A recent decision by the Ninth Circuit reversed a district court’s denial of an employer’s motion to compel arbitration under the Federal Arbitration Act (“FAA”). This decision is notable because the applicable dispute resolution policy, outlining the terms of arbitration, was contained within the company’s policy manual and detached from the employee’s signed acknowledgment of receipt of the manual. The Ninth Circuit reversed the district court’s decision on the grounds the language of the employer’s dispute resolution policy, separately outlined within the company’s policy manual, expressly indicated a waiver of the right to a judicial forum for civil rights claims such that the employee “knowingly” agreed to arbitrate his Title VII claim. Michael Ashbey v. Archstone Property Management, Inc., No. 12-55912 (9th Cir., May 12, 2015).
In Ashbey, after the commencement of his employment, plaintiff employee signed a document entitled, “Acknowledgment of Receipt of Archstone Company Policy Manual 2009” (“Acknowledgment”) which contained the following relevant excerpt:
“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 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. . .” (emphasis added). Id. at 2.
The employer’s manual, separate from the Acknowledgement, contained a detailed dispute resolution policy which explicitly required disputes between the employee and the company to be resolved through arbitration under the FAA. The policy included disputes over “harassment and claims arising under the . . . Civil Rights Act of 1964. . . and all other state statutory and common law claims.” The terms of the company’s arbitration policy was not restated within the employee’s signed Acknowledgment.
The court found Archstone’s Acknowledgment contained an “express” choice such that the employee “knowingly” waived his right to a judicial forum. As emphasized within the excerpt above, what makes this Acknowledgment distinguishable from prior cases is that it makes two explicit references to the company’s dispute resolution policy. Even though the Acknowledgment lacked a discussion of the terms of the arbitration policy, the absence of such terms was not fatal to the agreement’s enforcement because the full text of the policy was easily accessible to the employee. By signing the Acknowledgment, the employee recognized receipt of directions on how to access the company’s manual and that the employee was responsible for understanding the company’s manual and dispute resolution policy. The court stated that upon review of the company’s dispute resolution policy, any employee “would immediately realize he was entering into an agreement to waive a specific statutory remedy afforded him by a civil rights statute.”
The Ninth Circuit found that the company’s dispute resolution policy explicitly covered all disputes arising out of the employment relationship, including Title VII claims. The language of the Acknowledgment “explicitly notified” the employee, in two places, that the company manual contained its dispute resolution policy. The Acknowledgment and policy presented the employee with an “express” choice such that the employee knowingly waived his right to a judicial forum for his Title VII claim against his employer. Upon these findings, the court reversed the decision denying the employer’s motion to compel arbitration.