Martinez v. Scott Specialty Gases, Inc.

• Decision Date: 03 March 2000
• Docket Number: No. A087128.,A087128.
• Citation: Martinez v. Scott Specialty Gases, Inc., 83 Cal.App.4th 1236, 100 Cal. Rptr.2d 403 (Cal. App. 2000)
• Court: California Court of Appeals
• Parties: Gabriel MARTINEZ et al., Plaintiffs and Appellants, v. SCOTT SPECIALTY GASES, INC., et al., Defendants and Respondents.

100 Cal.Rptr.2d 403

83 Cal.App.4th 1236

Gabriel MARTINEZ et al., Plaintiffs and Appellants, v. SCOTT SPECIALTY GASES, INC., et al., Defendants and Respondents.

No. A087128.

Court of Appeal, First District, Division 2.

March 3, 2000.

Law Offices of Colin H. Jewell, Colin H. Jewell, Hayward, Counsel for Plaintiffs and Appellants.

Littler, Mendelson, Henry D. Lederman, Walnut Creek, Jessica Pasternack, Counsel for Defendants and Respondents.

LAMBDEN, J.

Gabriel and Ann Martinez (individually Gabriel and Ann) brought this action against Gabriel's former employer Scott Specialty Gases, Inc. (Scott), a Pennsylvania corporation with a facility in Fremont, California, Scott subsidiary Scott Semiconductor Gases, and Scott employee Paul Cowles (Cowles). Gabriel claimed unlawful termination in violation of public policy, defamation and misrepresentation concerning other employment (Lab.Code, § 1050), while Ann, his spouse, claimed loss of consortium. All four causes of action flowed from Gabriel's being fired from his job at Scott.

Defendants sought summary judgment (Code Civ. Proc., § 437c) and prevailed, the court finding no issue of material fact to show that any of the claims were outside the scope of an arbitration agreement Gabriel had signed in 1997. Plaintiffs appeal the ensuing judgment. They argue that Scott had repudiated the agreement and so waived its right to enforce it. We will affirm the judgment.

Background

Plaintiffs' first amended complaint alleges that Gabriel was hired by Scott on September 2, 1997, as a clean gas mixer and later worked as a dopant gas mixer, and then a corrosive liquid filler, until he was fired on May 27, 1998, after a dump cylinder at the Fremont plant exploded. Plaintiffs allege he was fired ostensibly for safety violations leading to the explosion (from overfilling) and for falsifying records, but actually in retaliation for having complained about unsafe and unlawful working conditions at the plant. Defendants, including plant manager Cowles, allegedly defamed him with an untrue story about the discharge and disseminated the untruth to prospective employers. Ann alleges that these same incidents led to her loss of consortium.

Defendants raised among their affirmative defenses that all of these claims were barred because they were subject to an agreement for final, binding and exclusive arbitration which plaintiffs had not only failed to exhaust but also repudiated.

The facts about the arbitration issue were largely undisputed on the motion for summary judgment. Upon first taking the job, Gabriel received and read an employee handbook called "Working with Scott" (publication no. 6086) that governed employer/employee matters and provided by attachment: "If any dispute arises from your employment with [Scott], you and [Scott] agree that you both will submit it exclusively to final and binding arbitration. Except for workers' compensation and unemployment insurance claims and matters heard by the labor commissioner, `dispute' includes every kind of type of [sic ] dispute including, without limitation, any allegation of wrongful discharge, discrimination, harassment, or any injury to your physical, mental, or economic interests. This means that a neutral arbitrator, rather than a court or jury, will decide the dispute." Such disputes were to be governed by Code of Civil Procedure section 1280 et seq. and submitted within one year after a dispute or termination of employment, and "[a]ny failure to request the arbitration in this time frame and according to the procedures set forth below shall constitute a waiver of all rights to raise any claims in any forum arising out of any dispute that was subject to arbitration." Procedures were incorporated by reference to an "Employment Arbitration Procedure Manual" that employees could request any time. The material further advised, "Please remember you must sign and return the Acknowledgement of Receipt & Reading Certificate" (acknowledgement).

Gabriel signed such an acknowledgement (and a shorter separate form) on his first day of employment, September 2, 1997. The acknowledgement provided in part: "This certificate acknowledges that I received a copy of the Personnel Handbook, which supersedes all prior personnel handbooks or [Scott] employment policies. I understand that it contains important information about [Scott] general personnel policies, benefits, and provisions that control my employment relationship with [Scott].

"......................................

"... I acknowledge that [Scott] reserves the right to change any provision in this Handbook at any time for any reason without advance notice. Though [Scott] can make changes, I understand that nothing in this Handbook can be modified or deleted, nor can anything be added in any way by oral statements or practice. Only the Regional Vice President of [Scott] can change this Handbook, and the change must be in writing. If [Scott] makes any material changes, it will give me a copy of them.

"I also read and specifically agree that if there is any dispute arising out of my employment as described in the section called `Arbitration of Disputes' in the handbook, I will submit it exclusively to final and binding arbitration according to the procedures outlined in the `Employment Arbitration Procedures Manual.'" (Emphasis in original.)

Around February 23, 1998, Gabriel received an updated employee handbook— "Working with Scott" (publication no. 6086.1). As in 1997, the new handbook provided—now in the handbook itself rather than by attachment—for binding arbitration of employment-related disputes. There were also other changes: requests for arbitration (still with a one-year time limit) would be submitted to the American Arbitration Association (AAA) and governed by AAA rules of procedure, whereas the former provisions called for selection of arbitrators from the California State Mediation and Conciliation Service.

A cover letter dated February 23, from Scott Vice President Robert E. Squires, advised that the new handbook was "updated to include" a new reference index, sexual harassment and electronic communication policies, and "An Updated Employee Dispute Resolution section—page 22...." The letter stated: "Please read this new handbook and return a signed copy of the Acknowledgment by March 16 to your Vice President or Senior Manager's secretary for inclusion in your personnel file."

The new acknowledgement form, as before, said the new handbook "(Publication 6086.1)" "supersedes all prior personnel handbooks or [Scott] employment policies" and stated, above the signature line, "I ... specifically agree that if there is any dispute arising out of my employment as described in the section called `Arbitration' in the Handbook, I will submit it exclusively to final and binding arbitration according to the procedures outlined in the 'American Arbitration Association National Rules for the Resolution of Employment Disputes.'"

Gabriel read the handbook and other documents but never signed or returned the acknowledgement. According to his own declaration, he had become disenchanted with aspects of his employment, had expressed unhappiness to plant manager Cowles and told Cowles he "would not sign" the acknowledgment because he "did not agree with" the arbitration policies and procedures. Afraid that his job might be in jeopardy due to his ongoing complaints, Gabriel wanted "to preserve [his] right to jury trial in the event of retaliatory discharge."¹

His firing came about three months later, on May 27, and Gabriel wrote to Scott on June 5 that he intended to make a claim with the state Labor Commissioner that he was fired for refusing to work in violation of occupational safety standards. In a response letter of June 18, office manager Regina Coe denied knowing of the matter but added: "If anyone at Scott has done so, we would like to know the details so that we can investigate fully and resolve any disputes in accordance with the Employee Dispute Resolution procedures presented in the `Working with Scott' handbook number 6086.1, which you acknowledged receipt of on September 2, 1997. I have enclosed a copy of the handbook as well as a copy of your acknowledgement of receipt. [¶] ... [¶] If you have any questions, please do not hesitate to contact me."

Gabriel made no contact for arbitration but on September 14 filed this action, and on October 1 filed a first amended complaint adding Ann's loss-of-consortium claim. On October 14, Scott's counsel wrote to plaintiffs' counsel, Colin H. Jewell, stating in part: "As you can see from the enclosures [the 1997 handbook and acknowledgement], Gabriel Martinez signed an arbitration agreement. The agreement covers all of the claims brought by [him]. He also was employed at the time Scott issued its new employee handbook which contained a mandatory arbitration provision. Therefore, since arbitration is the exclusive means by which Mr. Martinez can pursue his claims, we are requesting that Gabriel Martinez immediately file a dismissal of all of his claims as to all parties.

"If Mr. Martinez does not dismiss his claims, we will consider his continuing to prosecute his case in superior court to be a direct repudiation of his arbitration agreement. We also will seek summary judgment for each Defendant under the controlling authority of Charles J. Rounds Co v. Joint Council of Teamsters No. 42 (1971) 4 Cal.3d 888, 899 [95 Cal.Rptr. 53, 484 P.2d 1397]; 24 Hour Fitness v. Superior Court[, Inc.] (1998) [66] Cal.App.4th [1199, 78 Cal.Rptr.2d 533]. By maintaining this lawsuit instead of proceeding to arbitration, [Mr. Martinez] is depriving Defendants of the benefit of the arbitration bargain and is breaching the arbitration agreement....

"We also believe that Ms. Martinez is required to arbitrate her loss of consortium claim. The parties' arbitration agreement requires arbitration of any dispute arising out of Mr. Martinez'...