Court Opinion

ID: 5666697
Source: CourtListenerOpinion
Date Created: 2022-01-12 03:57:49.794654+00
Date Added: 2024-06-11T08:39:21.880368
License: Public Domain

TURNER, P. J., Concurring and Dissenting.
I respectfully dissent from the determination to affirm the order denying the petition to compel arbitration.
First, California contract law provides when an employee signs an acknowledgment of receipt of an employee handbook, she or he is bound by its contents including an agreement to arbitrate. (24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1215 [78 Cal.Rptr.2d 533] [acknowledgement referred to arbitration provision in employee handbook]; Boys Club of San Fernando Valley, Inc. v. Fidelity & Deposit Co. (1992) 6 Cal.App.4th 1266, 1271-1272 [8 Cal.Rptr.2d 587] [party bound by incorporation of a contract into a performance bond]; Ware v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1972) 24 Cal.App.3d 35, 41 [100 Cal.Rptr. 791] [broker’s signature on application that referred not to arbitration but to exchange rules which contained an agreement to arbitrate disputes]; Gear v. Webster (1968) 258 Cal.App.2d 57, 61 [65 Cal.Rptr. 255] [Realtor who agreed to abide by association bylaws bound by arbitration agreement contained therein]; see Adajar v. RWR Homes, Inc. (2008) 160 Cal.App.4th 563, 569 [73 Cal.Rptr.3d 17]; Knight et al., Cal. Practice Guide: Alternative Dispute Resolution (The Rutter Group 2011) ¶ 5:18, p. 5-12 (rev. # 1, 2010).) Here, the undisputed evidence demonstrates plaintiff’s written acknowledgement signed by him states he agreed to be bound by the employee handbook. The employee handbook has a clearly stated arbitration provision. It is expressly listed in the 2006 employee handbook table of contents. Entitled “DISPUTE RESOLUTION POLICY,” it plainly sets forth both parties’ obligation to arbitrate all employment disputes. No doubt, other jurisdictions may have other views of the effect of an express agreement to be bound by the terms of an employment handbook. But those views are inconsistent with this state’s law until now.
The fact plaintiff chose not to read the 2006 handbook is not controlling. Plaintiff acknowledged in writing he received the employee handbook, which set forth his obligations as an employee. Plaintiff agreed in writing he was governed by the handbook’s contents. He further agreed to read the employee handbook and understand and adhere to its policies. This was sufficient to comply with the written agreement to arbitrate requirement imposed by the federal and California arbitration acts. (9 U.S.C. § 2; Code Civ. Proc., § 1281; Valero Refining, Inc. v. M/T Lauberhorn (5th Cir. 1987) 813 F.2d 60, 63-64; Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th *1525348, 361 [72 Cal.Rptr.2d 598].) The fact he chose not to read the 2006 employee handbook nor claims to be bound by it does not discharge plaintiff’s duty to arbitrate. (Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 710 [131 Cal.Rptr. 882, 552 P.2d 1178]; Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, 1674 [53 Cal.Rptr.2d 515]; Rowland v. PaineWebber Inc. (1992) 4 Cal.App.4th 279, 286 [6 Cal.Rptr.2d 20]; Chan v. Drexel Burnham Lambert, Inc. (1986) 178 Cal.App.3d 632, 641 [223 Cal.Rptr. 838].)
Second, I am unpersuaded by plaintiffs argument that the arbitration provisions are somehow hard to find or understand. They look clear to me. And plaintiff was hired to act as defendant’s controller. The complaint alleges he gave sophisticated tax and labor law advice to defendant’s senior officials and his warnings were rebuffed. The arbitration provisions are apparent, obvious and lucid. The acknowledgement expressly refers to the handbook, which contains the arbitration provisions.
Third, I am unpersuaded by plaintiff’s reliance on cases where the arbitration agreement requires it be executed. Three cases involve that scenario. In each of these cases, the employee handbook contained an arbitration provision. Each of the three arbitration provisions required the employees to sign the agreement to arbitrate. And in none of these cases had the employee signed the separate agreements to arbitrate. (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 776, 805-806 [137 Cal.Rptr.3d 773]; Mitri v. Arnel Management Co. (2007) 157 Cal.App.4th 1164, 1169-1173 [69 Cal.Rptr.3d 223]; Romo v. Y-3 Holdings, Inc. (2001) 87 Cal.App.4th 1153, 1159-1160 [105 Cal.Rptr.2d 208].) Here, there was no specified duty in the employee handbook to execute a distinct arbitration agreement. And the trial court expressly relied on Mitri and Romo; neither of which is controlling.
Fourth, there is no merit to plaintiffs argument the 2006 employee handbook’s statement that it does not create a contract of employment permitted the arbitration petition to be denied. The language relied upon by plaintiff, which appears under the heading “TERMINATION OF EMPLOYMENT,” states: “Employment is at will and may be terminated by the Employer or the Employee with or without notice or reason. An Employee terminated without notice for a reason other than dishonesty, insubordination or malfeasance, as determined at the sole discretion of the Employer, will receive two weeks transition pay. Nothing contained in this handbook is intended to create a contract of employment or alter the at-will nature of the employment relationship in any way.” This paragraph addresses the issue of an implied contract not to terminate but for good cause. (Dore v. Arnold *1526Worldwide, Inc. (2006) 39 Cal.4th 384, 389-393 [46 Cal.Rptr.3d 668, 139 P.3d 56]; Stillwell v. The Salvation Army (2008) 167 Cal.App.4th 360, 375-376 [84 Cal.Rptr.3d 111].) This paragraph does not in any way obviate the duty to arbitrate. The duty to arbitrate remains. Further, the employer has the right to alter employment conditions if done reasonably. The underlying contract is not rendered illusory by the exercise of that power. (Schachter v. Citigroup, Inc. (2009) 47 Cal.4th 610, 619 [101 Cal.Rptr.3d 2, 218 P.3d 262]; Asmus v. Pacific Bell (2000) 23 Cal.4th 1, 15-18 [96 Cal.Rptr.2d 179, 999 P.2d 71]; DiGiacinto v. Ameriko-Omserv Corp. (1997) 59 Cal.App.4th 629, 634 [69 Cal.Rptr.2d 300]; see Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338, 356 [112 Cal.Rptr.3d 455]; Mitri v. Arnel Management Co., supra, 157 Cal.App.4th at p. 1171.)
Fifth, plaintiff’s argument that all preemployment arbitration agreements are unconscionable and therefore may not be enforced is not a ground for affirming the judgment. Such a rule is preempted by the Federal Arbitration Act. (9 U.S.C. § 2; Marmet Health Care Center v. Brown (2012) 565 U.S._, _ [182 L.Ed.2d 42, 132 S.Ct. 1201, 1203]; AT&T Mobility LLC v. Concepcion (2011) 563 U.S. _, _ [179 L.Ed.2d 742, 131 S.Ct. 1740, 1750].)
Sixth, the agreement is not unconscionable because of any problem relating to discovery. Plaintiff argues the American Arbitration Association rules do not permit for the sufficient use of discovery devices. Implied in an employer-employee arbitration agreement is the opportunity to utilize discovery devices in a case which potentially may involve emotional distress damages. (Code Civ. Proc., § 1283.1; Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1076-1081 [130 Cal.Rptr.2d 892, 63 P.3d 979]; Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 105-106 [99 Cal.Rptr.2d 745, 6 P.3d 669].) Here, there is a cause of action for intentional severe emotional distress infliction. Implied within the arbitration agreement is the right to adequate discovery.
Seventh, I agree though with plaintiff as to any of his claims covered by the 2009 handbook. There is no evidence plaintiff was ever advised of the contents of the 2009 handbook, which supplanted the earlier arbitration agreement. There is no signed acknowledgement of the 2009 handbook as was the case earlier. Thus, his claims incurred subsequent to the promulgation of the 2009 handbook are not subject to its arbitration provisions. (Metters v. Ralphs Grocery Co. (2008) 161 Cal.App.4th 696, 703-704 [74 Cal.Rptr.3d 210].) As a result, I would reverse the trial court’s findings as to all the *1527pre-2009 agreement claims and direct they be arbitrated; allow the trial court to sever the nonarbitrable claims; and order arbitration on the arbitrable claims even though such may be impractical. (KPMG LLP v. Cocchi (2011) 565 U.S._,_-_[181 L.Ed.2d 323, 132 S.Ct. 23, 25-26].)
A petition for a rehearing was denied August 20, 2012, and the opinion was modified to read as printed above.