Horne v. Los Alamos National Security, L.L.C.

2013 NMSC 4, 2013 NMSC 004, 3 N.M. 436
CourtNew Mexico Supreme Court
DecidedJanuary 31, 2013
DocketDocket 33,135
StatusPublished
Cited by43 cases

This text of 2013 NMSC 4 (Horne v. Los Alamos National Security, L.L.C.) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Horne v. Los Alamos National Security, L.L.C., 2013 NMSC 4, 2013 NMSC 004, 3 N.M. 436 (N.M. 2013).

Opinion

OPINION

BOSSON, Justice

{1} This case arises from an employee grievance at Los Alamos National Laboratory (LANL), operated by Los Alamos National Security, LLC. After succeeding in arbitration, the employee, John Horne, filed a lawsuit in state district court in 2008, in which he alleged more expansive claims arising out of the same subject matter covered in the arbitration agreement. LANL objected, claiming that it should not have to defend against claims that either were subject to arbitration or were waived by the arbitration agreement. Accordingly, we discuss the consequences that follow when an employee voluntarily contracts to arbitrate grievances and what the employee must do to preserve a subsequent lawsuit if that is his intention. In this case we side with the district court’s ruling in favor of LANL, and in so doing, reverse the Court of Appeals.

BACKGROUND

{2} Horne, a twenty-year laboratory employee, received a formal written reprimand based on an alleged security infraction at LANL that concerned a failure to follow security standards regarding Classified Removable Electronic Media (CREM). In 2003, while preparing for a conference, Horne obtained twelve bar codes with which to label CREM that he intended to create. Despite being issued twelve bar codes, Horne generated only ten items of CREM. Unknown to Horne, the LANL classified electronic media custodian entered all twelve bar codes into the electronic media tracking system. When Horne returned the ten CREM items he had created, the media custodian failed to remove the two unused bar codes from the tracking system, making it appear that Horne had generated twelve items of CREM instead of only ten and was improperly retaining two.

{3} In July 2004, LANL discovered that two items of CREM were allegedly missing. Following an internal audit, LANL learned that the two extra bar codes associated with the CREM had been entered into the tracking system by mistake and that, in fact, nothing was missing. Despite this finding, Horne was suspended without pay, received a written reprimand, as well as a security infraction for his involvement with the incident.

{4} Following these events, on January 24, 2005, Horne submitted an internal laboratory complaint resolution form and requested a hearing. As grounds for a formal hearing, Horne selected “Salary decrease, withholding of salary increase, demotion, or suspension without pay” and “Retaliation for using AM 111 or any other policy that protects employees from retaliation ...” on the complaint resolution form. 1 Attached to this form was Horne’s own statement capturing his complaint as follows:

This situation has had severe consequences in my personal life and has caused irreparable harm to my reputation and to my ability to advance in the career path that I had chosen to pursue. The association of my good name to the unsubstantiated claims and unethical actions of Pete Nanos, Kevin Jones, Mary Hockaday, Mike Irving, et al. 2 has created a hostile work environment for me as well as essentially destroying any hope for future advancement. This shameless attempt to validate the aforementioned acts and accusations through official sanction is not only unethical but is in violation of AMI 11, AMI 12, and AM729.

In his grievance, Horne sought: (1) removal of the letter of reprimand from his record, (2) reinstatement of his lost compensation, benefits, and vacation time, and (3) reimbursement of any fees he incurred. In the months after submitting his complaint, from February 2005 to May 2005, Horne had other negative employment experiences at LANL. For example, Horne alleged that one of the LANL directors called him a “fool” and that another LANL official told Horne he “needed to prove himself.” All these negative employment experiences stemmed from the alleged missing CREM incident.

{5} More than two years after signing the complaint resolution form, on May 9, 2007, Horne and LANL entered into a Formal Hearing Agreement to arbitrate Horne’s grievances (hereafter “arbitration agreement”). Just over a month later, on June 21, 2007, Horne signed an American Arbitration Association (AAA) demand form giving notice to LANL that the arbitration agreement was being sent to the AAA to “commence administration of the arbitration.”

{6} The arbitration took place on December 11, 2007. The arbitrator characterized the issue to be arbitrated as whether Horne had acted reasonably in executing his duties and whether the discipline LANL imposed on Horne for the CREM infraction was “entitled to conclusive deference.” Horne was completely successful at arbitration. The arbitrator found that “the decisions to find an ‘infraction’ on the part of Mr. Horne, and to administer discipline on that basis are wholly unreasonable.”

{7} On February 20, 2008, the arbitrator issued his interim award. The award included a detailed and comprehensive account of the CREM incident. The arbitrator concluded that “none of the conclusions of the decision makers in this matter meet the standard of objective reasonableness . . .” and “[tjhe decisions are unsupported by any evidence showing that Mr. Horne was anything other than a ‘reasonable man’ in his handling of CREM during October, 2003.” Before issuing his award, the arbitrator cited laboratory administrative policy, AM 111.16, stating that “‘[a] hearing officer ... is limited to restoring any pay, benefits or rights lost as a result of the action taken and may, in his or her discretion, award costs, expenses, and attorneys fees in favor of the prevailing party.’”

{8} Ultimately, the arbitrator awarded Horne “all wages and benefits lost as a result of discipline in connection with this matter” as well as attorney’s fees. The arbitrator also directed LANL “to restore any loss of rights which Mr. Horne may have sustained as a result of the unfounded ‘infraction’ and the adverse personnel action arising from the report of the infraction.” Apparently satisfied with the award, Horne did not move to vacate or modify the award under the New Mexico Uniform Arbitration Act. See NMSA 1978, §§ 44-7A-24 & -25 (2001) (permitting a party to petition the court for modification of an arbitration award on certain limited grounds).

{9} Nearly ten months later, on December 12, 2008, Horne filed a lawsuit against LANL and against individual laboratory employees alleging eight claims. Horne’s complaint alleged: (1) retaliation under the New Mexico Fraud Against Taxpayers Act, (2) breach of contract, (3) breach of implied covenant of good faith and fair dealing, (4) intentional infliction of emotional distress, (5) constructive discharge, (6) tortious interference with existing contractual relations, (7) civil conspiracy, and in the alternative, (8) prima facie tort. Horne sought both compensatory and punitive damages as well as equitable relief and attorney’s fees.

{10} LANL responded in district court with a motion to dismiss or in the alternative for summary judgment.

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Bluebook (online)
2013 NMSC 4, 2013 NMSC 004, 3 N.M. 436, Counsel Stack Legal Research, https://law.counselstack.com/opinion/horne-v-los-alamos-national-security-llc-nm-2013.