Opinion
6:21-cv-01304-MK
05-11-2022
SHAWNA MARSHALL, Plaintiff, v. HEALTHY LIVING NETWORK RESOURCES, LLC; HEALTHY LIVING AT HOME - BEND; and ADVANCED HOME HEALTH NORTHWEST, LLC, Defendants.
FINDINGS AND RECOMMENDATION
MUSTAFA T. KASUBHAI (He / Him) United States Magistrate Judge
Plaintiff brought this lawsuit pursuant to various state and federal employment statutes against Defendants Healthy Living Network Resources, LLC (“HLN Resources”), Healthy Living at Home - Bend, LLC (“HLH Bend”), and Advanced Home Health Northwest, LLC (“AHH Northwest”). Defendants have moved to compel arbitration, which Plaintiff opposes. See ECF Nos. 20, 23. For the reasons that follow, Defendants' motion should be GRANTED.
BACKGROUND
HLN Resources operates multiple home health care agencies in the Western United States. Compl. ¶ 7. In 2020, HLN Resources issued Plaintiff a W-2 income tax form for her 2019 earnings. Id. HLH Bend employed Plaintiff at one such facility in Bend, Oregon. Id. ¶ 8. AHH Northwest issued Plaintiff a W-2 income tax form for her 2020 earnings. Id. ¶ 9. Jeffery Baumgarner owned both HLH Bend and AHH Northwest. Id. ¶ 11. Plaintiff is a registered nurse who served as the Director of Patient Care Services for HLH Bend. Id. ¶¶ 8, 12, 15. Plaintiff has, and at all times relevant to this lawsuit had, multiple disabilities, including Anxiety Disorder and Panic Disorder. Id. ¶ 13.
In July 2019, HLH Bend sent Plaintiff a letter offering her a position as Director of
Patient Care Services. Gillette Decl., Ex. A, ECF No. 21. The offer letter identified, among other things, who Plaintiff would report to, the key responsibilities of her role, job description, compensation and benefits, as well as the arbitration agreement at issue in this case, which provided:
In the event of any dispute or claim relating to or arising out of your employment relationship with the Company, this Agreement, or the termination of your employment with the Company for any reason (including, but not limited to, any claims of breach of contract, defamation, wrongful termination or age, sex, sexual orientation, race, color, national origin, ancestry, marital status, religious creed, physical or mental disability or medical condition or other discrimination, retaliation or harassment), you and the Company agree that all such disputes shall be fully resolved by confidential, binding arbitration conducted by a single arbitrator through the American Arbitration Association (“AAA”) under the AAA's National Rules for the Resolution of Employment Disputes then in effect (the “AAA Rules”), which are available online at the AAA's website at www.adr.org.
The parties shall be entitled to engage in discovery in accordance with the AAA Rules, except that in all circumstances the arbitrator shall have the authority to order such discovery, by way of
deposition, interrogatory, document production or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issue in dispute, consistent with the expedited nature of arbitration. The arbitrator will issue a written decision including the essential findings and conclusions on which the award is based. The Company shall pay all fees and costs of the arbitration, including the arbitrator's fees, and each party shall pay their own attorney's fees and costs. You and the Company hereby waive your respective rights to have any such disputes or claims tried before a judge or jury.Id. On August 12, 2019, Plaintiff “began working for Defendants as the Director of Patient Care Services” for HLH Bend. Compl. ¶ 15. Plaintiff's supervisor in the position was Katie Swet, who served as the Northwest Regional Director of Patient Care Services for HLN Resources and HLH Bend. Id. ¶¶ 7, 11.
Plaintiff's arguments regarding the arbitration agreement's enforceability do not directly dispute that the literal terms of the agreement differ from those contained in the employment offer attached as Exhibit 1 to the Gillette Declaration. See infra at 5-9; Gillette Declaration, Ex. 1 at 5, ECF No. 21. In other words, Plaintiff's argument relate to how the Court should interpret the agreement, not what the literal terms of the agreement are. The employment offer also bears a check mark indicating that Plaintiff electronically signed the document on July 23, 2019. Id. Plaintiff's declaration acknowledges that she received “two requests to sign an offer letter” on July 23, 2019, and the Complaint alleges that she did in fact begin work the next month. Marshall Decl. ¶ 5; Compl. 15. In the “Facts” section of her response Plaintiff asserts, without citation, that she did “not recall making [her] electronic signature mark on a document agreeing to arbitrate claims against” HLH Bend. Resp. Def.'s 3. An independent review of her declaration reveals she offered testimony stating as much in January 2022. Marshall Decl. ¶ 17, ECF No. 25. Plaintiff, however, did not testify that she did not sign the agreement. Rather, she did not recall signing the agreement. That testimony standing alonei.e., without any specific argument from Plaintiff on the issue- is insufficient to raise the issue of whether Plaintiff did in fact electronically sign the July 23 agreement.
After consulting with a medical provider in January 2020, Plaintiff notified Griselda Perez, who served as a Human Resources Supervisor for HLN Resources, that she would be taking medical leave at her doctor's instruction. Id. ¶¶ 11, 29. On February 3, Plaintiff inquired with Perez about receiving short term disability, but was told that HLN Resources offered no such service. Id. ¶ 32. However, Perez explained that she would be offered leave under the Oregon Family Leave Act (“OFLA”). Id. On February 21, Plaintiff received an OFLA form from Perez. Id. Plaintiff faxed Perez her completed OFLA forms on March 2. Id. ¶ 38. On March 24, Plaintiff notified Perez that her return to workday would be March 30. Id. ¶ 39. On March 29, Perez and another Human Resources representative called Plaintiff and informed her that they were eliminating Plaintiff's position as Director of Patient Care Services due to COVID-19. Id. ¶ 40.
Plaintiff alleges that her termination was a result of illegal discrimination in violation of state and federal law. See Compl. ¶¶ 46-61 (ADA discrimination claim); 62-71 (ADA retaliation claim); 72-86 (ORS § 659A.103 et. seq. claim); 87-101 (ORS § 659A.150 et. seq. claim); 102110 (wrongful termination claim). After exhausting her administrative remedies, the Oregon Bureau of Labor and Industries issued Plaintiff a right to sue letter June 2021. Plaintiff filed this lawsuit approximately three months later. See Compl. ¶ 4.
STANDARD OF REVIEW
Congress enacted the Federal Arbitration Act (“FAA”) to “advance the federal policy favoring arbitration agreements.” Lowden v. T-Mobile USA, Inc., 512 F.3d 1213, 1217 (9th Cir. 2008). The FAA provides that arbitration agreements generally “shall be valid, irrevocable, and enforceable.” Id.; see also 9 U.S.C. § 2. Courts must “rigorously enforce” arbitration agreements and “must order arbitration if it is satisfied that the making of the agreement for arbitration is not in issue.” Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 719 (9th Cir. 1999) (citing Dean WitterReynolds v. Byrd, 470 U.S. 213, 218 (1985)). Accordingly, a court's inquiry is twofold. First, it must determine “whether a valid agreement to arbitrate exists[.]” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). And second, if it does, “whether the agreement encompasses the dispute at issue.” Id.
In the context of a motion to compel arbitration, the burden of proof is on the party contesting arbitration. Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220, 227 (1987). “[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem” is construction of the contract language, “an allegation of waiver, ” or a “defense to arbitrability.” Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25 (1983). If the court finds the matter is subject to arbitration, it may either stay the matter pending arbitration or dismiss the matter. EEOC v. Waffle House, Inc., 534 U.S. 279, 289 (2002); see also 9 U.S.C. § 3, 4.
DISCUSSION
Defendants move for an order to compel arbitration asserting that the arbitration agreement is enforceable and valid. Def.'s Mot. Compel Arbitration 4-8, ECF No. 20 (“Def.'s Resp.”). Plaintiff disagrees. She argues that because she “worked for one or more legal entities other than the entity she was alleged to have agreed to an arbitration clause with, ” the arbitration clause at issue “is unenforceable by the defendants in this case.” Pl.'s Resp. 5, ECF No. 23.
“Generally, parties who have not assented to an arbitration agreement cannot be compelled to arbitrate under its terms.” Namisnak v. Uber Techs., Inc., 971 F.3d 1088, 1094 (9th Cir. 2020) (quoting Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)). However, “[t]he United States Supreme Court has held that a litigant who is not a party to an arbitration agreement may invoke arbitration under the FAA if the relevant state contract law allows the litigant to enforce the agreement.” Kramer v. Toyota Motor Corp., 705 F.3d 1122, 1128 (9th Cir. 2013) (citation omitted); see also Franklin v. Cmty. Reg'l Med. Ctr., 998 F.3d 867, 870-71 (9th Cir. 2021) (applying state law when examining whether a nonsignatory to an arbitration agreement may invoke the agreement when the signatory “attempts to avoid arbitration by suing nonsignatory defendants for claims that are based on the same facts and are inherently inseparable from arbitrable claims against signatory defendants”).
The Oregon Court of Appeals decision in Livingston v. Metro. Pediatrics, LLC, 234 Or.App. 137, 139 (2010) is instructive. There, the court rejected an argument nearly identical to the one that Plaintiff advances here-i.e., that because HLN Resources and AHH Northwest were not signatories to the agreement, they cannot invoke the agreement's arbitration clause. Def.'s Resp. 6-7; Livingston, 234 Or.App. at 149 (“In plaintiff's view, the arbitration clause . . . cannot be enforced by individual defendants who are not parties to plaintiff's agreement with MP.”).
After discussing the presumption in favor of finding arbitrability, the court explained that the appropriate inquiry was “whether the arbitration clause [was] susceptible to an interpretation that covers the parties' dispute . . . i.e., whether the clause can plausibly be interpreted to require arbitration.” Livingston, 234 Or.App. at 147 (citing Snow Mountain Pine, Ltd. v. TectonLaminates Corp., 126 Or.App. 523, 529 (1994) (“We are bound to construe the arbitration agreement liberally to enhance arbitrability.”)). “In making that determination, [courts] consider not only the arbitration clause itself, but the entire contract, as well as the relationship of the parties, the subject matter of the contract, and the practical construction the parties themselves may have placed on the contract by their act.” Id. (citation omitted).
Here, it is clear from the text and context of the agreement, the relationship of the parties, as well as the parties conduct that Plaintiff intended to arbitrate this type of claim for at least two reasons. First, as in Livingston, Plaintiff agreed to resolve employment matters “arising out of [her] employment relationship with the Company” through arbitration. Compare Livingston, 234 Or. App. at 146 (“Any controversy, dispute or disagreement arising out of or relating to this Agreement, or the breach thereof, shall be resolved by arbitration ....”), with Gillette Decl., Ex. A, ECF No. 21 (“In the event of any dispute or claim relating to or arising out of your employment relationship with the Company ....”). “That expansive language encompasses any controversy, dispute, or disagreement, as long as the subject matter of the dispute arises out of or relates to the employment agreement.” Livingston, 234 Or.App. at 147.
Second, a review of the Complaint reveals a sufficient nexus among Defendants and Plaintiff relating to her supervision, compensation, and employment responsibilities. For example, Plaintiff's supervisor was employed by both HLN Resources and HLH Bend. Compl. ¶¶ 7, 11. Plaintiff received W-2 tax forms, from HLN Resources and AHH Northwest for her work at HLH Bend. Id. ¶¶ 8. 9. And HLH Bend and AHH Northwest share a common owner. Id. ¶ 11. Further, the Complaint makes clear that Plaintiff viewed Defendants as a single entity. See, e.g., ¶ 14 (“Plaintiff requested accommodations for her disabilities while working for Defendants, which Defendants denied.”) (emphasis added); ¶ 15 (“Plaintiff began working for Defendants as the Director” of HLH Bend) (emphasis added); ¶ 46 (“At all time material, Defendants were an employer for the purpose” of Plaintiff's ADA claim) (emphasis added); ¶ 63 (“Defendants retaliated against Plaintiff ....”). In other words, the Complaint acknowledges that Defendants' alleged misconduct was “clearly intertwined and interdependent” and therefore subject to arbitration. See Ortega v. Barrett Bus. Servs., Inc., No. 2:16-cv-00368-SU, 2016 WL 5030396, at *7 (D. Or. Aug. 19, 2016), adopted, 2016 WL 5030357 (D. Or. Sept. 19, 2016).
Finally, Plaintiff argues that because the term “Company” in the arbitration clause does not explicitly name all three Defendants named in this lawsuit, the arbitration agreement cannot be enforced. The argument, however, ignores both state and federal cases reaching the opposite conclusion. See, e.g., Livingston, 234 Or.App. 137, 150 n.7 (noting that “nonsignatories to an arbitration agreement may benefit from the agreement where the legal basis and factual context for claims against nonsignatories are the same as claims against the signatories, where nonsignatories are employees, disclosed agents, or principal of signatory”) (citation omitted); Letizia v. Prudential Bache Sec., Inc., 802 F.2d 1185, 1187-88 (9th Cir. 1986) (joining the majority of “[o]ther circuits [that] have held consistently that nonsignatories of arbitration agreements may be bound by the agreement under ordinary contract and agency principles”); Boston Telecommunications Grp., Inc. v. Deloitte Touche Tohmatsu, 278 F.Supp.2d 1041, 1048 (N.D. Cal. 2003), aff'd, 249 Fed.Appx. 534 (9th Cir. 2007) (non-signatory can compel arbitration when plaintiff “raises allegations of substantially interdependent and concerted misconduct by both the nonsignatory and one or more of the signatories to the contract”); Legacy WirelessServs., Inc. v. Hum. Cap., L.L.C., 314 F.Supp.2d 1045, 1054 (D. Or. 2004) (observing that courts have repeatedly compelled arbitration on an agency theory “when a signatory has brought claims against nonsignatory agents and the agents then seek to invoke the arbitration clause against the signatory”); Jorgens v. Janke, 77 Fed.Appx. 420, 421 (9th Cir. 2003) (“an agent may invoke the arbitration provision of his principal provided that the subject matter of the dispute falls within the scope of the arbitration agreement”).
Accordingly, the Court should conclude, “especially in light of the public policy favoring arbitrability. . . that the arbitration clause [at issue here] plausibly encompasses not only claims between [Plaintiff and HLH Bend], but claims against” HLN Resources and AHH Northwest as well. Livingston, 234 Or.App. at 150-51. The Court should therefore conclude that a valid agreement to arbitrate exists between Plaintiff and Defendants and that the agreement encompasses the employments claims that are the subject of this lawsuit.
Because the Court finds that Plaintiff's Response raised non-frivolous arguments regarding the arbitration clause at issue, Defendants' request for an award of attorneys' fees is DENIED. See Myers v. Highlands at Vista Ridge Homeowners Ass'n, Inc., No. 6:20-cv-00562-MK, 2021 WL 5985164, at *1 n.1 (D. Or. Dec. 16, 2021) (“Although the parties have not consented to allow a Magistrate Judge to enter final orders and judgment in this case in accordance with Fed.R.Civ.P. 73 and 28 U.S.C. § 636(c), this Court has the authority to decide a request for attorneys' fees arising out of a distinct pretrial event, such as attorneys' fees arising out of a discovery dispute.”).
RECOMMENDATION
For the reasons above, Defendants' motion to compel arbitration (ECF No. 20) should GRANTED. The Court should dismiss Plaintiff's Complaint with prejudice and a judgment should be entered.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Federal Rule of Appellate Procedure 4(a)(1) should not be filed until entry of the district court's judgment or appealable order. The Findings and Recommendation will be referred to a district judge. Objections to this Findings and Recommendation, if any, are due fourteen (14) days from today's date. See Fed.R.Civ.P. 72. Failure to file objections within the specified time may waive the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153, 1157 (9th Cir. 1991).