Ramirez-De-Arellano v. American Airlines

• Court: Court of Appeals for the First Circuit
• Decided: December 22, 1997
• Docket: 97-1508
• Status: Published

Opinion

USCA1 Opinion

United States Court of Appeals

                                For the First Circuit

                                 ____________________


No. 97-1508



            JOSE RAMIREZ-DE-ARELLANO, MARTA SUAREZ DE RAMIREZ DE ARELLANO

                  AND THE CONJUGAL PARTNERSHIP CONSTITUTED BY THEM,



                               Plaintiffs, Appellants,



                                          v.



                               AMERICAN AIRLINES, INC.,



                                 Defendant, Appellee.



                                 ____________________



                     APPEAL FROM THE UNITED STATES DISTRICT COURT



                           FOR THE DISTRICT OF PUERTO RICO



                   [Hon. Daniel R. Dominguez, U.S. District Judge]
                                              ___________________



                                 ____________________



                                        Before



                                 Stahl, Circuit Judge,
                                        _____________

                            Godbold,* Senior Circuit Judge
                                      ____________________

                            and Cyr, Senior Circuit Judge.
                                     ____________________



                                 ____________________



            Carlos A. Del Valle Cruz on brief for appellants.
            ________________________

            Luis  D. Ortiz  Abreu,  Vivian  Nunez,  and  Goldman  Antonetti  &
            _____________________   _____________        _____________________

        Cordova on brief for appellee.
        _______

                                 ____________________



                                  December 22, 1997

                                 ____________________

        _____________________

        *Of the Eleventh Circuit, sitting by designation.



Stahl,  Circuit  Judge.  Jose Ramirez  de  Arellano
                      Stahl,  Circuit  Judge
                      _____



            ("Ramirez"),  together  with his  wife,  child,  and conjugal



            partnership,  appeal  from  the  district  court's  grant  of



            summary judgment  to American Airlines  ("American") in  this



            wrongful discharge  and retaliatory dismissal  action brought



            primarily  under  the  Fair Labor  Standards  Act  (FLSA) and



            Puerto Rico law.1  After  carefully reviewing the record  and



            considering  Ramirez's   arguments,  we  conclude   that  the



            district   court   properly  awarded   summary   judgment  to



            defendant.  We  prefer, however, not to rely  on that portion



            of the district court's order  which gave res judicata effect
                                                      ___ ________



            to  American's  internal grievance  procedure.   Instead,  we



            choose to  affirm on the  grounds that Ramirez  was dismissed



            for just cause under Puerto  Rico law and that Ramirez failed



            to set forth  sufficient evidence to trigger a presumption of



            discrimination or retaliation on the  part of American.   See
                                                                      ___



            Polyplastics,  Inc. v. Transconex, Inc., 827 F.2d 859, 860-61
            ___________________    ________________



            (1st  Cir.  1987)  (explaining that  an  appellate  court can



            affirm  on  any  independent  ground  made  manifest  in  the



            record).


____________________



            1.   Ramirez's  original district  court claims  included the

            FLSA claim  for retaliatory dismissal,  an age discrimination

            claim   under  Puerto  Rico  law,  claims  for  wrongful  and

            retaliatory  dismissal  under  local  severance  law,  and  a

            defamation claim.   Two of  these claims are not  included in

            the  present appeal:  the  age  discrimination  claim,  which

            Ramirez voluntarily  dismissed,  and  the  defamation  claim,

            which the district court rejected on grounds of privilege. 



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American  employed  Ramirez  from  1984-1997  as  a



            ticket agent,  and, later, as  a baggage handler.   After two



            written performance advisories,  American terminated Ramirez,



            citing  as reasons  his failure  to follow  company time  and



            attendance procedures and  his attempt to  circumvent company



            rules to his own benefit.



                      Following  his   dismissal,  Ramirez   submitted  a



            written  grievance  to  American, pursuant  to  the  internal



            grievance  procedure  set  forth  in the  employee  handbook.



            American  upheld the termination and denied Ramirez an appeal



            on  the basis  of tardy  application.   Ramirez  subsequently



            filed suit in Puerto Rico district court, and now appeals the



            order of  summary judgment  rejecting the  FLSA claim  on the



            merits  and  all  other  claims  under  the  doctrine of  res
                                                                      ___



            judicata.   See  Ramirez v.  American Airlines  Inc.,  957 F.
            ________    ___  _______     _______________________



            Supp.  359  (D.P.R.   1997)  (equating  American's  grievance



            procedure with a binding arbitration).



                      We  review the award  of summary judgment  de novo,
                                                                 __ ____



            and  draw  all  reasonable  inferences  in  Ramirez's  favor.



            Grenier v.  Vermont Log Bldgs.,  Inc., 96 F.3d 559,  562 (1st
            _______     _______ _________________



            Cir.   1996).    The   record  is  replete   with  documented



            illustrations of Ramirez's  performance problems and repeated



            failure  to   follow  American's  policies   and  procedures.



            Moreover, American had given Ramirez two  official advisories



            prior  to his dismissal.   Thus,  there can  be no  basis for


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inferring that American's stated reason for the discharge was



            wrongful or pretextual under federal law.



                      The result is  no different under Puerto  Rico law,



            which provides that an employee  is not entitled to statutory



            wrongful discharge indemnity  if the employee  was terminated



            for just cause.  P.R.Laws Ann.tit 29   185 et seq. 
                                                       __ ____



                      Under  Puerto Rico  law, just  cause for  dismissal



            includes  repeated violations  of  the  employer's rules  and



            regulations,  provided that, as  here, the employee  has been



            provided with  a written  copy of the  relevant policies  and



            procedures.    See P.R.  Laws Ann.  tit 29    185b;  see also
                           ___                                   ___ ____



            Menzel  v. Western  Auto Supply  Co., 662  F. Supp.  731, 744
            ______     _________________________



            (D.P.R. 1987), aff'd, 848 F.2d 327 (1st Cir. 1988).  As noted
                           _____



            above,  the  record  here  admits  of  only  one  conclusion:



            Ramirez's  repeated  transgressions  of  company  policy  and



            procedures provided American with just cause for termination.



            Summary judgment  was,  therefore, properly  granted  to  the



            defendant.



                      Although summary judgment  was properly awarded, we



            have  some doubt  about  the  district  court's  ruling  that



            American's internal company grievance procedure, set forth in



            its employee  handbook, is  the legal  equivalent of  binding



            arbitration  and,  therefore,   bars  judicial  resolution of



            potential  statutory and constitutional  claims.   As Ramirez



            points  out, there is  little in  the way  of back  and forth


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bargaining  between a  company  and  its  employees  when  an



            employment  handbook   is  created,  making   this  situation



            distinguishable  from   the  arbitration   provisions  of   a



            collective  bargaining  agreement.    This  is  especially so



            where, as  here, the handbook  expressly provides that  it is



            not  a  contract  between  the  parties  and  is  subject  to



            unilateral amendments by American at any time.



                        Although the district court was correct in noting



            the   existence   of  a   strong   federal   policy  favoring



            arbitration, the threshold question for review must always be



            whether the agreement to arbitrate was, indeed, voluntary and



            intentional.    Mitsubushi  Motors Corp.  v. Solar  Chrysler-
                            ________________________     ________________



            Plymouth  Inc.,  473  U.S.  614,   626  (1985).    Given  the
            ______________



            apparently  unilateral  and  adhesive  nature  of  American's



            employee  handbook, we  do  not  embrace  the  argument  that



            Ramirez voluntarily waived his right to pursue  his claims in



            federal court.2



                                
            ____________________



          2.    We note  that two  other Circuits  have recently  addressed this

          issue.   In Nelson v.  Cyprus Bagdad Copper  Corp., 119 F.3d  756 (9th
                      ______     ___________________________

          Cir. 1997), the Ninth Circuit held that signing an acknowledgment form

          which provided  that the  employee agrees to  "read and  understand" a

          revised employee handbook  did not serve to  bind the employee to  the

          handbook's  internal grievance  provisions.   Id. at  761.   The Ninth
                                                        ___

          Circuit reasoned that: 



                    Merely  signing  the  form  did  not  in  any  way

                    constitute a 'knowing agreement to arbitrate,' and

                    thereby  to surrender  [the employee's]  statutory

                    right [under  the ADA] to  a judicial forum .  . .

                    Any bargain to waive the right to a judicial forum

                    for civil  rights claims, including  those covered

                    by  the   ADA,  in  exchange  for   employment  or



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Moreover,  we   have  strong  concerns   about  the



            fundamental  fairness  of  giving  preclusive effect  to  the



            particular grievance  procedure  in this  case.   Arbitration



            proceedings must meet "the minimal requirements of fairness--



            adequate notice, a hearing on the evidence, and  an impartial



            decision  by the arbitrator."   Sunshine Mining Co. v. United
                                            ___________________    ______



            Steelworkers, 823 F.2d  1289, 1295 (9th Cir.  1987) (internal
            ____________



            quotations and citations omitted); Bowles Fin. Group, Inc. v.
                                               _______________________



            Stifel, Nicolaus &  Co., Inc., 22 F.3d 1010,  1013 (10th Cir.
            _____________________________



            1994).



                      First, with respect to notice, we are not convinced



            that  Ramirez's application  for a hearing  was appropriately



            denied  for untimeliness because it appears that American may


____________________



                    continued  employment, must  at least  be express:

                    the  choice must  be  explicitly presented  to the

                    employee and the employee must explicitly agree to

                    waive the specific right in question.  Id. at 761-
                                                           ___

                    62 (internal quotations and citations omitted). 



               Similarly,  the  Eighth  Circuit  recently  instructed  that  the

          absence of  such an express waiver precludes  a finding that there has

          been a  knowing agreement.   See Patterson v. Tenet  Healthcare, Inc.,
                                       ___ _________    _______________________

          113  F.3d 832, 835  (8th Cir. 1997).   The Patterson  court upheld the
                                                     _________

          employee handbook arbitration provision because the arbitration clause

          was both separate  and distinct from other provisions  in the handbook

          and was introduced by the heading, "IMPORTANT!  Acknowledgment Form." 

          Id.   Unlike other  provisions  within the  handbook, the  arbitration
          ___

          clause  used  contractual  language, such  as  "I  understand"  and "I

          agree."  Id.   Moreover, the form  was signed by the employee, removed
                   ___

          from the handbook,  and given to the Human Resources  Department to be

          stored in the employee's personnel file.  Id.  It was only because the
                                                    ___

          court  deemed  these   actions  in  toto  sufficient  to   render  the
                                          __  ____

          arbitration  clause "separate and distinct"  from the remainder of the

          handbook,  that  the  court  held  that  the  internal  grievance  and

          arbitration clause constituted an enforceable contract.  Id.       
                                                                   ___



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have been equally, if not more, to blame for the late filing.



            Second, there was no opportunity  for discovery.  See Hoteles
                                                              ___ _______



            Condado Beach v. Union de Tronquistas Local 901, 763 F.2d 34,
            _____________    ______________________________



            39 (1st Cir. 1985)(instructing that an arbitrator must afford



            each party an  adequate opportunity to present  both evidence



            and  argument); see also Williams  v. Katten, 1996 WL 717447,
                            ___ ____ ________     ______



            at  *4-5,  (N.D.  Ill.  Dec.  9,  1996)  (discussion  of  the



            permissible parameters of limited discovery in an arbitration



            proceeding).     Third,  the   decision  maker   was  not   a



            disinterested  party,  but  rather,  an  American  managerial



            employee.   See  Employers  Ins. of Wausau v.  National Union
                        ___  _________________________     ______________



            Fire    Ins.   Co.,   933   F.2d   1481,   1491   (9th   Cir.
            __________________



            1991)(stipulating  that  fair  arbitration  proceedings  must



            include non-biased  decisionmakers).    Finally,  the  record



            reveals  that Ramirez  was actually  denied any  review  by a



            hearing  officer  or  panel,  which, following  the  district



            court's  analysis, effectively rendered all of his claims res
                                                                      ___



            judicata on the basis of one manager's view.3
            ________


____________________



            3.   This is a distinctly  different scenario from Garcia  v.
                                                               ______

            American Airlines,  Inc., 673 F. Supp. 63  (D.P.R. 1987), the
            ________________________

            case  upon which  the  district  court  relied  for  its  res
                                                                      ___

            judicata ruling. In Garcia, the employee utilized step two of
            ________            ______

            American's  grievance  procedure  and,  while represented  by

            counsel, had  an  opportunity  to  appeal his  dispute  to  a

            stateside hearing officer.   Id. at 66. In  contrast, Ramirez
                                         ___

            was denied any opportunity to present his claims to a hearing

            officer (step  two) or  panel (step  three); he  simply spoke

            with the General Manager, and was denied any further appeal. 



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Because American had ample just cause to terminate



            Ramirez's  employment  and   Ramirez  presented  insufficient



            evidence   to  raise  an   inference  of   discrimination  or



            retaliation,  we  uphold  the award  of  summary  judgment to



            American.



                      Affirmed.  No costs.
                      Affirmed
                      ________


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