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Correll v. Distictive Dental Services3/16/2000
Office of Appellate Courts
Heard, considered and decided by the court en banc.
O P I N I O N
In this case we are asked, in the context of a human rights claim arising out of an employment relationship, to resolve an apparent conflict between two statutes. The Minnesota Uniform Arbitration Act (arbitration act) gives binding effect to arbitration provisions in employment agreements. On the other hand, the Minnesota Human Rights Act (human rights act) provides that the administrative procedures for resolution of claims, which include hearings before an administrative law judge, are exclusive while pending. Relying on the human rights act, Bryan Correll petitioned the district court to stay arbitration of his pending human rights act claim against his past employer, Distinctive Dental Services, P.A. (DDS). The district court granted this stay but the court of appeals reversed. We reverse the court of appeals and affirm the district court's order.
Correll accepted employment as a dentist in DDS's Howard Lake, Minnesota office beginning February 9, 1994. Prior to commencing his employment, Correll entered into an employment agreement which included at paragraph 12 an arbitration provision and at paragraph 17 a non-competition provision:
12. Any controversy or claim arising out of, or relating to this Employment Agreement, or the breach thereof, shall be settled by arbitration in the City of Winsted, State of Minnesota, in accordance with the then governing rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be entered in any court of competent jurisdiction.
1. During the period of employment, Employee shall not engage in any other business activity, directly or indirectly, regardless of whether it is for profit, gain or otherwise that is similar to the business activity of Employer within 7 miles of the offices of Employer.
On September 9, 1994 DDS's CEO Michael Thoennes terminated Correll's employment after learning that Correll's wife accepted a position as a dentist with a competing office in Winsted, Minnesota. Though Correll and Thoennes disagree as to the details of the conversation that occurred that day, they agree that Thoennes ended Correll's employment because of his wife's new position. Thoennes' letter to Correll explaining the termination states that "there is a defacto breach of contract by you since Dr. James Neff has contracted with your wife Mary to perform dental services within the City of Winsted." In support of this conclusion Thoennes cited paragraph 17 of the employment agreement regarding non-competition.
Correll filed a charge with the Minnesota Department of Human Rights on September 7, 1995, alleging marital status discrimination in violation of Minn. Stat. § 363.03, subd. 1(2)(b) (1998). In 1996 the department made a probable cause determination favorable to Correll and scheduled a hearing.
Shortly before the hearing was to be held, DDS sent Correll a demand for arbitration. Correll filed in district court a petition for a stay of arbitration pursuant to Minn. Stat. § 572.09(b) (1998), arguing that the human rights act precludes arbitration of this dispute. DDS served a cross-motion to compel arbitration, arguing that the arbitration act requires enforcement of the parties' agreement. DDS did not argue that the Federal Arbitration Act (the FAA) compelled arbitration of this dispute and provided no evidence that the employment agreement involved interstate commerce, a threshold requirement under the FAA. See 9 U.S.C. §§ 1-2 (1999). The district court concluded Minn. Stat. § 363.11 (1998) required that arbitration be st
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