321 F.Supp.2d 142 (2004) | Cited 1 time | D. Massachusetts | June 3, 2004


This case presents the general question of whether an employercan take advantage of the informality and speed of emailcommunications to notify an employee about a new and mandatoryarbitration policy. The issues are significant. Defendants seekto effectively extinguish plaintiff-employee's right to a federaljury trial through the enforcement of an "agreement" he may havenever known about.

Roderick I. Campbell ("Campbell") brings this case against hisformer employer, General Dynamics Government Systems Corporation("General Dynamics"), and its Human Resources Director, RichardSchnorbus ("Schnorbus"), alleging that defendants discriminatedagainst him by terminating him because of his handicap, sleepapnea, in violation of Massachusetts General Laws, Chapter 151B,and the Americans With Disabilities Act, 42 U.S.C.A. §§12101-12213. Before the Court is defendants' motion [document # 5] to staythe federal court proceedings and compel Campbell to arbitratehis claims, based on a Dispute Resolution Policy ("DRP")implemented by General Dynamics during the time Campbell wasemployed on an at-will basis. For the reasons set forth below,defendants motion to stay these proceedings and compelarbitration is DENIED.


A. Campbell's Claims

Campbell was employed by General Dynamics as an at-willemployee from February 18, 2000, until he was terminated onDecember 30, 2002. Plaintiff alleges that he suffers from sleepapnea, a condition that can disturb sleep and make it impossibleto wake up in the morning, as well as cause episodes of sleepduring the day. He alleges that his termination was due to hisdisability.

Campbell filed a charge of discrimination based on disabilityagainst defendants with the Massachusetts Commission AgainstDiscrimination ("MCAD") on May 13, 2003. On September 4, 2003,Campbell filed a Complaint in Norfolk Superior Court. Defendantsremoved the plaintiff's action to federal court on September 17,2003. On November 10, 2003, defendants filed the present motion[document # 5], asserting that the DRP became effective on May 1,2001, is enforceable with regard to Campbell, and requiresplaintiff to refer his claims to mandatory arbitration.Defendants request that this Court stay all federal courtproceedings and compel arbitration. This Court held a hearing onthis motion on December 16, 2003.

B. The Dispute Resolution Policy and its Dissemination

There is no dispute that the DRP, if enforceable and if read inits entirety, would require Campbell to submit his claims toarbitration. The controversy surrounding this motion centers onGeneral Dynamics' attempt to inform plaintiff of the DRP beforeits implementation, and on whether it succeeded in doing so.

The parties agree that on April 30, 2001, General Dynamics sentan email message to all of its employees. The email came from"Broadcaster, NDHM [NDHM.Broadcaster@GD-NS.Com]" [document # 6,exhibit 1]. The subject line of the email was "G. DeMuro — NewDispute Resolution Policy." Gerard DeMuro was the president ofGeneral Dynamics at that time. Nowhere in the email's heading wasany indication given that the email was of critical importance.There was certainly no indication that the email intended tochange employees' legal rights.

The text of the message was in the form of a letter addressed"Dear Fellow Employee:", and its length was the equivalent of onefull page, single spaced. The first two paragraphs of the email made no mention of the DRP, theimportance of the email, or anything even remotely indicatingthat the email was to have the effect of taking away employees'rights to a federal judicial forum. The paragraphs were insteadinnocuous descriptions of General Dynamics as "a leader in a verycompetitive marketplace," and its "support of open, forthrightand honest communication." The DRP was described in broad termsin the third paragraph; there was only a vague reference to theissues it encompassed. "[W]e have developed the DisputeResolution Policy ('DRP') to address legal issues raised byeither an employee or General Dynamics CommunicationSystems."1 Id. The fifth paragraph noted that the DRPwould become effective May 1, 2001, and only there was it firstmentioned that it was "an essential element of [employees']employment relationship." Id. No other reference — implicit orexplicit — was made in the text of the message to the fact thatGeneral Dynamics expected its employees to be bound by the DRP ifthey continued working there.

The email message included two links — to"dispute_resolution.htm and DRP_Handbook_2.doc" — located onGeneral Dynamics' internal website, which employees could accessby clicking on either link with their cursor. The former, "dispute_resolution.htm," was a two-page flyer [document # 6,exhibit 2] ("the flyer"), which set out key provisions of the DRPin plain-language in a question-and-answer format. In bold,highlighted text, the flyer informed employees that the DRP is"the exclusive means of resolving workplace disputes for legallyprotected rights. If an employee files a lawsuit against theCompany, the Company will ask the Court to dismiss the lawsuitand refer it to the Dispute Resolution Policy" [document # 6,exhibit 2, page 2]. Other sections of the flyer informedemployees that the DRP would apply to all employees who"[c]ontinue [their] employment after the effective date of theDRP's adoption," and that "[e]mployment discrimination andharassment claims, based on, for example, . . . disability" arecovered [document # 6, exhibit 2, page 2].

The latter, "DRP_Handbook_2.doc," was a 26-page handbook[document # 6, exhibit 3] ("the handbook"), which detailed theprovisions of the DRP.

Campbell denies having any memory of even receiving the email.Defendants allege that Campbell opened the email, and present asevidence a "tracking log" [document # 6, exhibit 4] whichindicated that Campbell opened the email at 1:56 p.m. on April30, 2001. (The email was sent at 1:54 p.m. on that day.) However,defendants offer no evidence to support, nor do they evensuggest, that Campbell clicked on either link, or that he readthe text of the email. General Dynamics did nothing but send the email to make itsemployees aware of the DRP. Plainly, even email technologyenables the company to do better. The company did not, forexample, require an employee to signify by return email that hehad read the email, or more importantly, that he had read theattachments and understood their implications. General Dynamicsdid not require the employee to note "I accept" in a returnemail. Nor did it use the old fashioned ways of assuring notice.It did not hold a meeting announcing the DRP with a sign-in sheetto monitor which employees had attended.

In these days, when employees may be deluged with electronicmessages and readily delete them, the question is whether acompany can notify its employees of a substantial change inpolicy as General Dynamics did here. While email dispenses withmany of the formalities of written communication, wheninformation of this significance is conveyed, it may not beadequate.


Defendants assert that the DRP prevents Campbell from bringinghis ADA claim in federal court. Campbell responds with twoarguments: first, that the DRP cannot be enforceable as to himbecause General Dynamics' notice was insufficient, and thereforehe cannot be held to have agreed to it; and second, thatregardless, the DRP does not satisfy the Federal Arbitration Act, 9 U.S.C.S. §§ 1, et seq., ("FAA") because electronicnotification does not satisfy the FAA's "written agreement"requirement. Since I find that General Dynamics' efforts tonotify its employees of the DRP so clearly fail againstCampbell's first argument, I do not address the second.

A. General Dynamics' Method of Notification

1. Standard Under the FAA and Contract Law

The FAA, 9 U.S.C. § 1 et seq., provides that federalcourts shall stay proceedings in any action "referable toarbitration under an agreement in writing for such arbitration"until the arbitration is complete. 9 U.S.C. § 3. Under the FAA,a civil action must be stayed if: (1) there is a writtenagreement to arbitrate; and (2) any of the issues raised arewithin reach of that agreement. See MCI TelecommunicationsCorp. v. Exalon Industries, Corp., 138 F.3d 426, 429 (1st Cir.1998); Bercovitch v. Baldwin Sch., 133 F.3d 141, 148 (1st Cir.1998).

The Supreme Court has held that agreements to arbitratestatutory employment discrimination claims are enforceable.Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 123-24(2001). Claims under both the ADA and M.G.L. c. 151B may properlybe subject to arbitration. See Bercovitch v. Baldwin Sch.,Inc., 133 F.3d 141, 149-50 (1st Cir. 1998). The ADA expresslyencourages arbitration of disputes under some circumstances.Section 12212 of the ADA states, "[w]here appropriate and to the extent authorized by law, the use of alternative means of disputeresolution, including . . . arbitration, is encouraged to resolvedisputes arising under this chapter." 42 U.S.C. § 12212.

It is clear that employment discrimination claims based ondisability were specifically included in the handbook (§ 4.1) andthe flyer (page 2). From defendants' perspective, the contents ofthose documents thus constitute an agreement between GeneralDynamics and Campbell. But it is equally clear that employmentdiscrimination claims were not referenced in any significant wayin the body of the email message. What is more, Campbell deniesever having read the email, and challenges whether GeneralDynamics' method of notice was sufficient for this Court to holdthat Campbell "agreed" to a policy he denies having ever beenmade aware of.

The key question here is thus whether, under general principlesof state contract law and under the language of the ADA, thelevel of notice was sufficient to find that there was anagreement which encompassed those terms. See Rosenberg v.Merrill Lynch, Pierce, Fenner & Smith, Inc., 170 F.3d 1, 19 (1stCir. 1999) (in general, state contract law governs the existenceof an arbitration agreement, but the 1991 Civil Rights Act andthe ADA require also that arbitration agreements be enforced"where appropriate and to the extent authorized by law");Brennan v. King, 139 F.3d 258, 264 (1st Cir. 1998) (citingFirst Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944(1995). Section 118 of the 1991 Civil Rights Act provides "[w]here appropriateand to the extent authorized by law, the use of alternative meansof dispute resolution, including . . . arbitration, is encouragedto resolve disputes arising under the Acts or provisions ofFederal law amended by this title." Pub.L. No. 102-166, 188, 105Stat. 1071, 1081 (1991). See also, 42 U.S.C. § 12212 (parallellanguage under the Americans with Disabilities Act (ADA)).Obviously, if General Dynamics' method of notice was insufficientand Campbell was not aware of the proposal, there was noagreement.2

2. The Notice Standard After Rosenberg

The First Circuit has held that a waiver of the right to ajudicial forum for civil rights claims in exchange for continuedemployment "must at least be express." See Ramirez-De-Arellanov. American Airlines, Inc., 133 F.3d 89, 91 n. 2 (1st Cir. 1997)(quoting Nelson v. Cyprus Bagdad Copper Corp., 119 F.3d 756,761-62 (9th Cir. 1997) (internal quotation marks omitted). Undereven the loosest standards suggested by courts, an employee doesnot give up his statutory right to a judicial forum unless he knew he was doing so or the notice he received was sufficient tobind him despite his lack of actual knowledge (such as in thecase of a party who signed an agreement without bothering to readits contents). See Rosenberg, 170 F.3d at 19, citing Wrightv. Universal Maritime Service Corp., 525 U.S. 70, 80 (1998), andnoting that the Supreme Court's holding in Wright that a waiverof a judicial forum set forth in a CBA must be "clear andunmistakable" to be enforceable," supports the idea that "theremust be some minimal level of notice to the employee thatstatutory claims are subject to arbitration," although a lesserstandard than "clear and unmistakable" applies in the context ofprivate agreements. Rosenberg, 170 F.3d at 21.

In Rosenberg, the First Circuit dealt with a situation wherean incoming employee had signed a form agreeing to arbitrate "anydispute, claim or controversy that may arise . . . that isrequired to be arbitrated under the rules, constitutions, orbylaws of the organizations indicated in Item 10." The documentsdescribed in Item 10 articulated that the specific claims atissue in her case were covered by the arbitration agreement, butMerrill Lynch failed to give her those documents. In addressingwhether to enforce the arbitration agreement, the Court focusedon "Congress's concern that agreements to arbitrate employmentdiscrimination claims should be enforced only where`appropriate,' a concern not expressed in the FAA or at commonlaw." Rosenberg, 170 F.3d at 19 (although the Court was dealing there with the 1991 Civil Rights Act, it explicitly noted thatthe ADA used the parallel language quoted above.)

It is not surprising that Congress and the courts have lookedmore critically at whether an employee has been given notice ofmandatory arbitration in a civil rights setting than in acommercial setting. Such agreements effect a waiver of a judicialforum for civil rights claims, such as those brought under theADA — a forum particularly important to plaintiffs.3Discrimination laws reflect a Congressional finding that certaingroups are especially in need of federal protection in theworkplace. See Pryner v. Tractor Supply Co., 109 F.3d 354,360 (7th Cir. 1997). What is more, litigation has played andcontinues to play a critical role in the legal and social changesthat strike at the core of the purpose of discrimination laws.See Rosenberg v. Merrill Lynch, 995 F. Supp. 190, 197 (D.Mass.1998).

In Rosenberg, while the employee had admittedly signed theform, and the form undisputedly referenced mandatory arbitration,the Court held it could not be enforced. Merrill Lynch had theopportunity to make the contract sufficiently specific to putRosenberg on notice, but it failed to do so, and even failed toprovide the Item 10 documents it was required to provide underthe employment agreement at issue. As the Court noted, "[g]ivenCongress's concern that agreements to arbitrate employmentdiscrimination claims should be enforced only where`appropriate,' a concern not expressed in the FAA or at commonlaw, Merril Lynch should, we believe, bear [the risk ofplaintiff's ignorance]." 170 F.3d at 19. Even if state contractlaw or generally the provisions of the FAA permitted such notice,the discrimination laws did not.

3. General Dynamics' Method of Notification

General Dynamics seemed to have done as little as it could toensure their employees were informed of a program thatsubstantially affected their employee's legal rights. Although they hired Campbell in writing4 and terminated him bothin person and in writing, they chose to send notice of theimplementation of the DRP solely by email. They sent no paperletters, and held no meetings to announce the DRP verbally. Theydid not ask employees to sign anything — even electronically —signifying they read and understood the DRP. They did not eventake the incredibly simple and inexpensive step of configuringtheir system to log when and if employees clicked on the links tothe flyer or the handbook.

Email is certainly an inexpensive and convenient means ofnotification. But those same blessings bring with them drawbacks.Whether used for work or for personal reasons, most users ofemail inevitably receive incredible volumes of messages. It isoften hard to distinguish the important from the frivolous. It isnot surprising that Campbell reported that he received between 10to 100 daily, many of which were "mass emails . . . relating tocompany functions, birthdays and anniversary announcements, andother trivial matters." The practice of reflexively opening (soas to remove the unread tag) and deleting a mass email withoutreading it, or even being aware of it, is not uncommon. Underthose circumstances, to presume that Campbell read the text ofthe email, clicked on its links, and read the linked documents, and use that as the basis fordepriving him of rights guaranteed to him by federal law, wouldbe to show an intolerably low level of respect for those rights.

Put simply, receiving an email in a virtual mailbox is not thesame as receiving a letter in a real mailbox.5 Showingthat someone opened an email is not the same as showing that theyacknowledged it. There are a number of simple ways, as I havedescribed above, that the sender of an email can monitor what itsrecipient has done with it. General Dynamics chose only toutilize the most superficial of these. As a result, we knownothing about Campbell's interaction with the email and itsattachments except for the fact that, according to GeneralDynamics' tracking log, he opened it.

I find that sending a mass email message, without more, failsto constitute the minimal level of notice required by the FirstCircuit under Rosenberg and other decisions. 4. The Risk of Ignorance Must Fall on General Dynamics

Considering its ability to control the level of notice andtaking into account the significance of the rights GeneralDynamics was attempting have its employees waive, it is clearthat General Dynamics should bear the risk of ignorance for thoseemployees who did not choose to read the email and itsattachments. See Rosenberg, 170 F.3d at 19.6

It was General Dynamics who not only drafted the policy, butdetermined the way it would be disseminated. Cf. Mastrobuonov. Shearson Lehman Hutton, Inc., 514 U.S. 52, 62 (1995) (notingthe "common-law rule of contract interpretation that a courtshould construe ambiguous language against the interest of theparty that drafted it"). It was General Dynamics who could havecheaply and easily announced the change in a way that would haveensured that Campbell and every other employee knew. It seemsonly appropriate that General Dynamics now bear the riskassociated with its minimal effort.7 B. General Dynamics Cannot Establish that Campbell WasActually Aware of the DRP

If Campbell had actually been aware of General Dynamics' planto implement the DRP, despite General Dynamics' plainlyinsufficient method of notification, the policy might still beenforceable. But plaintiff has asserted that he had no knowledgeof the DRP, and defendants have offered no evidence to contradicthis assertion that, whether he opened the email or not, he wasnever aware of its contents and the significance of the DRP.Given General Dynamics' means of notification, I have no reasonto doubt Campbell's claim. For the reasons described in detailabove, I will not assume that Campbell was aware of the email'scontents simply because he clicked to open it.

C. The FAA's Written Agreement Requirement

Because Campbell's first argument is so clearly dispositive ofdefendants' motion, it is unnecessary for this Court to addresswhether an email message can satisfy the FAA's written agreementrequirement.


For all of the foregoing reasons, defendants' motion to staythe proceedings and compel submission of plaintiff's claims toGeneral Dynamics' DRP [document # 5] is DENIED. SO ORDERED.

1. While it is this sentence that at least arguably madereference to legal claims being resolved through the DRP, it isimportant that this sentence not be considered in isolation. Thesentence is the fourth in an eight sentence paragraph, and itstone is certainly not consistent with the reality that the DRPtakes away rights from General Dynamics' employees.

2. Defendants may be correct to point out that where anat-will employee would reasonably believe that a new policyembodies conditions upon which employment is to continue, theemployee's continuing to work after being notified of the policyconstitutes acceptance of the policy. See O'Brien v. NewEngland Tel. & Tel. Co., 664 N.E.2d 843, 848 (Mass. 1996); seealso Gebhard v. Royce Aluminum Corp., 296 F.2d 17, 19 (1stCir. 1961) (observing that, as a matter of law, upon presentationof new terms and conditions of employment, an at-will employee'soptions are to accept the terms or quit). Defendants' reliance onthat proposition, however, assumes, that Campbell was notified(or can be considered notified) of the policy. It is hischallenge of that assumption which provides the primary basis forplaintiff's argument.

3. The ADA's "appropriate" language raises the bar forenforceability, but even applying basic Massachusetts contractlaw the DRP could not be enforced against Campbell; there wassimply no valid contract. Under Massachusetts law, a validcontract requires offer, acceptance, and consideration. SeeCity of Haverhill v. George Bronx, Inc., 716 N.E.2d 138(Mass.App.Ct. 1999). While continuing to work with the knowledgethat a dispute resolution policy is a mandatory condition ofcontinued employment can constitute acceptance (and the continuedemployment, consideration), an employee's knowledge of the offeris obviously a necessity for the inference of acceptance to hold.See Hightower v. GMRI, Inc., 272 F.3d 239, 241 (4th Cir.,2001) (enforcing a mandatory dispute resolution policy against aplaintiff bringing race and religion discrimination claims, wherethe plaintiff had attended a meeting announcing the policy andsigned a form that stated "I have attended a DRP meeting and havereceived the information in regards to DRP.") While defendants are correct that an agreement to arbitratedoes not have to be signed to be enforceable, they areundoubtedly wrong if they mean to suggest an employee need nothave notice of the policy. The cases to which defendants have soproudly pointed make clear that employers are required to giveemployees actual notice in order to implement a mandatoryarbitration agreement. While courts have enforced unsignedagreements to arbitrate which have been disseminated in a varietyof ways — mailing and office memoranda (Howard v. Oakwood HomesCorp., 516 S.E.2d 879 (N.C. App. 1999)), office-wide meeting withsign-in sheet (Hightower, 272 F.3d 239), employee handbooks andmailing (Reese v. Commercial Credit Corp., 955 F. Supp. 567, 569(D.S.C. 1997)), multiple mailings through professional mailingservice tracking delivery (Cole v. Halliburton Co., 2000 WL1531614, *3 (W.D.Okla. Sept. 6, 2000)), office memorandum (VanSlyke v. Commercial Credit Corp., 1995 WL 766399, *1 (N.D.N.Y.Dec. 29, 1995)) — in each and every case the court made a findingthat the plaintiff had actual notice of the policy.

4. The phrase "in writing" is used here to distinguish paperfrom email, and is not a statement regarding whether or not emailis ever sufficient to satisfy the FAA's "written agreement"requirement. Because the notice here was so clearly insufficient,it is unnecessary for this Court to decide that question.

5. This reality can be seen even in this district court's ownpolicies. Although an electronic case filing system ("ECF")hasbeen implemented within the last year, which allows pleadings tobe filed electronically with only email notice to participants,the initial service of process must still be done by hand, andparties are only responsible for email notice after they havesigned up to be a participant in the system. Indeed, the early experience with ECF provides a cautionarytale. When the Court sent out email notification to attorneys oftheir log-in names and passwords, with the return email address"," many attorneys deleted it, not understandingits significance. See also A. Michael Froomkin, ICANN'S "Uniform DisputeResolution Policy" — Causes and (Partial) Cures, 67 Brook. L.Rev. 605, 650 (Spring, 2002) (criticizing Internet Corporationfor Assigned Names and Numbers' policy for mandatoryarbitration-like process, under which notice of dispute,triggering deadlines for reply, started to run when notice wasemailed, regardless of when or if it was read.)

6. In Rosenberg, the First Circuit held that the employershould bear the risk, although it is significant to note thatfacts in that case weighed more heavily on both sides than in thepresent case. Rosenberg had signed a form that referenced thatthe NYSE rules would apply to her employment. It is a traditionalrule of contract law that a party to a contract is assumed tohave read and understood the terms of a contract she signs. SeeId., n. 17 (citing Tiffany v. Sturbridge Camping Club, Inc.,587 N.E.2d 238, 240 n. 5 (Mass.App.Ct. 1992). However, the formsigned by Rosenberg and her employer also required the employerto provide Rosenberg with a copy of the NYSE rules and ensurethat she was familiar with them. Rosenberg's employer failed todo that.

7. Considering that it would have been virtually free (both interms of time and money) for General Dynamics to ensure itsemployees knew of the policy, yet it chose not to do so, thecompany's motives in designing its dissemination method could bequestioned. However, it is unnecessary to attach any malignantintent to General Dynamics' notification efforts to find thatthey were insufficient.

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