Amichai Ohring v. Unisea, Inc. ( 2022 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAY 20 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
AMICHAI OHRING, individually and on No. 21-35591
behalf of other similarly situated individuals,
D.C. No. 2:21-cv-00359-TSZ
Plaintiff-Appellee,
v. MEMORANDUM*
UNISEA, INC.,
Defendant-Appellant.
Appeal from the United States District Court
for the Western District of Washington
Thomas S. Zilly, District Judge, Presiding
Argued and Submitted April 13, 2022
Seattle, Washington
Before: BOGGS,** HAWKINS, and FORREST, Circuit Judges.
Dissent by Judge HAWKINS.
Defendant UniSea, Inc. appeals from the district court’s denial of its motion
to compel arbitration. We have jurisdiction under 9 U.S.C. § 16, and we review
denial of a motion to compel arbitration de novo. Wilson v. Huuuge, Inc., 944 F.3d
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Danny J. Boggs, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
1212, 1219 (9th Cir. 2019). We reverse and remand with instructions to stay the case
and compel arbitration.
Ohring agreed to submit threshold questions of arbitrability to an arbitrator
when he signed the December 2020 Employment Agreement. Several months before
entering into this employment agreement, Ohring signed a Dispute Resolution
Agreement (DRA) that contains “clear and unmistakable evidence” that it delegates
arbitrability questions to the arbitrator (delegation provision). Henry Schein, Inc. v.
Archer & White Sales, Inc., 139 S. Ct. 524, 531 (2019). Ohring’s December 2020
Employment Agreement “clearly and unequivocally” incorporates by reference the
DRA by stating that the parties “agree to resolve all Covered Disputes in the manner
set forth in UniSea’s [DRA], the terms and definitions of which are incorporated
herein.” Satomi Owners Ass’n v. Satomi, LLC, 225 P.3d 213, 225 (Wash. 2009).1
We reject Ohring’s assertion that his December 2020 Employment Agreement
incorporated only the defined terms and pre-arbitration and arbitration procedures in
the DRA. Indeed, Ohring’s reading would seem to incorporate everything in the
DRA except the delegation provision. Not only does the plain language of the
1
Although UniSea did not explicitly refer to incorporation by reference in its
arguments before the district court, it expressly argued that Orhing “recommit[ted]”
to arbitrating Covered Disputes pursuant to the DRA when he signed the December
Employment Agreement. Therefore, this issue was raised “sufficiently for the trial
court to rule on it” and we may consider it on appeal. Yamada v. Nobel Biocare
Holding AG, 825 F.3d 536, 543 (9th Cir. 2016) (quoting Whittaker Corp. v. Execuair
Corp., 953 F.2d 510, 515 (9th Cir. 1992)).
2
December 2020 Employment Agreement state that all the “terms” of the DRA are
incorporated, but the DRA’s delegation provision is part of section defining
“covered disputes,” and Ohring does not dispute that this definition was
incorporated.
For these reasons, and because Ohring does not contend that his December
2020 Employment Agreement was procedurally unconscionable, we conclude that
Ohring is bound by the delegation clause in the DRA that was incorporated by
reference into the December 2020 Employment Agreement. Romney v. Franciscan
Med. Grp., 349 P.3d 32, 37–38 (Wash. Ct. App. 2015).
REVERSED and REMANDED with instructions to stay the case and
compel arbitration.
3
FILED
Ohring v. Unisea, Inc., 21-35591 MAY 20 2022
MOLLY C. DWYER, CLERK
HAWKINS, Senior Circuit Judge, dissenting: U.S. COURT OF APPEALS
UniSea’s treatment of Ohring, even shorn of the more draconian content of its
employment agreement, underlines the district court’s conclusion that such behavior
permeated the relationship and satisfies the abuse of discretion standard applied to
the district court’s decision to strike down the Dispute Resolution Agreement
(“DRA”) in its entirety. Because I also would hold that Ohring’s execution of the
December 2020 Employment Agreement did not salvage the otherwise
unconscionable DRA, I would affirm.
UniSea does not meaningfully dispute that the DRA was procedurally
unconscionable when signed and that many of its terms are substantively
unconscionable. Although later execution of an agreement could cure procedural
deficiencies of an earlier contract execution, see Romney v. Franciscan Med. Grp.,
Corp., 349 P.3d 32, 38 (Wash. Ct. App. 2015), I am persuaded by Ohring’s argument
that is not the case here. UniSea bore the burden of establishing that the December
2020 Employment Agreement incorporated the DRA, including its delegation
clause, by reference. State v. Ferro, 823 P.2d 526, 527 (Wash. Ct. App. 1992). Yet,
UniSea did not specifically argue incorporation by reference before the district court,
and I am not convinced that UniSea has shown the December 2020 Employment
Agreement “clearly and unmistakably” incorporates the DRA’s delegation clause.
See Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015) (quoting AT&T
Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 649, (1986)).
In the absence of an enforceable delegation clause, the district court
permissibly reached Ohring’s remaining unconscionability claims and acted within
its discretion by declining to enforce any portion of the DRA. See Lim v. TForce
Logistics, LLC, 8 F.4th 992, 999 (9th Cir. 2021).
Accordingly, I would affirm.
2