Caroline T. Retzios v. Epic Systems Corporation

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 24-1701
C AROLINE T. R ETZIOS ,
Plaintiff-Appellant,
v.
EPIC S YSTEMS C ORPORATION ,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 23-cv-03338 — Jeremy C. Daniel, Judge.
____________________
A RGUED DECEMBER 11, 2024 — DECIDED J ANUARY 24, 2025
____________________
Before EASTERBROOK, B RENNAN , and S T. EVE, Circuit Judges.
EASTERBROOK, Circuit Judge. Epic Systems fired Caroline
Retzios after she refused to be vaccinated against COVID-19.
She filed this suit under Title VII of the Civil Rights Act of
1964, asserting that the statute required Epic to accommodate
her religious objection to vaccination. 42 U.S.C. §§ 2000e(j),
2000e–2(a)(1). Epic asked the district court to send the dispute
to arbitration, which it did. The judge then dismissed the suit,

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2 No. 24-1701
producing an appealable order. Green Tree Financial Corp. v.
Randolph, 531 U.S. 79 (2000).
The district judge should not have dismissed this suit. The
Federal Arbitration Act calls for a suit referred to arbitration
to be stayed rather than dismissed, when a party requests a
stay (as Epic did). 9 U.S.C. §3; Smith v. Spizzirri, 601 U.S. 472
(2024); Halim v. Great Gatsby’s Auction Gallery, Inc., 516 F.3d
557, 561 (7th Cir. 2008). Had the court entered a stay, that or-
der would not have been appealable. 9 U.S.C. §16(b)(1). But
appellate jurisdiction depends on what the district court did,
rather than what it should have done, so we must proceed.
In 2020, when accepting an award of stock, Retzios agreed
to arbitrate with Epic “any statutory or common law legal
claims … that relate to or arise out of my employment or the
termination of my employment.” The district judge thought
that Retzios’s claim fits this language—which it does. Her ob-
jection to vaccination as a condition of employment relates to
that employment, and her objection to being fired arises out
of that employment’s termination.
Her arguments to the contrary disregard the contractual
language. She contends, for example, that the agreement does
not mention COVID-19 or vaccination. Indeed not, but why
should it? This clause covers any statutory or common law
claim that relates to her employment. It is unnecessary to sup-
ply a list (which inevitably would be incomplete) of potential
disputes that might come within the word “any”. Retzios is
free to present to the arbitrator her contention that Epic
should not have fired her. A promise to arbitrate is a forum-
selection agreement. See, e.g., Viking River Cruises, Inc. v. Mo-
riana, 596 U.S. 639, 653 (2022). A litigant’s belief in the

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No. 24-1701 3
rightness of her substantive position does not change the
agreed forum.
Retzios also contends that the agreement is “illusry” [sic]
and unenforceable. We don’t get it. Retzios received at least
two kinds of compensation in exchange for the promise to ar-
bitrate: the stock and her ongoing salary. Contracts supported
by consideration are enforceable under Wisconsin’s law
(which this contract specifies).
According to Retzios, promissory estoppel forbids en-
forcement of the agreement. We don’t get this either. Promis-
sory estoppel is a doctrine that applies in the absence of a
written contract when one party detrimentally relies on a con-
crete promise made by the other. See Hoffman v. Red Owl
Stores, Inc., 26 Wis. 2d 683 (1965). But Retzios and Epic have a
written contract. Retzios also does not point to any formal (but
non-contractual) promise on which she detrimentally relied.
She says instead that the COVID-19 pandemic was unpredict-
able, which may be true but has nothing to do with promis-
sory estoppel.
Finally, Retzios insists that Epic waived its right to arbi-
trate when it did not ask state unemployment-insurance offi-
cials or the EEOC to dismiss their proceedings. She does not
cite any statute or judicial decision for the proposition that ar-
bitration can be waived by participating in administrative
proceedings. Indeed, Epic and Retzios agreed that requests
for unemployment compensation or review by any agency
are outside the scope of arbitration. (The agreement says in
Part IV: “Covered Claims … do not include claims for work-
ers’ compensation or unemployment compensation. … I am
not barred from filing a claim or charge with a governmental
administrative agency”.)

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4 No. 24-1701
The doctrine of waiver addresses conduct in litigation, see
Morgan v. Sundance, Inc., 596 U.S. 411 (2022)—after all, 9
U.S.C. §3 applies only in court—and Epic invoked the arbitra-
tion agreement as soon as Retzios filed her complaint. Events
during this suit do not offer a smidgen of support for waiver.
The arguments that Retzios presented to the district court,
and repeated in this court even after the district judge ex-
plained why they are wrong, are uniformly frivolous. Epic
filed a motion for sanctions under Fed. R. App. P. 38, to which
Retzios responded by repeating the arguments we have al-
ready addressed.
Many decisions in this circuit award sanctions when liti-
gants present objectively groundless objections to arbitra-
tion—either before the arbitrator has a crack at the dispute, or
when the loser tries to upset the award. See, e.g., Hill v. Norfolk
& Western Ry., 814 F.2d 1192 (7th Cir. 1987); Production &
Maintenance Employees v. Roadmaster Corp., 916 F.2d 1161 (7th
Cir. 1990); BLET GCA UP v. Union Pacific R.R., 988 F.3d 409
(7th Cir. 2021); American Zurich Insurance Co. v. Sun Holdings,
Inc., 103 F.4th 475 (7th Cir. 2024). The reason is simple: arbi-
tration is designed to simplify and expedite the process of dis-
pute resolution. It cannot serve that purpose if one party to
the agreement resists tooth and nail. When that happens, the
arbitration clause exacerbates the conflict: instead of one suit in
court, we get one suit in court (about whether to arbitrate), a
second controversy before the arbitrator, and potentially a
third in court when the loser tries to get a judge to override
the outcome or forces the winner to file suit seeking the
award’s enforcement. Turning one dispute-resolution process
into two or three makes arbitration its own enemy.

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No. 24-1701 5
The American Rule on the allocation of legal fees pre-
sumptively requires both sides to pay their own legal ex-
penses. Alyeska Pipeline Service Co. v. Wilderness Society, 421
U.S. 240 (1975). A premise of the American Rule, however, is
that there will be just one encounter in the trial court, followed
by one appeal. People who agree to arbitrate may seek to re-
duce the cost of the trial and eliminate the expense of the ap-
peal. But when one side insists on litigating and appealing be-
fore arbitration, then pursuing an arbitration, and potentially
litigating and appealing after arbitration, legal costs go up and
the one-suit premise of the American Rule is defeated. As we
put it in Roadmaster, 916 F.2d at 1163: “Arbitration will not
work if legal contests are its bookends: a suit to compel or pre-
vent arbitration, the arbitration itself, and a suit to enforce or
set aside the award. Arbitration then becomes more costly
than litigation”. This circuit’s decisions awarding sanctions
for dogged, objectively unreasonable opposition are designed
to prevent that from happening.
Retzios and Epic bore their own legal costs in the district
court. They will bear their own costs again if Retzios pursues
arbitration. If Retzios prevails, Title VII will expose Epic to an
award of legal fees. 42 U.S.C. §2000e–5(k). Requiring Epic also
to bear the legal costs of this unnecessary, nay pointless, ap-
peal would be inappropriate. We therefore grant Epic’s mo-
tion for sanctions and direct Retzios to reimburse Epic for the
legal expenses it has incurred on appeal. Epic has 14 days to
file a statement of these expenses, and Retzios will have 14
days to respond.
A FFIRMED, WITH SANCTIONS

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