Ziober v. BLB Res., Inc.

• Decision Date: 14 October 2016
• Docket Number: No. 14-56374,14-56374
• Citation: 839 F.3d 814
• Parties: Kevin Ziober, an individual, Plaintiff–Appellant, v. BLB Resources, Inc., a California Corporation, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

839 F.3d 814

Kevin Ziober, an individual, Plaintiff–Appellant,

v.BLB Resources, Inc., a California Corporation, Defendant–Appellee.

No. 14-56374

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 5, 2016 Pasadena, California

Filed October 14, 2016

Peter Romer–Friedman (argued) and R. Joseph Barton, Cohen Milstein Sellers & Toll PLLC, Washington, D.C.; Kathryn S. Piscitelli, Orlando, FL; Thomas G. Jarrard, Law Office of Thomas Jarrard, PLLC, Spokane, WA; for Plaintiff–Appellant.

Lonnie D. Giamela (argued), Jimmie E. Johnson, and Nathan V. Okelberry, Fisher & Phillips LLP, Los Angeles, CA, for Defendant–Appellee.

Before: Mary H. Murguia and Paul J. Watford, Circuit Judges, and Susan R. Bolton,^** District Judge.

Concurrence by Judge Watford

OPINION

MURGUIA

, Circuit Judge:

The plaintiff, Kevin Ziober, signed an agreement with his employer requiring the arbitration of legal disputes. Ziober later sued the employer, claiming that he was fired from his job after providing notice of his deployment to Afghanistan in the United States Navy Reserve. The lawsuit alleged violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which establishes employment rights for returning servicemembers. This case presents the question of whether USERRA prohibits the compelled arbitration of claims arising under its provisions. We join the other circuits to have considered the question and conclude that USERRA contains no such prohibition. We therefore affirm the district court's order compelling arbitration and dismissing Ziober's complaint.

I.

The facts, as alleged in the underlying complaint, are not in dispute for purposes of this appeal. Ziober served in the United States Navy Reserve and worked in his civilian life as an operations director for defendant BLB Resources, Inc., a real estate marketing and management firm. Approximately six months after joining the company, Ziober signed a bilateral arbitration agreement. The agreement stated:

To the fullest extent allowed by law, any controversy, claim or dispute between Employee and the Company ... relating to or arising out of Employee's employment or the cessation of that employment will be submitted to final and binding arbitration before a neutral arbitrator ... for determination in accordance with the American Arbitration Association's (“AAA”) Employment Arbitration Rules and Mediation Procedures (excluding mediation), including any subsequent modifications or amendments to such Rules, as the exclusive remedy for such controversy, claim or dispute.

Under the agreement, the company agreed to pay all arbitration costs. The agreement further specified that the scope of discovery and available remedies would be the same in arbitration as they would be in court.

Ziober subsequently told the company that the Navy was recalling him to active duty in Afghanistan. On Ziober's last scheduled day of work, the company informed him that he would not have a job upon his return to civilian life.

In April 2014, after returning from Afghanistan, Ziober sued his former employer for violating USERRA's provisions protecting servicemembers against discrimination and establishing reemployment rights. The complaint also includes various state law claims, including claims for wrongful termination and violations of a state statute protecting servicemembers against discrimination. The employer moved to compel arbitration pursuant to the agreement Ziober had signed. The district court granted the defendant's motion after concluding that USERRA did not invalidate or supersede the arbitration agreement. This appeal followed.

II.

We have jurisdiction under 9 U.S.C. § 16(a)(3)

to review the district court's order compelling arbitration and dismissing Ziober's complaint. We review the district court's order de novo. Bushley v. Credit Suisse First Boston , 360 F.3d 1149, 1152 (9th Cir. 2004).

III.

Our analysis begins with more than three decades of Supreme Court precedent recognizing the “liberal federal policy favoring arbitration agreements,” as established by the Federal Arbitration Act (FAA). Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)

; see also CompuCredit Corp. v. Greenwood , –––U.S. ––––, 132 S.Ct. 665, 669, 181 L.Ed.2d 586 (2012)

. That pro-arbitration policy extends to arbitration agreements in the employment contracts of non-transportation workers. Circuit City Stores, Inc. v. Adams , 532 U.S. 105, 109, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001). The FAA requires courts to “ ‘rigorously enforce’ arbitration agreements according to their terms,” including agreements to arbitrate claims arising under federal statutes. Am. Express Co. v. Italian Colors Rest. , ––– U.S. ––––, 133 S.Ct. 2304, 2309, 186 L.Ed.2d 417 (2013) (quoting Dean Witter Reynolds Inc. v. Byrd , 470 U.S. 213, 221, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985) ); see also

CompuCredit , 132 S.Ct. at 669. Section 3 of the FAA specifically directs federal district courts to stay proceedings and compel arbitration of “any issue referable to arbitration under an agreement in writing for such arbitration.” 9 U.S.C. § 3.

An exception to the FAA's arbitration mandate exists when the mandate “has been ‘overridden by a contrary congressional command.’ ” CompuCredit , 132 S.Ct. at 669

(quoting Shearson/Am.

Express Inc. v McMahon , 482 U.S. 220, 226, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987) ). The burden rests on the party challenging arbitration “to show that Congress intended to preclude a waiver of a judicial forum” for the claims at issue. Gilmer v. Interstate/Johnson Lane Corp. , 500 U.S. 20, 26, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). Such congressional intent “will be discoverable in the text of the [statute], its legislative history, or an inherent conflict between arbitration and the [statute's] underlying purposes.” Id. at 26, 111 S.Ct. 1647 (internal quotation marks omitted); see also

14 Penn Plaza LLC v. Pyett , 556 U.S. 247, 258, 129 S.Ct. 1456, 173 L.Ed.2d 398 (2009).

In this case, Ziober argues that the plain text and legislative history of USERRA reveal that Congress intended to preclude the compelled arbitration of claims arising under its provisions. We join our sister circuits to have considered the question and conclude that neither the text nor legislative history evinces that intent. Landis v. Pinnacle Eye Care, LLC , 537 F.3d 559 (6th Cir. 2008)

; Garrett v. Circuit City Stores, Inc. , 449 F.3d 672 (5th Cir. 2006) ; see also

Bodine v. Cook's Pest Control Inc. , 830 F.3d 1320 (11th Cir. 2016) (holding that a USERRA claim was arbitrable even where the underlying arbitration agreement contained terms that violated the statute because those terms could be severed from the remainder of the agreement).

A.

Some historical context helps frame the discussion of USERRA's provisions. By the time Congress passed USERRA in 1994, the FAA had been in place for nearly seventy years, and the Supreme Court had made clear that “a contrary congressional command” was required to override the FAA's pro-arbitration mandate. McMahon , 482 U.S. at 226, 107 S.Ct. 2332

. Three years before USERRA's passage, the Supreme Court further held that an age discrimination claim arising under the Age Discrimination in Employment Act of 1967 could be subject to compelled arbitration. Gilmer , 500 U.S. at 23, 111 S.Ct. 1647. Arbitration agreements in employment contracts were not uncommon at the time. See, e.g.,

Erving v. Va. Squires Basketball Club , 468 F.2d 1064, 1066–67 (2d Cir. 1972) ; Dickstein v. duPont , 443 F.2d 783, 784–85 (1st Cir. 1971).

Against that backdrop, Congress passed USERRA to broadly prohibit employment discrimination against, and to establish reemployment rights on behalf of, those who serve in the military and then reenter civilian life. See

38 U.S.C. §§ 4301

–4334. Central to this appeal, 38 U.S.C. § 4302(b) provides:

This chapter supersedes any State law (including any local law or ordinance), contract, agreement, policy, plan, practice, or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter, including the establishment of additional prerequisites to the exercise of any such right or the receipt of any such benefit.

An individual may enforce his or her substantive rights against a private employer in one of two ways. 38 U.S.C. §§ 4322

, 4323. First, an individual may file a complaint with the Secretary of Labor and request that the Secretary refer the matter to the Attorney General for further prosecution. Id. §§ 4322, 4323(a)(1). Second, an individual may directly pursue a civil action in federal court. Id. § 4323(a)(3).¹ Section 4323 gives district courts jurisdiction over USERRA claims, and it specifies the venue in which actions may proceed. Id. § 4323(b), (c).

Taken together, Ziober argues that those statutory provisions create a procedural right to sue in federal court that precludes a contractual agreement to arbitrate. We disagree. As an initial matter, it is well established that “[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum.” Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc. , 473 U.S. 614, 628, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985)

; see also

Circuit City , 532 U.S. at 123, 121 S.Ct. 1302. Ziober therefore loses no substantive protections by arbitrating his claims, and the only way he can prevail is if USERRA creates a procedural right to a judicial forum, protected by § 4302(b).

The Supreme Court's decision in CompuCredit

forecloses the argument that USERRA includes a non-waivable procedural right to a judicial forum. In CompuCredit, the Court enforced a consumer agreement to arbitrate claims arising under the Credit Repair Organizations Act (CROA), which, similar to USERRA, prohibited the waiver of “any right of the...