“Any Dispute” Language Plus Incorporation of AAA Rules Manifested Clear and Unmistakable Intent to Delegate Arbitrability Decision to Arbitrator

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In an unpublished opinion, the Second District Court of Appeal held that an arbitration clause that states that “[a]ny dispute whatsoever arising out of or referable to this Agreement, . . . as to the arbitrator’s jurisdiction, or as to the ability to arbitrate any such dispute, shall be submitted to final and binding arbitration” manifested a clear and unmistakable intent to delegate the arbitrability decision to the arbitrator.  Gallo v. Youbet.com, Inc., 2012 WL 470426, No. B230274 (Feb. 14, 2012).

Background

Plaintiff Gallo is an attorney a former General Counsel of defendant Youbet.com, Inc. Id. He signed an employment agreement, which included the following arbitration clause:

Any dispute whatsoever arising out of or referable to this Agreement, including, without limitation, any dispute as to the rights and entitlements and performance of the parties under this Agreement or concerning the termination of Executive’s employment or of this Agreement or its construction or its validity or enforcement, or as to the arbitrator’s jurisdiction, or as to the ability to arbitrate any such dispute, shall be submitted to final and binding arbitration in Los Angeles, California, by and pursuant to the Labor Arbitration Rules of the American Arbitration Association with discovery proceedings pursuant to Section 1283.05 of the California Code of Civil Procedure.   The arbitrator shall be entitled to award any relief, which might be available at law or in equity, including that of a provisional, permanent or injunctive nature.   The prevailing party in such arbitration as determined by the arbitrator, or in any proceedings in respect thereof as determined by the person presiding, shall be entitled to receive its or his reasonable attorneys’ fees incurred in connection therewith.

Id.

Defendant moved to compel arbitration, and the trial court granted the motion except for two causes of action for alleged violation of FEHA.  Id. The trial court did not issue a written rationale for its ruling or orally explain its rationale at the hearing.  Id.

Discussion

The Second District held that the arbitration agreement clearly and unmistakably delegated the threshold issue of arbitrability to the arbitrator.  Id.

Here, the arbitration provision in the Employment Contract, on its face, manifests a clear and unmistakable intent to have the arbitrator determine issues of arbitability.   The parties specifically and unambiguously agreed that “[a]ny dispute whatsoever arising out of or referable to this Agreement, … as to the arbitrator’s jurisdiction, or as to the ability to arbitrate any such dispute, shall be submitted to final and binding arbitration.   In our view, this language, standing alone, leaves no doubt that Gallo and appellant intended the arbitrator (rather the court) to decide whether claims arising out of the Employment Agreement are subject to arbitration.

Id.

The court further found that the incorporation of the AAA rules, which include themselves include a delegation clause, also supported delegation.

This conclusion is bolstered by the fact that Gallo agreed to have the AAA Employment Dispute Resolution rules, which assign issues of arbitability to the arbitrator,FN8 apply to his dispute when he originally sought arbitration of his claims against appellant in 2009.

Id.

Accordingly, the court agreed with appellant that under the arbitration provision in Gallo’s Employment Agreement, the issue of whether the FEHA claims were subject to arbitration was a determination for the arbitrator to make rather than the lower court.  Id.

Judges and Attorneys

Associate Justice Fred Woods wrote the opinion for the Court.  Presiding Justice Dennis M. Perluss and Associate Justice Frank Y. Jackson concurred.

Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Charles L. Thompson and Michael J. Nader for Defendant and Appellant.

Rosa Kwong for Plaintiff and Respondent.

By CHARLES JUNG

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