Opinion
CV 03-1772-BR.
April 21, 2004
DAVID D. PARK, Elliott Park, Portland, OR, Attorneys for Plaintiff.
BRUCE A. RUBIN, CHRISTINA L. THACKER, Miller Nash LLP, Portland, OR, Attorneys for Defendant.
OPINION AND ORDER
This matter comes before the Court on Defendant Winco Foods, Inc.'s Motion to Compel Arbitration and Stay Case Pending Arbitration (#5). For the reasons that follow, the Court DENIES Defendant's Motion.
BACKGROUND
The following facts are taken primarily from Plaintiff's Complaint and are construed in the light most favorable to Plaintiff for purposes of Defendant's Motion.
Defendant is an Idaho corporation that operates grocery stores. Plaintiff John David Swartz was employed by Defendant as a freight crew member at a store in Portland, Oregon. On November 22, 2002, Plaintiff injured his low back while stacking wood at work. Plaintiff filed a workers' compensation claim, which was accepted by Defendant's workers' compensation insurance carrier. Plaintiff was unable to work from November 22, 2002, through December 19, 2002. On December 20, 2002, Plaintiff returned to light duty work. Plaintiff returned to regular work on December 20, 2002.
On May 10, 2003, Plaintiff sustained a nondisabling on-thejob injury to his left index finger. Plaintiff filed a workers' compensation claim for this injury that was also accepted by Defendant's insurer.
On May 19, 2003, Defendant terminated Plaintiff's employment. Defendant contends it terminated Plaintiff because of his failure to comply with Defendant's Alcohol and Drug Policy when he failed to submit to a drug test following his May 10 injury. Plaintiff asserts he agreed to be tested and made himself available, but Defendant unreasonably failed to arrange for the testing.
In addition, Plaintiff alleges Defendant's stated reason for terminating his employment was pretextual, and Defendant actually terminated him in retaliation for filing workers' compensation claims. Plaintiff also alleges Defendant discriminated against him when Defendant assigned Plaintiff the least desirable jobs and reduced his hours of work.
Defendant contends Plaintiff's employment is governed by an Hourly Employee Working Conditions Wages Agreement. The Agreement was negotiated by the Employees Association, a committee of Winco employees, and was effective beginning August 21, 2000. Defendant contends the Agreement was the result of collective bargaining.
It is unclear from the record whether the Agreement applies to all Winco employees or only to employees of the Gateway store where Plaintiff was employed.
In addition to describing a detailed grievance procedure, the Agreement contains the following provision:
In the event that the grievance, controversy, claim, or dispute is not resolved to the satisfaction of the aggrieved employee party or the Employee Association by the procedure set forth in paragraphs 1 through 6 hereof, the sole recourse is for the aggrieved employee party or Employee Association to submit the matter to mandatory arbitration. The party wishing to challenge the last subcommittee decision in the procedure must request, in writing, to the employer within thirty (30) calendar days from the subcommittee decision that the issue be submitted for arbitration, otherwise, the last decision shall be considered final and binding on all parties. Such grievances, controversies, claims, or disputes subject to mandatory arbitration include, but are not limited to, claims under Title VII of the 1964 Civil Rights Act, Age Discrimination in Employment Act, the Civil Rights Act of 1991, and the Americans with Disabilities Act under federal law, anti-discrimination statutes under applicable state and local law where the employee is or was employed, and applicable common law.
The Agreement requires arbitration to be conducted by the American Arbitration Association or "the nearest office of a locally recognized arbitration service" and prohibits the arbitrator from awarding punitive damages. In addition, the Agreement provides arbitration shall be binding and conclusive on all parties, "shall be instead of any other action based on the occurrence involved, and shall be controlling in case of attempted re-litigation in another forum."
Plaintiff followed the grievance procedure set forth in the Agreement. On May 28, 2003, the grievance committee found Plaintiff had failed to comply with Defendant's drug and alcohol policy. On July 3, 2003, Plaintiff requested arbitration of his grievance.
On November 17, 2003, Plaintiff brought an action against Defendant in Multnomah County Circuit Court. Plaintiff alleged Defendant violated Or. Rev. Stat. § 659A.109, which prohibits discrimination against workers who have exercised their rights under Oregon's workers' compensation laws.
On December 22, 2003, Defendant removed the action to federal court. This Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332(a).
STANDARDS
Under the Federal Arbitration Act (FAA), 9 U.S.C. § 1, et seq., written agreements to arbitrate disputes that arise out of transactions involving interstate commerce "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2.
DISCUSSION
Defendant contends the Agreement requires Plaintiff to submit his discrimination claim to arbitration. Plaintiff asserts the arbitration clause is unenforceable because it is unconscionable.
The enforceability of the same arbitration clause in this Agreement was addressed in Knutson v. WinCo Foods, Inc., No. CV-02-1145-ST (D. Or. May 7, 2003) (J. Stewart). In Knutson, Winco sought to compel an employee to arbitrate a claim brought against WinCo under the Americans with Disabilities Act. The court, however, found the identical arbitration provision to be unconscionable and unenforceable. This Court finds the analysis in Knutson applies equally to Plaintiff's state law discrimination claim in this matter.
Defendant, however, argues this Court should disregard Knutson due to an intervening change in the law. In November 2003, the Ninth Circuit issued a decision in Equal Employment Opportunity Commission v. Luce, Forward, Hamilton Scripps, 345 F.3d 742 (9th Cir. 2003), in which it overruled Duffield v. Robertson Stephens Co., 144 F.3d 1182 (9th Cir. 1998). In Duffield, the Ninth Circuit held an employer may not compel prospective employees to enter into an agreement to arbitrate civil rights claims. Although Duffield was controlling precedent at the time, the court did not rely on Duffield when it decided Knutson. The Ninth Circuit's recent decision abrogating Duffield, therefore, does not have any effect on the vitality of Knutson.
Defendant also argues the unconscionability analysis in Knutson was erroneously applied to the arbitration clause because the clause is contained in a collectively bargained agreement. Defendant, however, does not cite any authority that precludes an unconscionability analysis.
This Court does not see any reason to reach a conclusion different from Knutson. Accordingly, for the reasons identified in Knutson, the Court concludes the arbitration provision in the Agreement is unenforceable and, therefore, denies Defendant's Motion.
CONCLUSION
For these reasons, the Court DENIES Defendant's Motion to Compel Arbitration and Stay Case Pending Arbitration (#5).
IT IS SO ORDERED.