Motion to compel arbitration under a boilerplate employment application & agreement; Distinguishing Rayford v American House Roseville I, LLC; Rembert v Ryan’s Family Steak Houses, Inc; Adhesion contract; Unconscionability; The Elliott-Larsen Civil Rights Act (ELCRA)

On remand from the Supreme Court, the court held that the employment contract provision at issue requiring arbitration was reasonable and not unconscionable. Thus, it again affirmed the trial court’s order granting defendant’s motion to compel arbitration. The Supreme Court vacated its prior opinion and remanded for reconsideration in light of Rayford. The court noted that plaintiff’s challenge was “not to a shortened limitations period, but to an arbitration agreement that was part of a larger employment application. Thus, Rayford’s specific holding is inapplicable, but the standards it applied are not.” The court assumed that the contract here was an adhesion contract. As “in other states, in Michigan an agreement is not an unlawful adhesion contract if a court determines that the terms a party essentially had no option to dispute are otherwise reasonable.” Thus, the issue of the arbitration agreement’s validity turned on whether it was reasonable. The court held that it was. It first noted that the “Legislature and Supreme Court have long approved arbitration as a legitimate, efficient alternative to resolving matters in court.” Further, in light of the “general public policy favoring arbitration, a conflict panel of” the court held in Rembert “that an agreement to arbitrate a civil rights claim was reasonable as a matter of law, because it did not deprive plaintiff of her statutory rights and remedies and was procedurally fair.” The arbitration provision here, like the one in Rembert, did “not limit plaintiff’s substantive rights or remedies available under the [ELCRA]. The provision requires both the employer and employee to bring all nonexempt claims in arbitration, and the rules of the American Arbitration Association govern all proceedings.” The court concluded there was nothing in the agreement that was “unusual, as it contains many provisions typically found in arbitration agreements. In light of the terms of the agreement, and the common law and statutory law of this state containing a general approval of arbitration as an alternative means to decide matters, we hold that the arbitration provision is reasonable, and is therefore not an unlawful adhesion contract.” It was also not unconscionable, as it “in no way ‘shocks the conscience’ of the Court.”