King County Public Hospital v. Jeoung Lee

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COURT 0~ APrEALS 1W~
STATE OF WASHINGTOh -
2019FE8 II M11I:OO
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION ONE
JEOUNG LEE and SHERRI ) No. 77694-1-I
MCFARLAND, on their own behalf )
and on behalf of all persons similarly )
situated, )
)
Respondents, )
)
v. )
)
EVERGREEN HOSPITAL MEDICAL ) PUBLISHED OPINION
CENTER, a/k/a KING COUNTY )
PUBLIC HOSPITAL DISTRICT #2, ) FILED: February 11,2019
)
Appellant. )
VERELLEN, J. —A union employee working for a public employer does not
waive her ability to bring statutory wage and hour claims in a judicial forum unless
her collective bargaining agreement (CBA) clearly and unmistakably does so.
Because, on its face, the CBA between the Washington State Nurses’ Association
(WSNA) and Evergreen Hospital (Evergreen) does not waive union members’
abilities to enforce their statutory rights in a judicial forum, the trial court correctly
denied Evergreen’s motion to compel arbitration.
Even if Evergreen had the right to compel arbitration under the CBA, it
waived any right to do so by its conduct. A litigant waives its right to invoke
arbitration where it knows of its right to arbitrate and engages in conduct
No. 77694-1 -1/2
inconsistent with seeking arbitration, such as actively litigating and passing an
obvious opportunity to assert that right. Evergreen noted its right to arbitrate in its
answer to Jeoung Lee’s initial complaint. Evergreen actively litigated the dispute
for nine months and then opposed Lee’s motion to continue the impending trial
date, declaring it was ready to litigate as scheduled. Three weeks later, Evergreen
filed its motion to compel arbitration. Because Evergreen knew of any right to
compel arbitration, litigated vigorously, and passed an obvious opportunity to
assert its right to compel arbitration, Evergreen waived its right.
Therefore, we affirm.
FACTS
Lee was an emergency room nurse at Evergreen from February 2010 until
August 2016. The terms of her employment were governed by a CBA between
Evergreen and WSNA. To resolve nurses’ work-related grievances, the CBA
provided a set of informal procedures culminating with the option of arbitration.
The CBA also contained a provision about nurses’ meal and rest breaks.
Lee filed a putative class action in November 2016 with herself as the sole
representative plaintiff alleging that Evergreen denied emergency room nurses
their statutorily guaranteed rest and meal breaks. Evergreen filed an answer in
December denying that class certification was appropriate and raising an
affirmative defense alleging that Lee “failed to exhaust the grievance and
arbitration process under the applicable collective bargaining agreement.”1 On
1 Clerk’s Papers (CP) at 10.
2
No. 77694-1-U3
January 17, 2017, Lee filed a first amended complaint making identical rest and
meal break allegations.2
Over the next six months, the parties engaged in discovery, conducted
depositions, disagreed about trial dates, and disputed class certification. Lee also
sent out class notices to over 500 nurses after the court certified the proposed
class.
On July 26, Evergreen deposed class member Sherri McFarland. Soon
after, Lee moved to continue the trial date from November of 2017 to March of
2018 and to amend her complaint by adding McFarland as a representative
plaintiff. Evergreen opposed Lee’s motion to continue and argued trial should go
forward as scheduled. The court granted Lee’s motion to continue.
On August 15, the court also granted Lee’s motion to file her second
amended complaint, which is the operative complaint. Two weeks later,
Evergreen filed its motion to compel arbitration and alleged “Plaintiffs’ second
amended complaint, recent discovery requests, and deposition testimony of class
representatives now make clear that the claims arise under the [CBA].”3 The court
denied Evergreen’s motion to compel arbitration.
Evergreen appeals.
Lee originally filed to certify a class under CR 23(b)(2), and Evergreen
2
moved to dismiss because she sought damages. The first amended complaint
was essentially the same, except for seeking class certification pursuant to
CR 23(b)(3).
~ CP at 544.
3
No. 77694-1-1/4
ANALYSIS
We review de novo denial of a motion to compel arbitration.4 We also
review de novo whether a party waived the right to compel arbitration.5
Whether The CBA Requires Arbitration
Evergreen contends the CBA compels binding arbitration of all class claims
because Lee’s alleged violations arise from section 7.7 of the CBA, not from any
statute or regulation.6
The Federal Arbitration Act (FAA)7 generally applies to CBAs.8 We apply
federal substantive law to any arbitration agreement within the coverage of the
FAA.9 When reviewing a motion to compel arbitration, we consider “whether the
arbitration agreement is valid” and ‘‘whether the agreement encompasses the
~ Cox v. Kroqer Co., 2 Wn. App. 2d 395, 403, 409 P.3d 1191(2018). The
parties debate whether a motion to compel arbitration may be made as a general
motion or whether it must be made pursuant to CR 12(c) or CR 56. But the issue
is purely academic because Evergreen advised the trial court it was moving
pursuant to CR 12, and both parties urge us to consider materials outside the
pleadings. Thus, our review is de novo regardless of which civil rule governed
Evergreen’s motion to compel arbitration.
~ Romney ex rel. Estate of Romney v. Franciscan Med. Gm., 199 Wn. App.
589, 602, 399 P.3d 1220, review denied, 189 Wn.2d 1026 (2017).
6 Evergreen addresses Lee and McFarland’s individual claims separately
from class claims and contends both must be submitted to arbitration. Because
Evergreen did not appeal class certification, and we do not consider the underlying
issues—e.g., class certification—on appeal of a motion to compel arbitration,
Peninsula Sch. Dist. No. 401 v. Public Sch. Emp. of Peninsula, 130 Wn.2d 401,
413, 924 P.2d 13 (1996), we treat all claims as class claims.
~ 9 U.S.C. §~ 1-14.
~ Cox, 2 Wn. App. 2d at 403.
ki. at 403-04.
4
No. 77694-1-1/5
claims asserted.”1° If both criteria are met, then Washington courts order
arbitration in most instances.11 The parties do not dispute the validity of the CBA.
The critical question is whether Lee’s claims are statutory or contractual.12
Evergreen relies on RCW49.12.187 to argue Lee’s claims are contractual
because the statute gives public employers and public employee unions the ability
to negotiate CBAs “that specifically vary from or supersede, in part or in total, rules
adopted under this chapter regarding appropriate rest and meal periods.”13 But
section 7.7 does not vary from or supersede WAC 296-126-092. And this CBA’s
grievance process does not encompass statutory claims.
Article 16 in the CBA provides a four-step grievance process.14 The CBA
defines a grievance as “an alleged breach of the express terms and conditions” of
10k~. at 404 (quoting Wiese v. CACH, LLC, 189 Wn. App. 466, 474, 358
P.3d 1213 (2015)).
1~ Estate of Romney, 199 Wn. App. at 596-97.
12 Evergreen argues this court lacks the authority to compare the CBA with
meal and rest break regulations because issues of arbitrability must be resolved
by an arbitrator. But threshold questions around arbitrability—questions about
“whether the parties have submitted a particular dispute to arbitration”—should be
resolved by courts unless the parties clearly and unmistakably provided otherwise
in their CBA. Martin v. Yasuda, 829 F.3d 1118, 1123 (9th Cir. 2016) (quoting
Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 5. Ct. 588, 154
L. Ed. 2d 491 (2002)); accord FutureSelect Portfolio Mcimt., Inc. v. Tremont Grp.
Holdings, Inc., 190 Wn.2d 281, 287, 413 P.3d 1(2018). Because the CBA does
not provide otherwise, we determine if Lee’s claims are arbitrable.
13 RCW49.12.187.
14First, a nurse must present her written grievance to her supervisor.
Second, if unresolved, she must present her written grievance to the chief nurse
executive. Third, if still unresolved, the nurse must present her grievance to an
administrator. Fourth, “[ijf the grievance is not settled on the basis of the foregoing
5
No. 77694-1-116
the agreement.15 The terms of this CBA do not allow an alleged statutory breach
to be grieved under this narrow definition.
Chapter 49.12 RCW authorizes the creation of regulations about meal and
rest periods for employees, which are defined in WAC 296-126-092:
(1) Employees shall be allowed a meal period of at least thirty
minutes which commences no less than two hours nor more than
five hours from the beginning of the shift. Meal periods shall be on
the employer’s time when the employee is required by the employer
to remain on duty on the premises or at a prescribed work site in the
interest of the employer.
(2) No employee shall be required to work more than five
consecutive hours without a meal period.
(3) Employees working three or more hours longer than a
normal work day shall be allowed at least one thirty-minute meal
period prior to or during the overtime period.
(4) Employees shall be allowed a rest period of not less than
ten minutes, on the employer’s time, for each four hours of working
time. Rest periods shall be scheduled as near as possible to the
midpoint of the work period. No employee shall be required to work
more than three hours without a rest period.
(5) Where the nature of the work allows employees to take
intermittent rest periods equivalent to ten minutes for each 4 hours
worked, scheduled rest periods are not required.
Section 7.7 of the CBA addresses meal and rest periods for nurses:
Meal periods and rest periods shall be administered in accordance
with state law (WAC 296-126-092). Nurses shall be allowed an
unpaid meal period of one-half (1/2) hour. Nurses required by the
Employer to remain on duty during their meal period shall be
compensated for such time at the appropriate rate of pay. All nurses
procedures, [WSNA] may submit the issue in writing to final and binding
arbitration.” CP at 107.
15 CP at 106 (emphasis added).
6
No. 77694-1-1/7
shall be allowed a rest compensated for such time at the appropriate
rate of pay. All nurses shall be allowed a rest period of fifteen (15)
minutes on the Employer’s time, for each four (4) hours of working
time.~1 6]
Contrary to Evergreen’s contentions, section 7.7 in the CBA merely
comports with WAC 296-126-092. Section 7.7 states meal and rest breaks ‘shall
be administered in accordance with” WAC 296~126~092.17 Notably, the regulation
is more extensive than section 7.7 and addresses matters on which the CBA is
silent.18 For example, section 7.7 does not provide guidance on when nurses can
take rest breaks. WAC 296-126-092(4) requires that rest periods be scheduled as
near as possible to the midpoint of an employee’s work period. Also, section 7.7
does not explain when employees can take meal breaks.19 ButWAC 296-126-
092(2) requires that “[nb employee shall be required to work more than five
consecutive hours without a meal period.” As section 7.7 states, administration of
the CBA necessarily relies on compliance with the regulation rather than the CBA
varying from or superseding the regulation.
16 CP at 93.
17 CP at 93.
18 Compare CP at 93 (section 7.7 of the CBA), with WAC 296-126-092.
19 Throughout its briefing and at oral argument, Evergreen repeatedly
claimed that the CBA provides only one meal break per 12-hour shift. But this is
misleading. The section of the CBA Evergreen cites to for this fact is an
addendum to the CBA applicable only to nurses working a “combined shift
schedule” with both eight and 12-hour shifts. CP at 198. Generally, though,
nurses working 12-hour shifts would work three 12-hour shifts within a seven day
period. Because Lee and McFarland only worked 12-hour shifts, the combined
shift schedule would not have applied to them. Instead, section 7.7, rather than
the addendum, governed their meal and rest breaks.
7
No. 77694-1-1/8
Evergreen makes much of the fact that section 7.7 provides for a 15-minute
rest period, whereas WAC 296-126-092(4) provides for a rest period of “no less
than ten minutes.”20 But 15 minutes is “no less than ten minutes.” The 15-minute
rest period merely reflects compliance with rather than variance from the
regulation. Also, Lee’s claim is for missed rest breaks. The potential duration of a
rest break is irrelevant if the break never begins or was less than 10 minutes.
Evergreen also relies on deposition testimony from McFarland and other
class members to argue Lee’s claims are contractual rather than statutory. But
arguable differences between class claims pled in the complaint and snippets of
plaintiffs’ testimony do not recast Lee’s claims as Evergreen wants them to be.21
Specifically, Evergreen contends that McFarland’s testimony about missed breaks
20 See, e.g., Appellant’s Br. at 23-25 (‘The CBA grants nurses 15-minute
rest breaks, not the 10 minutes provided by WAC 296-126-092(4). . ~f nurses
. .
missed their 15-minute rest breaks and were not paid, that is a ‘breach of the
express terms and conditions’ of the CBA and must be resolved through the CBA’s
grievance process, culminating in arbitration.”).
21 Evergreen points to CR 15(b) and related cases as authority for its
contention. But neither CR 15 nor the cases Evergreen cites apply here.
“CR 15(b) is applicable in general terms to those occasions when the course of the
trial departs so materially from the image of the controversy pictured in the
pleadings that it becomes necessary to adjust the pleadings to reflect the case as
it was actually litigated in the courtroom.” Harding v. Will, 81 Wn.2d 132, 136, 500
P.2d 91(1972). “Where evidence raising issues beyond the scope of the
pleadings is admitted without objection, the pleadings will be deemed amended to
conform to the proof.” Reichelt v. Johns-Manville Corp., 107 Wn.2d 761, 766-67,
733 P.2d 530 (1987). CR 15(b) is not an invitation to recast one party’s claims at
the behest of the opposing party based on highly disputed characterizations of
cherry-picked deposition testimony.
8
No. 77694-1-1/9
shows her claims arise under the C BA,22 but the rest and meal breaks provided by
the CBA accord with state law.23 And Lee’s complaint alleges Evergreen failed to
provide any rest breaks regardless of each break’s duration. Neither the CBA nor
plaintiffs’ testimony converts this statutory claim into a contractual one.
Evergreen contends that all disputes between parties to a CBA are
presumptively subject to arbitration unless specifically excluded. This argument is
not persuasive because it fails to recognize the source of the rights Lee asserts in
her complaint.
The “Steelworkers Trilogy,”24 which sets out the principles governing
arbitration of public employee labor disputes governed by a CBA, strongly favors
22 ~ Appellant’s Br. at 14-16 (“I think if the union contract states that
they’re required to give you a rest break within a certain period of time, then if they
do not give you that, they ought to pay you for it, yes.”) (quoting CP at 589-90).
23 Evergreen also relies on testimony from a single class member to argue
Lee’s claims rely on the “CBA’s ten-minute continuous and 15-minute total
standards” for rest breaks. Appellant’s Br. at 24. But Lee’s expectation of a
continuous 10-minute break does not originate in the CBA. WAC 296-126-092(4)
requires a rest break of at least 10 minutes, while WAC 296-126-092(5) merely
allows for short, intermittent breaks over four hours to add up to a single 10-minute
break. Whether some nurses take advantage of WAC 296-126-092(5) is a
question germane to class certification and damages, neither of which are before
us. Also, this argument admits that nurses can satisfy the break requirement in
their CBA by totaling their short breaks over four hours even though this procedure
is available only through WAC 296-1 26-092(5) and not section 7.7 of the CBA. It
shows the CBA being administered by the regulation rather than superseding it.
245~ United Steelworkers v. Am. Mfq. Co., 363 U.S. 564, 80 S. Ct. 1343,
4 L. Ed. 2d 1403 (1960); United Steelworkers v. Warrior & Gulf Navigation Co.,
363 U.S. 574, 80 5. Ct. 1347, 4 L. Ed. 2d 1409 (1960); United Steelworkers v.
Enter. Wheel & Car Corp., 363 U.S. 593, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960).
9
No. 77694-1 -1/10
arbitration of contractual disputes within the scope of an arbitration provision.25
But a public or private employee’s statutory rights are distinct from her contractual
rights.26 Even where a CBA contains a provision that is coextensive with a
statutory right, the ultimate question is what the law requires; “and that is not a
question which should be presumed to be included within the arbitration
requirement.”27
Moreover, arbitration clauses in CBAs differ from arbitration clauses in
bilateral employment contracts, particularly when it comes to statutory rights.28
Consequently, an employee retains the ability to enforce her statutory rights in
court unless the employees clearly and expressly agreed in the CBA to arbitrate
their statutory claims.29 The CBA must “explicitly state[j” in “clear and
255~ RCW 41 .56.122(2) (“A collective bargaining agreement may. .
(2) Provide for binding arbitration of a labor dispute arising from the application or
interpretation of the matters contained/n a [CBA].”) (emphasis added); Mount
Adams Sch. Dist. v. Cook, 150 Wn.2d 716,723,81 P.3d 111 (2003) (quoting
Peninsula Sch. Dist., 130 Wn.2d at 413-14) (summarizing principles derived from
the Steelworker’s Trilogy)).
26 Vega v. New Forest Home Cemetery, LLC, 856 F.3d 1130, 1134 (7th Cir.
2017); Civil Serv. Comm’ of City of Kelso v. City of Kelso, 137 Wn.2d 166, 175,
969 P.2d 474 (1999); see Wright v. Universal Mar. Serv. Corp., 525 U.S. 70, 78-
80, 119 S. Ct. 391, 142 L. Ed. 2d 361 (1998) (concluding that the presumption
favoring arbitrability in the Steelworker’s Trilogy was inapplicable to a statutory
claim).
27 Wright, 525 U.S. at 79.
28~g~, Colev. Burns Int’l Sec. Servs., 105 F.3d 1465, 1473-79 (D.C. Cir.
1997) (discussing the historic background of the role of arbitration and
distinguishing contractual and statutory claims).
29 14 Penn Plaza LLC v. Pvett, 556 U.S. 247, 258-59, 264, 129 5. Ct. 1456,
173 L. Ed. 2d 398 (2009) (holding that employees subject to a CBA must arbitrate
statutory claims where the CBA’s “arbitration provision expressly covers both
10
No. 77694-1-I/il
unmistakable language” that employees waive their ability to enforce statutory
rights in court.3°
In Vega v. New Forest Home Cemetery, LLC, a union employee working
under a CBA sued his former employer to collect unpaid wages.31 The employee
brought claims under the Fair Labor Standards Act (FLSA)32 and Illinois state
wage law.33 The CBA addressed the employee’s wages, set out a mandatory
four-step grievance process to resolve disputes, and explicitly defined grievances
to include disputes over pay.34 The court held the employee could sue in court to
enforce his statutory wage rights under the FLSA because nothing in the CBA
referenced the statute.35 Because the CBA did not explicitly reference the FLSA,
there was nothing clear and unmistakable in the CBA compelling the employee to
assert his statutory rights through the grievance process.36
statutory and contractual discrimination claims.”) (emphasis added); Wright, 525
U.S. at 79 (“[A]ny CBA requirement to arbitrate [a statutory claim] must be
particularly clear.”).
30 Vega, 856 F.3d at 1134 (citing 14 Penn Plaza, 556 U.S. at 258-59); Cox,
2 Wn. App. 2d at 404; ~f. Kelso, 137 Wn.2d at 177 (“[W]here the two appeal
processes are concerned with different substantive rights, this court will not
impose an election of remedies clause [in a CBA] where none was bargained for
by the parties.”).
31 856 F.3d 1130, 1131 (7th Cir. 2017).
32 29 U.S.C. § 206(b).
33Vega, 856 F.3d at 1132.
ki. at 1133. Notably, the mandatory grievance process in Vega
authorized arbitration on the demand of either the union or the employer. ki. at
1131 nI.
35k1.at 1135.
36 Id.
11
No. 77694-1-1/12
Similarly, this court recently held in Cox v. Kroqer Co. that an arbitration
provision in a union employee’s CBA did not waive his ability to bring statutory
wage and hour claims in court.37 The employee brought a class action against his
former employer to collect wages allegedly denied in violation of state wage
laws.38 Because neither the CBA’s wage nor grievance provisions identified or
even referenced any wage statutes covered by the agreement, the CBA did not
“clearly and unmistakably” waive his ability to enforce his statutory rights in court.39
The court affirmed the trial court’s denial of the employer’s motion to compel
arbitration.4°
By contrast, the Supreme Court held in 14 Penn Plaza LLC v. Pyett that a
union employees’ CBA waived their ability to enforce statutory rights in court.41
The employees alleged discrimination in violation of the federal Age Discrimination
in Employment Act of 1967 (ADEA).42 But the employees’ CBA explicitly provided
that all employment discrimination claims, including those brought under the
ADEA, would be subject to the contract’s grievance provision requiring binding
arbitration “as the sole and exclusive remedy for violations.”43 The court reasoned
372Wn. App. 2d 395, 405, 409 P.3d 1191 (2018).
38 kI. at 399-400.
kI. at at 404-05.
Id. at 405
41 556 U.S. 247, 251-52, 129 S. Ct. 1456, 173 L. Ed. 2d 398 (2009).
42 29 U.S.C. § 621.
ki. at 251-52.
12
No. 77694-1-1/13
the CBA “clearly and unmistakably” required arbitration because the discrimination
section explicitly stated ADEA claims were arbitrable.44
Here, as in Vega and Cox, article 16 makes no reference of any kind to any
statute orto statutory rights. In addition, article 16 narrowly defines a grievance as
an “alleged breach of the express terms and conditions of the [CBA],”45 which
WAC 296-126-092 is not. And unlike 14 Penn Plaza, no part of the CBA explicitly
waives Lee’s ability to enforce her statutory rights in court. Lee’s complaint
alleges that she and her fellow class members “did not receive meal and rest
breaks violat[ing] RCW 49.12 and WAC 296~126~092.”46 The complaint does not
reference breach of any contractual term, and the face of the CBA shows it does
not supersede or vary from WAC 296-126-092.``
Article 16 provides the option of submitting unresolved grievances to
binding arbitration, rather than mandating arbitration in all instances.48 And, as in
Id. at 260.
~ CP at 106.
46 CP at 439.
~ We note that our Supreme Court has held that a CBA may not abrogate a
worker’s right to periodic rest periods under chapter 49.12 RCW or WAC 296-1 96-
092, and the statute must “operate as a base” from which parties may negotiate a
CBA that “enhance[sj or exceed[s] those minimum standards.” Wingert v. Yellow
Freight Sys., Inc., 146 Wn.2d 841, 852, 50 P.3d 256 (2002) (quoting Wingert v.
Yellow Freight Sys., Inc., 104 Wn. App. 583, 596, 13 P.3d 677 (2000)). Thus,
variances are still actionable as statutory claims to the extent the CBA abrogates
an emergency room nurse’s ability to enjoy the minimum rest and meal breaks
guaranteed by the statute.
48 CP at 107 (“If the grievance is not settled on the basis of the foregoing
procedures, [WSNA] may submit the issue in writing to final and binding
arbitration.”) (emphasis added).
13
No. 77694-1-1114
~ the CBA’s grievance provisions make no mention of any statutory rights and
apply only to a breach of the agreement’s express terms. Lee’s complaint does
not implicate the CBA and, moreover, the CBA does not clearly and unmistakably
waive Lee’s ability to bring individual statutory claims in court.49
Evergreen contends, though, 14 Penn Plaza, Vega, and ~ç~ç are inapposite
because those employees were privately employed whereas Lee was a public
employee with a CBA subject to Washington’s Public Employee Collective
Bargaining Act (PECBA).5° According to Evergreen, PECBA presumes that an
employee’s disputes with her public employer are subject to arbitration absent “a
clear and unmistakable carve-out” because PECBA “provides an express waiver
of a judicial forum for employee statutory claims on matters covered in the CBA.”51
First, PECBA does not presume or mandate arbitration of employees’
statutory claims. PECBA merely allows that a CBA “may. . . [pjrovide for binding
arbitration of a labor dispute” arising from “matters contained in” the agreement.52
The parties to a CBA are free to collectively bargain for particular dispute
resolution procedures. PECBA mandates neither arbitration nor litigation. And, as
discussed, Lee’s statutory claims do not arise from “matters contained in” the
CBA.
~ 14 Penn Plaza, 556 u.s. 258-59; Wright, 525 U.S. at 79; Cox, 2 Wn. App.
2d at 404.
50 Ch. 41.56 RCW.
51 Appellant’s Supp. Br. at 5-6.
52 RCW 41 .56.122(2).
14
No. 77694-1 -1115
Second, our Supreme Court recognized in Peninsula School District No.
401 v. Public School Employees of Peninsula that PECBA is not implicated where
only “statutorily created private rights” are allegedly harmed by an employer’s
conduct.53 In Peninsula, a school district declined to recognize a grievance filed
jointly by a union and its member because the district argued the matter grieved
fell outside the bounds of the CBA.54 Thus, the court had to address whether the
matter could be and was collectively bargained for.55 The Peninsula court
distinguished that case from Shoreline Community Collecie District No. 7 v.
Employment Security Department56 because Peninsula did not involve a waiver of
private statutory rights.57
In Shoreline, the community college argued that an English instructor was
not entitled to unemployment benefits because his CBA calculated his work hours
such that he could not meet the statutory minimum to receive benefits.58 The
community college further contended the CBA controlled over conflicting
provisions of the Employment Security Act,59 effectively waiving the instructor’s
right to receive unemployment benefits.6° The court disagreed and held that a
``130 Wn.2d 401, 412, 924 P.2d 13(1996).
~ kzl. at 403-05.
55kLat409.
56120 Wn.2d 394, 842 P.2d 938 (1992).
``130 Wn.2d at 412.
58120 Wn.2d at 401-02.
~ Oh. 50.04 RCW.
60120 Wn.2d at 401-02.
15
No. 77694-1-1116
contractual waiver of the right to unemployment benefits was void as contrary to
public policy because the right to benefits serves a public policy purpose; the
court’s analysis never considered PEC BA.61
Because the CBA does not clearly and unmistakably waive Lee’s ability to
enforce her statutory rights in court and PECBA is not germane, the court did not
err in denying Evergreen’s motion to compel arbitration.62
61 j~ at 410. We also note that PECBA’s stated purpose is to provide “‘a
uniform basis for implementing the right of public employees to join ... and to be
represented by [labor] organizations in matters concerning their employment.”
Peninsula, 130 Wn.2d at 406-07 (quoting RCW 41.56.010). And cases cited by
Evergreen implicating PECBA all involve infringements on a union’s ability to
represent its members. Peninsula, 130 Wn.2d at 403-04, 407 (school district
refused to comply with CBA and enter arbitration after the union filed a grievance
in conjunction with a terminated employee); Municipality of Metro. Seattle v. Pub.
Emp’t Relations Comm’n, 118 Wn.2d 621, 624, 631-34, 826 P.2d 158 (1992)
(employer refused to comply with an order from the Public Employment Relations
Commission mandating arbitration to advance the collective bargaining process
between it and a union); Rose v. Erickson, 106 Wn.2d 420, 421-22, 721 P.2d 969(1986) (employer refused to recognize a union employee’s grievance filed
pursuant to terms of the CBA); Nucleonics All., Local Union No. 1-369, Oil, Chem.
& Atomic Workers Int’l Union, AFL-CIO v. Washington Pub. Power Supply Sys.
(WPPSS), 101 Wn.2d 24, 25-27, 677 P.2d 108 (1984) (union soughtto represent
nonunion employees and employer opposed its efforts); SEIU 775 v. State Dep’t of
Soc. & Health Servs., 198 Wn. App. 745, 396 P.3d 369 (holding that PECBA does
not prohibit a public employer’s release of employees’ names where the
employees’ union intervened to enjoin release of members’ names under the
Public Records Act), review denied, 189 Wn.2d 1011(2017); The Council of
County. & City Employees, AFSCME, AFL-CIO v. Spokane County, 32 Wn. App.
422, 647 P.2d 1058 (1982) (employer refused to recognize and arbitrate a
grievance filed pursuant to CBA with the union). Here, by contrast, Evergreen’s
conduct implicates only private statutory rights and not collective bargaining rights.
As in Shoreline Community College, PECBA does not appear to be germane to
this litigation.
62 Vega, 856 F.3d at 1134; ~ 2 Wn. App. 2d at 404. Evergreen has
moved to strike portions of Lee’s supplemental briefing, which she and Evergreen
both filed at our request. First, Evergreen’s motion to strike relied exclusively on
16
No. 77694-1-1/17
Whether Evergreen Waived The Right To Compel Arbitration
Lee contends that even if the CBA required arbitration of her claims,
Evergreen waived its right to compel arbitration.
We review de novo whether a party waived arbitration.63
“Washington courts have long held that the contractual right to arbitration
may be waived if it is not timely invoked.”64 Because Washington has a strong
presumption in favor of arbitration, the party arguing against it bears a heavy
burden of showing that waiver occurred.65 “‘To establish waiver of the right to
arbitration, the party opposing arbitration must demonstrate (1) knowledge of an
existing right to compel arbitration; (2) acts inconsistent with that existing right; and
(3) prejudice to the party opposing arbitration resulting from such inconsistent
acts.”66 A party asserting its right to arbitration acts inconsistently with that right
where it seeks a decision on the merits of issues in the litigation67 and fails to
materials outside the appellate record in violation of RAP 17.3(a). Second,
Evergreen moved to strike only those portions of Lee’s supplemental brief arguing
that her claims are based solely on statutes, but a motion to strike is not the
appropriate vehicle for arguments on the merits of an appeal. We deny the
motion.
63 Estate of Romney, 199 Wn. App. at 602.
64 Otis Hous. Ass’n, Inc. v. Ha, 165 Wn.2d 582, 587, 201 P.3d 309 (2009).
65 Estate of Romney, 199 Wn. App. at 602.
66 kI. at 601-02 (internal quotation marks omitted) (quoting Wiese, 189 Wn.
App. at 480).
67 Martin, 829 F.3d at 1125; Petroleum Pipe Ams. Corp. v. Jindal Saw, Ltd.,
575 F.3d 476, 480 (5th Cir. 2009); see Otis Housing Ass’n, 165 Wn.2d at 588,
(litigating a parallel action before invoking right to arbitrate in a separate action on
same merits waives the right); Naches Valley Sch. Dist. No. JT3 v. Cruzen, 54 Wn.
17No. 77694-1 -1/18
assert its right at “‘obvious opportunities” to do so.68 “Simply put, . . . a party
waives a right to arbitrate if it elects to litigate instead of arbitrate.’69
Evergreen agrees it did not move to compel arbitration until the parties had
been litigating for nine months.7° But it contends it did not know the claims in the
complaint arose under the CBA until after it deposed McFarland on July 26, 2017,
and Lee added McFarland as a representative plaintiff a few weeks later.71
Lee’s meal and rest break claims against Evergreen in her second
amended complaint are identical to those in her first amended complaint and her
original complaint.72 Also, Evergreen first raised arbitration as a defense in the
App. 388, 395-96, 775 P.2d 960 (1989) (plaintiffs waived arbitration by filing for
summary judgment on the merits of their claims).
68 Hill v. Garda CL Nw. Inc., 169 Wn. App. 685, 692, 281 P.3d 334 (2012)
(quoting Steele v. Lundgren, 85 Wn. App. 845, 853-55, 935 P.2d 671 (1997)),
rev’d on other grounds, 179 Wn.2d 47, 308 P.3d 635 (2013).
69 Otis Hous. Ass’n,, 165 Wn.2d at 588.
70 See Appellant’s Br. at 28-29 (Evergreen’s “motion to compel arbitration
was filed 15 days after the [c]ourt granted the motion to amend and plaintiffs filed
the [s]econd [a]mended [c]omplaint.”).
71 See k1. at 29-30 (“The combination of McFarland’s deposition testimony,
which was given before plaintiffs sought to amend the complaint, and the [s]econd
[a]mended [c]omplaint made clear that the claims in this lawsuit arise under the
CBA and require an interpretation of the CBA’s express terms and past practices
of the parties.”).
72 Compare CP at 439 (section VI of second amended complaint stating
claims against Evergreen: “Defendant’s practices under which Plaintiffs and the
class did not receive meal and rest breaks violate RCW 49.12 and WAC 296-126-
092.”), with CP at 5, 17 (section VI of complaint and first amended complaint
stating claims against Evergreen: “Defendant’s practices under which Plaintiff and
the class did not receive meal and rest breaks violate RCW 49.12 and WAC 296-
126-092.”).
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No. 77694-1 -1119
answer it filed December 22, 2016.`` Evergreen cannot now contend it did not
know these claims might be arbitrable where its answer raised arbitration as an
affirmative defense.
Evergreen behaved inconsistently with a party seeking to arbitrate. Soon
after McFarland’s deposition, Lee moved to continue trial from November 2017 to
March 2018. Lee also sent Evergreen a copy of her proposed second amended
complaint adding McFarland as a representative plaintiff. Evergreen opposed the
motion to continue, and stated it “is prepared to try this case on November 6,
2O17.”`` Also, Evergreen was fully aware of McFarland’s deposition testimony at
the time it insisted on litigating. Evergreen specifically argued against granting
Lee a continuance because McFarland had already been deposed and “[a] second
class representative adds nothing to the present case.”75 Put simply, Evergreen
elected to litigate and missed an obvious opportunity to assert its right to arbitrate.
Lee would be prejudiced by granting Evergreen’s motion to compel. “When
a party has expended considerable time and money due to the opposing party’s
failure to timely move for arbitration and is then deprived of the benefits for which it
has paid by a belated motion to compel, the party is indeed prejudiced.”76 For
example, there is prejudice when a party loses a motion on the merits and
~ CP at 10.
~ CP at 1793.
~ CP at 1798.
76 Martin, 829 F.3d at 1127.
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No. 77694-1 -1/20
effectively attempts to relitigate it by invoking arbitration77 or when a party “too long
postpones” invocation of arbitration and causes the opposing party ‘to incur
unnecessary delay or expense.”78
Here, Lee will be prejudiced if Evergreen is allowed to belatedly compel
arbitration. Lee asserts she incurred over $140,000 in fees and costs from formal
discovery and pretrial litigation before Evergreen moved to compel arbitration.
Granting Evergreen’s motion would also prejudice Lee by giving Evergreen a
second chance on the critical substantive issues, such as class certification, that it
litigated and lost.79
Evergreen analogizes to Hill v. Garda CL Northwest Inc. to argue it did not
waive its right to compel arbitration.8° In Hill, a group of employees filed a putative
class action against an armored car company for alleged wage violations.81 The
‘~ Steele, 85 Wn. App. at 859.
78 Schuster v. Presticie Senior Mcjmt., LLC, 193 Wn. App. 616, 643, 376
P.3d 412 (2016); Steele, 85 Wn. App. at 859. Evergreen argues that its motion to
compel arbitration was not belated because it occurred only two weeks after the
court approved Lee’s second amended complaint. But this ignores the preceding
nine months of litigation during which Evergreen knew it could arbitrate, and it
attempts to elevate chronology over conduct.
~ Steele, 85 Wn. App. at 859; see Martin, 829 F.3d at 1128 (holding the
defendant waived arbitration “because the plaintiffs would be prejudiced if the
defendants got a mulligan on a legal issue it chose to litigate in court and lost”);
Riverside Publ’q Co. v. Mercer Publ’q LLC, 829 F. Supp. 2d 1017, 1021-23 (W.D.
Wash. 2011) (finding prejudice from the plaintiff’s “forum shopping” when it
belatedly moved to compel arbitration only after losing substantive pretrial
motions).
80 169 Wn. App. 685, 691-94, 281 P.3d 334 (2012).
81 kI.at 688.
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No. 77694-1-1/21
company asserted its right to compel arbitration in its answer and began to engage
in discovery, but it did not move to compel arbitration for over one year.82 But
during that year, the parties agreed to delay litigation while awaiting the outcome
in a very similar case83 being litigated in this court.84 After the similar case was
decided, the parties filed a joint stipulation agreeing that the matter was
arbitrable.85 Also, both parties endeavored to resolve the dispute through
mediation prior to committing to arbitration or litigation.86 After the company finally
moved to compel arbitration, this court held it had not waived the right to arbitrate
“[b]ecause the delay in filing the motion to compel resulted in part from an effort to
resolve this case without resorting to litigation and Garda asserted its arbitration
rights in its answer.”87
Evergreen’s conduct in this case bears little similarity to that of the armored
car company. Unlike the company in Hill, Evergreen demanded to litigate this
case in court before seeking arbitration. Also, nothing in the appellate record
shows an effort by either party to resolve this dispute out of court.
Evergreen’s knowledge of its ability to invoke arbitration, its litigation
conduct, and the potential prejudice to Lee demonstrate waiver of the right to
82 Id. at 688-89, 691.
83 Pellino v. Brink’s Inc., 164 Wn. App. 668, 267 P.3d 383 (2011).
84[.jjfl, 169 Wn. App. at 691.
85 Id.
86kLat692.
87 Id.
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No. 77694-1 -1/22
arbitrate. Accordingly, we conclude Evergreen waived the right to arbitrate when it
elected to litigate instead of arbitrate.88
For the foregoing reasons, we affirm.
AL)!
WE CONCUR:
0
88 Otis Hous. Ass’n, 165 Wn.2d at 588.
22