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Media Alerts - Ashbey v. Archstone Property Management, Inc. - Ninth Circuit
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June 9, 2015
  Ashbey v. Archstone Property Management, Inc. - Ninth Circuit
Headline: Ninth Circuit panel reverses district court's denial of defendant employer's motion to compel arbitration, holding that plaintiff employee knowingly waived his right to a judicial forum for his claim under Title VII of the Federal Civil Rights Act of 1964.

Area of Law: Civil Procedure; Arbitration; Employment Law

Issue Presented: Whether employee knowingly waived his right to a judicial forum for his Title VII Civil Rights claim and equivalent state-law claims by signing an acknowledgement of receipt of the employer's company policy manual which explicitly notified the employee that the manual contained a dispute resolution policy explaining the employer's arbitration policy, and the employee expressly agreed to adhere to the manual and the dispute resolution policy.

Brief Summary: Michael Ashbey was employed at Archstone Property Management, Inc. (Archstone) from December 1996 until he was fired in November 2010. In 2009 Ashbey signed an acknowledgement of receipt of the Company Policy Manual which contained, in two places. an acknowledgement of the company's dispute resolution policy (DRP) explaining the company's arbitration policy. The section containing the dispute resolution policy specifically identified the areas the DRP was intended to be applicable to between the employee and the employer. In 2011, Ashbey filed suit against Archstone claiming retaliatory conduct and wrongful termination. Archstone removed the case to federal district court and then filed a motion to compel arbitration pursuant to the Manual. The federal district court denied the motion and Archstone appealed. On appeal, the Ninth Circuit panel noted that Title VII of the Federal Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA) "limit[s] the enforcement of arbitration agreements with respect to claims arising under those statutes" and that, before 1991, "Title VII had been interpreted to prohibit any waiver of its statutory remedies in favor of arbitration," but that Congress amended Title VII, in 1991, to encourage the use of alternative means of dispute resolution, including arbitration, "where appropriate." The panel then noted 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.'" The panel determined that the employee knowingly waived his right to a judicial forum because the acknowledgment he signed "explicitly notified Ashbey the Manual contained a Dispute Resolution Policy, and it did so in two places" and that the employee "expressly agreed "'to adhere' to the Manual and the Dispute Resolution Policy." Accordingly, the panel reversed the lower court and remanded with instructions to compel arbitration.

Significance: An employee may waive the right to a judicial forum where the employee signs an acknowledgement of the company policy that specifically contains a requirement to arbitrate and the arbitration agreement specifically encompasses the area of dispute.

Extended Summary: Michael Ashbey was employed at Archstone Property Management, Inc. (Archstone) from December 1996 until he was fired in November 2010. In 2009 Ashbey signed an acknowledgement of receipt of the Company Policy Manual (Manual) which contained in two places an acknowledgement of the company's dispute resolution policy (DRP). The DRP explicitly stated that it "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 2011 Ashbey filed suit against Archstone alleging 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's complaint also further alleged that, following the termination of his wife's employment, Archstone engaged in retaliatory conduct towards him by first altering his employment conditions and then by wrongfully terminating his employment.

Archstone removed the case to federal district court under diversity and federal question jurisdiction and then filed a motion to compel arbitration pursuant to the Manual. The federal district court denied the motion and Archstone appealed.

The Ninth Circuit panel first addressed the Federal Arbitration Act (FAA) which provides "[a] written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract . . . 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. ยง 2. However, the scope of the FAA was narrowed by Title VII and the Americans with Disabilities Act because the two statutes limit enforcement of arbitration agreements that fall under those statutes.

The panel then addressed effect of the 1991 Congressional amendment to Title VII finding that the amendment was a "polite bow to alternative dispute resolution" but only where "appropriate." The Ninth Circuit previously interpreted the phrase "where appropriate" to mean that "a plaintiff cannot waive his right to a judicial forum for Title VII claims unless he does so 'knowingly'." Therefore, a Title VII plaintiff can be forced to arbitrate his claims where he has "knowingly" agreed to submit such disputes to arbitration. Prudential Ins. Co. of Am. v. Lai, 42 F.3d 1299, 1305 (9th Cir. 1994).

The panel distinguished the instant case from Nelson v. Cyprus Bagdad Copper Corp., 119 F.3d 756, 761 (8th Cir. 1997) and Kummetz v. Tech Mold, Inc., 152 F.3d 1153 (9th Cir. 1998). In Nelson the Ninth Circuit reversed the district court's granting of a motion for summary judgment for the employer holding the acknowledgment form did not notify "Nelson either that the Handbook contained an arbitration clause or that his acceptance of the Handbook constituted a waiver of his right to a judicial forum in which to resolve claims covered by the ADA." 119 F.3d at 761. Similarly, in Kummetz the Ninth Circuit held that the acknowledgment "did not notify Kummetz that the Booklet contained an arbitration provision, nor did it mention or imply anything about employment-related disputes, civil rights statutes, or waivers of remedies." 152 F.3d at 1154.

In both Nelson and Kummetz, the Ninth Circuit found there was not enough information in the acknowledgment signed by the employee to allow the employee to make a "knowing" agreement.

In contrast to the acknowledgments in Nelson and Kummetz, here the panel found that that Ashbey knowingly waived his right to a judicial forum because the acknowledgment he signed "explicitly notified Ashbey the Manual contained a Dispute Resolution Policy, and it did so in two places" and that the employee "expressly agreed "'to adhere' to the Manual and the Dispute Resolution Policy." As such, the panel reversed the decision by the district court and remanded with instructions to compel arbitration.

For the full opinion:http://cdn.ca9.uscourts.gov/da...15/05/12/12-55912.pdf

Panel: Jay S. Bybee, Carlos T. Bea, and Morgan Christen, Circuit Judges

Date of Issued Opinion: May 12, 2015

Docket Number: 12-55912

Decided: Reversed and Remanded.

Case Alert Author:Lawrence J. Hudack

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

Avi Burkwitz (argued) and Diana Ratcliff, Peterson Bradford Burkwitz, Burbank, California, 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.

Author of Opinion: Carlos T. Bea

Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 06/09/2015 05:04 PM     9th Circuit  

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