Facts
- Dr. Carol A. Warfield, an anesthesiologist on the hospital’s medical staff since 1980, entered an employment agreement with Beth Israel Deaconess Medical Center, Inc. and Harvard Medical Faculty Physicians at Beth Israel Deaconess Medical Center, Inc. to serve as anesthesiologist-in-chief, effective January 1, 2000.
- The agreement set out duties, compensation, benefits, and termination terms and included an arbitration clause requiring arbitration of “any claim or controversy or dispute arising out of or in connection with this Agreement or its negotiations.”
- After new leadership changes, including a new chief of surgery, Dr. Josef E. Fischer, and a new CEO, Warfield alleged gender-based discrimination and that management failed to remedy it; she was later removed from the chief position.
- Warfield filed suit in Superior Court alleging gender discrimination and retaliation under Massachusetts General Laws chapter 151B, along with related common-law claims including tortious interference and defamation.
- Defendants moved to dismiss and compel arbitration based on the agreement; the trial court denied the motion, and the Supreme Judicial Court took interlocutory review.
Issues
- Whether an arbitration clause covering disputes “arising out of or in connection with” an employment agreement encompasses statutory discrimination and retaliation claims under Mass. Gen. Laws ch. 151B.
- If the chapter 151B claims are not arbitrable, whether related common-law claims that may fall within the arbitration clause must nevertheless remain in court when they are factually and legally intertwined with the statutory claims.
Decision
- The Supreme Judicial Court affirmed the denial of the motion to dismiss and compel arbitration.
- The court held the arbitration clause did not encompass the chapter 151B discrimination and retaliation claims because the contract did not state in clear and unmistakable terms that those statutory claims were subject to arbitration.
- The court held the common-law claims should also remain in court because they were wholly intertwined with the statutory discrimination claims and trying them separately would undermine judicial economy and risk inconsistent results.
Legal Principles
- An employment contract agreement that limits or waives rights or remedies under Mass. Gen. Laws ch. 151B is enforceable only if stated in clear and unmistakable terms.
- Broad, general arbitration language referring to disputes “arising out of or in connection with” the employment agreement is insufficient, without more, to require arbitration of chapter 151B discrimination or retaliation claims.
- The Federal Arbitration Act enforces arbitration agreements as written but does not require arbitration of statutory discrimination claims absent a clear agreement to arbitrate those claims.
- When common-law claims are integrally connected to nonarbitrable chapter 151B claims, they may be kept in court to avoid parallel proceedings and inconsistent determinations.
Conclusion
The court required explicit contractual language before an employee is deemed to have agreed to arbitrate Massachusetts statutory discrimination claims under chapter 151B and kept related common-law claims in court where they were factually and legally intertwined with the statutory claims.