Zions Management Services v. Record

2013 UT 36, 305 P.3d 1062, 737 Utah Adv. Rep. 58, 2013 WL 3190212, 2013 Utah LEXIS 89, 119 Fair Empl. Prac. Cas. (BNA) 1258
Utah Supreme Court·Decided June 25, 2013·No. 20110860·Published·Cited by 16 cases

Opinion

Chief Justice DURRANT,

opinion of the Court:

INTRODUCTION

11 Appellant Jeffrey S. Record seeks appellate review of the district court's order compelling him to arbitrate various claims that arose out of his employment with Appel-lee Zions Management Services Company (Zions). Mr. Record argues that the district court erred in compelling arbitration because the plain language of the arbitration clause in his employment contract allows him to pursue administrative remedies prior to submitting to arbitration. We agree. Accordingly, we vacate the district court's order compelling arbitration and remand for further proceedings.

BACKGROUND

T2 Mr. Record began working for Zions in February 1996. Throughout the course of his employment with Zions, and specifically in June 2007, Mr. Record signed various documents whereby he acknowledged receipt of the Zions Employee Handbook, which stipulated that any disputes arising out of his employment with Zions had to be resolved through mandatory, binding arbitration (Arbitration Agreement). In relevant part, the Arbitration Agreement stated:

Any legal controversy or claim arising out of your employment with [Zions], which is not otherwise governed by an arbitration provision, that cannot be satisfactorily resolved through negotiation or mediation, shall be resolved, upon election by you or [Zions], by binding arbitration pursuant to this arbitration provision and the code of procedures of the American Arbitration Association (AAA). ... Under this binding arbitration policy, an employee still has a right to file a claim with the EEOC, OSHA, or any other appropriate federal or state regulatory agency regarding a workplace issue. However, where permitted by law, binding arbitration, rather than the court system, is the process used for pursuing relief beyond the agency.

The Arbitration Agreement further stipulated that "[blecause employment with [Zions] involves interstate commerce, this binding arbitration agreement is made pursuant to, and is governed by, the Federal Arbitration Act."

T3 At some point during his employment, Mr. Record became acquainted with Emilie Tanner, a co-worker at Zions. According to Zions, Mr. Record and Ms. Tanner became romantically involved, and Zions claims that it received a number of complaints from other employees regarding the couple's behavior. Zions informed Mr. Record and Ms. Tanner of these complaints and encouraged them to maintain a professional demeanor while with each other at work. Unfortunately, neither Mr. Record nor Ms. Tanner heeded this counsel, as Zions terminated both of them on February 22, 2010, after another employee reported seeing them together, partially undressed, in the back of a dark, unused file room.

T4 After his termination, Mr. Record filed a "Charge of Discrimination" with the Utah Anti-Discrimination and Labor Division of the Utah Labor Commission (UALD), wherein he alleged that Zions had discriminated against him on the basis of his age, religion, gender, and association with a disabled individual. Mr. Record also alleged that Zions had retaliated against and harassed him in violation of federal and state law. UALD issued its Determination and Order on March 29, 2011, dismissing Mr. Record's discrimination claims because the "facts in the record, viewed in their entirety, indicate there is no reasonable cause to believe that [Mr. Record] was subjected to the discriminatory practices alleged."

*1065 T5 Pursuant to the "Appeal Rights of the Determination and Order," Mr. Record appealed UALD's decision to the Adjudication Division of the Utah Labor Commission (Labor Commission) on April 28, 2011. Zions responded by attempting to enforee the Arbitration Agreement in those proceedings by filing a motion to compel arbitration. The administrative law judge, however, determined that "[the Labor Commission lacks jurisdiction to enforce an Arbitration agreement between an employer and employee." But the judge also stated that "[ilf the respondent files a Court Order requiring the case to be arbitrated the Commission would follow the Court Order."

T6 Accordingly, and pursuant to both the Utah and Federal Arbitration Acts, 1 on June 14, 2011, Zions filed a "Motion to Compel Arbitration and Stay Judicial Proceedings" with the district court,. Specifically, Zions' motion sought an order compelling Mr. Ree-ord to arbitrate his discrimination claims and an order staying the Labor Commission's review of UALD's decision. The district court granted Zions' motion and ordered Mr. Record to submit to arbitration. The district court also ordered the Labor Commission "to proceed no further in resolving [Mr. Record's] claims."

T7 Pursuant to the district court's order, Zions attempted to dismiss Mr. Record's administrative proceeding by filing an "Order of Dismissal" before the Labor Commission on August 22, 2011. Despite its prior statement, however, the Labor Commission denied Zions' motion and instead insisted that "Itlhe District Court does not have jurisdiction to stay the Commission's proceedings for an employment discrimination claim" and refused to stay the proceeding. In light of this order, Mr. Record likewise refused to comply with the district court's order and instead pressed on with his appeal before the Labor Commission.

18 After failing to secure either Mr. Ree-ord's or the Labor Commission's compliance with the district court's order, Zions returned to the district court and filed a "Motion for Contempt Order" on September 12, 2011. In its motion, Zions requested that the district court hold Mr. Record in contempt for his willful violation of the district court's order compelling arbitration. A few days later, Mr. Record filed his Notice of Appeal from the district court's Order Compelling Arbitration.

1 9 Despite Mr. Record's Notice of Appeal, the district court granted Zions' contempt motion on September 30, 2011. The district court's order recognized, however, that Mr. Record's "conduct in refusing to comply with the [district] court's order is based upon the [Labor Commission's) Order and therefore may be legally privileged." Nevertheless, the district court ordered Mr. Record to "take all steps reasonably necessary to stay ... the proceedings before the [Labor Commission]."

10 Then, on October 6, 2011, the Utah Labor Commissioner modified the administrative law judge's decision to deny Zions' Order of Dismissal, holding that "until such time as the Order [Compelling Arbitration] is withdrawn, overturned, or superseded, the Labor Commission will comply with its terms." The Commissioner then stayed the proceedings related to Mr. Record's claims. Mr. Record amended his notice of appeal on October 81, 2011, to include the district court's contempt order and now asks us to review both the Order Compelling Arbitration and the Contempt Order. We have jurisdiction pursuant to section 78A-3-102(8)(j) of the Utah Code.

STANDARD OF REVIEW

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Zions Management Services v. Record, 2013 UT 36, 305 P.3d 1062, 737 Utah Adv. Rep. 58, 2013 WL 3190212, 2013 Utah LEXIS 89, 119 Fair Empl. Prac. Cas. (BNA) 1258 (Utah 2013).

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