Ashbey v. Archstone Prop. Mgmt., Inc.

• Decision Date: 13 April 2012
• Docket Number: Case No. SACV 12-0009 DOC (RNBx)
• Citation: Ashbey v. Archstone Prop. Mgmt., Inc., Case No. SACV 12-0009 DOC (RNBx) (C.D. Cal. Apr 13, 2012)
• Parties: MICHAEL ASHBEY v. ARCHSTONE PROPERTY MANAGEMENT, INC., ET AL.
• Court: U.S. District Court — Central District of California

MICHAEL ASHBEY

v.ARCHSTONE PROPERTY MANAGEMENT, INC., ET AL.

Case No. SACV 12-0009 DOC (RNBx)

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Date: April 13, 2012

CIVIL MINUTES - GENERAL

PRESENT:

THE HONORABLE DAVID O. CARTER, JUDGE

+-------------------------------+
                ¦Julie Barrera   ¦N/A           ¦
                +----------------+--------------¦
                ¦Courtroom Clerk ¦Court Reporter¦
                +-------------------------------+
                

ATTORNEYS PRESENT FOR PLAINTIFF:

None Present

ATTORNEYS PRESENT FOR DEFENDANT:

None Present

PROCEEDINGS: (IN CHAMBERS): ORDER DENYING MOTION TO COMPEL ARBITRATION

Before the Court is a Motion to Compel Arbitration ("Motion") filed by Defendant Archstone Communities LLC ("Defendant"). (Dkt. 8).

This case raises the question of whether an employer can enforce an arbitration provision in an employment handbook where the employer represented to its employee that the handbook "does not . . . create any contractual rights." The Court answers that question in the negative. Accordingly, the Court DENIES the Motion.¹

I. Background

Defendant seeks to compel arbitration of state and federal claims brought by Plaintiff Michael Ashbey ("Plaintiff") arising from Defendant's alleged violation of the Labor Code and wrongful termination of Plaintiff. See Michaels Decl. ("Compl.") (Dkt. 4) Ex. A at ¶ 6, 37-44. Plaintiff and his wife were both fired by Defendant allegedly in retaliation for a complaint made by his wife about sexual harassment by another employee. Id. at ¶ 37-44.

The gravamen of Defendant's argument is that the existence of a valid, written arbitration contract is shown by the arbitration provision in Defendant's Company Policy Manual ("Manual") and Plaintiff's signature on two forms ("2009 and 2010 Receipts") in which Plaintiff acknowledges receiving directions on how to access the Manual.

Although the parties dispute some of the following facts, the Court need not resolve this fact dispute because the Court concludes, infra, that no arbitration contract existed even taking all of Defendant's facts as true.² Accordingly, the Court assumes without deciding that Defendant's facts are true.

a. 2009 and 2010 Receipts acknowledging access to Manual

Plaintiff's signature appears at the signature line on the bottom of a one-page document titled "Acknowledgement of Receipt of Archstone Company Policy Manual 2009" ("2009 Receipt"), which reads as follows:

I acknowledge that I have received directions as to how I may access the Archstone Company Policy Manual, including the Dispute Resolution Policy. I understand that Archstone can administer, interpret, discontinue, supplement, amend or withdraw any of the employment and personnel policies and procedures set forth in this Company Policy Manual. I understand that it is my responsibility to understand the Archstone Company Policy Manual, including the Dispute Resolution Policy, and to adhere to all of the policies contained herein.

I understand that this document supersedes any of the Human Resources policies contained in any prior Human Resources handbook, Company Policy Manual, and Code of Conduct.

I understand that the rules, policies and procedures set forth in the online/intranet Company Policy Manual are subject to change, modification or amendment by Archstone from time to time, without advance notice.

I also understand that this Company Policy Manual does not alter the employment-at-will relationship discussed in the Archstone Company Policy Manual or create any contractual rights. I understand that, as an employee-at-will, either Archstone or I may terminate the employment relationship at any time, with or without notice or cause. I understand that if at any time I have any questions regarding this Company Policy Manual I can discuss them with my supervisor, office manager, the Legal Department or a Human Resources representative. During my employment, I agree to abide by the provisions contained in this Company Policy Manual.

Please sign and return this form to the Archstone Human Resources Department at 9200 East Panorama Circle, Suite 400, Englewood. CO 80112.

See Lynch Decl. (Dkt. 8) Ex. C (bold font and italics in original).

Plaintiff's signature also appears at the signature line on the bottom of a one-page document titled "Acknowledgement of Receipt of Archstone Company Policy Manual 2010" ("2010 Receipt"). See id. Ex. D. This document has identical language to the 2009 Receipt, except that the third paragraph is replaced with the following sentence:

I understand that the rules, policies and procedures set forth in the printed version of the Company Policy Manual are subject to change, modification or amendment by Archstone from time to time, without advance notice, and that all changes are included in the online/intranet version of the Company Policy Manual and such changes are effective when posted.

b. Defendant's distribution or online posting of the Manual

Defendant avers that "a memorandum was distributed to all employees along with a hard copy of the 2009 Company Policy Manual."³ Lynch Decl. (Dkt. 8) at ¶ 6. Defendant has submitted an exhibit of the memorandum, which contains a table of four rows and three columns under the heading "Summary of Modifications." Id. Ex. A.The top row contains the headings "Policy," "Older Version," and "New Version." Id. Ex. A. The last row appears as follows:

+-----------------------------------------------------------------------------+
                ¦                         ¦                   ¦Associate and company agree    ¦
                ¦                         ¦                   ¦                               ¦
                ¦                         ¦                   ¦to utilize an outside          ¦
                ¦                         ¦                   ¦arbitrator                     ¦
                ¦                         ¦                   ¦                               ¦
                ¦                         ¦                   ¦for any disputes relating to   ¦
                ¦                         ¦                   ¦                               ¦
                ¦Dispute Resolution Policy¦Not in 2008 manual.¦employment and/or              ¦
                ¦                         ¦                   ¦                               ¦
                ¦                         ¦                   ¦termination of employment.     ¦
                ¦                         ¦                   ¦                               ¦
                ¦                         ¦                   ¦Please see page 20 in the      ¦
                ¦                         ¦                   ¦                               ¦
                ¦                         ¦                   ¦manual for a complete          ¦
                ¦                         ¦                   ¦                               ¦
                ¦                         ¦                   ¦description of this new policy.¦
                +-----------------------------------------------------------------------------+
                

The memorandum also states in bold that:

To ensure each associate receives the Company Policy Manual, we ask that you sign the acknowledgement in the front to the Company Policy Manual and turn it in to . . . Human Resources. . . .

We hope that this manual is helpful to you in performing your duties and responsibilities.

Id. Ex. A.

c. Manual containing "Dispute Resolution Policy"

Defendant avers that "[a]ll employees have access to [Defendant's] intranet website, insideArchtone.com" and that a "link to the Company Policy Manual is prominently displayed on the left side of the Human Resources portal on the intranet." Id. at ¶ 5.

Defendant's motion refers to the "Company Policy Manual and Dispute Resolution Policy set forth therein."⁴ See Mot. at 6:11-12. Thus, the Court assumes without deciding that the Dispute Resolution Policy is contained in the hard copy and online versions of Manual.

Defendant has submitted an exhibit of the Dispute Resolution Policy "in effect in 2009 and 2010." Id. Ex. B. One of the paragraphs of the Dispute Resolution Policy describes several types of disputes and states that "this Policy requires all such disputes between Employee and the Company to be resolved only by an arbitrator through final and binding arbitration and not by way of court or jury trial." Id.

II. Legal Standard

The Federal Arbitration Act ("FAA") governs the enforceability of written arbitration provisions in certain contracts involving interstate commerce. See 9 U.S.C. § 1, et seq.; Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24-26 (1991).

A party seeking to compel arbitration under the FAA has the burden to show: (1) the existence of a valid, written agreement to arbitrate in a contract; and (2) that the agreement to arbitrate encompasses the dispute at issue.⁵ Cox v. Ocean View HotelCorp., 533 F.3d 1114, 1119 (9th Cir. 2008); Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000); see also 9 U.S.C. § 2.

The first prong of the FAA's two-part test - the existence of a valid, written agreement to arbitrate in a contract - is governed by state contact law. Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630-31 (2009); Circuit City Stores, Inc. v. Adams, 279 F.3d 889, 892 (9th Cir. 2002). It is "well settled" that the existence of a valid, written agreement to arbitrate in a contract is an issue for court, not an arbitrator, to decide. Granite Rock Co. v. Int'l Broth. of Teamsters, 130 S. Ct. 2847, 2855-56, 177 L. Ed. 2d 567 (2010).

"Although it is often said that there is a federal policy in favor of arbitration, federal law places arbitration clauses on equal footing with other contracts, not above them." Janiga v. Questar Capital Corp., 615 F.3d 735, 740 (7th Cir. 2010). Thus, "[a]ny 'preference' for arbitration is reserved for the interpretation of the scope of a valid arbitration clause." Id. The "liberal federal policy regarding the scope of arbitrable issues is inapposite" to the first prong of the FAA test: the existence of a valid, written agreement to arbitrate in contract.⁶ Comer v. Micor, Inc., 436 F.3d 1098, 1104 n.11 (9th Cir. 2006).

The policy favoring arbitration applies only to the second prong of the FAA's...