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Cheek v. United Healthcare of Mid-Atlantic11/13/2003
Harrell, J. dissents
The issue in this case is whether a valid and enforceable arbitration agreement exists between an employer and an employee when the employer has reserved the right to, within its sole discretion, alter, amend, modify, or revoke the arbitration agreement at any time and without notice, even though it has not exercised that option in the present case.
Appellant, Ronnie E. Cheek, filed suit in the Circuit Court for Baltimore City for breach of contract and related causes of action after his employer, appellee United Healthcare of the Mid-Atlantic, Inc., terminated his employment. United responded with a motion to compel arbitration, which the Circuit Court granted. Cheek appealed, and we granted certiorari prior to any proceedings in the Court of Special Appeals. For the reasons discussed herein, we conclude that the arbitration agreement between Cheek and United is unenforceable for lack of consideration because United's promise to arbitrate is illusory and because United's employment of Cheek cannot serve as consideration for the arbitration agreement. Consequently, we shall reverse the order of the Circuit Court compelling arbitration and remand this case for further proceedings.
I. BACKGROUND
On November 17, 2000, United orally offered Cheek a position of employment as a senior sales executive, which was confirmed in writing the same day. The two-page letter set forth various conditions of United's offer of employment, including that Cheek accept United's "Employment Arbitration Policy." Specifically, the letter stated that enclosed with it were "summaries of the United Group Internal Dispute and Employment Arbitration Policy which are conditions of your employment."
In a November 28, 2000, letter to United, Cheek wrote that he was "delighted to accept United Healthcare's generous offer" and that " ll of the terms in your employment letter are amenable to me." He also indicated that he had submitted his resignation that morning to his current employer, Blue Cross/Blue Shield of the District of Columbia.
On January 2, 2001, during Cheek's first day of employment with United, he received a copy of United's Employee Handbook, which contained summaries of United's Internal Dispute Resolution Policy and Employment Arbitration Policy (hereinafter, "Arbitration Policy" or "Policy"). The summary of the Arbitration Policy described the scope of the Policy, the rules applicable in arbitration, how an employee initiates arbitration, and the types of relief available in arbitration. Specifically, the summary of the Policy stated that United "believes that the resolution of disagreements" between employees and United "are best accomplished by an internal dispute review (IDR) and, where that fails, by arbitration based on the rules of the American Arbitration Association." Accordingly, United declared in the summary of the Policy that arbitration "is the final, exclusive and required forum for the resolution of all employment related disputes which are based on a legal claim" and that "any party to [such a dispute] may initiate the arbitration process." Particularly relevant to the disposition of this appeal, the summary of the Arbitration Policy also provided:
United HealthCare reserves the right to alter, amend, modify, or revoke the Policy at its sole and absolute discretion at any time with or without notice. The senior executive of Human Resources has the sole authority to alter, amend, modify, or revoke the Policy.
On January 2, 2001, Cheek signed an "Acknowledgment Form for the Code of Conduct and Employment Handbook." In that Form, Cheek acknowledged that he had "specific
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