United States District Court, E.D. California
HARRISON Y. HARRIS, Plaintiff,
v.
HALLIBURTON COMPANY, et al., Defendants.
ORDER ADOPTING FINDINGS AND RECOMMENDATIONS AND
GRANTING DEFENDANTS’ MOTION TO COMPEL ARBITRATION (ECF
NO. 20)
LAWRENCE J. O’NEILL UNITED STATES CHIEF DISTRICT JUDGE
Plaintiff
Harrison Y. Harris (“Plaintiff”) commenced this
action against defendants Halliburton Company and Halliburton
Energy Services, Inc.[1] (collectively, “Defendants”),
bringing nine claims for race and gender discrimination,
harassment and retaliation under Title VII of the Civil
Rights Act of 1964 (“Title VII”), the California
Fair Employment and Housing Act, and various California labor
statutes arising from events that occurred while he was
employed by defendant Halliburton Energy Services, Inc. ECF
No. 1.
Defendants
filed a motion to compel arbitration on the basis that
Plaintiff’s obligation to arbitrate his claims is
governed by and enforceable under the Federal Arbitration
Act. ECF No. 10. This matter is now before the Court upon
consideration of the Amended Findings and Recommendations
(“F&Rs”) issued by Magistrate Judge Thurston,
in which she recommends that Defendants’ motion be
granted. ECF No. 20. Plaintiff filed Objections, ECF No. 21,
and Defendants filed a Response, ECF No. 22.
In
accordance with the provisions of 28 U.S.C. §
636(b)(1)(C), this Court has conducted a de novo
review of this case. Having carefully reviewed the entire
file, the Court finds the F&Rs to be supported by the
record and by proper analysis, and that Plaintiff’s
Objections either repeat arguments that the F&Rs have
correctly rejected or reflect a misunderstanding both of the
relevant facts of this case and the reasoning set forth in
the F&Rs.
First,
Plaintiff takes issue with the Magistrate Judge’s
finding that he knowingly waived his right to a judicial
forum for his claims. ECF No. 21 at 4-5. Specifically, he
reiterates his claim that he was unaware that he had agreed
to submit disputes arising out of his employment to binding
arbitration pursuant to Defendants’ Dispute Resolution
Program (“DRP”), stating that Defendants never
provided him with a copy of the DRP and arguing that this
omission renders the DRP procedurally unconscionable.
Id.
Plaintiff’s
arguments are unavailing. The Magistrate Judge’s
determination as to Plaintiff’s waiver of his claims is
supported by a recent Ninth Circuit decision, Ashbey v.
Archstone Property Management, Inc., 785 F.3d 1320,
1325-26 (9th Cir. 2015). In Ashbey, the Ninth
Circuit held that a plaintiff had knowingly waived his right
to a judicial forum for his Title VII and equivalent
state-law claims where he signed an acknowledgment form that
stated “I understand that it is my responsibility to
understand the Archstone Company Policy Manual, including the
Dispute Resolution Policy, and to adhere to all of the
policies contained herein.” Id. The Ninth
Circuit further noted “[t]hat the acknowledgment did
not list the terms of the Policy is not fatal to the
Policy’s enforcement, ” because “[t]he full
text of the Policy was at [the plaintiff]’s fingertips;
he acknowledged he had received directions on how to access
both the Manual and the Dispute Resolution Policy contained
in the Manual.” Id. Similarly, in this case,
Plaintiff acknowledged that he “[could] obtain a copy
of the DRP from the Human Resources Department, ” (ECF
No. 10-2 at 9 & 28), and the full text of the DRP was
accessible to Plaintiff, as the sworn affidavit of
Halliburton’s Senior Human Resources Manager Stanley
Wells, indicates that “[a]s a Halliburton employee,
Plaintiff had access to the Halliburton DRP website via the
company intranet. This site includes the DRP materials and
documents describing the DRP process, including the
obligation to submit disputes over asserted legal rights to
binding arbitration. This website also serves as a portal for
assessing DRP staff with any questions an employee may have
about the DRP.” ECF No. 10-2 at 2. Ashbey
therefore confirms the F&Rs’ conclusion that
Plaintiff made a knowing waiver of his right to a judicial
forum for his claims.
Next,
Plaintiff argues that the Magistrate Judge did not properly
analyze the substantive unconscionability of the DRP
provisions on attorney’s fees and injunctions. ECF No.
21 at 5-7. With regard to the DRP’s provision on
attorney’s fees, Plaintiff argues that the F&Rs
failed to account for the possibility that the DRP could
permit Defendants to recover costs that it could not recover
under California law. Id. at 5-6. However, a plain
reading of the relevant provision in the DRP indicates that
the recovery of attorney’s fees and cost is restricted
to only the employee or applicant-in other words, the DRP
does not permit Defendants to recover costs. ECF No. 10-2 at
57 (Paragraph 8.D, “Notwithstanding the provisions of
the preceding subsection, in an proceeding before an
arbitrator, the arbitrator, in the arbitrator’s
‘discretion, may allow a prevailing Employee or
Applicant reasonable attorney’s fees, expert
witness’ fees, and other costs which may be allowable
under the Federal Rules of Civil Procedure as part of the
award.”).
As for
the DRP’s provision on injunctions, Plaintiff makes the
unsupported assertion that “the DRP does not apply to
requests for injunctive orders, e.g., to protect
confidentiality of company information or protect trade
secrets, which are the claims Halliburton is likely to bring
against its employees.” ECF No. 21 at 7. Again,
Plaintiff misinterprets the plain text of the DRP, which
clearly permits either party to seek an injunction in court.
ECF No. 10-2 at 54 (“any court with jurisdiction over
the parties may issue any injunctive orders (including
preliminary injunctions) if the necessary and equitable
requirements under applicable law are met.”). While
acknowledging that “courts generally do reject
contractual provisions that would have the practical effect
of being invoked only, or far more often than the employer,
” see Davis v. Gazillion, No. C 10-743 RS,
2010 WL 2740002, at *2 (N.D. Cal. July 12, 2010), the Court
sees no basis for Plaintiff’s assertion that the
DRP’s injunction provision is more likely to be used by
Defendants. Furthermore, as Defendants note in their
Response, the provision is completely irrelevant here, as
neither Defendants nor Plaintiff seek an injunction in this
matter. ECF No. 22 at 6.
Based
on these two erroneous assertions, Plaintiff then contends
that the DRP is so “permeated with
unconscionability” that it cannot be saved by severing
the unconscionable provisions. ECF No. 21 at 7-9. However, as
the F&Rs correctly find, only two provisions in the DRP
can be deemed unconscionable: the provision barring
representative claims and the provision regarding
Defendants’ unilateral termination and amendment of the
DRP. ECF No. 20 at 17, 21. Moreover, both provisions are
irrelevant to this case, as Plaintiff has not brought any
representative claims (see ECF No. 1), and it is
impossible for the unilateral termination and amendment
provision to apply, because the plain text of this provision
indicates that any amendment or termination of the DRP would
not apply to disputes that arose prior to amendment or
termination (see ECF No. 10-2 at 56). As the
F&Rs note, these provisions can be severed from the DRP.
See, e.g., Davis, 2010 WL 2740002, at *3
(granting a motion to compel providing that “[t]he
final sentence of Paragraph C and Paragraph D are stricken
from the arbitration agreement between the parties.”);
see also Cal. Civ. Code § 1599 (“Where a
contract has several distinct objects, of which is one at
least is lawful, and one at least is unlawful, in whole or in
part, the contract is void as to the latter and valid as to
the rest.” Because the vast majority of the DRP is not
unconscionable, the F&Rs are correct in finding that the
two unconscionable provisions may be severed and that the DRP
is enforceable.
Finally,
Plaintiff objects to the Magistrate Judge’s finding
that the Franken Amendment and Executive Order 13673 do not
apply in this case. ECF No. 21 at 9-10. The Franken Amendment
precludes the Department of Defense from entering a contract
in excess of $1, 000, 000 unless the contractor agrees not to
“take any action to enforce any provision of an
existing agreement with an employee or independent contractor
that mandates that the employee or independent contractor
resolve through arbitration any claim under title VII of the
Civil Rights Act of 1964 or any tort related to or arising
out of sexual assault or harassment, including battery, [and]
intentional infliction of emotional distress.”
Pub.L. No. 111-118, § 8116, 123 Stat. 3409, 3454-3455
(2010). Similarly, Executive Order 13673, which President
Obama Dated: July 31, 2014, provides in relevant part, that
[All Federal] [a]gencies shall ensure that for all contracts
where the estimated value of the supplies acquired and
services required exceeds $1 million, provisions in
solicitations and clauses in contracts shall provide that
contractors agree that the decision to arbitrate claims
arising under title VII of the Civil Rights Act of 1964 or
any tort related to or arising out of sexual assault or
harassment may only ...