Ashbey v. Archstone Prop. Mgmt., Inc.

• Decision Date: 12 May 2015
• Docket Number: No. 12–55912.,12–55912.
• Citation: 785 F.3d 1320
• Parties: Michael ASHBEY, Plaintiff–Appellee, v. ARCHSTONE PROPERTY MANAGEMENT, INC., a corporation, Defendant–Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

785 F.3d 1320

Michael ASHBEY, Plaintiff–Appellee

v.ARCHSTONE PROPERTY MANAGEMENT, INC., a corporation, Defendant–Appellant.

No. 12–55912.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 4, 2014.

Filed May 12, 2015.

Henry D. Lederman (argued), Littler Mendelson, P.C., Walnut Creek, CA; Connie L. Michaels and Sarah E. Ross, Littler Mendelson, P.C., Los Angeles, CA, for Defendant–Appellant.

Avi Burkwitz (argued) and Diana Ratcliff, Peterson Bradford Burkwitz, Burbank, CA, for Plaintiff–Appellee.

Susan R. Oxford (argued), Attorney, P. David Lopez, General Counsel, Carolyn L. Wheeler, Acting Associate General Counsel, and Lorraine C. Davis, Assistant General Counsel, United States Equal Employment Opportunity Commission, Washington, D.C., for Amicus Curiae Equal Employment Opportunity Commission.

Appeal from the United States District Court for the Central District of California, David O. Carter, District Judge, Presiding. D.C. No. 8:12–cv–00009–DOC–RNB.

Before: JAY S. BYBEE, CARLOS T. BEA, and MORGAN CHRISTEN, Circuit Judges.

OPINION

BEA, Circuit Judge:

Defendant Archstone Communities LLC (“Archstone”) appeals from the district court's denial of its Motion to Compel Arbitration. We reverse the district court's order and remand for entry of an order granting Archstone's Motion to Compel Arbitration.

I.

Michael Ashbey was employed at Archstone from December 1996 until November 2010, when he was fired. He began as a Service Technician and was promoted to Regional Service Manager in 2003.

In 2009, Ashbey signed a document entitled “Acknowledgment of Receipt of Archstone Company Policy Manual 2009” (“Acknowledgment”). The Acknowledgment contained the following language:

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 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 in this Company Policy Manual.

As the Acknowledgment twice mentioned, the Company Policy Manual for 2009 (“Manual”) (as well as the Manual for 2010)¹ contained a detailed Dispute Resolution Policy section explaining Archstone's arbitration policy. The Dispute Resolution Policy stated in relevant part:

This Policy is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq.... Except as it otherwise provides, this Policy is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law, and therefore 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.... This Policy also applies, without limitation, to disputes arising out of the employment relationship or the termination thereof including, without limitation, disputes over ... harassment and claims arising under the ... Civil Rights Act of 1964 ... and all other state statutory and common law claims.

In November 2011, Ashbey filed a complaint in California state court alleging, among other claims, unlawful retaliation in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (“Title VII”), and equivalent state-law claims. In his complaint, Ashbey alleged that in 2006, Archstone employee Alex Winborn began harassing Ashbey's wife, who also worked for Archstone. In June 2010, shortly after Ashbey's wife complained of Winborn's unlawful conduct, Archstone terminated her employment. Ashbey further alleged that, following the termination of Mrs. Ashbey's employment, Archstone engaged in retaliatory conduct towards him by first altering his employment conditions and then by wrongfully terminating his employment. Ashbey demanded a jury trial.

Archstone removed the case to federal district court on the grounds of both diversity of citizenship and federal question (Title VII) jurisdiction. Archstone then filed a Motion to Compel Arbitration pursuant to the Manual's Dispute Resolution Policy. The district court denied Archstone's motion as to all of Ashbey's claims. We address here the district court's refusal to compel arbitration of Ashbey's Title VII claim and its state-law equivalents on the ground that Ashbey did not knowingly waive his Title VII right to a jury trial. We address the district court's refusal to compel arbitration on Ashbey's other claims in an accompanying memorandum disposition.

II.

We review de novo a district court's denial of a motion to compel arbitration. Bushley v. Credit Suisse First Boston, 360 F.3d 1149, 1152 (9th Cir.2004).

A.

The Federal Arbitration Act (“FAA”) provides:

A written provision in any ... contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

9 U.S.C. § 2. A party seeking to compel arbitration has the burden under the FAA to show (1) the existence of a valid, written agreement to arbitrate; and, if it exists, (2) that the agreement to arbitrate encompasses the dispute at issue. Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir.2008). In the accompanying memorandum disposition we hold that these two elements are satisfied with regard to all of Ashbey's claims. But our task does not end there. The scope of the FAA is narrowed by other federal statutes, such as Title VII and the Americans with Disabilities Act (“ADA”), which “limit the enforcement of arbitration agreements with regard to claims arising under th[ose] statute[s].” Kummetz v. Tech Mold, Inc., 152 F.3d 1153, 1155 (9th Cir.1998).

Before 1991, “Title VII had been interpreted to prohibit any waiver of its statutory remedies in favor of arbitration.” Prudential Ins. Co. of Am. v. Lai, 42 F.3d 1299, 1304 (9th Cir.1994). But Congress reversed course with amendments to Title VII in the Civil Rights Act of 1991. Id. Section 118 of the Act states: “Where appropriate and to the extent authorized by law, the use of alternative means of dispute resolutions, including settlement negotiations, conciliation, facilitation, mediation, factfinding, minitrials, and arbitration, is encouraged to resolve disputes arising under the Acts or provisions of Federal law amended by this title.”See Pub.L. No. 102–166, § 118, 105 Stat. 1071 (codified at Notes to 42 U.S.C. § 1981 ); see also Lai, 42 F.3d at 1304. We have recognized that Section 118 was a “polite bow to the popularity of alternative dispute resolution.” EEOC. v. Luce, Forward, Hamilton & Scripps, 345 F.3d 742, 747 (9th Cir.2003) (en banc) (quoting Pryner v. Tractor Supply Co., 109 F.3d 354, 363 (7th Cir.1997) ). Nonetheless, we did not read Section 118 in Lai as an unfettered endorsement of alternative dispute resolutions for Title VII claims; such resolutions are permissible only “where appropriate.” Lai, 42 F.3d at 1305. We concluded, based on a Senator's floor statement, that the phrase “where appropriate” signals a plaintiff cannot waive his right to a judicial forum for Title VII claims unless he does so “knowingly.” Id. (“[W]e conclude that a Title VII plaintiff may only be forced to forego her statutory remedies and arbitrate her claims if she has knowingly agreed to submit such disputes to arbitration.”). As a result, not only must there be a valid agreement to arbitrate that encompasses the right at issue, that agreement must also be “knowing.” Id.²

The district court here held the arbitration agreement was unenforceable with respect to Ashbey's Title VII and related state-law claims because the Acknowledgment's language did not give Ashbey adequate notice for Ashbey “knowingly” to have waived his right to a jury trial for those claims.

B.

Our opinions in Nelson and Kummetz are instructive on this issue. See Nelson v. Cyprus Bagdad Copper Corp., 119 F.3d 756, 760 (9th Cir.1997) ; Kummetz, 152 F.3d at 1155. In Nelson, the employer required Nelson to sign an acknowledgment similar to the one in this case:

I have received a copy of the Cyprus Bagdad Copper Corporation Handbook that is effective July 1, 1993 and understand that the Handbook is a guideline to the Company's policies and procedures. I agree to read it and understand its contents. If I have any questions regarding its contents I will contact my supervisor or Human Resources Representative.

See Nelson, 119 F.3d at 758. The handbook contained an arbitration agreement. Id. at 758–59. Some time after Nelson signed the acknowledgment, the employer reorganized its operations and required Nelson to begin working 12–hour shifts. Id. at 758. Nelson had difficulty with the new shifts due to medical limitations and, after attempting to accommodate Nelson, the employer fired him. Id. Nelson filed a lawsuit in federal district court alleging the employer violated the ADA. Id. at 759. The district court granted summary judgment for the employer because it found the arbitration clause in the handbook was enforceable and that Nelson had knowingly agreed to waive his right...