Amichai Ohring v. Unisea, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 20, 2022
• Docket: 21-35591
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAY 20 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT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.