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Montalvo v. SBH-EL Paso, LLC

United States District Court, D. New Mexico

June 29, 2018

JORGE MONTALVO, Plaintiff,
v.
SBH-EL PASO, LLC d/b/a PEAK BEHAVIORAL HEALTH SERVICES, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court on “Defendant's Opposed Motion to Dismiss and Compel Arbitration, ” filed February 22, 2018. (Doc. 6). Plaintiff filed his response on March 8, 2018, and Defendant filed its reply on March 21, 2018. (Docs. 8 and 10). Having reviewed the parties' briefing and exhibits, and the relevant law, the Court grants Defendant's motion to dismiss and compels Plaintiff to arbitrate his employment claims.

         I. Background

         Plaintiff is a former employee of Defendant. (Doc. 6) at 1, ¶ 1; (Doc. 8) at 1, ¶ 1. On October 22, 2013, Plaintiff signed an “Applicant's Statement & Agreement” (“Agreement”) form provided by Defendant, which was the last page of his employment application. (Doc. 6-1) at 4; (Doc. 8) at 3. This form contains, amongst other provisions, an arbitration provision. (Doc. 6-1) at 4. The arbitration provision explains:

I also understand that the Company promotes a voluntary system of alternative dispute resolution which involves binding arbitration to resolve all disputes that may arise out of the employment context. Because of the mutual benefits (such as reduced expense and increased efficiency) which private binding arbitration can provide both the Company and myself, I acknowledge that the Company and I will utilize binding arbitration to resolve all disputes that may arise out of the employment context.

Id. The arbitration provision concludes with the following: “I understand that by voluntarily agreeing to this binding arbitration provision, both I and the Company give up our rights to trial by jury. I further agree to pursue any claims individually and not as part of any class or collective action.” Id.

         The Agreement also contains an “at-will” provision. Id. This provision explains that Plaintiff's employment is “terminable at-will, is for no definite period, and [his] employment and compensation may be terminated by the Company (employer) at any time and for any reason whatsoever, with or without good cause at the option of either the Company or myself.” Id. The at-will provision further provides that “[n]o implied, oral, or written agreements contrary to the express language of this agreement are valid unless they are in writing and signed by the President of the Company (or majority owner or owners if Company is not a corporation).” Id.

         On November 4, 2013, Plaintiff signed an “Acknowledgement of Receipt of Strategic Behavioral Health's Employee Handbook” (“Acknowledgement”). Id. at 5. The Acknowledgement states that the accompanying “Handbook serves only as a guide and under no circumstances can this Handbook create a contract of employment between SBH and me.” Id. The Acknowledgement references at-will and arbitration sections in the accompanying Handbook. The Acknowledgment goes on to note that

I understand that all provisions, limitations, and exclusions related to employment are not and cannot be covered in this Handbook and SBH has the exclusive right at its sole discretion to deviate at any time from the provisions stated in this Handbook and/or to change, modify or terminate any of its provisions, except the ‘At Will' employment and Arbitration provisions.

Id. The Acknowledgement concludes with a paragraph titled, “Agreement to Arbitrate.” Id. This paragraph explains: “I understand that the Handbook provides a general outline of the arbitration process, but there is a separate Arbitration Agreement that outlines all terms and conditions of the arbitration process that will exist between SBH and me regarding employment related disputes.” Id.

         Plaintiff alleges he worked for Defendant until his termination effective March 1, 2017. (Doc. 1) at 4. Plaintiff then filed “Plaintiff's Original Complaint” on January 16, 2018, in this Court. (Doc. 1). Plaintiff challenges the termination of his employment in this lawsuit.

         Defendant moves to dismiss this case and compel arbitration, arguing that the Agreement's arbitration provisions constitute a valid and enforceable arbitration agreement and Plaintiff's claims fall within the scope of the arbitration agreement. In response, Plaintiff argues the motion should be denied because the agreement to arbitrate is illusory and he should be allowed discovery of the Handbook and other hiring documents.

         II. Legal Standard

         Under the Federal Arbitration Act (“FAA”), a court must enforce an agreement to arbitrate except for “such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. “[I]f a federal district court determines that a suit is subject to an arbitration agreement, it shall, on application of a party, stay the litigation pending arbitration.” Walker v. BuildDirect.com Techs., Inc., 733 F.3d 1001, 1004 (10th Cir. 2013) (citing id. at § 3). In addition, the Court will “make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.” Id. (citing 9 U.S.C. § 4).

         “[T]here is a strong federal policy encouraging the expeditious and inexpensive resolution of disputes through arbitration.” Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 39 F.3d 1482, 1488-1489 (10th Cir. 1994) (citation omitted). Similarly, “[t]he legislature and the courts of New Mexico have expressed a strong policy preference for resolution of disputes by arbitration.” United Tech. & Res., Inc. v. Dar Al Islam, 1993-NMSC-005, ¶ 11, 115 N.M. 1 (internal quotation marks and citation omitted). “Of course, a prerequisite to compelling arbitration is the existence of a valid agreement to arbitrate.” Salazar v. Citadel Commc'ns Corp., 2004-NMSC-013, ¶ 8, 135 N.M. 447 (citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985)); see ...


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