Turner v. Vulcan, Inc.

TRACI TURNER, Appellant/Cross Respondent, v. VULCAN, INC., PAUL ALLEN, JODY ALLEN, Respondents/Cross Appellants,RAY COLLIVER, and LAURA MACDONALD, Respondents.

No. 71855-0-I

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE

November 2, 2015

UNPUBLISHED OPINION

TRICKEY, J. — In a motion to compel arbitration, a trial court must determine whether there is a valid agreement to arbitrate and, if so, whether the dispute is within the scope of that agreement. Here, the agreement to arbitrate is neither procedurally nor substantively unconscionable. The subject of the dispute is contained within the agreement to arbitrate. The challenge to the contract as a whole is a question for the arbitrator. Because this arbitration provision is part of an employment contract, the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16, applies.

The claims presented here are in connection with what is largely an employment dispute based primarily on an employee's statutory claims asserted under the Washington Law Against Discrimination Act (WLAD), chapter 49.60 RCW, and the Washington Minimum Wage Act (MWA), chapter 49.46 RCW. Because the employer's requested attorney fees would frustrate the broad remedial purposes of those acts, we affirm the arbitrator's award granting attorney fees only for the employer's motion on the validity of the employee's release of claims against the employer and for prevailing on the defamation claim.

In all respects, we affirm the trial court's order affirming the arbitrator's award.

FACTS

Vulcan, Inc. hired Traci Turner as a senior executive protection (EP) specialist in January 2011. At the same time, Turner signed an Employee Intellectual Property Agreement (EIPA) providing for an award of attorney fees to the prevailing party in any lawsuit arising out of her employment or the agreement itself.

Vulcan promoted Turner to the lead EP detail for Paul Allen in April 2011. In May 2011, she was assigned as the lead EP for Paul Allen's personal security detail. Two months later, in July 2011, Turner signed a Guaranteed Bonus Agreement (GBA), waiving and releasing any then-existing claims against Vulcan and agreeing to confidential arbitration in exchange for a guaranteed bonus payment in excess of the maximum wages she would otherwise receive. Turner's yearly wage at the time was $140,000.00. Her minimum guaranteed bonus was $25,156.00, subject to proration if her employment ended before the end of the year.

On September 23, 2011, Turner submitted her resignation, which she characterized as a constructive discharge. Shortly thereafter, Turner filed her first employment discrimination suit against Vulcan and several of its executives(Turner I). Vulcan immediately moved for an order compelling arbitration based on the GBA. Judge Patrick Oishi granted Vulcan's motion, compelled arbitration, and stayed the proceedings in King County Superior Court.

Turner moved for reconsideration and Vulcan responded. Before any decision was made on the reconsideration motion, Turner filed a notice of voluntary dismissal that was granted ex parte on November 1, 2011. Turner's stated reason for dismissal was that a mediation involving other Vulcan employees was taking place and, if successful, would resolve all of the issues. That mediation was unsuccessful, however. None of the other employees involved in the mediation voluntarily dismissed the cases that they had filed in superior court. One of those employees who, like Turner, had signed a GBA, was ordered to arbitration on February 24, 2012, by a different judge.

Meanwhile, on December 14, 2011, Vulcan initiated arbitration proceedings asserting several claims against Turner. The next day, Turner's counsel, Jerald Pearson, sent an e-mail informing Vulcan that Turner's current instructions to him were to refile the court case and to not accept the arbitration process. On January 5, 2012, Pearson withdrew as Turner's counsel.

On January 26, 2012, Vulcan e-mailed Turner's new attorney, Patrick McGuigan of the HKM law firm,¹ informing him that it had filed arbitration proceedings and intended to proceed with its claims. Vulcan asserted breach of the EIPA, anticipatory breach of the EIPA, breach of duty of loyalty, breach of confidential relationship, violation of Computer Fraud and Abuse Act (18 U.S.C. §1030), repayment of prorated bonuses, declaratory relief for nonliabilty for the employment related causes of action, fraud, defamation, and any actions prior to July 26, 2011.

On January 27, Turner filed a second lawsuit in superior court (Turner II), which was assigned to Judge Monica Benton. Her complaint reiterated the first five claims made in Turner I and asserted five additional claims. The first complaint asserted claims for gender discrimination, constructive termination, retaliation, hostile work environment, and defamation. The five additional claims asserted in Turner II were sexual orientation discrimination, age discrimination, intentional infliction of emotional distress, negligent infliction of emotional distress, and withholding of wages.

After unsuccessfully trying to transfer this second suit to Judge Oishi, Vulcan moved to dismiss the complaint because of the doctrines of res judicata and issue preclusion, and, alternatively, to once again compel arbitration under the GBA. On March 5, 2012, Turner filed a CR 60 motion to vacate the order compelling arbitration in Turner I.

On March 9, 2012, HKM notified the arbitrator of Turner's counterclaims against Vulcan and its executives. In that notification, HKM also challenged the arbitrator's jurisdiction, noting that Turner would request a schedule to brief that issue during a telephonic case management conference set for March 26, 2012.

The trial court heard oral argument on April 5, 2012. On April 16, the court entered an order denying Turner's CR 60 motion, but reserved ruling on Vulcan'smotion to dismiss affording the parties an opportunity to submit additional briefing on whether the additional claims were subject to mandatory arbitration.

On June 8, 2012, the court entered an order dismissing the first five claims that were already subject to arbitration as a result of Judge Oishi's order in Turner I. The court also dismissed the remaining five claims and referred them to the arbitration that was already in progress.

During these legal proceedings in Turner II, HKM also sought to pursue discovery. Vulcan disputed Turner's right to proceed with legal depositions, informing HKM that discovery was available in the arbitration proceedings.² Judge Benton granted Vulcan's motion for a protective order and quashed the depositions.

On July 13, 2012, HKM requested a four month continuance of the arbitration hearing scheduled for November 26, 2012, to pursue discovery. The arbitrator denied the continuance. On July 16, Vulcan sent a notice that it intended to depose Turner's current and past psychologists and her partner.

On July 30, 2012, HKM sent a letter stating that financial constraints on Turner would force a discontinuance of the arbitration. Previously, in response toHKM's inquiry regarding applicable rules, the American Arbitration Association (AAA) case manager had indicated that the employment arbitration rules applied. The case manager subsequently billed both parties in excess of $20,000.00. Vulcan paid its portion of the fees, and Turner paid $900.00.

After receiving HKM's notice of discontinuance, the case manager for AAA sent a letter advising that Turner would not be pursuing the counterclaims but noting that the matter was moving forward with Vulcan's claims. Vulcan objected to the dismissal of Turner's claims under CR 41(a)(3) arguing, inter alia, that the GBA was an employer promulgated plan and, under the rules of the AAA, Vulcan was responsible for the costs of the arbitration pertaining to those employment claims as well as the arbitrator's fees. Vulcan eventually paid all the administrative costs of the arbitration as well as the arbitrator's fees, totaling $34,961.24.

On August 9, 2012, Turner filed a motion to dismiss claims and end the arbitration proceedings. Turner argued that, in view of Vulcan's failure to advise the AAA that the GBA was an employer promulgated agreement, it could not now offer to pay all fees to continue the arbitration. On August 21, 2012, the arbitrator issued her ruling denying Turner's motion to dismiss and end the arbitration proceedings. The arbitrator based her ruling on the fact that Turner's pleadings cited Rule 48 of the AAA rules,³ which permitted the parties to disagree with thedetermination of fees, but that she had failed to do so earlier. Vulcan had no obligation to assert a claim on Turner's behalf. Because Vulcan agreed that it was responsible for the fees, there was no impediment to Turner pursuing arbitration of her employment claims. The arbitrator gave Turner five days to reinstate her counterclaims.

On August 27, 2012, HKM withdrew as Turner's attorney. On September 7, 2012, Turner, representing herself, requested a four month continuance. The arbitrator denied the continuance without prejudice and set a schedule for Vulcan's motions for summary judgment and Turner's response.

On October 16, 2012, Vulcan deposed Turner's current psychologist. Turner was present at that deposition and asked questions. The following day, based on her experience in the deposition, Turner sent an e-mail stating that she was withdrawing from the arbitration.

The arbitration hearing took place as scheduled on November 26, 2012, without Turner.⁴ The arbitrator entered Findings of Fact, Conclusions of Law, and an Interim Arbitration Award on December 21, 2012. The interim award dismissedTurner's claims with prejudice and awarded Vulcan $5,696.63 based on Turner's breach of contract for failing to repay Vulcan a portion of the bonuses received at the start of her employment since she left before the end of the year.

Vulcan requested $117,735.00 in fees for its...