Opinion
G059215
02-22-2021
MICHAEL BRYANT, Plaintiff and Respondent, v. ADVANCED M.P. TECHNOLOGY, LLC, et al., Defendants and Appellants.
Snell & Wilmer, William S. O'Hare, Tiffanny Brosnan, Todd E. Lundell and Anne Dwyer for Defendants and Appellants. Borchard & Callahan, Thomas J. Borchard and Jason K. Boss for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2019-01112743) OPINION Appeal from an order of the Superior Court of Orange County, Gregory H. Lewis, Judge. Affirmed. Snell & Wilmer, William S. O'Hare, Tiffanny Brosnan, Todd E. Lundell and Anne Dwyer for Defendants and Appellants. Borchard & Callahan, Thomas J. Borchard and Jason K. Boss for Plaintiff and Respondent.
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Defendants Advanced M.P. Technology, LLC, et al. (Advanced MP or AMPT) hired plaintiff Michael Bryant as a commissioned sales manager. Bryant signed an at-will employment and arbitration agreement on his first day at work. Three months later, Advanced MP fired Bryant. According to Bryant, Advanced MP failed to pay him the commissions he was due, and then later told prospective employers not to hire him after he was fired.
Bryant filed a complaint against Advanced MP asserting several causes of action that allegedly arose during his employment (e.g., nonpayment of wages, breach of contract, fraud). Bryant also asserted two causes of action that allegedly arose after his employment: intentional and negligent interference with prospective economic relations.
Advanced MP filed a motion to compel arbitration. The trial court granted Advanced MP's motion, except for Bryant's two post-employment tortious interference claims. The court found the two causes of action "are independent from and not rooted in the employment contract." We agree. Thus, we affirm the court's order.
I
FACTS AND PROCEDURAL BACKGROUND
Advanced MP, an international distributor of electronic components, hired Bryant as a sales manager. Advanced MP agreed in writing to pay Bryant "a salary of $4,200 per month plus commissions earned" based on his sales. On his first day, Bryant signed an at-will employment and arbitration agreement. About three months later, Advanced MP terminated Bryant's employment.
Bryant filed a complaint against Advanced MP and three of its executives. Bryant alleged Advanced MP hired him "because of his sales experience and his . . . ability to develop relationships with and land new Clients." Bryant claimed he developed new clients and generated "a large amount of sales and profits" during his three months of employment. However, Bryant generally alleged Advanced MP terminated his employment to avoid paying him the sales commissions he was due.
Bryant alleged 11 causes of action: 1) nonpayment of wages; 2) waiting time penalties; 3) fraud/fraudulent inducement; 4) negligent misrepresentation; 5) breach of contract; 6) breach of implied covenant of good faith and fair dealing; 7) unfair business practices; 8) unjust enrichment; 9) accounting; 10) intentional interference with prospective economic relations; and 11) negligent interference with prospective economic relations.
Bryant's complaint includes the following paragraphs within the tenth cause of action (intentional interference with prospective economic relations):
The factual allegations within the eleventh cause of action (negligent interference with prospective economic relations) essentially mirror those in the tenth cause of action. --------
"152. Prior to agreeing to come to work at AMPT, Plaintiff was offered employment at another company — Rand Technology ('Rand') — in the same and/or similar business as AMPT.
"153. Plaintiff was advised by Rand that it desired to employ Plaintiff in a similar position that he held at AMPT.
"154. At or about the time Plaintiff was advised that his employment at AMPT was being terminated, Plaintiff contacted Rand and at least one other company in order to determine if they would be interested in hiring Plaintiff.
"155. Plaintiff was told by Rand and at least one other company that they would love to hire Plaintiff, but they were told by AMPT, . . . and others at AMPT that they were not to hire Plaintiff, and in light of this instruction and due to their relationship with AMPT, . . . and others at AMPT, they could not hire Plaintiff.
"156. These other companies, including Rand, advised Plaintiff that but for AMPT, . . . and others at AMPT telling them that they were not to hire Plaintiff, they would have hired Plaintiff."
Advanced MP responded by filing a motion to compel arbitration. The motion included a document entitled: " COMPREHENSIVE AGREEMENT EMPLOYMENT AT-WILL AND ARBITRATION ." In relevant part, it states:
"1. It is hereby agreed . . . that the Company or the Employee can terminate employment and compensation of Employee at any time, with or without cause and/or with or without notice, at the option of the Company or the Employee.
"2. It is further agreed that Employee and the Company will utilize a system of binding arbitration to resolve all disputes that may arise out of the employment context. Both the Company and the Employee agree that any claim, dispute, and/or controversy that either Employee may have against the Company (or its owners, directors, officers, managers, employees, . . .) or the Company may have against me, arising from, related to, or having any relationship or connections whatsoever with my seeking employment with, employment by, or other association with the Company shall be submitted to and determined exclusively by binding arbitration
Advanced MP also attached to its motion a declaration by its president, who acknowledged discussing Bryant's employment with a third party (Rand):
"4. The first conversation occurred near the time Plaintiff was first hired by Advanced MP, when [Rand's CEO] told me that she had been thinking of hiring Plaintiff and learned that Advanced MP hired him.
"5. The second conversation occurred after Plaintiff's termination from Advanced MP, at a time when Plaintiff had already made threats to sue Advanced MP related to his employment and termination. The substance of my communications . . . in that conversation as it related to Plaintiff solely concerned Plaintiff's employment with Advanced MP, his termination and his threatened lawsuit."
Bryant filed an opposition to Advanced MP's motion to compel arbitration. Bryant argued that his two post-employment claims (intentional and negligent interference with prospective economic relations) were not within the scope of the at-will employment and arbitration agreement he had signed. Bryant did not challenge the arbitrability of the nine other claims, nor the enforceability of the agreement.
The trial court denied Advanced MP's motion to compel arbitration as to Bryant's two post-employment tort claims: intentional and negligent interference with prospective economic relations. The court found the two claims "are independent from and not rooted in the employment contract." Advanced MP appeals.
II
DISCUSSION
"Where the trial court's decision on arbitrability is based upon resolution of disputed facts," an appellate court "review[s] the decision for substantial evidence." (NORCAL Mutual Ins. Co. v. Newton (2000) 84 Cal.App.4th 64, 71.) When the "arbitration provision is not in dispute, the trial court's decision as to arbitrability is subject to de novo review." (Gravillis v. Coldwell Banker Residential Brokerage Co. (2006) 143 Cal.App.4th 761, 771.) Here, the parties agree our review is de novo.
"The purpose of arbitration is to have a simple, quick and efficient method to resolve controversies." (New Linen Supply v. Eastern Environmental Controls, Inc. (1979) 96 Cal.App.3d 810, 818.) For this reason, there is "a 'strong public policy'" favoring contractual arbitration. (Mercury Ins. Group v. Superior Court (1998) 19 Cal.4th 332, 342.) However, "'"a party cannot be compelled to arbitrate a dispute that he has not agreed to resolve by arbitration."'" (Westra v. Marcus & Millichap Real Estate Investment Brokerage Co., Inc. (2005) 129 Cal.App.4th 759, 763.)
"Although '[t]he law favors contracts for arbitration of disputes between parties' [citation], '"there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate . . . ."' [Citations.] In determining the scope of an arbitration clause, '[t]he court should attempt to give effect to the parties' intentions, in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made [citation].'" (Victoria v. Superior Court (1985) 40 Cal.3d 734, 744; Civ. Code, § 1648 ["However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract"].)
Generally, torts that are independent of the employment relationship are outside of the scope of an abitration agreement. (Buckhorn v. St. Jude Heritage Medical Group (2004) 121 Cal.App.4th 1401, 1407-1408 (Buckhorn).) However, if the alleged torts "are 'rooted' in the contractual relationship between" the employer and employee, then post-employment claims may be within the scope of the arbitration clause. (Ibid.)
Where a former employee's tort claim is based on alleged post-employment conduct that is independent of the employment contract, that claim is not "rooted" in the employment relationship, and an employer's broadly worded arbitration agreement does not apply. (Howard v. Goldbloom (2018) 30 Cal.App.5th 659.) In Howard, a former president of a company (Howard) sued the corporation's CEO and others after his separation. (Id. at pp. 661-662.) Howard alleged the defendants had abused their corporate powers and breached their fiduciary duties by diluting Howard's stock in the company. (Ibid.) The Court of Appeal rejected the defendants' argument that Howard's post-employment claims were covered under the broadly worded arbitration agreement. (Id. at pp. 667-671.) The appellate court held Howard's claims were not "rooted" in his prior employment contract with the company: "Defendants would have owed Howard the same duty if he had acquired the stock in a completely different manner, for example by purchasing it from a third party, or if the only shares he owned were those he acquired before he began working for the company." (Id. at p. 670.)
Here, the torts of intentional (or negligent) interference with prospective economic relations each have five elements: 1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; 2) the defendant's knowledge of the relationship; 3) an intentional (or negligent) wrongful act on the part of the defendant designed to disrupt the relationship (e.g., fraud, misrepresentation); 4) actual disruption of the relationship; and 5) economic harm to the plaintiff caused by the acts of the defendant. (See CACI Nos. 2202, 2204.)
In tortious interference claims, the plaintiff must prove the defendant's conduct was independently wrongful by some legal measure other than the fact of the interference itself. (Bed, Bath & Beyond of La Jolla, Inc. v. La Jolla Village Square Venture Partners (1997) 52 Cal.App.4th 867, 881 [a plaintiff has the "burden to prove, as an element of the cause of action itself, that the defendant's conduct was independently wrongful and, therefore, was not privileged"].)
In this case, by pleading tortious interference Bryant is alleging Advanced MP committed independently wrongful acts designed to interfere with his economic relations with prospective new third party employers. Therefore, just as in Howard v. Goldbloom, supra, 30 Cal.App.5th 659, the conduct alleged by Bryant was independent of his employment relationship with Advanced MP. Further, it is not reasonable to conclude that when Bryant agreed to arbitrate disputes arising "out of the employment context" he also intended to arbitrate independently wrongful conduct by Advanced MP that was alleged to have occurred after Bryant had left Advanced MP. (See Civ. Code, § 1648 ["However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract"].)
In short, we find Bryant's claims of intentional and negligent interference with prospective economic relations are not within the scope of the parties' arbitration agreement. Thus, we affirm the trial court's ruling denying Advanced MP's motion to compel arbitration as to the two tortious interference causes of action.
Advanced MP argues Buckhorn, supra, 121 Cal.App.4th 1401, compels a different result. We disagree. In Buckhorn, a physician sued his former employer (a medical group) for wrongful termination as well as "torts allegedly committed after he was discharged, including defamation and interference with prospective economic advantage." (Id. at p. 1403.) The employer invoked an arbitration clause in the employment agreement applying to disputes "'concerning the enforcement or the interpretation of any provisions of this Agreement.'" (Ibid.) The Court of Appeal held the physician's claims that the medical group had interfered with his relationships with his patients after his termination were based on an expectation of future income from his patients, "therefore the employment agreement would inform the extent of any economic interest" the physician had in those relationships. (Id. at pp. 1407-1408.) "Because [the physician] failed to demonstrate his tort claims were 'wholly independent' of the employment agreement" the court held the physician's post-employment tort claims against his prior employer must be submitted to arbitration. (Ibid.)
Here, the abitration agreement covers "any claim, dispute, and/or controversy . . . arising from, related to, or having any relationship or connections whatsoever with" Bryant's "employment by" Advanced MP. However, unlike Buckhorn, supra, 121 Cal.App.4th at p. 1401, Bryant is not alleging Advanced MP interfered in the economic relationships with any of the customers Bryant had obtained for Advanced MP during his "employment by" Advanced MP. Rather, Bryant is alleging that sometime after Advanced MP had terminated his employment, Advanced MP then interfered in his independent economic relationships with his potential new third party employers.
In sum, the potential new economic relationships that Bryant alleges Advanced MP tortiously interfered with are independent of Bryant's prior employment relationship with Advanced MP. Thus, the holding of Buckhorn does not apply to the facts of this case. Again, we conclude the trial court properly denied Advanced MP's motion to compel arbitration as to Bryant's two tortious inference claims.
III
DISPOSITION
The trial court's order denying Advanced MP's motion to compel arbitration (as to the tenth and eleventh causes of action) is affirmed. Advanced MP is ordered to pay costs on appeal.
MOORE, J. WE CONCUR: BEDSWORTH, ACTING P. J. GOETHALS, J.