r. F a ilu reto d o s o c on sti tut e s a waive r o f that c on fl ic t.

To hold otherwise wo u l d run af oul of one of the most valuable bene fits of
arb itr a tio n w hic h is e xpe die nt andine xpe ns ive dis pu te re so lut ion

. To ho ld o the rw ise would also enc ourag e parties to delay in acting upon disclosures in hopes of a positive result whil e maintaining the ability to challeng e an a dverse result. See e .g., Kiernan v. Piper Jaffray Companies, Inc

. , 137 F.3d 588, 593 ( 8th Cir. 1998) (holding that pa rt ie s to a n arb itr a tio n waive d the ir e vid e nt p art ia lit y c la im “ by

we ig hin g the ir
o p t i o n s att h e t i m e o f [ t h e a rb i tra t o r’ s ] am en d ed d i s cl o s u re s an d d ec i d i n g t o go fo rw ard wi th he r on the pa ne l” ); Go twa ld v . G otw ald , 768 S.W .2d 689, 694 (Tenn. C t

. A p p

. 1 9 8 8 ) ( r e q u i r i n g t h a ta p ar t y m u s tc o m p l a i n a n d s e e k r e l i e f i m m e d i a t e ly afte r the oc curr ence of a pr ejudicial eve nt and “may not silentlyprese rve the event as an ‘ ace in the hole’ to be use d in the event of an adve rse de cision”).8 I t is this Court’s opinion that the arbitrator’s disclosure would lead a
re a so na ble pe rs on to as su me a bia s o r c on fl ic t of int e re st e xists , o r at th e ve ry le a st to put a rea sonable pe rson on notice of the potential partialityof the a rbitrator. The Plaintiff had adequate time to object to the arbitrator befor e ar bitration commence d. To allow the Plaintiff to object afte r arbitration ha s been completed would undermine the very essenc e of the arbitration process, whic h is intended to expedite resolution and avoid unne cessa

ry judicial entang lement with resolution of the dispute.

Sufficienc y

of the Ar bitrator’s Disc losure

Plaintiff contends t hat t he arbitrator’s disclosure l acke d sufficie nt detail and, the re fo re , d e mon str a te s e vid e nt p art ia lit y by the Ar bit rato r. To su c c e e d o n th is arg ument, Plaintiff must adduce proof that the allege d partiality was “ direc t, definite, and ca pable of demonstration.” Nationw ide Mut. Ins. Co. v. Home Ins. Co. , 278 F.3d 62 1, 62 6 (6th Cir. 20 02 ). I n ad dit ion , the c ha lle ng ing pa rty mus t e sta bli sh “ sp e c if

ic fac ts that indicate improper motives on the part of the arbitrator.” Id

. Ag ain, in revie wing the information disclosed by the ar bitrat o r, no such infere nce is possible. I ndeed, the fac t that the arbitrator affirmatively disclosed that there was a

potential conflict g iven her firm’s re prese ntation of Americ an Ge nera l pr e c lud e s a

fi nd ing that th e arb itr a tor ha d impr op e r m oti ve s inmakin g thi s disclosure. More over, not only did the arbitrator disclose her belief that a conf

lict might exist, she specifica lly named an attorney who had been involved in the prior repr esentation - Nanc y

Vincent, a

former partne r. Given the arbitrator’s ef forts to put the p ar ties on notice of he r firm’s c onnection to American Ge nera l, there is no i n d i c a t i o n t h a tt h e ar

b i tr a t o r s o u g h tt o a c ti m p r o p e r l y.

Ms. B a ile y the n app e a le d the tria l c ou rt ’s or de rs to c omp e l arb itr a tio n a ndfailu reto v a c a te the ar bitration on two (2) sepa

rate g rounds. First, Ms. B ailey arg ues the trial c ourt should not have
c omp e lle d a

rb itr a tio n b e c aus e the do c ume nts c omp ri sin g he r a g r e e m e n t s w i thA G LA d id n ot c on ta in an enf orce able oblig ation to arbitrate . Second, Ms. B ailey arg ues that the trial court should have
vacated the ar

bitrator’s de cision because of the a rbitrator’ s failure to disclose potential conflicts or,
a lte rn a tiv e ly , th e tr ia l c ou rt sh ou ld h a ve a t le a st a llo we d M s. B a ile y to c on duct di sc ov e ry

int o po te nti a l c on fl ic ts.S h e d o e s n o t c la im the y a re u n c o n sc io n a b le a n d u n e n fo rc e a b le o n tha t b a sis. See Cooperv
. M RM Inve s t m ent 4 Com pany , 3 6 7 F .2 d 4 9 3 , 4 9 9 -5 0 5 (6 th C ir. 2 0 0 4 ) (d isc u ssin g T e n n e sse e law o n a d h e sio n c o n tra ct s, t h e un c o n sc io n a b ili ty and enfo rcem ent t hereo f , and t he p roo f requi red t o est ab l i sh a co nt ract of ad hesi o n and unco nsci o nab i l i t y i n t he co nt ext
o f an em p l o y m ent agreem ent wi t h an arbi t rat i o n cl ause).

T h e F A A a p p lies to c o n tra c ts “ in v o lv ing ” inte rs ta te c o m m e rc e

. See Fri z el l Co nst r uct i on Co

. , Inc. v. 5 G at l i nb ur g, L

. L. C. , 9 S .W .3 d 7 9 , 8 3

- 8 4 (T enn. 19 9 9 ) ( d i scus si ng t he i nt ers t at e co m m erce requir em ent ). T here i s no evi dence i n t hi s r ecor d abo ut t he i s s ue of i nt er s t at e c om merc e, an d t he i s s ue was not rai s ed. T he D i s put e Res ol ut i on P l an
s t at e s t h a t t h e F AA s h a l l a p p l y t o t h e Pl a n a n d a n y p r o c e e d i n g s t h e r e u n d e r , i n c l u d i n g a c t i o n s t o c o m p e l , v ac at e or
co nf i rm o rders r esul t i ng f

rom t he arbit rat i o n. In t hei r b ri ef s, the p art i es ci t e at va ri o us t i m es t o b o t h the F A A a nd t he T A A

. W het her t he FA A or t he T A A gove r ns t he s peci f i c i s s ues r ai s ed i n t his a p peal i s of no pr act i cal s i gn i f

i can ce b ecause t he p rob l em s t he FA A was i nt end ed t o cure have b een vi rt ual l y el i m i nat ed b y t he enactment i n T enness ee and

o t her s t at es of

t he U ni fo rm A rbit rat i o n A c t. T h e U A A a nd FA A have si m i l ar or i d ent i cal pro vi si o ns o n t he rel evant issu e s. N o q u e stio n o f p re -em p tio n is p re se n te d he re in. S e e F rizze ll , 9 S

. W

. 3 d at 84 (di scus si ng pre- em p t i o n of FA A ).

T h e p a rtie s m a d e no o the r c h o ic e o f sub sta n ti v e law in the d o c u m e n ts. T h e d o c u m e n ts w e re e x e c u te d in 6 T enn es s ee, an d t he work was per formed her e. Co ns equen t l y , T enn es s ee l aw a pp l i es

. T he part i es ag r ee.
9 II. A GRE E M E NT T O A R BI TRA TE

Ms. Ba iley

first appe als the trial court’s orig inal decision to compel a rbitration. She ar g ues that AGLA has fai l ed t o p rove the exis tence of an e nforc eable ag ree ment to arbitrate beca use the terms of the doc uments are too indefinite and a mbiguous. As pa rt of this arg ument, Ms. Ba iley claims that the contra cts are ones of adhesion and shoul d thus be strictly construed a g ainst AGLA. 4 Ms. B ailey does not de ny that she ag ree d to the Application, Acknowle dg ment, Resolution P lan and Rules. Her primary

arg ument focuse s on whether those documents contain an obligation to ar bitrate.

Under both the Fe dera l Arbitration Act (“F AA”) and the Tenne ssee Unif orm Arbitration Act (“ TA A”), part ies c a nn ot b e c omp e lle d to arb itr a te a ny dis pu te that he or

sh e ha s n ot e xpre ssl y 5 agr ee d t o ar bitrate. Fr izz e ll Co ns tru c tio n Co mp an y , I nc . v . G atl inb ur

g, L.L. C. , 9 S.W .3d 79, 84 (T e nn . 1 99 9) . In d e c idi ng wh e the r the pa rt ie s ag re e d to ar

bit rate a c e rt a in m a tte r, c ou rt s g e ne ra lly should “apply

ordinary state-law principles that g overn the formation of c ontrac ts.” First Options of Chicago v. Kaplan , 51 4 U. S. 93 8, 94 4, 11 5 S.Ct

. 19 20 , 1 92 4 ( 19 95 ); T.R. Mills C ontractors, Inc.
v . W RH En te rp ris e s, LLC , 93 S.W .3d 861, 866-70 (Te nn. Ct. App. 2002) (enf orce ability

of contra ct
c on ta ini ng arb itr a tio n p ro vis iong ov e rn e d b y state c on tr a c t law ). As a g e ne ra l rule , a g re e me nts to arbitrate under

both the FAAand the TA A ar e “va lid, irrevoca ble, and e nforc eable , save upon suc h gro u n d s as ex i s t at law or in e quity for the r evocation of any contra ct.” P

y b u r n v
. B i l lH

e a rd Chevrolet , 63 S.W .3d 351, 356-360 (Tenn. Ct. App. 2001) (quoting the FAAand holding that the qu e sti on of

wh e the r g ro un ds e xist to re vo c a te is de te rm ine d by state c on tr a c t la w) ; see also Tenn. Cod e An n. § 2 9- 5- 30 2. Th e re fo re , Tenn ess ee c on tr a c t la w g ov e rn s w he the r the a g re e me nt t o arbitrate is too vag ue and inde finite to be enf orce able. That is a question of law that this court

6

re vie ws de novo

. The “ centr al t enet” of contra ct construc tion in Tennessee is that the intent of the contra cting p ar ti e s w h e n th e a g r e e me n t is e xe c u te d g o v erns. Plan te rs G in Com pa ny v Fe de ra l Co mp re ss & W arehouse Company, Inc. , 7 8 S. W.3 d 885 , 890 (T e nn . 200 2)

. Th e pa rt ie s in te nt i s “ pr e su me d” to10

be in the wor ds of the contr act. Id . I f the terms are c lear and unambig uous, then “the litera l meaning of the lang uag e contr ols the outcome.” Id

. I t is a c c ur a te that a c on tr a c t mu st b e su ff ic ie ntl y de fi nit e to be e nf or c e d an d tha t inde fi nit e ne ss o n a n e sse nti a l te rm ma y pr e ve nt c re a tio n o f an e nf or c e able contra ct. Doe v . HCA Health S er vi ce s of Tennessee, I nc. , 46 S.W .3d 191, 196 (Tenn. 2001)

. Howeve r, a contra ct is ambig uous only when it is of “unc erta in meaning and may fairly be understood in more w ay s than one.” Id

. Even if we strictly

construe the terms aga inst AGLA, it is sti ll clear that Ms. Ba iley

ag ree d to b ind ing arb itr a tio n. Th e Appl ic a tio n, sig ne d b y Ms. B a ile y , h a s th re e pr ov isi on s w he re in M s. Bailey ag ree s that she waive s any rig ht she may

have to proce ed in court. When Ms. Ba iley acc epted
e mpl oyme nt w ithAG LA in Sep te mbe r o f 1 99 9, sh e sig ne d th e Ac kn ow le dg me nt a g re e ing to c omp ly wi th the Re so lut ionPla n w hic h in c or po rates th e Ru les. Th e Ac kn ow le dg me nt e vid e nc e d M s. Bailey ’s ag ree ment to be bound by the dispute resolu t i o n p ro ce s s in the Plan, which may include arbitration. The Resolution P lan clea rly included within its c overa g e the tort claims and state huma n ri g hts c la ims raise d b y

Ms. B a iley

. Th e Rul e s p ro vid e d th a t if thedis pu te wa s n ot i nf

orma lly
re so lve d to bo th part ie s’ satis fa c tio n, the n th e pa rt ie s a g re e d to arb itr a te the ma tte r. Th e pr e vio us ly quotedRe s o lu ti o n Pl a n a n d Ru le s c le ar ly r e q u ir e th a t A G LA a n d M s

. B a il e y s u b mi t e mp lo y me nt disputes to binding ar

bitration. Ther e are no va g ue or ambiguous provisions in the Application, Acknowle dg ment, Resolution P lan or Rules re g arding the obligation to arbitrate. It is also clea r that
a g re e ing to a

rb itr a tio n is a

waive r of th e ri ght to p ur su e re lie f i n th e c ou rt s. Th e te rm s o f the se do c ume nts are c ry sta l c le ar andin n o w a y of “ un c e rt a in m e a nin g ” or

a mbi g uo us

.
Ms. B a ile y

a tte mpt s to arg ue that si nc e theAc kn ow le dg me nt r e fe re nc e d th e Pr og ram in its title ( “E m p l oy ee A cknowledg ment Concerning Americ an Ge nera l L ife a nd Acc ident I nsuranc e Company ’s Employ ee D ispute Resol ution Program”) y et discusses the Plan in its tex t, then an ambig uity is thereby cre ated. We disa g ree

. Ms. Ba iley ’s Application re fer ence s the Prog ram, whic h discusses the dispute re solution process g ener ally , including inf ormal interve ntion and formal arbitration. When hir ed, Ms. B ailey then signe d the Acknowle dg ment which discusses the Plan, the document that, tog ether

with the Rules, provides the de tails about the arbitration process. Rea ding their docume n t s t o get h er, the re is no ambig uity . Ms. Ba iley maintains that ref

ere nce to a

“four op tio n p ro c e ss” in the Ac kn ow le dg me nt c re a te s c on fu sio n a bo ut the ne c e ssi ty

of arb itr a tio n. I t is likewise cle ar that the “four option pr ocess which may include . . . arbitration” simplymeans that if a dispute is not resolved e arlier then it goe s to arbitration. I f a dispute is resolved informally then
arb itr a tio n is no t re qu ir e d. Ms. B a ile y ’s arg ume nt that th e fi rs t op tio n inthe fo ur op tio n p ro g ram is unclea r is simil arly

without merit in thi s challeng e to an a rbitrator’ s decision.

For these reasons, we ag ree with the trial court that Ms. Bailey was oblig ated to submit her employ ment claims to binding a rbitration.T h e T en n es s ee Su prem e C o ur t h as h el d t h at t h e T en n es s ee U n i for m Ar bi t r at i on Act g ov er n s t h e s cope of 7 ju d ic ia l re v ie w o f ar b itra tio n

. Ar nol d v

. M or gan Kee gan & Com pany , 9 1 4 S .W .2d 4 4 5 , 4 4 7

- 4 8 (T en n. 1 9 9 6 ). T ha t ca se i n v ol v ed r ev i ew of

t h e ar bi t r at or ’ s dec i s i on on t h e mer i t s of t h e di s pu t e. T h e i s s u e bef or e u s i n v ol v es mat t er s ou t s i de t he d eci si o n of t he arbit rat o r. In any event , t he T A A and t he FA A i ncl ud e vi rt ual l y i d ent i cal l anguage est ab l i shi ng t he rel evant ground s fo r vacat i ng an arbi t rat o r’ s d eci si o n.

T h e se gr o u n d s a re vir tua lly id e n tica l t o tho se fo u n d in T e n n e sse e ’s co d ifi c a tio n o f t h e U n ifo rm A rb itra tio n A c t, 8 T enn. C o d e A nn. § 2 9

- 5

- 3 1 3 (a).
11 III. C O N FLICT O F I N TEREST D I S CL OS URE

F or he r s e c on d g ro un d of

app e a l, M s. B a ile y

c la ims that th e arb itr a tor ’s failu reto d isc los e conflicts of inter est requir es that her decision be va cate d. I t is important to note that Ms. B ailey does not claim that Ms. Moss failed to disclose any direc t involvement she had with AGL A. The d i s c l o s u r e m a d e b y

M s

. M o s s d i d n o t p u rp o r t t o l i s ta l l m a t t e r s h a n d l e d b y h e r f i r mf o r A G LA

. It pu t Ms . B a ile y

on no tic e that the arb itr a tor ’s fi rm re pr e se nte d A GLA o n u ns pe c if ie d p re se nt andpa st matters. I n eff

ect, Ms. B ailey arg ues that the arbitrator’s disclosure should ha ve pr o v i d ed m ore details about the matter s the arbitrator’s firm ha ndled for A GLA. The Rules g overning ar b itrator sele ction specific ally require d that any

potential disclosed conflict be provided to the pa rties “f or comment.” The letter

from AAA specifie d the parties had until a date ce rtain to object. As the trial court noted, the arbitrator eve n stated t h at M s

. Bailey would probably

object to her

appointment based on the disclosure. At that juncture, Ms. B ailey was e nti tle d to ob

je c t to the app oin tme nt or a sk fo r fu rthe r inf ormatio n. I t is c le ar in the re c or d th a t Ms

. Bailey took no action whatsoe ver.
The terms of the Resolution Pl an and Rules pr ovide that judici al re v i ew of an ar bitrator’s decision shall be pur suant to the Feder al Arbitration Act. The F AA spec ifies four ( 4) g rounds that 7

are available to vacate an a rbitrator’ s decision:
(1 ) w he re the a wa

rdwa s p ro c ur e d b y

c or ru pti on , f ra ud , o r u nd ue me a ns ; (2) whe re the re w as evide nt partiality or cor ruption in the arbitra t o rs, or either of the m; (3) whe re the arbitr at o rs were g uiltyof misconduct in re fusing to postpone the hearing, upon sufficie nt c ause shown, or in r efusing to hear evidenc e per

tinent and materia l to the controversy ; or of any other misbehavior by which the rights of any party have be en pre

judiced; or (4) whe re the arbitrators exceede d their power s, or so imperfe ctly executed them that a mutual, final, a nd definite a war d upon the subject matter submitt ed was not made.
9 U.S.C. § 10(a). 8

Ac c or din g to M s. B a ile y , th e arb itr a tor ’s failu reto p ro pe rl y di sc los e po te nti a l c on fl ic ts
re su lte d in a n arb itr a tor ’s de c isi on that wa s ob ta ine d by “ un du e me a ns ,” that wa s e vid e ntl y pa rt ia l,12

and that wa s the result of a rbitrator misconduct. Although differ ent statutory g rounds ar e alleg ed, they are all based on the claim that the a rb i t ra t o r did not disclose the full extent of her f irm’s
re la tio ns hip wi th A GLA o r d isc los e wi th s uf fi c ie nt d e ta il.

An arb itr a tor ’s failu re to d isc los e a ma te ri a l r e la tio ns hip wi th o ne of the pa rt ie s c a n c on sti tut e “evide nt pa

rtiality ” requiring vacatur of the a rbitrator’ s awa

rd. Commonwealth Coati ngs Corp. v. Continental Cas. Co. , 3 93 U. S. 1 45 , 1 47 -4 8, 89 S.Ct . 3 37 , 3 39 (1 96 8)

. Th is c a se , h ow e ve r, is c le arl y dis tin g uis ha

ble fr om C o m m o n w e a lth s i nce Ms. B ailey was put on notice that the arbitrator’s firm had pre s en t and past de aling s with AGLA prior to the a rbitration, had an opportunity to object or seek c larification, and y et fa iled to act in the eig ht mo n t h s b et wee n the AAA le tter and the
arb itr a tio n. . In o the r w or ds , M s. B a ile y c ho se , ine ff

e c t, t o r e ma in i g no rant.

I t is well settled that a party to arbitration is not entitled to be awa re of the possibilit y

of impartiality

prior to the ar

b i t ra t i on and then late r raise it as a g round to vac ate the a rbitrator’ s decision. I n Cook Industries Inc., v . C. Itoh & Co. , 449 F.2d 106 ( 2d Cir. 1971), a pa rty challeng ed
an ar bitration decision on the g round that the e mploy er of o n e o f t h e arbitrators had substantial business dealing s with one of the pa rties to the ar

bitration. Id . at 107. The tria l judge found that the party challeng ing the arbitrator’s decision was awa re of the re lationship at the time of the ar bitration. Id

. Appellant cannot remain silent, ra is i n g no objection during the cour se of the arbitration procee ding, and when an awa rd adve rse to him has bee n hand ed down
c omp la in o f a

situatio n o f w hic h h e ha d kno wl e dg e fr om the fi rst . “Whe rea pa rty has knowledg e of f

acts possibly

indicating bias or partialityon the part of an arbitrator he c annot remain silent and later obje ct to the awa rd of the a

rbitrators on that g round. His silence constitutes a waiver of the objection. Se e Sa n Carl o O pe ra Co. v. Conley, D.C.S.D.N.Y

. 1946, 72 F.Supp. 825, 833, aff irmed 2 Cir., 1947, 163 F.2d 310.” Ilios Shipping & Trading C orp. S.A. v. Ame rican Anthracite & Bituminous Coal Corp. , 148 F.Supp. 698, 700 (S.D.N.Y.) aff ’d per curia m, 245 F.2d 87 3 ( 2dCir . 1 95 7) ; se e als o G ar fie ld & Co. v . W

ie st , 432 F.2d 849 ( 2d Cir. 1970), cert. de nied , 401 U.S. 940, 91 S.C t. 939, 28 L .Ed.2d 220 (1971).
Cook Industries, Inc. , 449 F.2d at 108.

I n Lucent Technologies v . Tatung C o. , 379 F.3d 24 ( 2d Cir. 2004) , a party to the arbitration, Tatung , soug ht to vacate an ar bitrator’s de cision because it claimed it neve r re ceive d a copy of the arbitrator’s disclosure statement sent to the parties by AAA. Id

. at 27-28. Tatung claimed that the disclosure it did not rece ive strong ly sug g ested pa

rtiality on the par

t of the ar

bitrator re quiring
vacatur of the arbitrator’s dec ision. Id . at 27 . T a tun g arg ue d th a t Commonwealth Coati ngs require d that an aw ard be vacated when one party is not informed of a material relationship betwee n the other p ar t y an d t h e a rb i tra t o r. T h e S ec o n d C i rc u i td i s agr ee d , s t at i n g:13

Tatung ’s propose d ru l e

. . . encour ag es parties to remain ig norant of pote ntial conflicts until after

losing in ar

bitration . . .“[i] nstead of r ewa rding diligenc e at th e b eginning of
a rb itr a t i o n p r o c e e d i n g s , s u c h a r e s u l t w o u l d ‘ e n c o u r a g e t h e l o s i n g p ar t y t o e v e r y ar b i tr a t ion to conduct a backg round investig ation of ea ch of the arbitrators in an ef fort to uncove r evide nce of a former relationship with the adver sary .’” Lucent Techs., Inc

. , 2 6 9 F. S u p p

. 2 d at4 0 5 (q u o t i n g Me rit Ins. v. LeatherbyIns. Co. , 7 14 F .2 d 6 73 , 6 83 (7 th Cir . 198 3) ). On ly a ft e r o btaini ng a n u nf a vo ra ble result would a pa

rty sear ch for relationships betwe en an a rbitrator and an opposing party in hopes of finding a “pre text for invalidating the a war d,” Commonwealth Coati ngs , 3 93 U. S. at 15 1, 89 S.Ct

. 337.
Lucent Technologies , 379 F.3d at 29. See Kiernan , 137 F.3 d at 5 9 3 (dec lining to vac ate a war d “while [t he party

seeking vacatur of the a

rbitration dec ision] did not have full knowledg e of a ll the relationships t o which they now obj ect, they did have c oncerns about [arbitrator’s] impartiality and y et chose to have he r re main on the pane l rather than spend time and mone y investigating f

urther until los ing the arbitration.”)
We ag ree with th e tria l c o u r t th a t to a ll o w M s

. B a il e y to c h a ll e n g e th e ar b it r a to r a f te r an unfavor able a war d based on c onflict of intere st under these circ umstances would a ffor d Ms. Ba iley an unfair adva ntag e and thwa rt the purpose s of ar

bitration. The a

rbitrator’ s disclosure did not p u rp o r t t o b e c o m p l e t e a n d c l e ar l y p l a c e d M s

. B a i l e y

o n n o t i c e t h a th e r

f i r mh a d r e p r e s e n t e d A G LA both pr esently and in the past on unspecifie d matters. I f we allow vacatur of the decision based on these facts, t hen we will rea p the conse quence s warne d of in Lucent Technologies : namely , parties mig ht m ake str a te g ic de c isi on s no t to c ha lle ng e the se le c tio n of the arb itr a tor on ly to u se the sa me g roun d s to challeng e the a war d later. G iven the ar bitrator’s disclosure about her firm’s repr esentation and her ow n skepticism that Ms. Bailey would acc ept her

appointment, Ms. Ba iley was required to avail herself of the opportunity to challeng e the a

ppointment of Ms. Moss based on this information rather

than use it to later c halleng e the a war d.

IV. C ONCL US I ON
There fore , for the foreg oing rea sons and those conta ined in the trial court’s order s, we a ffirm the trial cour t ’s d en i al of Ms. Bailey ’s re quest to vacate the aw ard or , alternatively , conduct dis c ov e ry . T he jud g ment of th e tr ia l c ou rt is a ff ir me d. Cos ts a

rea sse sse d a g a ins t th e app e lla nt, S h ar o n B a i l e y, f

o r w h i c h e x e c u t i o n m a y i s s u e i f n e c e s s ar y.

____________________________________ PATRI CI A J . COTTRELL , J UDGE