## Facts

- Joann Melena worked as a nonunion, at-will employee at Anheuser-Busch’s Mount Vernon, Illinois distribution center.
- Anheuser-Busch implemented a Dispute Resolution Program (DRP) that required multi-level internal review and, if unresolved, final and binding arbitration.
- The DRP materials stated the program was an agreement to arbitrate under the Federal Arbitration Act (or state arbitration law if the FAA did not apply).
- The materials stated that by accepting or continuing employment, covered employees agreed, as a condition of employment, to submit “covered claims” to the DRP.
- Covered claims included employment-related claims concerning termination and alleged unlawful or illegal conduct by the company or managers acting within the scope of employment.
- Anheuser-Busch provided notice through mailed materials, an in-person meeting, workplace posters, and a later employee handbook; Melena signed an acknowledgment that she received, read, and understood the handbook.
- After a workplace injury, Melena filed a workers’ compensation claim and received disability benefits.
- While on disability, Anheuser-Busch terminated Melena’s employment.
- Melena sued in Illinois state court for retaliatory discharge, alleging she was fired for filing a workers’ compensation claim.
- Anheuser-Busch moved to dismiss or stay the case and compel arbitration under the DRP; the trial and appellate courts refused, but the Illinois Supreme Court reviewed the case.

## Issues

1. Whether an at-will employee assents to an employer’s arbitration agreement by continuing employment after receiving clear notice that arbitration is a condition of employment.
2. Whether the DRP arbitration agreement was unenforceable for lack of voluntariness or due to procedural or substantive unconscionability.
3. Whether a retaliatory-discharge claim based on filing a workers’ compensation claim fell within the DRP’s definition of covered claims.

## Decision

- The Illinois Supreme Court reversed and remanded with directions to compel arbitration of Melena’s claim.
- The court held Melena accepted the arbitration agreement by continuing to work after receiving unequivocal notice that arbitration of covered claims was a condition of employment.
- The court held the arbitration agreement was enforceable and not unconscionable.
- The court held the retaliatory-discharge claim fell within the DRP’s coverage because it was an employment-related claim regarding termination and alleged unlawful conduct.

## Legal Principles

- Under Illinois contract law, a unilateral offer may be accepted by performance when the offeree has clear notice that the performance constitutes acceptance; in at-will employment, continued employment can serve as acceptance of new employment terms, including arbitration.
- A mandatory arbitration requirement imposed as a condition of employment is not invalid solely because it is required to keep the job; enforceability turns on ordinary contract defenses (e.g., fraud, duress, unconscionability) and knowing acceptance.
- An adhesion-style, employer-drafted arbitration program is not procedurally unconscionable where the arbitration obligation is stated clearly and the employee receives meaningful notice of the terms.
- An arbitration agreement is not substantively unconscionable where it provides for a neutral arbitrator and preserves remedies available in court, without unfair cost shifting or one-sided limits that effectively insulate the employer from liability.
- Broad arbitration language covering employment-related termination claims and alleged unlawful conduct encompasses common-law retaliatory-discharge claims tied to workers’ compensation filings, so long as the agreement waives only the forum and not substantive rights.

## Conclusion

The Illinois Supreme Court required arbitration of an employee’s retaliatory-discharge claim, holding that clear notice of a mandatory arbitration program, followed by continued at-will employment, constituted acceptance and formed an enforceable agreement covering termination-based employment claims.


Melena v. Anheuser-Busch, Inc., 847 N.E.2d 99 (Ill. 2006)