[00:00:01] Speaker 01:
Good morning, Your Honors.

[00:00:02] Speaker 01:
May it please the Court.

[00:00:03] Speaker 01:
My name is John Berg.

[00:00:04] Speaker 01:
I'm here on behalf of Appellant Bonaventure of East Wenatchee LLC.

[00:00:10] Speaker 01:
Your Honors, the District Court rested its decision on Wilson v. City of Monroe.

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In Wilson, unlike here, the Federal Arbitration Act did not

[00:00:22] Speaker 01:
apply.

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And that importance cannot be understated, cannot be overstated.

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I'm sorry, Your Honor.

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It should be where this opinion begins and ends.

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I can see that perhaps you may already share that opinion.

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from the kindred opinion you dispersed before the argument.

[00:00:43] Speaker 00:
Let me ask you, Mr. Berg, I was struck by some language in the Wilson case saying that a wrongful discharge claim was non-negotiable.

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Now, is it the law of Washington that the party plaintiff cannot negotiate a settlement with the party defendant?

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I didn't think so.

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That would be a tremendous difference from everywhere else in this country.

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What did he mean by non-negotiable other than an arbitration agreement is not negotiable?

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The concept of negotiability and non-negotiability is addressed in the footnotes of the Wilson opinion with citation to Lingel, Alice Chalmers.

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We're talking about Supreme Court decisions about the prongs of 301 preemption.

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One is dependence on a collective bargaining agreement.

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Another is the non-negotiability of the rights at issue.

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Non-negotiability means it cannot be alienated or waived.

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And it is a matter that, as I understand it, cannot be negotiated by a union in the context of collective bargaining agreements.

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That is the distinction here between Wilson and this case, of course.

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There is no union.

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There is no collective bargaining.

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It is an agreement signed by this individual plaintiff.

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It is an agreement that is governed by the Federal Arbitration Act.

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There is mutual assent.

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And I believe the appellee does not contest the actual making and formation of this arbitration agreement.

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Absent in Wilson, absent federal labor preemption under 301, there is no arbitration agreement that would bound Wilson, the plaintiff in that case.

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And that is why the court focused on federal labor preemption.

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Again, without it, there is no arbitration agreement.

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There's no need to exhaust remedies under a grievance arbitration provision within the CBA.

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The court, in the context of Wilson, in its very holding, states because Wilson's wrongful termination and retaliatory discharge claims are based on non-negotiable rights established by state law, comma, and because the claims are resolved without interpreting the CBA, comma, the claims are not preempted by federal labor law.

[00:03:27] Speaker 01:
Clearly, there are two legal conclusions drawn by the court.

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One as to the claims being non-negotiable.

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The other as to the claims being the result.

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Non-negotiable by the union.

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That's what they meant.

[00:03:42] Speaker 01:
That is my understanding of the law, yes, Your Honor.

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Non-negotiable also generally applies to matters of great public importance as opposed to individual

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interests, where the public's interests are at stake, it is non-negotiable.

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So the holding of Wilson makes two conclusions.

[00:04:09] Speaker 01:
Those are the prongs of federal labor preemption.

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Again, the footnotes make that clear.

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And we see sometimes a judicial opinion

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relegates its case authority to footnotes sometimes.

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That can make an opinion easier to read, but it also can make it easier to misunderstand.

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It can make it easier to cite and quote out of context.

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And that, Your Honors, that is what has happened here.

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This district court has ruled entirely on the basis of Wilson, as if its hands were tied and the law was settled by Wilson.

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But Wilson is a ruling specific to labor preemption and therefore completely inapplicable in this context.

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The district court's ruling also is exactly the sort of judicial hostility that the FAA was designed to eradicate.

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It sets a rule, if we assume the meaning given to it by the district court and the appellee, it sets a rule that targets arbitration agreements, essentially that

[00:05:25] Speaker 01:
These are causes of action that are just too important.

[00:05:29] Speaker 04:
How do you deal with, and I'm just trying to understand Washington law, how do you deal with the Young case?

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Young versus, I'm not sure how to pronounce it, Feral Gas.

[00:05:38] Speaker 04:
That seems to be inconsistent with your interpretation of Wilson.

[00:05:43] Speaker 01:
You will note from the footnotes in the Young opinion, the reference to the fact that the arbitration agreement there is not governed by the FAA.

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And that is all the difference, according to Kindred.

[00:05:56] Speaker 04:
A footnote in Young?

[00:05:58] Speaker 01:
In Young, yes.

[00:06:00] Speaker 02:
Or in footnote two, I think it is.

[00:06:03] Speaker 04:
Yeah, yeah, it's footnote two.

[00:06:05] Speaker 01:
OK.

[00:06:05] Speaker 01:
I'm sorry.

[00:06:05] Speaker 01:
I don't have the footnote number at hand.

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But that sounds correct.

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I would also add that,

[00:06:11] Speaker 04:
So you're saying that Young is actually consistent with your interpretation of Wilson?

[00:06:16] Speaker 01:
What I'm saying is Young is consistent with Smith that follows Wilson.

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Smith is a Supreme Court of Washington case.

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And so Young must have felt compelled, the court and Young must have felt compelled to follow Smith as binding authority.

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Smith is only saying what Wilson said, which shouldn't be interpreted.

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You cannot take these legal concepts out of context and apply them and give them generic meaning.

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in where you have a private arbitration agreement that is not negotiated by a union that is not collectively bargained.

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And so Young is following Smith.

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Young is very clearly giving greater weight to the public policy of Washington.

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without any respect to the public policy embodied by the FAA, which, as we know, requires us to place arbitration agreements on equal footing.

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We can't have rules that either directly or indirectly target arbitration agreements and make them, put them to a higher standard for enforceability.

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And I believe that's what we have from this district court's ruling by adopting what the court seemed to think Wilson said.

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I didn't mention reservation for rebuttal.

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I would like to do that.

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In this case, I actually have never heard from Appellee as to,

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their position on several points.

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So I'd like to reserve the remainder of my time.

[00:07:49] Speaker 04:
Before you sit down, I've got a question.

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I'm reading your beef on page four.

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You write, on May 4, 2022, Bonaventure terminated Banghart after he stormed out of a meeting with the suggestion that he may never return.

[00:08:05] Speaker 04:
Where is that in the record?

[00:08:08] Speaker 01:
Your Honor, the record is undeveloped in the sense that at the motion to compel an arbitration provision, the merits of the case are not before the court.

[00:08:19] Speaker 01:
So we have never, I don't believe, had a record on what truly was the basis of the underlying events.

[00:08:29] Speaker 04:
So there's nothing in the record in front of us that tells me that that statement is true?

[00:08:34] Speaker 01:
There is nothing in the record that states that that's true or that the allegations have merit.

[00:08:39] Speaker 04:
The reason I'm concerned about that is that you do give me a citation as if it were in the record.

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You write that sentence, and then you say ER 54.

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But ER 54 does not say that.

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And this is, you know, it's not fatal, but it's damaging to the other side.

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And there's nothing in the record that says that's true.

[00:09:01] Speaker 01:
I would argue, Your Honor, that

[00:09:04] Speaker 01:
That's an inadvertent mistake, certainly not something I intended to do.

[00:09:08] Speaker 01:
But I would also say I don't believe it's damaging to the issue presented to the court, which is the- Well, wait a minute.

[00:09:14] Speaker 04:
When somebody storms out saying, I'm never going to return, that's not a very nice thing to say.

[00:09:19] Speaker 04:
And there's nothing in the record to support that.

[00:09:22] Speaker 01:
I do not have support in this record for that statement that is correct.

[00:09:26] Speaker 01:
As to its impact before the court, I think none, in the sense that the court is not being asked to decide the merits of the case.

[00:09:35] Speaker 04:
I can draw my own conclusions as to whether or not that's potentially harmful.

[00:09:39] Speaker 04:
It certainly dirties them up a little bit.

[00:09:41] Speaker 04:
Storming out, saying I'm not going to return, is not a very nice thing to say.

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And there's nothing in the record to support that.

[00:09:47] Speaker 04:
I don't like that.

[00:09:49] Speaker 01:
And my apologies to the court in that respect.

[00:09:52] Speaker 02:
Do you want to reserve?

[00:09:54] Speaker 01:
Yes, if I could, the remainder of my time.

[00:09:55] Speaker 01:
Thank you.

[00:09:56] Speaker 02:
Very well.

[00:10:05] Speaker 03:
Fortunately, we're a similar size.

[00:10:08] Speaker 03:
My name is Paul Kubi, if it please the court, for the plaintiff and the respondent here appalling.

[00:10:17] Speaker 03:
Judge Rice, I think, made the right decision under Washington state law.

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There's a distinction without a difference.

[00:10:24] Speaker 03:
The actual quote of Wilson is as follows.

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The right to be free from wrongful termination and contravention of public policy is independent of any underlying contractual agreement between the employer and the employee.

[00:10:40] Speaker 04:
But isn't your adversary right that all this whole line of cases, those are all collective bargaining agreement cases?

[00:10:47] Speaker 03:
As Judge Rice indicated, he didn't see that as a distinction without a difference under Washington law.

[00:10:55] Speaker 04:
But how about under federal law?

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That is to say, the claim here is that there's a right to arbitrate under the contract under federal law.

[00:11:03] Speaker 03:
Right.

[00:11:04] Speaker 03:
There's nothing to say.

[00:11:05] Speaker 04:
And as I read the cases, your adversary describes them correctly.

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That is to say they're all CBA cases.

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And I understand why that's so in the CBA.

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I mean, Wilson explains it.

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The collective bargaining agreement is entered into between the union and the employer.

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The individual employee has no say in it.

[00:11:27] Speaker 04:
And Washington's law then is, well, if it's a collective bargaining agreement and there's an independent statutory right, you can sue under the independent statutory right outside the arbitration process.

[00:11:38] Speaker 04:
But that's all reasoning based upon the fact that there's a collective bargaining agreement.

[00:11:42] Speaker 03:
In every appellate court case that he has cited, there was more than one cause of action.

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And I think the case law is pretty clear that when there are more than one cause of action, that all those, for example, if we had, as I mentioned in my brief,

[00:12:00] Speaker 03:
If we filed a state minimum lock wage claim, if we filed a state law or federal discrimination claim, then yes, it would be subject to the mandatory arbitration.

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But there isn't a single case.

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There's some cases that didn't rise it in the Western District that didn't get passed the district court that claims because somebody didn't raise Wilson means that Wilson doesn't apply.

[00:12:22] Speaker 03:
But we're only making one cause of action, bringing one cause of action.

[00:12:28] Speaker 03:
And whether it was negotiated by a union, like, for example, you can't negotiate to waive minimum wage act, right?

[00:12:38] Speaker 03:
We understand that.

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You can't negotiate to get out of the discrimination laws.

[00:12:43] Speaker 03:
We understand that.

[00:12:44] Speaker 03:
But in Washington, it's a non...

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The employer can't negotiate whether you can terminate an employee for wrongful discharge and violation of public policy.

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And that's what Wilson case stands for, I believe.

[00:12:58] Speaker 00:
Can your man settle this case?

[00:13:00] Speaker 03:
Yeah.

[00:13:01] Speaker 00:
That's negotiation, right?

[00:13:02] Speaker 03:
Right.

[00:13:03] Speaker 03:
It is negotiation.

[00:13:04] Speaker 03:
And negotiation is regular terms.

[00:13:06] Speaker 03:
Of course, an employee can negotiate on that topic.

[00:13:10] Speaker 00:
And can't negotiate to go into an arbitration agreement?

[00:13:15] Speaker 03:
Underneath Wilson, the argument is, we can go into the policy.

[00:13:23] Speaker 03:
One of the things that I think is significant in the facts of our case, and I think it's important that you brought this up in questioning my friend here, is that

[00:13:35] Speaker 03:
We're dealing with the most vulnerable people in this case, people that get their families pay five, seven to $10,000 a month.

[00:13:44] Speaker 03:
And in this case, you have a corporation who at the outset makes an employee sign this agreement and

[00:13:56] Speaker 03:
immediately, within four months, terminates the employee because the employee was doing his job by going to the government entities and raising concerns about the lack of staffing and emplacement.

[00:14:08] Speaker 04:
Well, you might win this in arbitration.

[00:14:11] Speaker 03:
Yeah.

[00:14:12] Speaker 03:
I think it's a very compelling case.

[00:14:13] Speaker 03:
But I also think it goes to the public policy here in the sense that do we want employers, people that take care of our most vulnerable people, to be able to lie in wait

[00:14:26] Speaker 03:
have them sign an agreement that's never going to see the light of day.

[00:14:29] Speaker 03:
I mean, they might see the light of a AAA arbitration, but you've got families in the balance here.

[00:14:35] Speaker 03:
And so I seized upon this language, I agree, in Wilson to stand for the proposition that as a matter of public policy,

[00:14:46] Speaker 03:
And the judge agreed with me, Judge Rice, we're not talking about an out there on the limb judge, that in Washington, that is a distinction without a difference, that the right for an employee to can't negotiate, I don't want to misstate, I'm going to quote the law, embodies a strong state interest in protecting against violations of public policy, Ms.

[00:15:09] Speaker 03:
Wilson, which cannot be altered and therefore non-negotiable.

[00:15:16] Speaker 02:
Have there been any cases in Washington Court that discuss Concepcion and Kindred Nursing?

[00:15:23] Speaker 02:
I mean, Wilson's, I was a law clerk when Wilson was decided, so I'm trying to put this in perspective here.

[00:15:30] Speaker 03:
I gotta tell you, I was pretty nervous getting ready for this today, and I've read a lot of cases.

[00:15:36] Speaker 03:
So there probably is, but I can't think of anything else.

[00:15:39] Speaker 02:
The reason I ask is because I understand Wilson says what it says when it said it.

[00:15:45] Speaker 02:
But since that time, Supreme Court has been a, I think I could say it's a big fan of arbitration and a big fan of saying if it's arbitrated, you got to arbitrate it.

[00:15:56] Speaker 02:
And so I'm trying to understand, has the Washington Supreme Court or the Washington Courts of Appeals grappled with the shift in law and arbitration, like grappled with Kindred nursing or Concepcion?

[00:16:08] Speaker 03:
I jeopardize Wilson, of course, like, you know, before even cited it in my complaint.

[00:16:15] Speaker 03:
And now I didn't find anything directly that was addressing it.

[00:16:19] Speaker 03:
I do know the Supreme Court has ruled and I have the case in my briefcase.

[00:16:23] Speaker 03:
If you want me to get it, I can.

[00:16:25] Speaker 03:
The Washington State Supreme Court case about arbitration seems to be, Washington State seems to be moving against arbitration.

[00:16:32] Speaker 03:
So there might be shifting political positions here, you know, divergent thoughts on the matter.

[00:16:41] Speaker 03:
I welcome the case that I had to read while everyone else was arguing today that you guys provided us.

[00:16:47] Speaker 03:
You know, it suggests, you know, against my position.

[00:16:50] Speaker 03:
You know, I would concede that.

[00:16:53] Speaker 03:
Anything further?

[00:16:56] Speaker 02:
All right, thank you, counsel.

[00:17:04] Speaker 01:
The Tajart versus Smith Barney case is one in an almost identical context where you have a claim that has a vital state interest.

[00:17:15] Speaker 01:
One, it's a statutory claim against for, I'm sorry, discrimination.

[00:17:22] Speaker 01:
And there's a recognition that there's a public policy.

[00:17:26] Speaker 01:
And they tackled the issue of whether or not this is something that could be arbitrated, weighing the state interests versus the FAA's policy in favor of arbitration.

[00:17:36] Speaker 01:
And Tejart ordered compelled arbitration, nearly identical context, just giving life to the policy that, as you mentioned, the Supreme Court is so regularly weighed in on.

[00:17:50] Speaker 01:
in favor of arbitration.

[00:17:52] Speaker 01:
Arbitration isn't a change in the substantive rights.

[00:17:56] Speaker 01:
It is a change in the venue.

[00:17:58] Speaker 01:
It is a change in the process for enforcement of those rights.

[00:18:04] Speaker 01:
And the Supreme Court has said that we favor that.

[00:18:09] Speaker 01:
And I believe the ruling by this district court is contrary to the FAA.

[00:18:16] Speaker 01:
It is contrary to the Supreme Court's decisions.

[00:18:19] Speaker 01:
And contrary to Kindred, it creates a rule that says this is too important for arbitration.

[00:18:26] Speaker 01:
It doesn't say,

[00:18:27] Speaker 01:
It is very, the rule is specific to arbitration.

[00:18:32] Speaker 01:
There's no black swans involved or any, any confusion, nothing nebulous about it.

[00:18:37] Speaker 01:
It is.

[00:18:38] Speaker 01:
This is just too important to be resolved via arbitration.

[00:18:42] Speaker 01:
And for that reason.

[00:18:44] Speaker 01:
It flies in face of our binding authority here in the Supreme Court in Kindred and other cases saying we have to give life to the FAA.

[00:18:52] Speaker 01:
That's what Congress intended.

[00:18:54] Speaker 01:
I think I still am not hearing

[00:18:59] Speaker 01:
a basis to reconcile the flood of cases, compelling arbitration.

[00:19:05] Speaker 01:
I think the difference in context is going to, if we sorted all the cases, be the FAA applies versus a contract potentially not involving interstate commerce.

[00:19:19] Speaker 01:
I don't know, but there is no explanation for why all of these cases have said, let's compel the very claim that Appellee is saying is immune from arbitration.

[00:19:31] Speaker 01:
I don't know if immunity is the correct word, but that's the effect of the rule that Judge Rice has created in this case, giving life to Wilson in a way I think never intended.

[00:19:45] Speaker 01:
If the court has any questions, I'll answer them otherwise.

[00:19:51] Speaker 02:
uh... nothing further we appreciate your argument your briefing this matter uh... this case is submitted and uh... this panel is done for the day thank you oh i forgot one thing uh... happy birthday to my brother david he turns forty eight today he's a schoolteacher public schoolteacher in the bay area so i'll tell them to watch the video thank you