Opinion ID: 203024
Heading Depth: 2
Heading Rank: 2

Heading: The Dispute Resolution Program

Text: We describe the essential facts surrounding the Program and its adoption. Roughly a year before the plaintiffs left the company, on Tuesday, November 25, 2003, at 11:42am, two days before the Thanksgiving holiday, DRC sent a five-line e-mail to all of its employees asking them to read three attached documents describing the company's new Dispute Resolution Program. [The third attachment is not in the record and apparently is not in dispute.] Nothing in the e-mail mentioned that the attachments constituted modifications to the employees' terms of employment or employment contract, nor that the documents restricted the employees' rights to a judicial forum, nor that they waived class actions. Further, no response to the e-mail was required, nor were employees asked to acknowledge reading the documents. The initial attachment, which appeared first after the body of the e-mail, contained a two-page memorandum introducing the Program. That memorandum explained that the Program took effect on the following Monday, December 1, 2003, and applied to all work-related disputes between the company and its employees. The memorandum stated that the Program expands upon and enhance[s] DRC's previous problem resolution process by requiring mediation and arbitration, described as two additional and more formal processes for resolving disputes between an employee and the company. The enhanced Program would create improved, reasoned, predictable, and reliable processes that would provide the same resolution as can be obtained through the court system but with less cost and complications for all parties. Lastly, the memorandum reiterated that [t]he program does not limit or change any substantive legal rights of our employees, but it does require that you seek resolution of such rights and complaints by following the procedures of the program. (Emphasis added.) This language is in some tension with later waiver language contained in the other attached documents. An employee who stopped after reading the descriptive memorandum would not know of the class action waiver. A second attachment contained the actual text of the Program in four parts: a broadly-phrased, fifteen-page description of the Program, two appendices describing the Program's rules, and a third appendix containing relevant forms. The scope of the Program, by its terms, is broad and encompasses claims under federal and state employment statutes and matters of interpretation of the Program's rules. The Program applies to all Disputes, defined as any dispute for controversy including all legal and equitable claims, demands, and controversies, of whatever nature or kind, whether in contract, tort, under statute or regulation, or at law or in equity, between persons and entities bound by the Program . . . including, but not limited to, any matters with respect to . . . this Program. . . . The Program also covers claims premised on allegations of[] discrimination based on race, sex, religion, national origin, or disability; sexual harassment; workers' compensation retaliation; [and] defamation. . . . The Program also instructs the arbitrator to construe the scope of the Program liberally: The arbitrator shall interpret and apply these Rules to the greatest extent possible insofar as they relate to the arbitrator's powers and duties. There is also a severability clause. Should a section or a provision of the Program be invalidated, the Program provides: The invalidity or unenforceability of any provision herein shall not affect the application of any other provision or any jurisdiction in which such a provision may be lawful. The fifteen-page Program description, plus its three Appendices, constitutes a thirty-three-page document. An employee who read only the e-mail, the descriptive memorandum and the fifteen-page Program description would not know of the class action waiver. The two class action waiver clauses are contained in the Appendices to the Program. The first is in Appendix A, entitled Dynamics Research Corporation's Dispute Resolution Program Rules. Rule 12 is entitled Authority and states:  The Arbitrator shall have no authority to consider class claims or join different claimants or grant relief other than on an individual basis to the individual employee involved. The right of any party to pursue a class action for any Dispute subject to the Program shall be waived to the fullest extent permitted by law.  (Emphasis added.) The language is some twenty pages into the thirty-three pages of the Program and the Appendices. Later, in Appendix B, entitled Dynamics Research Corporation's Dispute Resolution Program Arbitration Rules, there is a second waiver clause in Rule 30 (Scope of the Arbitrator's Authority) on page 28 which provides that the arbitrator  shall have no jurisdiction to grant class relief . . . . (Emphasis added.) This clause does not contain the limiting language to the fullest extent permitted by law contained in Appendix A. In order to find either of the provisions, the employee would have needed to read the initial five-line e-mail, the memorandum and the Program attachment, and to proceed to the pages in question. A reader who read all of the attachments would likely still be confused because of tension between the wording of several clauses and documents. For example, one set of provisions provide for the preservation of all of the employees' rights and remedies. The last page of the Program description notes that an arbitrator has the same authority as a judge or jury in making awards or granting relief to an individual employee. [1] A judge, in an appropriate case, may issue class-wide relief, while the second class waiver clause said an arbitrator had no such authority. To give another example, the first paragraph of Appendix A, in a section entitled Purpose and Construction, states in part: [The Program] is not intended either to abridge or enlarge substantive rights available under applicable law. In the same rule reiterating the class waiver on page 28, the Program also provides: The arbitrator shall not have the authority to either abridge or enlarge substantive rights available under existing law. The Program's rules elsewhere state that [o]ther than as expressly provided herein, the substantive legal rights, remedies, and defenses of all Parties are preserved. Further, the reader would have to search to find that he or she had consented to the terms of the new Program by returning to work on the following Monday. While nothing is mentioned in the e-mail, the descriptive memorandum, or the document describing the Program, the final page of Appendix A provides that [e]mployment on or continued employment after [December 1, 2003] constitutes consent by both the Employee and the Company to be bound by this Program. . . . By contrast, before the mass e-mail to all company employees on November 25, 2003, DRC had sent a similar e-mail to its general managers, including the two plaintiffs. That e-mail contained an attached memorandum which informed the managers that the Program would be mandatory and non-discretionary. This language was omitted from both the November 25 e-mail and the attached memorandum sent to all employees. The company's later announcements to its employees also failed to disclose the class action waiver. The company's monthly newsletters in January, February, and November of the next year discussed the Program. Only the February 2004 article was explicit that lawsuits under the Program would be subject to a motion to remove the dispute from court. None of the newsletters described the class action waiver provision. There is evidence that the method by which the Program was announced and adopted varied from the company's usual practices. Unlike the Dispute Resolution Program at issue in this case, which was only featured in the newsletter after it became effective, a New Compensation Program was announced in the January 2004 newsletter before its effective date of February 1, 2004. That newsletter also discussed plans to schedule employee Compensation Program Orientation Sessions to explain the New Compensation Program. While DRC routinely communicated with employees about new policies using e-mails and, at times, after-the-fact articles in the newsletter, the company also sent personalized letters to the homes of employees, ran training programs, and made announcements at employee meetings when it implemented new retirement programs. As to its Code of Conduct, the company also required employees to sign an annual acknowledgment that they had received and read the distributed materials. There was no evidence from DRC that it had ever adopted and implemented any significant personnel policy, much less a significant one involving waiver of rights, by an e-mail to employees shortly before a holiday, and to which the employees were deemed to have agreed by returning to work after the holiday.