Campbell v. General Dynamics

Citation: Campbell v. General Dynamics Gov’t Sys. Corp., 407 F.3d 546, 559 (1st Cir. 2005).

Factual Background
Plaintiff, Roderick Campbell, held a full-time, salaried position at General Dynamics Government Systems since June 6, 2000. On April 30, 2001, defendant, General Dynamics, sent out a mass e-mail to all employees, informing them that a new dispute resolution policy would be in effect, beginning May 1, 2001, to “resolv[e] employee issues concerning legally protected rights and manners.”

The e-mail was composed of text, which urged employees to “review the enclosed materials carefully, as the [Policy] is an essential element of your employment relationship” and two links. The first link brought employees to a two-page brochure dealing with how the Policy worked and the second link provided access to General Dynamic’s dispute resolution handbook. No part of the e-mail communication required a response from the employee acknowledging receipt of the Policy. Further, General Dynamics took no steps to record whether or not the employees clicked on the embedded links in the e-mail.

On December 30, 2002, General Dynamics terminated Roderick Campbell's employment, citing persistent absenteeism and tardiness as the cause. Plaintiff then filed an administrative complaint, claiming that he suffered from sleep apnea and that General Dynamics should have accommodated his condition. Plaintiff later withdrew his administrative complaint and filed an action in Massachusetts state court. Defendant than moved the action to a federal district court and filed an answer alleging that plaintiff’s claims were subject to the dispute resolution clause of the Policy.

Trial Court Proceedings
The district court determined that General Dynamics' efforts to inform the plaintiff about the change in Policy was insufficient to extinguish his right to a judicial forum. In reaching this determination, the court concluded that “a mass e-mail message, without more, fails to constitute the minimal level of notice requires” to enforce the arbitration agreement. Further, the court determined that the plaintiff lacked knowledge of the offer and, therefore, did not accept the Policy’s terms. As a result, the court denied the defendants motion to stay proceedings and compel arbitration.

General Dynamics appealed both the denial of its motion to stay the proceedings and compel arbitration and the order striking its affirmative defense.

Appellate Court Proceedings
On appeal, the First Circuit focused on whether a valid agreement to arbitrate existed between the plaintiff and defendant.

First, the court analyzed whether General Dynamic’s e-mail announcement of the Policy change provided sufficient notice to the plaintiff that his continued employment would constitute a waiver of his right to litigate any ADA-related claim. The court concluded that the employer did not satisfy the relatively light burden of producing evidence illustrating that the employee had actual notice because they did not bother to elicit an affirmation from any employee stating that he/she read the e-mail.

Despite the lack of actual notice, the court determined that the plaintiff could still be bound to the “arbitration clause” found in the Policy if the totality of the circumstances indicated that notice was sufficient. The court pointed out that e-mail can be a proper medium to inform employees of changing contractual obligations, however General Dynamics did not utilize e-mail as its “usual means” to handle personnel matter within the company. Therefore, the court reasoned that they couldn’t say that delivery of an e-mail heralding the birth of a new policy would raise a red flag vivid enough to put a reasonable employee on notice that their rights and obligations have been altered. Additionally, the court determined that the e-mail announcement undersold the significance of the Policy and omitted the critical fact that it contained a mandatory arbitration agreement.

As a result, the appellate court held that there was insufficient notice to constitute a valid agreement and to compel arbitration. The holding of the lower court was affirmed.