Court Opinion

ID: 2681958
Source: CourtListenerOpinion
Date Created: 2014-07-03 21:00:32.407071+00
Date Added: 2024-06-11T09:41:45.377355
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              JUL 03 2014

                    UNITED STATES COURT OF APPEALS                     MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

TAYLER BAYER,                                    No. 11-17920

              Plaintiff - Appellee,              D.C. No. 3:11-cv-03705-MEJ

  v.
                                                 MEMORANDUM*
NEIMAN MARCUS HOLDINGS, INC.,

              Defendant - Appellant.

                   Appeal from the United States District Court
                      for the Northern District of California
                  Maria-Elena James, Magistrate Judge, Presiding

                      Argued and Submitted October 18, 2013
                            San Francisco, California

Before: THOMAS and McKEOWN, Circuit Judges, and KENDALL, District
Judge.**

       Neiman Marcus Holdings, Inc. (“Neiman”) appeals from the district court’s

order denying its motion to compel arbitration. We affirm.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable Virginia M. Kendall, District Judge for the U.S.
District Court for the Northern District of Illinois, sitting by designation.
                                          I

      Bayer commenced work with Neiman in 2006. He was diagnosed with

emphysema in 2007 and placed on medical leave. He was authorized by his

physician to return to work on June 1, 2007, subject to medical restrictions on his

work, including working no more than eight hour shifts, four days a week. Bayer

alleges that Neiman refused to accommodate this schedule, which resulted in his

loss of status as a full-time employee and concomitant benefits. He filed an

administrative complaint with the Equal Employment Opportunity Commission

(“EEOC”) on June 20, 2007.

      On that same day, all Neiman employees were mailed notice of a dispute

resolution program, which included a mandatory arbitration agreement

(“Arbitration Agreement”). The mailing included an acknowledgment form

(“Acknowledgment Form”) that required the employee’s signature. The

Acknowledgment Form indicated that the employee was “waiving the right to a

trial by jury or trial before a judge in a court of law.” The Acknowledgment Form

also required the employee to express his or her understanding that the arbitration

provisions were “not optional,” but rather they were “mandatory, and a condition

and term of my employment if I am employed or continue employment on or after

July 15, 2007.”

                                         -2-
      Bayer refused to sign the Acknowledgment Form. Instead, he filed a second

administrative complaint with the EEOC, alleging that Neiman had discriminated

against him in violation of his rights under the Americans with Disabilities Act, 42

U.S.C. § 12101, et. seq. (“A.D.A.”) by attempting to coerce him into signing the

Arbitration Agreement as a condition of continued employment.

      After the EEOC issued a right to sue letter on his first administrative

complaint, Bayer filed a federal civil suit alleging disability discrimination under

the A.D.A. because of Neiman’s alleged refusal to accommodate his disability.

The parties settled that action, but they specifically excluded from the release any

claims Bayer might have with respect to challenging the validity or enforceability

of the Arbitration Agreement.

      Bayer continued his employment throughout 2008. On at least four

occasions between July 2007 and September 2008, he refused to sign arbitration-

related forms. On at least four occasions, he told his supervisors that he was

refusing to agree to or be bound by the Arbitration Agreement. He delivered two

letters to Neiman explaining why he had refused to sign the Acknowledgment

Form and other arbitration-related forms, and why he was refusing to be a party to

the Arbitration Agreement.

                                          -3-
      Neiman terminated him in January 2009. In response, Bayer filed a third

EEOC complaint, alleging he was terminated in retaliation for filing EEOC and

A.D.A. complaints. The EEOC issued a right to sue letter, and Bayer filed this

action, alleging discrimination and retaliation in violation of the A.D.A. Neiman

filed a motion to compel arbitration, which the district court denied. This

interlocutory appeal followed.

                                           II

      The primary question in this case is whether Bayer’s continued employment

with Neiman after he received the Arbitration Agreement and Acknowledgment

Form constituted implied consent to the Arbitration Agreement under California

law. When a federal court confronts a state law issue without binding precedent

from the state’s highest court, as is the case here, the court “must predict how the

highest state court would decide the issue using intermediate appellate court

decisions, decisions from other jurisdictions, statutes, treatises, and restatements as

guidance.” Sec. Pac. Nat’l Bank v. Kirkland (In re Kirkland), 915 F.2d 1236, 1239

(9th Cir. 1990).

      Under California law, a contract is established when (1) the parties are

capable of contracting, (2) the parties consent to the contract, (3) the contract

describes a lawful object, and (4) there was sufficient cause or consideration

                                          -4-
supporting the contract. Cal. Civ. Code § 1550. Here, there is no dispute over the

first, third, and fourth elements. The only question is whether Bayer legally

consented to the Arbitration Agreement.

      California’s intermediate appellate courts have recognized that employees’

consent may be implied from their continued employment after the unilateral

imposition of an arbitration agreement by the employer. See, e.g., Craig v. Brown

& Root, Inc., 84 Cal. App. 4th 416, 421–22 (2000). However, as the district court

properly noted, California courts have not found implied consent when the

employer has required the employee to sign or acknowledge an arbitration

agreement. Gorlach v. Sports Club Co., 209 Cal. App. 4th 1497, 1509–11 (2013);

Mitri v. Arnel Mgmt. Co., 157 Cal. App. 4th 1164, 1171 (2007); Romo v. Y-3

Holdings, Inc., 87 Cal. App. 4th 1153, 1159–60 (2001).

      In Gorlach, the employees were presented with a new employee handbook

that contained a provision stating that, as a condition of employment, all employees

must sign an arbitration agreement. The plaintiff declined to sign and continued

working. 209 Cal. App. 4th at 1500. The court concluded that the continued

employment did not create an implied-in-fact arbitration agreement. Id. at

1507–10. The court distinguished Craig on the basis that the employees were

required to sign the agreement. Id. at 1508–09.

                                          -5-
      Similarly, in Mitri, the employee handbook contained a unilateral arbitration

policy and stated that employees would be required to sign a separate arbitration

agreement. 157 Cal. App. 4th at 1167. None of the affected employees signed the

separate agreement; therefore, the court concluded the employees had not

consented, and therefore there was no effective agreement to arbitrate. Id. at 1173.

In Romo, the employee handbook contained general provisions and an arbitration

provision. 87 Cal. App. 4th at 1156. The plaintiff acknowledged the general

provisions but did not sign the arbitration provision. Therefore, the court

concluded there was no effective arbitration agreement. Id. at 1159–60.

      Here, as part of its mailing to the employees, Neiman required the

employees to sign the Acknowledgment Form, which contained the waiver of

rights and an acknowledgment that continued employment would include

arbitration as a condition and term. Bayer not only refused to sign, he filed an

EEOC claim contending that the requirement constituted disability discrimination.

Over the course of his employment, he refused to sign four other arbitration-related

documents. He explained to his supervisors that he was refusing to be bound by

the Arbitration Agreement. He sent letters to Neiman explaining his refusal to be

governed by the Arbitration Agreement, and he filed another administrative action

before the EEOC raising the issue.

                                         -6-
      Bayer’s actions stand in contrast to Craig, where the employee did not

refuse the new arbitration terms, explicitly reject them, or state any disagreement

with them. See 84 Cal. App. 4th at 19–20. Indeed, Bayer’s actions rejecting the

Arbitration Agreement were more pronounced than those involved in Gorlach,

Mitri, and Romo, where the primary rationale was that the plaintiffs had not signed

tendered documents.

      Given this case law and the circumstances specific to Bayer’s case, as well

as appropriate drawing of all factual inferences in favor of the non-moving party,

the district court reasonably concluded that California courts would not hold that

Bayer’s continued employment constituted implied consent to the Arbitration

Agreement.1

                                         III

      1
         Our recent decisions in Johnmohammadi v. Bloomingdale’s, Inc., __ F.3d
__, 2014 WL 2808135 (9th Cir. 2014), and Davis v. Nordstrom, Inc., __ F.3d __,
2014 WL 2808139 (9th Cir. 2014), do not affect this disposition because both are
factually distinguishable. In Bloomingdale’s, Johnmohammadi received the
arbitration agreement and opt-out form when she was first hired. 2014 WL
2808135, at *1. She did not opt out and did “not contest the district court’s
findings that she made a fully informed and voluntary decision . . . . By not opting
out within the 30–day period, she became bound by the terms of the arbitration
agreement.” Id. In Nordstrom, Davis received the arbitration agreement as a part
of the employee handbook and was thus bound by the agreement when she first
took her position. 2014 WL 2808139, at *2. Nordstrom later revised the
agreement, but Davis “never objected to the revised provision and she did not quit
her job.” Id. at *3.

                                         -7-
      Neiman also argues that the question of arbitrability must be decided by the

arbitrator, not the court. However, the district court did not reach this question.

We therefore decline to address it in this interlocutory appeal.

      AFFIRMED.

                                          -8-