Douglass v. Pflueger Hawaii, Inc.

• Citation: 135 P.3d 129
• Decision Date: 25 May 2006
• Docket Number: No. 26363.,26363.
• Parties: Adrian D. DOUGLASS, Plaintiff-Appellant, v. PFLUEGER HAWAII, INC. dba Pflueger Acura, Defendant-Appellee.
• Court: Supreme Court of Hawai'i

135 P.3d 129

Adrian D. DOUGLASS, Plaintiff-Appellant, v. PFLUEGER HAWAII, INC. dba Pflueger Acura, Defendant-Appellee.

No. 26363.

Supreme Court of Hawai`i.

May 25, 2006.

As Corrected May 30, 2006.

COPYRIGHT MATERIAL OMITTED

Timothy L. MacMaster, on the briefs, Honolulu, for plaintiff-appellant.

Barbara A. Petrus and M. Elizabeth Raxter (of Goodsill Anderson Quinn & Stifel), Honolulu, on the briefs, for defendant-appellee.

MOON, C.J., LEVINSON, NAKAYAMA, and DUFFY, JJ.; ACOBA, J., concurring separately.

Opinion of the Court by MOON, C.J.

This appeal concerns the sole question whether plaintiff-appellant Adrian D. Douglass, a minor at the time he was hired by defendant-appellee Pflueger Hawai`i, Inc. dba Pflueger Acura (Pflueger), is contractually bound by an arbitration provision set forth in Pflueger's Employee Handbook. Douglass appeals the December 30, 2003 order of the Circuit Court of the First Circuit, the Honorable Victoria S. Marks presiding, granting Pflueger's motion to stay action and to compel arbitration of the claims asserted by Douglass in his complaint.¹ Douglass' claims stem from his allegations of sexual harassment and assault committed by his supervisor, an employee of Pflueger.

On appeal, Douglass contends that the circuit court erred in compelling arbitration because (1) Douglass was a minor child who did not have the legal capacity to bind himself as a party to "an enforceable, valid, and irrevocable" arbitration agreement; (2) the arbitration provision contained in the Employee Handbook is not a valid and enforceable contract; and (3) Douglass produced sufficient evidence in opposition to Pflueger's motion to compel for the court to have sustained the motion and allow the case to proceed to trial. Douglass further contends that Pflueger waived its right to compel arbitration because it knowingly and voluntarily accepted the benefits of the judicial process.

For the reasons discussed infra, we vacate the December 30, 2003 order staying the instant action and compelling arbitration and remand this case for further proceedings consistent with this opinion.

I. BACKGROUND

On or about August 31, 2001, Pflueger hired Douglass as a lot technician at the Pflueger Acura car lot in Honolulu, Hawai`i. At that time, Douglass was seventeen years old (less than four months shy of the age of majority, i.e., eighteen years²), having graduated from high school in the spring of 2001. On September 13, 2001, Douglass attended an employee orientation, where he received Pflueger's Employee Handbook [hereinafter, the Employee Handbook or the Handbook]. The Employee Handbook contained, inter alia, policies and procedures regarding Pflueger's anti-harassment/discrimination policies and an arbitration provision. The provision located on page 20 of the Handbook provides:

Arbitration Agreement

Any and all claims arising out of the employee's employment with the Company and his/her termination shall be settled by final binding arbitration in Honolulu, Hawaii, in accordance with the arbitration provisions of the Federal Arbitration Act and the rules and protocol prevailing with the American Arbitration Association. Any claim must be presented for arbitration within two (2) years of the date upon which the claimant became aware of, or should have become aware of the claim.

The results of any arbitration shall be final and binding upon the parties. The parties agree not to institute any action in any court located in the State of Hawaii or elsewhere against the other arising out of the claims covered by this paragraph.

(Emphasis in original.)

At the September 13, 2001 meeting, Douglass signed an acknowledgment form, located at page 60 in the Employee Handbook, which stated in full as follows:

ACKNOWLEDGMENT

This employee handbook describes important information about the Company and I understand that I should consult the Business Manager regarding any questions not answered in the handbook. The provisions contained in this handbook are presented as a matter of information only and do not constitute an employment contract. I have entered into my employment relationship with the Company voluntarily and acknowledge that there is no specified length of employment. At any time, either I or the Company can terminate the relationship at-will, with or without cause or notice, as long as there is no violation of applicable federal or state law.

I also understand that because business judgments and needs may change from time to time, the guideline described herein are not conditions of employment. The Company has the right to change this handbook at any time and without advance notice.

I have received a copy of Pflueger Group's Employee Handbook and I have read and understand the information outlined in the handbook. I have asked any questions I may have concerning its contents and will comply with all policies and procedures to the best of my ability.

(Emphases in original.)

On or about November 29, 2001, Douglass was injured on the job when a coworker sprayed him on the buttocks area with an air hose. Subsequently, on May 2, 2002, Douglass filed a complaint with the Hawai`i Civil Rights Commission (HCRC). In response to his request to withdraw his HCRC complaint and pursue the matter in court, the HCRC, on September 25, 2002, issued a right-to-sue letter to Douglass, pursuant to HRS § 368-12 (1993).³ Thereafter, on December 17, 2002, Douglass filed an action against Pflueger in the circuit court. The complaint essentially asserted that: (1) Douglass was sexually assaulted in an attack in which his supervisor at Pflueger's car lot "took an air hose, held it against and/or in close proximity to his buttocks, and unleashed a blast of compressed air"; (2) Douglass' anus, rectum and colon were instantaneously penetrated, inflated, and dilated by the force of the blast; (3) Douglass was treated at the Emergency Department of the Kapiolani Medical Center for Women and Children; and (4) he was admitted to the hospital overnight for further observation and treatment. In his complaint, Douglass alleged five employment law claims: (1) Hostile, Intimidating and/or Offensive Working Environment; (2) Unsafe Working Environment; (3) Sexual Assault and Sexual Discrimination; (4) Negligent Training (of its Supervisor); and (5) Negligent Supervision.

After filing its answer to the complaint, Pflueger's attorney, Barbara Petrus of Goodsill Anderson Quinn & Stifel, took Douglass' deposition on August 14, 2003. On September 11, 2003, the parties stipulated to the partial dismissal with prejudice of Douglass' negligent supervision and negligent training claims. On September 16, 2003, Douglass filed his Pretrial Statement. Pflueger filed its Responsive Pretrial Statement on November 12, 2003.

Thereafter, on December 1, 2003, Pflueger filed its motion to stay this action and compel arbitration. The motion requested the circuit court to "stay this action and to compel arbitration in this dispute in accordance with the [a]rbitration [a]greement set forth in [the] Employee [H]andbook." The circuit court heard Pflueger's motion on December 29, 2003. At the conclusion of the parties' oral argument, the circuit court granted the motion, stating:

Well, I'm going to grant the motion. I think you have a situation where, as Ms. Petrus [Pflueger's counsel] says, you have a person who accepts the benefits of some of the contractual provisions and then tries to disavow one other contractual provision, and I don't think [ ] that's appropriate. And your argument is that if it wasn't specifically discussed or if they don't have a specific memory about it that [ ] somehow would allow anybody to disavow any contract that they sign. I don't find that particularly persuasive.

On December 30, 2003, the circuit court issued its written order granting Pflueger's motion to compel arbitration. On January 27, 2004, Douglass timely filed his appeal.

II. STANDARD OF REVIEW

A petition to compel arbitration is reviewed de novo. Dines v. Pac[.] Ins. Co., Ltd., 78 Hawai`i 325, 326, 893 P.2d 176, 177, reconsideration denied, 78 Hawai`i 474, 896 P.2d 930 (1995). See also Shimote v. Vincent, 80 Hawai`i 96, 99, 905 P.2d 71, 74 (App.), cert. denied, 80 Hawai`i 187, 907 P.2d 773 (1995). The standard is the same as that which would be applicable to a motion for summary judgment, and the trial court's decision is reviewed "using the same standard employed by the trial court and based upon the same evidentiary materials as were before [it] in determination of the motion." Koolau Radiology, Inc. v. Queen's Med[. Ctr.], 73 Haw. 433, 439-40, 834 P.2d 1294, 1298 (1992) (citation and internal quotation marks omitted); see also Cuba v. Fernandez, 71 Haw. 627, 631, 801 P.2d 1208, 1211 (1990); First Hawaiian Bank v. Weeks, 70 Haw. 392, 396, 772 P.2d 1187, 1190 (1989); Feliciano v. Waikiki Deep Water, Inc., 69 Haw. 605, 607, 752 P.2d 1076, 1078 (1988).

Brown v. KFC Nat'l Mgmt. Co., 82 Hawai`i 226, 231, 921 P.2d 146, 151 (1996) (brackets in original).

III. DISCUSSION

At the outset, we note that the section of Pflueger's Employee Handbook entitled "At-Will Employment" states:

At all times during employment with Pflueger Group, employees shall retain the right to leave employment if they choose, Pflueger Group retains the right, as well, at all times to separate any employee from employment at any time, with or without notice, in accordance with all applicable laws.

Thus, Douglass — like all of Pflueger's employees — was an employee-at-will. See Parnar v. Americana Hotels, Inc., 65 Haw. 370, 374, 652 P.2d 625, 627 (1982) (recognizing "at-will" employment as being "terminable at the will of either party, for any reason or no reason") (citing 9 S. Williston, Contracts § 1017 (3d ed.1967) and Annot., 51 A.L.R.2d 742 (1957)). However, "at-will" does not mean the nonexistence of an agreement of employment between the parties.

Although the record in the instant case does...