Court Opinion

ID: 9492177
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:34:08.758678+00
Date Added: 2024-06-11T17:55:09.482590
License: Public Domain

ROVNER, Circuit Judge,
dissenting.
Paying homage to “a basic tenet of contract law,” we recognized in Gibson that an employer must have given some consideration in exchange for an employee’s pledge to arbitrate if the agreement is to be enforced against her. Gibson v. Neighborhood Health Clinics, Inc., 121 F.3d 1126, 1130 (7th Cir.1997) (applying Indiana law); see also Larimer v. Dayton Hudson Corp., 137 F.3d 497, 502 (7th Cir.1998) (applying Wisconsin law); Levin v. Perkins, 12 Wis.2d 398, 107 N.W.2d 492, 495 (1961); Gustafson v. Physicians Ins. Co. of Wis., 223 Wis.2d 164, 588 N.W.2d 363, 367 (Wis.App.1998). Thus, Circuit City can hold Michalski to her promise only to the extent that the company suffered a detriment or conferred some benefit upon Michalski in exchange for her agreement to forgo judicial resolution of her claims. Gibson, 121 F.3d at 1130; see also First Wis. Nat’l Bank of Milwaukee v. Oby, 52 Wis.2d 1, 188 N.W.2d 454, 457 (1971) (collecting cases); Lovett v. Mt. Senario College, Inc., 154 Wis.2d 831, 454 N.W.2d 356, 358 (Wis.App.Ct.1990). In fact, Circuit City surrendered nothing at all. My colleagues read into the arbitration agreement a promise by Circuit City to be bound by the results of any arbitration proceeding and cite that as sufficient consideration. Ante at 637; see Gibson, 121 F.3d at 1131. But that promise, I believe, has no more substance than a chimera.
On the single sheet of paper that Mi-chalski signed there can be found no undertaking by Circuit City. That document — styled as the “Associate Receipt of Issue Resolution Package” — in the first instance reflects Michalski’s review of a video about the company’s arbitration program and her receipt of certain written *638materials — copies of the Associate Issue Resolution Handbook, the Circuit City Dispute Resolution Rules and Procedures, and the Circuit City Arbitration OpNOut Form. It goes on to evidence Michalski’s understanding that participation in the arbitration program is voluntary but that she was obliged to complete and return the opt-out form in the event she did not wish to participate. Finally, it sets forth the following acknowledgment by Michalski: “I understand that if I do not mail the [opt-out] Form within 30 calendar days, I will be required to arbitrate all employment-related legal disputes I may have with Circuit City.” Nowhere on the page, however, is there any indication of what Circuit City would or would not do in exchange for Michalski’s decision not to opt-out of the arbitration program. The acknowledgment does not purport to incorporate the terms of either the Handbook or the Rules and Procedures. Indeed, Mi-chalski — the only signatory — simply acknowledged that she would be required to arbitrate, but not pursuant to any of the rules or procedures set forth elsewhere.. Contrast Johnson v. Circuit City Stores, Inc., 148 F.3d 373, 375 (4th Cir.1998) (both applicant and Circuit City signed a dispute resolution agreement providing that “Circuit City agrees to follow this Dispute Resolution Agreement and the Dispute Resolution Rules and Procedures in connection with the Associate whose signature appears above”).1
My colleagues locate a promise by Circuit City to arbitrate in the separate Associate Issue Resolution Handbook of which Michalski acknowledged receipt. Ante at 637. I am inclined to think that the more pertinent document in this regard is the Circuit City Dispute Resolution Rules and Procedures (upon which Circuit City itself relies, see Circuit City Br. 24-25 and Reply Br. 12), for by them own express terms it is those Rules and Procedures which govern arbitrations between the company and its employees. See Rule 1 (Purpose). The Handbook, by contrast, describes the arbitration program in only the most general terms. Even the allusion to the binding nature of the arbitration that my colleagues reference does not make clear upon whom the arbitration is binding. The Rules are much more explicit in this respect:
The award rendered by the Arbitrator shall be final and binding as to both the Associate and the Company. Either party may appeal the Arbitrator’s decision to a court in accordance with the appeal procedures of the Federal Arbitration Act, 9 U.S.C. § 1 et seq., or the Uniform Arbitration Act of Virginia, 8.01-581.01 et seq.
Rule 17 (Appeal Rights).
What the Rules and Procedures also-make clear, however, is that Circuit City remains free to alter the terms and conditions of the arbitration program:
Circuit City may alter or terminate the Agreement and these Dispute Resolution Rules and Procedures on December 31st of any year upon giving 30 calendar days written notice to Associates, provided that all claims arising before alteration or termination shall be subject to the Agreement and corresponding Dispute Resolution Rules and Procedures in effect at the time the claim arose. An Associate shall be deemed to have accepted a modification or termination of the Dispute Resolution Agreement or the Rules and Procedures by accepting or continuing employment with Circuit *639City after receiving notice of such modification or termination.
Rule 19 (TERMINATION OR MODIFICATION OF Dispute Resolution Agreement or Dispute Resolution Rules and Prooedures). Circuit City has thus reserved the power to rewrite any of the Rules and Procedures, including the Rule addressing the binding nature of the arbitration. The company could, in other words, revoke its own promise to abide the results of arbitration, leaving Michalski no choice other than to quit if she did not approve the change. Had Circuit City and the employee signed a contract in which each agreed to arbitrate, as they did in Johnson, that scenario would be foreclosed to the company. But here there is no such document. The only agreement by Circuit City to arbitrate is one found in the Rules and Procedures, which can be modified by the company at will.
The putative consideration for Michal-ski’s consent to arbitrate was therefore wholly illusory. Circuit City retained the authority to alter the ground rules and declare, if it wished, that arbitration would be binding upon the employee but not the company. It suffered no detriment nor conferred any benefit upon Michalski in exchange for her agreement to arbitrate. That is true notwithstanding the provision deeming an employee to have “accepted” any subsequent modification in the Rules and Procedures by continuing to work for Circuit City after the change was announced. See Rule 19, supra. For having lured Michalski into the agreement to arbitrate with one inducement (a mutual promise to arbitrate), Circuit City cannot then retract that inducement and offer another in its stead (continued employment). That kind of “bait and switch” maneuver has no place in the law of contracts, particularly where the employee’s civil rights are concerned.
Whatever advantages it may offer employees, arbitration is not without its limitations. As the Equal Employment Opportunity Commission has recognized, there are aspects of arbitration that arguably give employers — particularly large, national employers like Circuit City which arbitrate on a frequent basis — a distinct advantage in that arena. See EEOC Notice No. 915.002 (July 10, 1997) <http://www.eeoc.gov/docs/mandarb.txt>. A choice to resolve one’s Title VII claims outside of the courtroom — if it is made freely and in return for adequate consideration — commands our deference.
But courts should be ever mindful that Congress, in enacting Title VII, thought it necessary to provide a judicial forum for the ultimate resolution of discriminatory employment claims. It is the duty of courts to assure the full availability of this forum.
Alexander v. Gardner-Denver Co., 415 U.S. 36, 60 n. 21, 94 S.Ct. 1011, 1025 n. 21, 39 L.Ed.2d 147 (1974). We must therefore exercise vigilance in ascertaining that the arbitration agreements that employers seek to enforce against their employees constitute valid, enforceable contracts. The agreement at issue here lacks the rudimentary element of consideration. Michalski promised to arbitrate her claims against Circuit City, but in return “Circuit City promised nothing,” as Judge Reynolds recognized below. R. 18 at 2. I would therefore affirm his decision to deny the motion to stay this suit or compel arbitration.
I respectfully dissent.

. Circuit City requires only its applicants for employment to sign an agreement in which the (prospective) employee affirmatively agrees to arbitrate. Those like Michalski, who were already employed with the company when it implemented the arbitration program, were automatically deemed participants unless they elected to opt out. Thus, only Michalski’s written acknowledgment of the opt-out alternative coupled with her failure to exercise that option evidence her agreement to arbitrate. See Gibson, 121 F.3d at 1132 (Cudahy, J., concurring) ("It seems to me that a knowing and voluntary waiver [of a judicial forum] would require at the least, a single and explicit contractual document.-”).