Todd v. Venwest Yachts, Inc.
Todd v. Venwest Yachts, Inc.
Opinion of the Court
FACTS
¶2 Venwest Yachts employed Todd as a commission-based salesperson under an oral contract from January 2000 until Todd resigned on June 30, 2003. Both Venwest and Todd are members of the NYBA.
¶3 Venwest answered, pleading as an affirmative defense that Todd failed to mediate and/or arbitrate the claims between the parties as required by the NYBA bylaws. It then moved to dismiss or stay the proceedings pending mediation and arbitration. The trial court ruled that “the parties did not incorporate the NYBA bylaws into their employment agreement and [the court] does not apply the NYBA bylaws to this dispute.” Venwest appeals.
¶4 Venwest concedes that Todd’s employment agreement did not contain an arbitration provision or incorporate the NYBA rules. Instead, it relies on the breadth of the NYBA arbitration provision. The NYBA membership application form states:
If accepted as a member in good standing into the NORTHWEST YACHT BROKERS ASSOCIATION, I agree to abide by and conform to the constitution, By Laws, Code of Ethics and policies of the Association.
Date:_Applicant’s Signature:_
Article IX of the bylaws contains the “Mediation and Binding Arbitration” clause requiring mediation and/or arbitration “[w]hen a dispute arises between members, between members and nonmember, or between members and the public . . . .”
¶5 We review questions of arbitrability de novo.
¶6 Todd does not dispute that the NYBA membership agreement to arbitrate falls within the scope of the Federal Arbitration Act (FAA).
¶7 Venwest asserts that agreements to arbitrate may be incorporated into a parties’ agreement by reference to a separate document which has an arbitration provision. It cites two cases in which courts held that disputes arising from parties’ private agreements were governed by outside arbitration agreements. In David L. Threlkeld & Co. v. Metallgesellschaft Ltd., written contracts between metal traders did not contain an arbitration clause but did incorporate by reference the London Metal Exchange’s (LME) rules and regulations. Those rules did have an arbitration clause.
¶8 We agree that when the parties’ employment agreement has incorporated an arbitration clause by reference, the arbitration clause may be enforced. But these parties did not do so. The parties’ employment agreement did not even refer to the NYBA, so it could not be interpreted as incorporating that organization’s arbitration clause. Venwest apparently acknowledges that the parties’ employment agreement does not incorporate the NYBA’s arbitration clause. Instead, it argues that because both parties are NYBA members, the NYBA’s arbitration clause automatically governs any disputes that arise in their employment relationship. Venwest analogizes the NYBA’s arbitration clause to the National Association of Securities Dealers’ (NASD) Code of Arbitration (Code), which applies to employment disputes between NASD members even where the members’ employment agreements do not reference the NASD Code. But the analogy does not hold up.
¶9 The NASD regulates securities brokers in the United States, and membership is mandatory. The NASD requires that all securities dealers complete a Uniform Application for Securities Industry Registration or Transfer Form U-4 (U-4) when they begin work at a firm or transfer from one firm to another. The U-4 contains a standard arbitration clause by which registered representatives agree “ ‘to arbitrate any dispute, claim or controversy that may arise between [them] and [their] firm. . . that is required to be arbitrated under the rules, constitutions, or by-laws of the [NASD].’"
¶10 The NYBA is a purely voluntary organization: “Any yacht broker, independent contractor or staff salesperson in the business of selling boats may join the NYBA as an Individual Member.”
Ellington, A.C.J., and Baker, J., concur.
Reconsideration denied June 23, 2005.
Review denied at 156 Wn.2d 1025 (2006).
Todd and Venwest became members independently of each other, and Venwest did not require that Todd be a member as part of his employment.
We refer to Venwest and the Cowleys collectively as “Venwest.” Todd’s complaint also alleged that Venwest overcharged him for advertising his boat for sale and failed to return some of his personal property.
Walters v. A.A.A. Waterproofing, Inc., 120 Wn. App. 354, 357, 85 P.3d 389 (2004) (citing Kamaya Co. v. Am. Prop. Consultants, Ltd.., 91 Wn. App. 703, 713, 959 P.2d 1140 (1998), review denied, 137 Wn.2d 1012 (1999)).
Title 9 U.S.C.
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 219, 105 S. Ct. 1238, 84 L. Ed. 2d 158 (1985).
Collins & Aikman Prods. Co. v. Bldg. Sys., Inc., 58 F.3d 16, 19 (2d Cir. 1995) (quoting Volt Info. Scis., Inc. v. Bd. of Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 478, 109 S. Ct. 1248, 103 L. Ed. 2d 488 (1989)).
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S. Ct. 3346, 87 L. Ed. 2d 444 (1985).
David L. Threlkeld & Co. v. Metallgesellschaft Ltd., 923 F.2d 245, 249 (2d Cir.) (citing Fleck v. E.F. Hutton Group, Inc., 891 F.2d 1047, 1050 (2d Cir. 1989); Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840, 844 (2d Cir. 1987); Mitsubishi, 473 U.S. at 626-28), cert. denied, 501 U.S. 1267 (1991).
923 F.2d 245, 249 (2d Cir.), cert. denied, 501 U.S. 1267 (1991).
742 F.2d 274 (6th Cir. 1984).
See, e.g., Credit Suisse First Boston Corp. v. Pitofsky, 4 N.Y. 3d 149, 824 N.E.2d 929, 930, 791 N.Y.S.2d 489 (2005) (first and second alterations in original) (quoting U-4 arbitration clause); A.G. Edwards & Sons, Inc. v. Clark, 558 So. 2d 358, 359 (Ala. 1990) (citing plaintiff broker’s U-4 agreement).
First Investors Corp. v. Am. Capital Fin. Servs., Inc., 823 F.2d 307, 309 (9th Cir. 1987).
NYBA membership application form. (Emphasis added.)
Article II, section 1 of the NYBA bylaws sets out the organization’s purposes:
(1) To actively promote boating to the general public, via a diversity of activities that include, but are not limited to, putting on boat shows, clinics and seminars;
(2) To define an organization that addresses the special needs of those involved in selling new and used yachts, and related marine activities;
(3) To unite those engaged in the business of new and used yacht sales for the purpose of promoting cooperation and professionalism among its members;
(4) To promote and maintain a high standard of conduct in the transacting of the yacht sales business;
(5) To instill into the boating public a greater confidence in yacht brokers and dealers;
(6) To encourage a greater interest in the welfare and safety of the boating public, through such endeavors as public education, lobbying efforts and cooperation with other organizations.
Reference
- Full Case Name
- R. Gerald Todd v. Venwest Yachts, Inc.
- Cited By
- 5 cases
- Status
- Published