Lee v. Evergreen Hosp. Med. Ctr.

434 P.3d 1071

JEOUNG LEE and Sherri McFarland, on their Own Behalf and on Behalf of All Persons Similarly Situated, Respondents,

v.EVERGREEN HOSPITAL MEDICAL CENTER, a/k/a King County Public Hospital District #2, Appellant.

No.77694-1-I

Court of Appeals of Washington, Division 1.

FILED: February 11, 2019

John James White, Kevin Blair Hansen, Rebecca Lauren Penn, Livengood Alskog, PLLC, 121 3rd Ave., Po Box 908, Kirkland, WA, 98083-0908, for Appellant.

David Elliot Breskin, Cynthia J. Heidelberg, Breskin, Johnson & Townsend PLLC, 1000 2nd Ave. Ste. 3670, Seattle, WA, 98104-1053, for Respondents.

PUBLISHED OPINION

Verellen, J.

¶ 1 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.

¶ 2 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 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.

¶ 3 Therefore, we affirm.

FACTS

¶ 4 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.

¶ 5 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 January 17, 2017, Lee filed a first amended complaint making identical rest and meal break allegations.²

¶ 6 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.

¶ 7 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.

¶ 8 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.

¶ 9 Evergreen appeals.

ANALYSIS

¶ 10 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

¶ 11 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

¶ 12 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 claims asserted.’ "¹⁰ 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

¶ 13 Evergreen relies on RCW 49.12.187 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.

¶ 14 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 the agreement.¹⁵ The terms of this CBA do not allow an alleged statutory breach to be grieved under this narrow definition.

¶ 15 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 shall be allowed a rest period of fifteen (15) minutes on the Employer’s time, for each four (4) hours of working time.^{[16 ]}

¶ 16 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 But WAC 296-126-092(2) requires that "[n]o 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.

¶ 17 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.

¶ 18 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 shows her claims arise under the CBA,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.

¶ 19 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.

¶ 20 The "Steelworkers Trilogy,"²⁴ which sets out the principles governing arbitration of public employee labor disputes governed by a CBA, strongly favors...