HILL v. GARDA CL NORTHWEST INC.No. 66137-0-I.
281 P.3d 334 (2012)
Lawrence HILL, Adam Wise, and Robert Miller, on their own behalves and on behalf of all persons similarly situated, Respondents,
GARDA CL NORTHWEST, INC., f/k/a AT Systems, Inc., a Washington corporation, Petitioner.
GARDA CL NORTHWEST, INC., f/k/a AT Systems, Inc., a Washington corporation, Petitioner.
Court of Appeals of Washington, Division 1.
July 30, 2012.
Clarence C. Belnavis, Fisher & Phillips LLP, Portland, OR, for Petitioner.
Daniel F. Johnson, Annette M. Messitt, Breskin Johnson & Townsend, Martin S. Garnfinkel, Adam J. Berger, Schroeter Goldmark & Bender, Seattle, WA, for Respondents.
¶ 1 A court may not require a party to submit to class arbitration unless the party agreed to do so.
¶ 2 Garda CL Northwest Inc. (Garda) is an armored transport company that employs over 100 armored truck crew members across Washington state. In February 2009, Lawrence Hill, Adam Wise, and Robert Miller (the employees) filed a class action lawsuit on behalf of themselves and others who worked for Garda as armored truck drivers in the state of Washington.
¶ 3 The applicable collective bargaining agreements required Garda employees to grieve and arbitrate "any claim under any federal, state, or local law ... related to the employment relationship." In its April 2009 answer, Garda asserted that the employees' claims "must be resolved by arbitration" under the dispute resolution provisions of these agreements. Garda, however, did not move to compel arbitration for more than a year. In the meantime, the parties engaged in discovery. Then, toward the end of 2009, Garda and the employees "delayed significant investment in prosecuting and defending the case" during the adjudication of Pellino v. Brink's, Inc.,
¶ 4 After a trial court issued a decision for the Pellino class in January 2010, Garda and the employees discussed settlement but did not reach an agreement. The employees moved for class certification in March 2010. Garda agreed to engage in mediation, but those efforts also failed. At Garda's request, the hearing on class certification was renoted three times. Then, on July 1, Garda moved to compel arbitration. The trial court heard the class certification motion on July 16 and certified the plaintiff class on July 23. At the hearing on Garda's motion to compel, the trial court ordered supplemental briefing on its authority to order class arbitration.
¶ 5 In its supplemental briefing, Garda asserted that the arbitrator, not the court, should decide whether the parties agreed to class arbitration and requested that the trial court order arbitration on an individual basis. The employees contended that the arbitration agreements were unenforceable because Garda waived the right to seek arbitration by engaging in litigation for 19 months before filing its motion to compel, the employees did not clearly and unmistakably waive the right to a judicial forum, and certain provisions in the arbitration agreement were unconscionable. The trial court ordered class arbitration, stating, "[T]he court, in light of its prior decision to certify a class, believes that it has the authority to compel arbitration as a class."
¶ 6 The parties filed cross motions for discretionary review in this court. A commissioner of this court granted discretionary review.
STANDARD OF REVIEW
¶ 7 We review a trial court's decision to grant a motion to compel arbitration de novo.
¶ 8 We begin with the employees' cross appeal. If, as the employees claim, the arbitration
¶ 9 The employees first claim that Garda waived its right to arbitration by engaging in 19 months of litigation before filing the motion to compel. A party may waive its contractual right to arbitrate.
¶ 10 The employees allege that Garda acted inconsistently with arbitration by participating in discovery and in motions practice, taking depositions of the named plaintiffs, and moving for summary judgment. We disagree. The record demonstrates that during the relevant period, the parties were largely attempting to resolve their dispute through means alternative to litigation. In late 2009 and early 2010, the parties put the case on hold while awaiting a decision in Pellino. From January to March, Garda and the employees explored settlement options. During that time, they filed a joint stipulation and motion to continue the trial date to December 2, stating, "Plaintiffs and Garda agree that this stipulation and motion is made without prejudice to Garda's position... that this matter is properly subject to arbitration under the applicable Labor Agreements." Shortly after the employees moved for class certification, Garda agreed to mediation, and the class certification hearing was postponed.
¶ 11 The cases the employees cite do not persuade us otherwise. In Steele v. Lundgren,
¶ 12 In Ives v. Ramsden,
¶ 13 These cases demonstrate that the right to arbitration must be timely invoked. In the cases above, the parties seeking arbitration first asserted that right well into the litigation. Here, Garda timely invoked its right to arbitration at the beginning of the litigation and throughout the proceedings leading up to its motion to compel. The record establishes the employees' awareness that Garda wished to arbitrate the claims. And the delay in filing the motion to compel was due, at least in part, to the parties' desire to engage in mediation, which is not an act inconsistent with arbitration.
¶ 14 Additionally, Garda's other actions do not demonstrate waiver. While Garda engaged in discovery, took depositions, and engaged in limited motions practice, it did not demonstrate the extensive or aggressive litigation behavior found to be indicative of waiver in Steele. Garda moved for summary judgment. But unlike the teachers in Naches, Garda joined this motion with its motion to compel. Finally, the employees have not demonstrated that Garda had prepared fully for trial as the defendant in Ives had. Because Garda's conduct does not demonstrate an intent to litigate rather than arbitrate, Garda did not waive its arbitration right.
¶ 15 Second, the employees argue that they did not "clearly and unmistakably" waive their rights to pursue their claims in a judicial forum. In other words, they claim that arbitration is not mandatory. We disagree. A party waives its right to a judicial forum only when the requirement to arbitrate
¶ 16 In this case, the grievance procedures in the collective bargaining agreements require arbitration of all grievances, which are defined as
These arbitration agreements require employees to submit any claim under any federal, state, or local law to the grievance procedure outlined in the arbitration agreement. Clearly, this provision encompasses the employees' wage claims under chapter 49.52 RCW and chapter 49.12 RCW. The requirement to arbitrate is clear and unmistakable. The employees waived their rights to pursue their claims through litigation.
¶ 17 The employees disagree, arguing that this case is like Brundridge v. Fluor Federal Services, Inc.
¶ 18 The employees also assert that the arbitration agreements limit the types of grievances they must arbitrate. They rely on a clause requiring a meeting between the employer and the union before submitting the case to arbitration, which states, "If after such management-union meeting arbitration is still necessary because a legitimate as well as significant issue of contract application remains open, then both the Company and the Union shall prepare a written position statement for submission to the arbitrator." (Emphasis added.) According to the employees, because their claims do not involve an issue of contract interpretation, they are not subject to arbitration under the agreement. We, however, must read each contract as a whole.
¶ 19 The employees claim that the arbitration agreement must contain an explicit statement that arbitration is the parties' exclusive remedy. We disagree. A collective bargaining agreement's grievance and arbitration procedure is presumed to be the exclusive remedy unless otherwise stated in the contract.
¶ 20 Having determined that Garda did not waive arbitration and that the parties unequivocally agreed to arbitrate the current disputes, we turn to Garda's appeal. Garda claims that the trial court erred by compelling class arbitration, arguing that only an arbitrator may decide whether an agreement permits arbitration on a class-wide basis. We agree that the trial court erred by ordering class arbitration but reach this conclusion without deciding whether the arbitrator or the court should decide the availability of class arbitration.
¶ 21 Stolt-Nielsen S.A. v. AnimalFeeds International Corp.
¶ 22 The United States Supreme Court granted certiorari "to decide whether imposing class arbitration on parties whose arbitration clauses are `silent' on that issue is consistent with the Federal Arbitration Act (FAA)."
¶ 23 After observing that arbitration "`is a matter of consent, not coercion,'"
Because the parties had not agreed to arbitrate on a class-wide basis, they could not be compelled to submit their dispute to class arbitration.
¶ 24 The Court noted that § 10(b) of the FAA required it either to "`direct a rehearing by the arbitrators'" or decide the question originally referred to the panel.
¶ 25 Turning to the arbitration agreements in this case, the contracts here, as in Stolt-Nielsen, are silent on the issue of class arbitration. When it compelled the parties to arbitrate on a class-wide basis, the trial court did not ascertain the parties' intent from the language of the agreement. Because no contractual basis existed allowing the court to order class arbitration, the trial court erred by doing so.
¶ 26 As in Stolt-Nielsen, only one possible outcome exists under the facts of this case; therefore, we do not remand to either the court or the arbitrator for determination of whether the arbitration agreement allows class arbitration. As a matter of law, the trial court could not compel class arbitration. We remand for individual arbitration.
¶ 27 We reverse the trial court's order compelling class arbitration and remand for individual arbitration.
WE CONCUR: DWYER and BECKER, JJ.
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