Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-55912/USCOURTS-ca9-12-55912-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MICHAEL ASHBEY,

Plaintiff-Appellee,

v.

ARCHSTONE PROPERTY

MANAGEMENT, INC., a corporation,

Defendant-Appellant.

No. 12-55912

D.C. No.

8:12-cv-00009-

DOC-RNB

OPINION

Appeal from the United States District Court

for the Central District of California

David O. Carter, District Judge, Presiding

Argued and Submitted

March 4, 2014—Pasadena, California

Filed May 12, 2015

Before: Jay S. Bybee, Carlos T. Bea,

and Morgan Christen, Circuit Judges.

Opinion by Judge Bea

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2 ASHBEY V. ARCHSTONE PROP. MGMT.

SUMMARY*

Arbitration

The panel held that employee Michael Ashbey knowingly

waived his right to a judicial forum for his Title VII claim

and equivalent state-law claims, reversed the district court’s

order denying Archstone Property Management, Inc.’s

motion to compel arbitration, and remanded for entry of an

order granting Archstone’s motion.

The scope of the Federal Arbitration Act is narrowed by

federal statutes, such as Title VII of the Civil Rights Act of

1964, which limits “the enforcement of arbitration

agreements with regard to claims arising under” the statute. 

Kummetz v. Tech Mold, Inc., 152 F.3d 1153, 1155 (9th Cir.

1998).

The panel held that the case was distinguishable from

Kummetz and Nelson v. Cyprus Bagdad Copper Corp., 119

F.3d 756 (9th Cir. 1997), because Archstone presented its

employee the “express” choice lacking in Kummetz and

Nelson where the employee signed an acknowledgment that

explicitly notified him that Archstone’s Company Policy

Manual contained a Dispute Resolution Policy section

explaining Archstone’s arbitration policy, and the employee

expressly agreed to adhere to the policy. The panel

concluded that the arbitration provision was enforceable.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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ASHBEY V. ARCHSTONE PROP. MGMT. 3

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.

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.

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4 ASHBEY V. ARCHSTONE PROP. MGMT.

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

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ASHBEY V. ARCHSTONE PROP. MGMT. 5

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.

1

In March 2010, Ashbey signed a document entitled “Acknowledgment

of Receipt of Archstone Company Policy Manual 2010.” The 2010

Acknowledgment is identical to the 2009 Acknowledgment in all material

respects.

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6 ASHBEY V. ARCHSTONE PROP. MGMT.

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). 

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ASHBEY V. ARCHSTONE PROP. MGMT. 7

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,

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8 ASHBEY V. ARCHSTONE PROP. MGMT.

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’slanguage did

not give Ashbey adequate notice for Ashbey “knowingly” to

have waived his right to a jury trial for those claims.

2 This “knowing” standard applies to Title VII’s state-law equivalents

also. See Lai, 42 F.3d at 1304 n.1.

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ASHBEY V. ARCHSTONE PROP. MGMT. 9

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 to a judicial

forum. Id.

We reversed. We held the acknowledgment form did not

notify “Nelson either that the Handbook contained an

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10 ASHBEY V. ARCHSTONE PROP. MGMT.

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.” Id. at 761. The fact

that Nelson continued to work for his employer did not cure

the notice failure: “Nelson’s continued employment after he

received the Handbook, and after he read it (and we assume

he did), did not amount to the type of ‘knowing agreement’”

required by our precedent. Id. at 762. We explained that

“[n]othing in either the acknowledgment form or the

Handbook itself put Nelson on notice that by not quitting his

job he was somehow entering into an agreement to waive a

specific statutory remedy afforded him by a civil rights

statute.” Id. We held, “[a]ny bargain to waive the right to a

judicial forum for civil rights claims . . . in exchange for

employment or continued employment must at the least be

express: the choice must be explicitly presented to the

employee and the employee must explicitly agree to waive

the specific right in question.” Id. The acknowledgment and

Handbook in Nelson failed that test.

Kummetz was similar to Nelson. There, the employer

gave Kummetz an Employment Information Booklet and an

Information Booklet Acknowledgment. Kummetz, 152 F.3d

at 1154. The Information Booklet Acknowledgment stated in

relevant part:

I understand and agree that I am covered by

and must abide by the contents of this

Booklet. I also understand and agree that this

Booklet in no way constitutes an employment

contract and that I remain an at-will

employee.

. . .

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ASHBEY V. ARCHSTONE PROP. MGMT. 11

I understand that the policies, practices and

benefits set forth in this Booklet are subject to

change at any time and without prior notice at

the sole and unlimited discretion of the

Company. The Company also reserves the

right to interpret any ambiguity or any

confusion about the meaning of any term in

this Booklet, and that interpretation shall be

final and binding.

Id. The Employment Information Booklet contained an

arbitration clause. Id. Four months later, the employer

attempted to transfer Kummetz to a lower-paying position,

and Kummetz quit. Id. Kummetz sued the employer in

federal district court for violating the ADA, alleging the

employer transferred him because he had previously

undergone a kidney transplant. Id. The district court granted

summary judgment to the employer because it concluded that

Kummetz had waived his right to a judicial forum. Id. We

reversed on appeal. We held that the acknowledgment did

not constitute valid notice of a jury trial waiver because it

“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.” Id. at 1155.

This case is distinguishable from Kummetz and Nelson. 

The Acknowledgment that Ashbey signed stated:

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,

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12 ASHBEY V. ARCHSTONE PROP. MGMT.

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.

. . .

During my employment, I agree to abide by

the provisions in this Company Policy

Manual.

In contrast to the acknowledgments in Kummetz and Nelson,

the Acknowledgment here explicitly notified Ashbey the

Manual contained a Dispute Resolution Policy, and it did so

in two places. And Ashbey expressly agreed “to adhere” to

the Manual and the Dispute Resolution Policy. That the

Acknowledgment did not list the terms of the Policy is not

fatal to the Policy’s enforcement. The full text of the Policy

was at Ashbey’s fingertips; he acknowledged he had received

directions on how to access both the Manual and the Dispute

Resolution Policy contained in the Manual. Anyone who

reviewed the Dispute Resolution Policy would immediately

realize he was “entering into an agreement to waive a specific

statutory remedy afforded him by a civil rights statute.” 

Nelson, 119 F.3d at 762. The Dispute Resolution Policy was

not ambiguous on that point: (1) the policy stated it “is

governed by the Federal Arbitration Act”; (2) the policy

stated that “all . . . disputes between Employee and the

Company [are] to be resolved only by an arbitrator through

final and binding arbitration and not by way of court or jury

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ASHBEY V. ARCHSTONE PROP. MGMT. 13

trial”; and (3) the policy stated it “applies, without limitation,

to disputes arising out of the employment relationship . . .

including, without limitation, disputes over . . . harassment

and claims arising under the . . . Civil Rights Act of 1964.” 

In short, Archstone presented Ashbey the “express” choice

lacking in both Kummetz and Nelson. We hold that Ashbey

knowingly waived his right to a judicial forum for his Title

VII claim and equivalent state-law claims.

III.

The district court erred in denying Archstone’s Motion to

Compel Arbitration. The district court’s order denying

Archstone’s Motion to Compel Arbitration is REVERSED

and REMANDED for entry of an order granting Archstone’s

Motion to Compel Arbitration.

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