
USCA1 Opinion

	




                            United States Court of Appeals                                For the First Circuit                                 ____________________        No. 97-1508            JOSE RAMIREZ-DE-ARELLANO, MARTA SUAREZ DE RAMIREZ DE ARELLANO                  AND THE CONJUGAL PARTNERSHIP CONSTITUTED BY THEM,                               Plaintiffs, Appellants,                                          v.                               AMERICAN AIRLINES, INC.,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                   [Hon. Daniel R. Dominguez, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                 Stahl, Circuit Judge,                                        _____________                            Godbold,* Senior Circuit Judge                                      ____________________                            and Cyr, Senior Circuit Judge.                                     ____________________                                 ____________________            Carlos A. Del Valle Cruz on brief for appellants.            ________________________            Luis  D. Ortiz  Abreu,  Vivian  Nunez,  and  Goldman  Antonetti  &            _____________________   _____________        _____________________        Cordova on brief for appellee.        _______                                 ____________________                                  December 22, 1997                                 ____________________        _____________________        *Of the Eleventh Circuit, sitting by designation.                      Stahl,  Circuit  Judge.  Jose Ramirez  de  Arellano                      Stahl,  Circuit  Judge                      _____            ("Ramirez"),  together  with his  wife,  child,  and conjugal            partnership,  appeal  from  the  district  court's  grant  of            summary judgment  to American Airlines  ("American") in  this            wrongful discharge  and retaliatory dismissal  action brought            primarily  under  the  Fair Labor  Standards  Act  (FLSA) and            Puerto Rico law.1  After  carefully reviewing the record  and            considering  Ramirez's   arguments,  we  conclude   that  the            district   court   properly  awarded   summary   judgment  to            defendant.  We  prefer, however, not to rely  on that portion            of the district court's order  which gave res judicata effect                                                      ___ ________            to  American's  internal grievance  procedure.   Instead,  we            choose to  affirm on the  grounds that Ramirez  was dismissed            for just cause under Puerto  Rico law and that Ramirez failed            to set forth  sufficient evidence to trigger a presumption of            discrimination or retaliation on the  part of American.   See                                                                      ___            Polyplastics,  Inc. v. Transconex, Inc., 827 F.2d 859, 860-61            ___________________    ________________            (1st  Cir.  1987)  (explaining that  an  appellate  court can            affirm  on  any  independent  ground  made  manifest  in  the            record).                                            ____________________            1.   Ramirez's  original district  court claims  included the            FLSA claim  for retaliatory dismissal,  an age discrimination            claim   under  Puerto  Rico  law,  claims  for  wrongful  and            retaliatory  dismissal  under  local  severance  law,  and  a            defamation claim.   Two of  these claims are not  included in            the  present appeal:  the  age  discrimination  claim,  which            Ramirez voluntarily  dismissed,  and  the  defamation  claim,            which the district court rejected on grounds of privilege.                                          -2-                                          2                      American  employed  Ramirez  from  1984-1997  as  a            ticket agent,  and, later, as  a baggage handler.   After two            written performance advisories,  American terminated Ramirez,            citing  as reasons  his failure  to follow  company time  and            attendance procedures and  his attempt to  circumvent company            rules to his own benefit.                      Following  his   dismissal,  Ramirez   submitted  a            written  grievance  to  American, pursuant  to  the  internal            grievance  procedure  set  forth  in the  employee  handbook.            American  upheld the termination and denied Ramirez an appeal            on  the basis  of tardy  application.   Ramirez  subsequently            filed suit in Puerto Rico district court, and now appeals the            order of  summary judgment  rejecting the  FLSA claim  on the            merits  and  all  other  claims  under  the  doctrine of  res                                                                      ___            judicata.   See  Ramirez v.  American Airlines  Inc.,  957 F.            ________    ___  _______     _______________________            Supp.  359  (D.P.R.   1997)  (equating  American's  grievance            procedure with a binding arbitration).                      We  review the award  of summary judgment  de novo,                                                                 __ ____            and  draw  all  reasonable  inferences  in  Ramirez's  favor.            Grenier v.  Vermont Log Bldgs.,  Inc., 96 F.3d 559,  562 (1st            _______     _______ _________________            Cir.   1996).    The   record  is  replete   with  documented            illustrations of Ramirez's  performance problems and repeated            failure  to   follow  American's  policies   and  procedures.            Moreover, American had given Ramirez two  official advisories            prior  to his dismissal.   Thus,  there can  be no  basis for                                         -3-                                          3            inferring that American's stated reason for the discharge was            wrongful or pretextual under federal law.                      The result is  no different under Puerto  Rico law,            which provides that an employee  is not entitled to statutory            wrongful discharge indemnity  if the employee  was terminated            for just cause.  P.R.Laws Ann.tit 29   185 et seq.                                                        __ ____                      Under  Puerto Rico  law, just  cause for  dismissal            includes  repeated violations  of  the  employer's rules  and            regulations,  provided that, as  here, the employee  has been            provided with  a written  copy of the  relevant policies  and            procedures.    See P.R.  Laws Ann.  tit 29    185b;  see also                           ___                                   ___ ____            Menzel  v. Western  Auto Supply  Co., 662  F. Supp.  731, 744            ______     _________________________            (D.P.R. 1987), aff'd, 848 F.2d 327 (1st Cir. 1988).  As noted                           _____            above,  the  record  here  admits  of  only  one  conclusion:            Ramirez's  repeated  transgressions  of  company  policy  and            procedures provided American with just cause for termination.            Summary judgment  was,  therefore, properly  granted  to  the            defendant.                      Although summary judgment  was properly awarded, we            have  some doubt  about  the  district  court's  ruling  that            American's internal company grievance procedure, set forth in            its employee  handbook, is  the legal  equivalent of  binding            arbitration  and,  therefore,   bars  judicial  resolution of            potential  statutory and constitutional  claims.   As Ramirez            points  out, there is  little in  the way  of back  and forth                                         -4-                                          4            bargaining  between a  company  and  its  employees  when  an            employment  handbook   is  created,  making   this  situation            distinguishable  from   the  arbitration   provisions  of   a            collective  bargaining  agreement.    This  is  especially so            where, as  here, the handbook  expressly provides that  it is            not  a  contract  between  the  parties  and  is  subject  to            unilateral amendments by American at any time.                        Although the district court was correct in noting            the   existence   of  a   strong   federal   policy  favoring            arbitration, the threshold question for review must always be            whether the agreement to arbitrate was, indeed, voluntary and            intentional.    Mitsubushi  Motors Corp.  v. Solar  Chrysler-                            ________________________     ________________            Plymouth  Inc.,  473  U.S.  614,   626  (1985).    Given  the            ______________            apparently  unilateral  and  adhesive  nature  of  American's            employee  handbook, we  do  not  embrace  the  argument  that            Ramirez voluntarily waived his right to pursue  his claims in            federal court.2                                            ____________________          2.    We note  that two  other Circuits  have recently  addressed this          issue.   In Nelson v.  Cyprus Bagdad Copper  Corp., 119 F.3d  756 (9th                      ______     ___________________________          Cir. 1997), the Ninth Circuit held that signing an acknowledgment form          which provided  that the  employee agrees to  "read and  understand" a          revised employee handbook  did not serve to  bind the employee to  the          handbook's  internal grievance  provisions.   Id. at  761.   The Ninth                                                        ___          Circuit reasoned that:                     Merely  signing  the  form  did  not  in  any  way                    constitute a 'knowing agreement to arbitrate,' and                    thereby  to surrender  [the employee's]  statutory                    right [under  the ADA] to  a judicial forum .  . .                    Any bargain to waive the right to a judicial forum                    for civil  rights claims, including  those covered                    by  the   ADA,  in  exchange  for   employment  or                                         -5-                                          5                      Moreover,  we   have  strong  concerns   about  the            fundamental  fairness  of  giving  preclusive effect  to  the            particular grievance  procedure  in this  case.   Arbitration            proceedings must meet "the minimal requirements of fairness--            adequate notice, a hearing on the evidence, and  an impartial            decision  by the arbitrator."   Sunshine Mining Co. v. United                                            ___________________    ______            Steelworkers, 823 F.2d  1289, 1295 (9th Cir.  1987) (internal            ____________            quotations and citations omitted); Bowles Fin. Group, Inc. v.                                               _______________________            Stifel, Nicolaus &  Co., Inc., 22 F.3d 1010,  1013 (10th Cir.            _____________________________            1994).                      First, with respect to notice, we are not convinced            that  Ramirez's application  for a hearing  was appropriately            denied  for untimeliness because it appears that American may                                            ____________________                    continued  employment, must  at least  be express:                    the  choice must  be  explicitly presented  to the                    employee and the employee must explicitly agree to                    waive the specific right in question.  Id. at 761-                                                           ___                    62 (internal quotations and citations omitted).                Similarly,  the  Eighth  Circuit  recently  instructed  that  the          absence of  such an express waiver precludes  a finding that there has          been a  knowing agreement.   See Patterson v. Tenet  Healthcare, Inc.,                                       ___ _________    _______________________          113  F.3d 832, 835  (8th Cir. 1997).   The Patterson  court upheld the                                                     _________          employee handbook arbitration provision because the arbitration clause          was both separate  and distinct from other provisions  in the handbook          and was introduced by the heading, "IMPORTANT!  Acknowledgment Form."           Id.   Unlike other  provisions  within the  handbook, the  arbitration          ___          clause  used  contractual  language, such  as  "I  understand"  and "I          agree."  Id.   Moreover, the form  was signed by the employee, removed                   ___          from the handbook,  and given to the Human Resources  Department to be          stored in the employee's personnel file.  Id.  It was only because the                                                    ___          court  deemed  these   actions  in  toto  sufficient  to   render  the                                          __  ____          arbitration  clause "separate and distinct"  from the remainder of the          handbook,  that  the  court  held  that  the  internal  grievance  and          arbitration clause constituted an enforceable contract.  Id.                                                                          ___                                         -6-                                          6            have been equally, if not more, to blame for the late filing.            Second, there was no opportunity  for discovery.  See Hoteles                                                              ___ _______            Condado Beach v. Union de Tronquistas Local 901, 763 F.2d 34,            _____________    ______________________________            39 (1st Cir. 1985)(instructing that an arbitrator must afford            each party an  adequate opportunity to present  both evidence            and  argument); see also Williams  v. Katten, 1996 WL 717447,                            ___ ____ ________     ______            at  *4-5,  (N.D.  Ill.  Dec.  9,  1996)  (discussion  of  the            permissible parameters of limited discovery in an arbitration            proceeding).     Third,  the   decision  maker   was  not   a            disinterested  party,  but  rather,  an  American  managerial            employee.   See  Employers  Ins. of Wausau v.  National Union                        ___  _________________________     ______________            Fire    Ins.   Co.,   933   F.2d   1481,   1491   (9th   Cir.            __________________            1991)(stipulating  that  fair  arbitration  proceedings  must            include non-biased  decisionmakers).    Finally,  the  record            reveals  that Ramirez  was actually  denied any  review  by a            hearing  officer  or  panel,  which, following  the  district            court's  analysis, effectively rendered all of his claims res                                                                      ___            judicata on the basis of one manager's view.3            ________                                            ____________________            3.   This is a distinctly  different scenario from Garcia  v.                                                               ______            American Airlines,  Inc., 673 F. Supp. 63  (D.P.R. 1987), the            ________________________            case  upon which  the  district  court  relied  for  its  res                                                                      ___            judicata ruling. In Garcia, the employee utilized step two of            ________            ______            American's  grievance  procedure  and,  while represented  by            counsel, had  an  opportunity  to  appeal his  dispute  to  a            stateside hearing officer.   Id. at 66. In  contrast, Ramirez                                         ___            was denied any opportunity to present his claims to a hearing            officer (step  two) or  panel (step  three); he  simply spoke            with the General Manager, and was denied any further appeal.                                          -7-                                          7                       Because American had ample just cause to terminate            Ramirez's  employment  and   Ramirez  presented  insufficient            evidence   to  raise  an   inference  of   discrimination  or            retaliation,  we  uphold  the award  of  summary  judgment to            American.                      Affirmed.  No costs.                      Affirmed                      ________                                         -8-                                          8
