Menard, Inc. v. Dep't of Workforce Dev.

371 Wis.2d 563

884 N.W.2d 534 (Table)

MENARD, Inc., Plaintiff–Respondent,

v.DEPARTMENT OF WORKFORCE DEVELOPMENT, Defendant–Appellant,Angela M. Fenhouse, Defendant.

No. 2015AP587.

Court of Appeals of Wisconsin.

July 26, 2016.

¶ 1 SEIDL, J.

The Department of Workforce Development (DWD) appeals an order granting a writ of prohibition entered by the circuit court barring the DWD from adjudicating an employment discrimination claim brought by employee Angela Fenhouse against Menard, Inc. We affirm the writ.

BACKGROUND

¶ 2 Fenhouse was employed as a human resources coordinator by Menard from February 1, 2012, to December 11, 2012. On February 1, 2012, she signed Menard's standard form Employment Agreement. The form agreement was created by Menard and all new employees are required to sign it. The Employment Agreement provides in relevant parts:

16. Remedy. In consideration of employment, or continued employment, ... you agree that all problems, claims, and dispute(s) ... related to your employment with Menards, ... shall first be resolved as outlined in the Team Member Relations section of the Grow With Menards Team Member Information Booklet .... If you are unable to resolve the dispute by these means, choose not to utilize such means, or you are no longer employed by Menards you agree to submit your dispute(s) to final and binding arbitration. Problems, claims, or disputes subject to binding arbitration include, but are not limited to: statutory claims under 42 U.S.C. § 1981, the Age Discrimination in Employment Act (ADEA), Fair Labor Standards Act (FLSA), Title VII of the Civil Rights Act of 1964, Title I of the Civil Rights Act of 1991, Americans with Disabilities Act (ADA), Family Medical Leave Act (FMLA), and non-statutory claims such as contractual claims, quasi-contractual claims, tort claims, and any and all causes of action arising under state laws or common law.

....

Any and all claims shall be resolved by binding arbitration ... pursuant to the National Rules of the Resolution of Employment Disputes of the American Arbitration Association (“AAA”)....

....

This provision shall supersede any contrary rule or provision of the forum state. This provision constitutes an express waiver of the right to court, jury, or administrative review or to participate in a class action.

....

Menards is engaged in commerce using U.S. Mail and telephone service. Therefore, this Agreement is subject to the Federal Arbitration Act, 9 U.S.C. §§ 1 –14, as amended from time to time.

(Emphasis added.) We will refer to the above provisions as the “arbitration clause.”

¶ 3 Later, paragraph 16 contains the following clause:

Nothing in this Agreement infringes on your ability to file a claim or charge of discrimination with the U.S. Equal Employment Opportunity Commission or comparable state or local agencies. These agencies have the authority to carry out their statutory duties by investigating the charge, issuing a determination, filing a lawsuit in Federal or state court in their own name, or taking any other action authorized under these statutes. You understand that you have the right to participate in such action.

The DWD calls this the “exception clause” and Menard calls it the “agency-rights clause.” We will refer to it as the “agency-rights clause.”

¶ 4 Menard discovered that Fenhouse had a criminal record and, as a result, it terminated Fenhouse's employment on December 11, 2012. On December 18, 2012, Fenhouse filed a discrimination complaint with the DWD under the Wisconsin Fair Employment Act (WFEA), Wis. Stat. § 111.39.¹ Her complaint alleged employment discrimination and unlawful employment termination by Menard on the basis of her criminal record. Finding probable cause that Menard had unlawfully discriminated against Fenhouse, the DWD's Equal Rights Division (ERD) scheduled a hearing.

¶ 5 On February 20, 2014, Menard and Fenhouse filed a Joint Stipulation to Submit to Arbitration and Motion to Stay the WFEA Proceedings. Menard and Fenhouse agreed that the arbitration clause of the Agreement was binding upon both parties and applicable to Fenhouse's WFEA complaint. They asked for a stay of the WFEA proceedings to allow them to submit to binding arbitration and “request[ed] that upon the completion of arbitration, the Equal Rights Division issue an Order adopting the Arbitrator's Final Ruling and Award as final and binding on all parties.”

¶ 6 The Administrative Law Judge (ALJ) assigned to the case responded that he was “unable to comply with such a suggestion” that he adopt a ruling by an arbitrator as the DWD's final order. He suggested that Fenhouse could withdraw her WFEA complaint instead and “voluntarily proceed with the arbitration process....”

¶ 7 On March 14, 2014, Menard asked the ALJ to reconsider his decision and indicated that if DWD did not comply with its request, Menard would seek a writ of prohibition in circuit court to prevent DWD from conducting a merits hearing in the Fenhouse case. Menard argued the arbitration clause deprived DWD of its authority and jurisdiction to adjudicate Fenhouse's WFEA claim.

¶ 8 Shortly thereafter, Fenhouse informed the ALJ that she opposed the request for reconsideration. She argued that Menard had waived the arbitration provision by not raising it sooner, and that the arbitration clause did not bar the administrative proceeding.

¶ 9 On June 3, 2014, the ALJ issued a decision and order denying Menard's motion to stay the administrative proceedings. He concluded the agreement contained conflicting provisions. The ALJ stated that “[b]y permitting an individual to ‘file a claim’ with a state agency like the [DWD], the contract itself allows for an alternative means of resolving the claim and, therefore, arbitration cannot be said to be the ‘exclusive remedy’ under the employment contract.”

¶ 10 On June 12, 2014, Menard filed a complaint in the circuit court seeking a writ of prohibition to prevent the administrative proceeding from going forward. Menard again asserted the arbitration clause deprived the DWD of its authority and jurisdiction to adjudicate Fenhouse's WFEA claim. The DWD and Fenhouse both opposed the issuance of the writ.

¶ 11 On February 6, 2015, the circuit court issued a writ of prohibition holding that “Defendant Department of Workforce Development lacks jurisdiction to conduct a binding adjudication of the Wisconsin Fair Employment Act claims Defendant Angela M. Fenhouse has filed against Plaintiff Menard, Inc. because such claims are within the scope of the parties' arbitration agreement.” The circuit court concluded the most reasonable interpretation of the arbitration clause was that Fenhouse and Menard had agreed to arbitrate all employment-related claims arising under state law, including WFEA claims, but under the agency-rights clause, the DWD retained all its investigative authority. DWD appeals from the order.

DISCUSSION

¶ 12 On appeal, the DWD argues the agency-rights clause unambiguously excepted DWD's adjudication of Fenhouse's WFEA claim from any arbitration requirement. Further, the DWD asserts that if the agreement is determined to be ambiguous, the ambiguity must be resolved against Menard as the drafter of the agreement. Menard argues Fenhouse's WFEA claim unambiguously falls within the scope of the arbitration clause and also argues arbitration is required here under the Federal Arbitration Act, 9 U.S.C. §§ 1 –14(FAA). Menard asserts that if this court finds the agency-rights clause renders the agreement ambiguous, based upon extrinsic evidence, any ambiguity must be resolved in favor of Menard's right to arbitration. The DWD counters that extrinsic evidence of Menard's subjective intent is inadmissible and irrelevant.²

¶ 13 We are called upon to interpret the agreement of the parties, particularly the arbitration clause in light of the agency-rights clause. The interpretation of the parties' arbitration agreement is a question of law this court reviews de novo. Osborn v. Dennison, 2009 WI 72, ¶ 33, 318 Wis.2d 716, 768 N.W.2d 20.

¶ 14 The ultimate aim in contract interpretation is to give effect to the intent of the parties as determined from the language of their agreement. Patti v. Western Mach. Co., 72 Wis.2d 348, 351, 241 N.W.2d 158 (1976). “If the contract is unambiguous, [the court's] attempt to determine the parties' intent ends with the four corners of the contract, without consideration of extrinsic evidence .” Huml v. Vlazny, 2006 WI 87, ¶ 52, 293 Wis.2d 169, 716 N.W.2d 807. Contract language is to be interpreted consistent with what a reasonable person would understand the words to mean under the circumstances. Seitzinger v. Community Health Network, 2004 WI 28, ¶ 22, 270 Wis.2d 1, 676 N.W.2d 426. When interpreting a contract provision, we must read the language within the context of the contract as a whole rather than interpreting a sentence or paragraph in a vacuum. Marlowe v. IDS Prop. Cas. Ins. Co., 2013 WI 29, ¶ 44, 346 Wis.2d 450, 828 N.W.2d 812. Courts must avoid interpretations that render language meaningless or superfluous. DeWitt Ross & Stevens, S.C. v. Galaxy Gaming & Racing Ltd. P'ship, 2004 WI 92, ¶ 44, 273 Wis.2d 577, 682 N.W.2d 839. “Another important rule employed in construing agreements is that where there is an apparent conflict between a general and a specific provision, the latter controls.” Goldmann Trust v. Goldmann, 26 Wis.2d 141, 148, 131 N.W.2d 902 (1965).

¶ 15 In Cirilli v. Country Insurance & Financial Services, 2009 WI App 167, ¶ 14, 322 Wis.2d 238, 776 N.W.2d 272, this court set forth the test for resolving “doubts concerning the scope of arbitrable issues”:

[W]hen a court is called upon to ascertain the arbitrability of a dispute, the court's function is limited to a determination of whether: (1) there is a construction of the arbitration clause that would cover the grievance on its face and (2) whether any other provision of the contract specifically excludes [arbitration].

In addition, if an arbitration agreement is...