This opinion is subject to revision before final publication in the Pacific Reporter

2013 UT 36

IN THE 

## S UPREME 

## C OURT OF THE 

## S TATE OF 

## U TAH

Z IONS M ANAGEMENT S ERVICES
,

Appellee,

v

. J EFFREY S. R ECORD
, Appellant.

No. 20110860 Filed: June 25, 2013

Third District, Salt Lake City Dep’t The Honorable Todd M. Shaughnessy

No. 110914393

Attorneys:

Michael Patrick O’Brien, Mark D. Tolman, Brock N. W orthen,

Salt Lake City, for appellee

Jaqualin Friend Peterson, Elizabeth M. Peck, April L. Hollingsworth, Salt Lake City, for appella nt

C HIEF J USTICE D URRANT authored the opinion of the Court,

in which A SSOCIATE C HIEF J USTICE N EHRING
, J USTICE D URHAM , J USTICE P ARRISH , and J USTICE L EE joined.

C HIEF J USTICE D URRANT , opinion of the Court:

INTRODUCTION

¶1 Appellant Jeffrey S. Record seeks appellate revi ew of the district court’s order compelling him to arbitrate various claims that arose out of his employment with Appellee Zion s Management Services Company (Zions). Mr. Record arg ues that the district court erred in compelling arbitration because the plain language of the arbitration clause in his employmen t contract allows him to pursue administrative remedies prior to submitting to arbitration. We agree. Accordingly, we vacate th e district court’s order compelling arbitration and remand for further proceedings.Z IONS M ANAGEMENT v

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Opinion of the Court

2 BACKGROUND

¶2 Mr. Record began working for Zions in February 1 996. Throughout the course of his employment with Zions, and specifically in June 2007, Mr. Record signed variou s documents whereby he acknowledged receipt of the Zions Employ ee Handbook, which stipulated that any disputes arisin g out of his employment with Zions had to be resolved through ma ndatory, binding arbitration (Arbitration Agreement). In rel evant part, the Arbitration Agreement stated:

Any legal controversy or claim arising out of your employment with [Zions], which is not otherwise governed by an arbitration provision, that cannot b e satisfactorily resolved through negotiation or mediation, shall be resolved, upon election by you or [Zions], by binding arbitration pursuant to this arbitration provision and the code of procedures of the American Arbitration Association (AAA). . . . Under this binding arbitration policy, an employee still has a right to file a claim with the EEOC, OS HA, or any other appropriate federal or state regulator y agency regarding a workplace issue. However, where permitted by law, binding arbitration, rather than the court system, is the process used for pursuing relief beyond the agency.

The Arbitration Agreement further stipulated that “ [b]ecause employment with [Zions] involves interstate commerc e, this binding arbitration agreement is made pursuant to, and is governed by, the Federal Arbitration Act.”

¶3 At some point during his employment, Mr. Record became acquainted with Emilie Tanner, a co-worker a t Zions. According to Zions, Mr. Record and Ms. Tanner becam e romantically involved, and Zions claims that it rec eived a number of complaints from other employees regarding the co uple’s

behavior. Zions informed Mr. Record and Ms. Tanner of these complaints and encouraged them to maintain a profes sional

demeanor while with each other at work. Unfortunate ly, neither Mr. Record nor Ms. Tanner heeded this counsel, as Z ions terminated both of them on February 22, 2010, after another employee reported seeing them together, partially u ndressed, in the back of a dark, unused file room.Cite as: 2013 UT 36

Opinion of the Court

3 ¶4 After his termination, Mr. Record filed a “Charg e of

Discrimination” with the Utah Anti-Discrimination a nd Labor Division of the Utah Labor Commission (UALD), where in he alleged that Zions had discriminated against him on the basis of his age, religion, gender, and association with a d isabled individual. Mr. Record also alleged that Zions had retaliated against and harassed him in violation of federal an d state law.

UALD issued its Determination and Order on March 29 , 2011, dismissing Mr. Record’s discrimination claims becau se the “facts in the record, viewed in their entirety, indicate t here is no reasonable cause to believe that [Mr. Record] was s ubjected to the discriminatory practices alleged.”

¶5 Pursuant to the “Appeal Rights of the Determinat ion and Order,” Mr. Record appealed UALD’s decision to the Adjudication Division of the Utah Labor Commission (Labor Commission) on April 28, 2011. Zions responded by a ttempting to enforce the Arbitration Agreement in those proceedi ngs by filing a motion to compel arbitration. The administrative law judge, however, determined that “[t]he Labor Commission la cks jurisdiction to enforce an Arbitration agreement be tween an employer and employee.” But the judge also stated t hat “[i]f the respondent files a Court Order requiring the case t o be arbitrated

the Commission would follow the Court Order.”

¶6 Accordingly, and pursuant to both the Utah and F ederal Arbitration Acts, 1 on June 14, 2011, Zions filed a “Motion to Compel Arbitration and Stay Judicial Proceedings” w ith the district court. Specifically, Zions’ motion sought an order compelling Mr. Record to arbitrate his discriminati on claims and an order staying the Labor Commission’s review of U ALD’s decision. The district court granted Zions’ motion and ordered

Mr. Record to submit to arbitration. The district c ourt also ordered the Labor Commission “to proceed no further in reso lving [Mr. Record’s] claims.”

¶7 Pursuant to the district court’s order, Zions at tempted to dismiss Mr. Record’s administrative proceeding by f iling an

“Order of Dismissal” before the Labor Commission on August 22,

1 9 U.S.C. § 4 (permitting a party who seeks to enfo rce an arbitration agreement to file a motion to compel ar bitration with any United States district court); U TAH C ODE § 78B-11-106 (permitting a party who seeks to enforce an arbitra tion agreement to file a motion to compel arbitration with any sta te district court).Z IONS M ANAGEMENT v

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Opinion of the Court

4 2011. Despite its prior statement, however, the Lab or Commission denied Zions’ motion and instead insisted that “[t] he District Court does not have jurisdiction to stay the Commis sion’s proceedings for an employment discrimination claim” and refused to stay the proceeding. In light of this or der, Mr. Record likewise refused to comply with the district court’ s order and instead pressed on with his appeal before the Labor Commission.

¶8 After failing to secure either Mr. Record’s or t he Labor Commission’s compliance with the district court’s o rder, Zions

returned to the district court and filed a “Motion for Contempt Order” on September 12, 2011. In its motion, Zions requested that the district court hold Mr. Record in contempt for his willful violation of the district court’s order compelling arbitration. A few days later, Mr. Record filed his Notice of Appeal f rom the district court’s Order Compelling Arbitration.

¶9 Despite Mr. Record’s Notice of Appeal, the distr ict court granted Zions’ contempt motion on September 30, 201 1. The district court’s order recognized, however, that Mr . Record’s “conduct in refusing to comply with the [district] court’s order is based upon the [Labor Commission’s] Order and there fore may be legally privileged.” Nevertheless, the district court ordered Mr. Record to “take all steps reasonably necessary to stay . . . the proceedings before the [Labor Commission].”

¶10 Then, on October 6, 2011, the Utah Labor Commis sioner modified the administrative law judge’s decision to deny Zions’ Order of Dismissal, holding that “until such time a s the Order [Compelling Arbitration] is withdrawn, overturned, or superseded, the Labor Commission will comply with i ts terms.” The Commissioner then stayed the proceedings relate d to

Mr. Record’s claims. Mr. Record amended his notice of appeal on October 31, 2011, to include the district court’s c ontempt order and now asks us to review both the Order Compelling Arbitration and the Contempt Order. We have jurisdiction pursua nt to section 78A-3-102(3)(j) of the Utah Code.

STANDARD OF REVIEW

¶11 “This court is the exclusive judge of its own j urisdiction. The question of whether an order is final and appea lable is aCite as: 2013 UT 36

Opinion of the Court

5 question of law.” 2 This case also concerns the district court’s interpretation of the parties’ contract, which is a question of law

that we review for correctness. 3

ANALYSIS

¶12 Before we can consider the merits of the partie s’ arguments, we must first resolve the procedural que stion of whether we have jurisdiction to hear this appeal. S pecifically, we must address the question of whether the district c ourt’s Order Compelling Arbitration was a “final order” from whi ch Mr. Record could properly appeal. 4 For the reasons stated below,

we conclude that the order was a final order and th at we may therefore address the parties’ arguments.

¶13 Mr. Record argues that the district court erred in compelling arbitration because the plain language o f the Arbitration Agreement does not mandate arbitration until Mr. Record seeks relief “beyond an agency.” We agre e with Mr. Record because the contractual language is unam biguous and does not foreclose the possibility of an employee s eeking

administrative review of an administrative decision prior to submitting to arbitration. 5

2 Powell v. Cannon , 2008 UT 19, ¶ 9, 179 P.3d 799 (footnote omitted) (internal quotation marks omitted).

3 Miller v. USAA Cas. Ins. Co. , 2002 UT 6, ¶ 19, 44 P.3d 663.

4 See U TAH R. A PP

. P. 3(a).

5 Mr. Record also argues that the district court err ed when it issued the Contempt Order because the order require d him to “take all steps reasonably necessary to stay the pa rties’ arbitration proceeding pending further order of this court or t he Appeals Court.” According to Mr. Record, this requirement s omehow “impacts the ability of [various third parties] to move forward with the arbitration of their disputes” and was thu s erroneous. Mr. Record did not raise this issue in the proceedi ngs before the district court, however, and hence may not raise it for the first time on appeal unless he alleges plain error or exc eptional

circumstances. State v. Moa , 2012 UT 28, ¶ 24, 282 P.3d 985. He has alleged neither. Instead, he attempts to raise this issue as a challenge to the district court’s subject matter ju risdiction, presumably in an attempt to avoid problems with pre servation. But because this issue does not implicate the distr ict court’sZ IONS M ANAGEMENT v

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Opinion of the Court

6 I. UNDER UTAH LAW, THE DISTRICT COURT’S ORDER

WAS A “FINAL ORDER” BECAUSE IT ENDED THE

CONTROVERSY BETWEEN THE LITIGANTS

¶14 We first turn to the issue of whether the distr ict court’s Order Compelling Arbitration was an appealable “fin al order.” Zions argues that the Arbitration Agreement is gove rned by the FAA, which allows an immediate appeal only if the d istrict court’s order is “a final decision with respect to an arbit ration that is subject to [the FAA].” 6 Relying on this language, Zions urges us to immediately dismiss this appeal for lack of jurisdi ction because the district court’s order does not qualify as a “f inal decision.” Specifically, Zions asserts that the order was not final because it “stayed rather than dismissed the case,” and thus d id not end the controversy between the parties. Mr. Record, in con trast, argues that the order was final and that therefore we may properly hear this appeal.

¶15 We agree with Zions that the Arbitration Agreem ent is subject to the FAA, which means that Mr. Record is entitled to appeal only if the district court’s order was “fina l.” W e disagree, however, with Zions’ assertion that federal procedu ral law governs our analysis of the order’s finality. Inste ad, we will address the finality issue by referring to our own rules and principles of law, under which we agree with Mr. Re cord; the

district court’s arbitration order constitutes a “f inal decision,” and therefore we have jurisdiction to consider the meri ts of Mr. Record’s appeal.

A. The Arbitration Agreement Clearly States that It Is Governed by the FAA, But State Rather Than Federal Procedural La w Applies When

Determining What Constitutes a “Final Order”

¶16 Mr. Record admits that he signed several docume nts acknowledging receipt of Zions’ “Employee Handbook, ” and the Arbitration Agreement contained within the Handbook expressly states that it is governed by the FAA: “Because emp loyment with [Zions] involves interstate commerce, this binding arbitration agreement is made pursuant to, and is governed by , the Federal Arbitration Act.” (Emphasis added.) And under Secti on 16(a)(3) of

subject matter jurisdiction and because it was not preserved below, we decline to address it.

6 9 U.S.C. § 16(a)(3).Cite as: 2013 UT 36

Opinion of the Court

7 the FAA, appeals may only be taken from “a final de cision with respect to an arbitration that is subject to this t itle.” 7 Thus, we agree with Zions’ argument that Mr. Record’s appeal was proper only if the district court’s order constitutes a “f inal order.”

¶17 We disagree, however, with Zions’ assertion tha t federal rather than state law applies to the procedural que stion of

whether the order was “final.” The United States Su preme Court has recognized the “general and unassailable propos ition . . . that [s]tates may establish the rules of procedure gover ning litigation

in their own courts.” 8 But in the same opinion the Court cautioned that “where state courts entertain a federally crea ted cause of action, the ‘federal right cannot be defeated by th e forms of local practice.’” 9 In other words, if state procedure poses “an obsta cle to the accomplishment and execution of the full purpos es and objectives of Congress,” then federal procedural la w would preempt state law. 10 Thus, the question for us becomes whether the application of our own procedural rules would p ose “an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” when it enacted the FAA

. ¶18 Fortunately, the Supreme Court has already prov ided us with some guidance in this area. With respect to Co ngress’s purpose in enacting the FAA, the Court has observed that the FAA “was designed to overrule the judiciary’s longs tanding refusal to enforce agreements to arbitrate” 11 and to “ensure the enforceability, according to their terms, of privat e agreements to
arbitrate.” 12 And with respect to the application of state procedure, the Court has stated that the “FAA conta ins no express pre-emptive provision, [and] does [not] reflect a c ongressional intent to occupy the entire field of arbitration.” 13 Furthermore, “[t]here is no federal policy favoring arbitration under a certain set

7 Id.

8 Felder v. Casey , 487 U.S. 131, 138 (1988).

9 Id. (quoting Brown v. Western Ry. of Ala., 338 U.S. 294, 296 (1949)).

10 Id. (internal quotation marks omitted).

11 Volt Info. Scis., Inc. v. Bd. of Trs. of the Leland Stanford Junior

Univ. , 489 U.S. 468, 474 (1989) (internal quotation mark s omitted).

12 Id. at 476.

13 Id. at 477.Z IONS M ANAGEMENT v

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Opinion of the Court

8 of procedural rules .” 14 Accordingly, most state courts that have considered this question have determined that there is no reason why federal procedural law should preempt state law in litigation governed by the FAA. 15

¶19 We agree with this reasoning. Whether an order is “final” for the purposes of appeal is a purely procedural q uestion, and given that (a) Congress has not expressly preempted the application of local procedural rules in the FAA an d (b) the application of local procedural rules will not frus trate the purposes of the FAA, we conclude that even in litig ation governed by the FAA, state procedural rules and app licable principles of law will apply. Accordingly, we addre ss the issue of the finality of the district court’s order under Ut ah law.

B. Under Utah Law, the District Court’s Order Consti tutes a “Final Order” Because No Claims Were Left Pending Before t he District Court

¶20 Zions’ principal argument against the finality of the

district court’s order is that the order included a stay of Mr. Record’s administrative appeal that was pending before the Labor Commission, rather than a dismissal. Had the district court

14 Id. at 476 (emphasis added).

15 See, e.g.

, S. Cal. Edison Co. v. Peabody W. Coal Co. , 977 P.2d 769, 773 (Ariz. 1999) (en banc) (“The FAA does not . . . require submission to federal procedural law.”); Am. Gen. Fin. Servs. v. Jape , 732 S.E.2d 746, 748–50 (Ga. 2012) (same); Collins v. Prudential Ins. Co. of Am. , 752 So. 2d 825, 828–29 (La. 2000) (same); Wells v. Chevy Chase Bank, F.S.B. , 768 A.2d 620, 627–29 (Md. 2001) (citing cases and stating that most state courts addressing this question have determined that their state procedural rules g overn unless those rules undermine the purposes of the FAA); St. Fleur v. WPI Cable Sys./Mutron , 879 N.E.2d 27, 32–33 (Mass. 2008) (deciding that the FAA does not preempt state procedural rules); Kremer v. Rural Cmty. Ins. Co. , 788 N.W.2d 538, 546–47 (Neb. 2010) (same); Superpumper, Inc. v. Nerland Oil, Inc. , 582 N.W.2d 647, 651 (N.D. 1998) (same); Moscatiello v. Hilliard , 939 A.2d 325, 329 (Pa. 2007) (“The FAA does not preempt the procedural rules gov erning arbitration in state courts, as that is beyond its reach.”); Toler’s Cove Homeowners Ass’n, Inc. v. Trident Constr. Co. , 586 S.E.2d 581, 584 (S.C. 2003) (same); In re Palacios , 221 S.W.3d 564, 565 (Tex. 2006) (per curiam) (same).Cite as: 2013 UT 36

Opinion of the Court

9 dismissed the discrimination claims that were pendi ng on appeal

before the Labor Commission and then ordered arbitr ation, Zions argues, the order would have been “final” and this appeal would be proper. Zions also contends that the order lacke d finality because the district court retains jurisdiction to confirm, vacate, modify, or correct the arbitration award once arbit ration is completed. We are not persuaded by either of these arguments because (1) the district court did not have the aut hority to issue the stay of the administrative proceedings, which m eans that the order compelling arbitration completely resolved th e controversy between the parties, making it a “final” order from which Mr. Record could appeal; and (2) the availability o f postarbitration remedies before the district court does not affect the finality of an order compelling arbitration.

1. Because the District Court’s Order Staying the Admi nistrative Proceedings Was Void, There Was Nothing Left Pendin g Before the District Court, and Therefore Its Order Compelling

Arbitration Was Final

¶21 In its argument against the finality of the dis trict court’s order, Zions relies primarily upon our decision in Powell v.

Cannon

. 16 In that case, the plaintiff parents sued a deliver y doctor, a women’s center, and a hospital for negligence. 17 The defendants moved to stay litigation and compel arbitration pur suant to the arbitration agreement that the plaintiffs had signe d during their first visit with the delivery doctor. 18 The district court determined that the arbitration agreement was valid, not uncon scionable, and that the plaintiffs could sign on behalf of the unb orn child. 19 Accordingly, it granted the motion to stay litigati on and compelled the plaintiffs to arbitrate their claims. 20

¶22 The plaintiffs appealed. 21 On appeal, the defendants argued that we lacked jurisdiction because the orde r staying litigation and compelling arbitration did not const itute a “final

16 2008 UT 19, 179 P.3d 799.

17 Id. ¶ 2.

18 Id. ¶ 3.

19 Id. ¶ 6.

20 Id

.

21 Id. ¶ 7.Z IONS M ANAGEMENT v

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Opinion of the Court

10 order.” 22 We agreed, reasoning that “[a] district court’s or der is a final judgment only if it ends the controversy betw een the parties by finally disposing of the litigation on the merit s as to all claims and all parties.” 23 In other words, “[i]f any issue remains pending, the final judgment rule is not satisfied.” 24 We then concluded that because the district court’s order stayed litigatio n of the underlying negligence claims pending completion of the arbitration, the order was not final: “Until the di strict court enters judgment on the arbitration award, the Powells’ und erlying claims for medical malpractice remain viable and co gnizable. . . . Therefore, we hold that an order staying litigation and compelling arbitration is not a final order from which an appe al may be

taken.” 25

¶23 Zions argues that Powell is directly applicable here

because the district court’s order included both a stay and an order compelling arbitration. This argument presupp oses, however, that the district court’s order staying th e administrative proceedings in the case before us was valid. But th is presupposition is true only if the district court h ad subject matter jurisdiction over the proceedings below. 26

¶24 As a general rule, Utah courts have “subject ma tter jurisdiction over a legal claim unless adjudicative authority for that claim is specifically delegated to an administrativ e agency .” 27 This case

concerns a discrimination claim over which the Labo r Commission possesses exclusive jurisdiction: “The p rocedures

contained in this section are the exclusive remedy under state law for employment discrimination based upon: (a) race; (b) color; (c) sex; (d) retaliation; (e) pregnancy, childbirth , or pregnancy22 Id.

23 Id . ¶ 15.

24 Id . (emphasis added).

25 Id . ¶¶ 18, 20.

26 J.M.W., III v. T.I.Z. (In re Adoption of Baby E.Z.) , 2011 UT 38, ¶ 37, 266 P.3d 702, (stating that “[a] decision ren dered by a court without subject matter jurisdiction is legally void at its inception”), cert. denied , 132 S. Ct. 1743 (2012).

27 Mack v. Utah State Dep’t of Commerce , 2009 UT 47, ¶ 33, 221 P.3d 194 (emphasis added).Cite as: 2013 UT 36

Opinion of the Court

11 related conditions; (f) age; (g) religion; (h) nati onal origin; or (i) disability.” 28 Therefore, because the Utah Code grants “exclusive” jurisdiction over discrimination claims to the Labor
Commission, 29 a district court’s role in the adjudication of suc h claims is governed by the Utah Administrative Proce dures Act (UAPA), 30 which authorizes judicial review of agency action only after the parties have exhausted administrative remedies

. 31 In interpreting this provision of UAPA, we have explic itly stated that state courts lack “subject matter jurisdiction to hear the case” if the litigant fails to exhaust all the administra tive remedies available to him, 32 which is precisely what happened in this case.

¶25 Mr. Record initiated administrative proceedings when he filed a claim with UALD alleging discrimination. Ac cordingly, under UAPA the district court has no jurisdiction o ver those proceedings until Mr. Record has exhausted his admi nistrative remedies, at which point Mr. Record can seek judici al review of the agency’s decision. 33 Thus, when it was presented with the district court’s order that purported to stay Mr. R ecord’s administrative appeal, the Labor Commission correct ly reasoned that “[t]he District Court does not have jurisdicti on to stay the Commission’s proceedings for an employment discrimi nation
claim.” This is correct because the district court’ s jurisdiction over those proceedings arises only after all administrative remedies have been exhausted. But because Mr. Record was jus t beginning

to avail himself of those remedies at the time the district court attempted to issue the stay, the district court act ed without jurisdiction, rendering its order void.

28 U TAH C ODE § 34A-5-107(15) (emphasis added).

29 See id. §§ 34A-5-104(1), 107(1).

30 See id. § 63G-4-102(1) (stating that UAPA applies to “ever y agency of the state” and “judicial review” of agenc y action).

31 Id. § 63G-4-401(2).

32 Frito-Lay v. Utah Labor Comm’n , 2009 UT 71, ¶ 30, 222 P.3d 55 (“The exhaustion of administrative remedies require ment mandates that the litigant follow all of the outlin ed administrative review procedures prior to a state court having sub ject matter jurisdiction to hear the case.”).

33 See U TAH C ODE § 63G-4-401 to -405.Z IONS M ANAGEMENT v

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Opinion of the Court

12 ¶26 Accordingly, for the purposes of determining wh ether we have jurisdiction over this appeal, we will ignore the district court’s attempt to stay the administrative proceedi ngs. Once the stay is removed from the district court’s order, th e only issue

before the district court was whether the Arbitrati on Agreement
should be enforced. And once the district court iss ued its Order Compelling Arbitration, there was nothing left for the district court to do. Thus, under the reasoning of Powell , the district

court’s order was a “final decision” because it eff ectively ended the controversy between the parties and left no cla ims pending before the district court. We therefore have jurisd iction to hear this appeal.

2. The Availability of Post-Arbitration Remedies Befor e the District Court Does Not Affect the Finality of an O rder Compelling Arbitration

¶27 Zions also argues that the district court’s ord er was not final because “the district court . . . retains jur isdiction, under both the FAA and [Utah Arbitration Act], to enter post-a rbitration judgment and to otherwise confirm, vacate, modify o r correct the arbitration award.” We disagree.

¶28 Although we stated in Powell that “the [district] court may modify or correct an arbitration award before e ntering a judgment on it,” 34 the fact remains that in Powell the district court

had stayed litigation on the underlying claims for negligence and medical malpractice. Thus, while arbitration was pr oceeding,

those claims remained live before the district cour t, and thus the district court did, in fact, “retain jurisdiction” over those claims, which is why we determined that the district court’ s order compelling arbitration and staying litigation was n ot final.

¶29 But here there were no live claims that remaine d before

the district court after it issued its order. As de monstrated above, the district court’s attempt to stay the administra tive proceedings was void for lack of jurisdiction, and even though the district court may, pursuant to either the FAA or the Utah A rbitration Act, “confirm, vacate, or modify” an arbitration aw ard, this fact does not affect the finality of an order compelling arbitration

where no claims remain before the district court af ter it issues the

34 2008 UT 19, ¶ 18.Cite as: 2013 UT 36

Opinion of the Court

13 order. 35 Therefore, we conclude that the district court’s o rder was final and that we have jurisdiction to hear the mer its of this appeal.

II. THE DISTRICT COURT ERRED IN ITS INTERPRETATION OF THE PARTIES’ ARBITRATION AGREEMENT, WHICH

UNAMBIGUOUSLY ALLOWS FOR ADMINISTRATIVE

APPEALS

¶30 Mr. Record argues that the district court also erred when it determined that he was required to submit his di scrimination claims to arbitration pursuant to the Arbitration A greement. He points to the language of the Arbitration Agreement , which states that “binding arbitration, rather than the court sy stem, is the process used for pursuing relief beyond the agency .” (Emphasis added.) He then argues that this language is unambi guous, and that by pursuing an appeal within the Labor Commiss ion, he has not sought relief “beyond the agency” and hence is not required to arbitrate. Zions, on the other hand, argues that this language is subject to multiple interpretations and urges us, p ursuant to both state and federal policies favoring arbitration, to affirm the district court’s order. Because this language is unambiguous , we agree with Mr. Record.

¶31 The Supreme Court has held that under the FAA “[a]rbitration is strictly a matter of consent, and thus is a way to resolve those disputes— but only those disputes —that the parties have agreed to submit to arbitration.” 36 In other words,

35 We note that the United States Supreme Court has r eached

the same decision. In Green Tree Financial Corp.-Alabama v. Randolph , the Court reasoned that because the district cour t had dismissed the underlying claims with prejudice, the district court had “nothing more . . . to do but execute the judgm ent.” 531 U.S. 79, 86 (2000). The Court then concluded: “where, as here, the District Court has ordered the parties to proceed t o arbitration, and dismissed all the claims before it, that decisi on is ‘final’ within the meaning of § 16(a)(3), and therefore app ealable.” Id. at 89. In reaching this conclusion, the Court also not ed that the fact that the FAA allows the parties to “bring a separat e proceeding in a district court to enter judgment on an arbitratio n award once it is made (or to vacate or modify it) . . . does not vitiate the finality of the District Court’s [decision] .” Id. at 86 (emphasis added).

36 Granite Rock Co. v. Int’l Bhd. of Teamsters , 130 S. Ct. 2847, 2857 (2010) (citations and internal quotation marks omit ted).Z IONS M ANAGEMENT v

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Opinion of the Court

14 “arbitration is a matter of contract,” 37 the interpretation of which is “ordinarily a question of state law, which this Court does not sit

to review.” 38 Nevertheless, the Court has cautioned that when

“ applying general state-law principles of contract i nterpretation to the interpretation of an arbitration agreement with in the scope of the [FAA], due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself [must be] resolved in favor of arbitr ation.” 39

¶32 It is well established in Utah that “[i]f the l anguage within the four corners of the contract is unambigu ous, the parties’ intentions are determined from the plain m eaning of the contractual language.” 40 Zions has failed to show, however, that the language in the Arbitration Agreement is ambigu ous. Instead, Zions focuses almost exclusively on the parties’ in tentions in entering the Arbitration Agreement, arguing that fa ilure to enforce it would cause “substantial delay, expense, duplication of effort, and risk of inconsistent results” as well a s “unnecessary procedural difficulties.” While this may be true, w e “will not rewrite an unambiguous contract,” 41 nor will we “allow the parties to change or rewrite their original agreeme nt.” 42

¶33 Zions admits that the Arbitration Agreement exp ressly allows for an employee to initiate administrative p roceedings by “filing a claim” before a state or federal agency. Zions also acknowledges, of course, that the Arbitration Agree ment contains the language “where permitted by law, binding arbit ration, rather than the court system, is the process used for purs uing relief beyond the agency .” (Emphasis added.) Because Zions has not

37 AT&T Techs., Inc. v. Commc’ns Workers of Am. , 475 U.S. 643, 648 (1986) (internal quotation marks omitted).

38 Volt Info. Scis., Inc. v. Bd. of Trs. of the Leland Stanford Junior

Univ. , 489 U.S. 468, 474 (1989).

39 Id. at 475–76 (citation omitted).

40 Cent. Fla. Invs., Inc. v. Parkwest Assocs. , 2002 UT 3, ¶ 12, 40
P.3d 599.

41 Provo City Corp. v. Nielson Scott Co. , 603 P.2d 803, 806 (Utah 1979).

42 Ivory Homes, Ltd. v. Utah State Tax Comm’n , 2011 UT 54, ¶ 12,
266 P.3d 751.Cite as: 2013 UT 36

Opinion of the Court

15 shown how this language is ambiguous, whatever the parties’ intentions were prior to entering into this Arbitra tion Agreement is irrelevant because “the parties’ intentions are determined from the plain meaning of the contractual language.” 43

¶34 Here, the language clearly states that arbitrat ion is required only if Mr. Record attempts to obtain reli ef from sources “beyond the agency.” But Mr. Record has not yet don e so. He
filed a discrimination claim with the Labor Commiss ion, and then attempted to appeal UALD’s decision on that claim t o the Labor Commission. Neither action constitutes an attempt t o seek relief “beyond the agency,” and therefore the district cou rt erred when it issued its order compelling arbitration because, under the plain language of the Arbitration Agreement, Mr. Record i s not required to arbitrate his discrimination claims unt il he seeks relief “beyond the agency.”

¶35 Zions attempts to avoid this result by arguing that Preston

v. Ferrer

44 requires the parties to submit to arbitration once the agency “shifts from its role as investigator to imp artial arbiter.” Zions has misapplied this case, however, since the language of the arbitration agreement at issue in Preston , unlike the agreement here, did not expressly allow for administrative remedies . Instead, the agreement in Preston simply stated that “any dispute . . . relating to the terms of [the contract] or the brea ch, validity, or legality thereof” should be arbitrated “in accordan ce with the rules [of the American Arbitration Association].” 45 There was no language about administrative remedies, nor any lan guage that conditioned arbitration on the petitioner’s decisio n to seek “relief beyond the agency.” Therefore, the reasoning in Preston is inapplicable.

¶36 At oral argument, Zions also attempted to rely on both state and federal policies that urge us to resolve “ ambiguities as to the scope of the arbitration clause itself . . . in favor of

43 Cent. Fla. Invs., Inc., 2002 UT 3, ¶ 12.

44 552 U.S. 346 (2008).

45 Id. at 350 (alterations in original) (internal quotati on marks omitted).Z IONS M ANAGEMENT v

. R ECORD
Opinion of the Court

16 arbitration.” 46 As noted above, however, Zions failed to demonstrate how the language at issue here was ambi guous. Furthermore, we wish to reaffirm the position we to ok in Bybee v.

Abdulla , wherein we stated that “[w] hile there is a presumption in favor of arbitration, that presumption applies only when arbitration is a bargained-for remedy of the partie s as evidenced by direct and specific evidence of a contract to arbit rate .” 47 We further note that state and federal policies favoring arbit ration cannot be used to defeat the plain language of the parties’ c ontract, nor can they be used to create ambiguities where there are none. Because the language of this contract is unambiguous, we re verse the district court’s decision to compel arbitration and remand this case to the district court for further proceedings consistent with this opinion.

CONCLUSION

¶37 Under the parties’ Arbitration Agreement, Mr. R ecord was not required to submit his discrimination claim s to arbitration until he sought relief based on those claims “beyon d the agency.” Because he has not yet pursued relief beyond the La bor Commission, the district court erred when it issued its order compelling arbitration. We therefore vacate that or der and

remand this case to the district court for further proceedings consistent with this opinion.

46 Volt , 489 U.S. at 476; see also Bybee v. Abdulla , 2008 UT 35, ¶ 27, 189 P.3d 40 (stating that we have “no quarrel” with the presumption that ambiguities be resolved in favor o f arbitration).

47 2008 UT 35, ¶ 27 (emphasis added) (internal quotat ion marks omitted).