Harley Marine Services, Inc. & Olympic Tug & Barge, Inc., V. Sven Christensen
81233-5
| Wash. Ct. App. | Jun 28, 2021Background
- In Dec. 2005 Sven Christensen applied for a port captain job with Olympic Tug & Barge and initialed nine preemployment certifications, including a binding arbitration clause; he signed an acknowledgment agreeing to be bound by the application terms.
- Christensen was hired as port captain (Jan. 1, 2006), promoted to general manager later in 2006, and in March 2017 became regional vice president without completing a new application.
- In Oct. 2018 Christensen executed a separate employment agreement with Harley’s CEO; that 2018 agreement contained no arbitration clause and did not expressly incorporate or supersede the 2005 application.
- HMS sued Christensen in Sept. 2019; Christensen counterclaimed for breach of the 2018 agreement and torts (defamation, false light, blacklisting).
- HMS moved to compel arbitration of the counterclaims under the 2005 arbitration provision; the trial court denied the motion, ruling the 2005 arbitration clause applied only to the port captain position.
- HMS appealed; the Court of Appeals affirmed, holding the arbitration agreement was limited to the position applied for and did not cover Christensen’s later vice president employment or the 2018 agreement.
Issues
| Issue | Plaintiff's Argument (HMS) | Defendant's Argument (Christensen) | Held |
|---|---|---|---|
| Whether the 2005 application arbitration clause applies to Christensen’s later roles (GM, RVP) | The certifications use broad "employment" language and thus bind Christensen in any subsequent Olympic/HMS role | The application expressly limited itself to the position applied for, so the certifications (including arbitration) only applied to the port captain role | The clause was limited to the port captain position; did not cover later employment |
| Whether the court erred by deciding arbitrability instead of an arbitrator | Court should enforce arbitration and let arbitrator decide scope/questions of arbitrability | Court must first determine whether a valid arbitration agreement exists and applies to the dispute | Court correctly resolved whether a valid agreement covered the later role; it did not reach scope/arbitrability because agreement didn't apply |
| Whether the 2018 employment agreement required arbitration or superseded the 2005 application | The 2018 agreement implicitly adopted or did not displace the 2005 arbitration terms | The 2018 agreement had no arbitration clause and did not incorporate the 2005 application; 2005 terms never applied to RVP role | Record did not support that the 2018 agreement integrated or superseded the 2005 application; court found 2005 terms never applied to the 2018 role |
Key Cases Cited
- Zuver v. Airtouch Commc’ns, Inc., 153 Wn.2d 293 (2004) (standard of review and principles for motions to compel arbitration)
- Heights at Issaquah Ridge Owners Ass’n v. Burton Landscape Grp., Inc., 148 Wn. App. 400 (2009) (court determines existence of an agreement to arbitrate)
- Peninsula Sch. Dist. No. 401 v. Pub. Sch. Emps. of Peninsula, 130 Wn.2d 401 (1996) (court’s duty to decide whether parties agreed to arbitrate)
- Kloss v. Honeywell, Inc., 77 Wn. App. 294 (1995) (application of contract interpretation rules to employment agreements)
- Hearst Commc’ns, Inc. v. Seattle Times Co., 154 Wn.2d 493 (2005) (objective theory of contract interpretation: intent from objective manifestations and ordinary meaning)
- Martinez v. Miller Indus., Inc., 94 Wn. App. 935 (1999) (factors for ascertaining intent: contract as a whole, subject matter, conduct)
- Tanner Elec. Coop. v. Puget Sound Power & Light, 128 Wn.2d 656 (1996) (factors to consider in contract interpretation)