Marquez v. Living, 13-cv-05320-RS

• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
• Writing for the Court: RICHARD SEEBORG
• Docket Number: No. 13-cv-05320-RS,13-cv-05320-RS
• Parties: NORMA MARQUEZ, Plaintiff, v. BROOKDALE SENIOR LIVING, Defendants.
• Decision Date: 08 April 2014

NORMA MARQUEZ, Plaintiff,
v.
BROOKDALE SENIOR LIVING, Defendants.

No. 13-cv-05320-RS

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION

Dated: April 8, 2014

ORDER GRANTING MOTION TO COMPEL ARBITRATION AND DENYING SANCTIONS
I. INTRODUCTION

Plaintiff Norma Marquez brings this action against defendant Brookdale Senior Living ("Brookdale") alleging employment discrimination based on her sexual orientation, disability, and medical condition. She also alleges Brookdale retaliated against her by wrongfully terminating her. Brookdale moves to compel arbitration, invoking an agreement to arbitrate that Marquez signed as a condition of her employment. Brookdale also seeks sanctions against Marquez and her counsel, alleging they filed a frivolous lawsuit and acted in bad faith. Marquez opposes the motion, contending the agreement is unenforceable. For the following reasons Brookdale's motion to compel arbitration will be granted and this action will be stayed pending arbitration. Brookdale's request for sanctions will be denied.

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II. BACKGROUND

Brookdale hired Marquez as a caregiver in May of 2011. Marquez was required to sign Brookdale's Employment Arbitration Agreement (the "agreement") as a condition of her employment. The agreement states that Brookdale and Marquez agree to arbitrate any disputes arising between the parties during the course of her employment with Brookdale. In early 2013, Brookdale informed Marquez that they had received a "hotline" tip that she was engaging in inappropriate workplace behavior with a female subordinate. Based on this conversation and the fact that she reportedly injured her back while taking care of a patient, Marquez contends she was terminated two months later for "false reasons." Marquez subsequently filed a complaint in Superior Court alleging Brookdale discriminatorily terminated her because of her back injury, resulting medical condition, and sexual orientation. Brookdale filed a response, denying Marquez's claims and questioning the extent and manner of her injuries. Brookdale also asserted a number of affirmative defenses, including its right to arbitrate Marquez's claims. Brookdale removed the action to this court, invoking diversity jurisdiction under 28 U.S.C. § 1441. Brookdale seeks to enforce its right to arbitrate Marquez's claim in this motion to compel arbitration.

III. DISCUSSION

A. Enforceability of the Agreement

To resolve whether a dispute is subject to arbitration, the court first determines whether the parties agreed to arbitrate and, if they did, whether the agreement covers the dispute at issue. Chiron Corp v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 1996). "[A]n agreement to arbitrate is a matter of contract: 'it is a way to resolve those disputes — but only those disputes — that the parties have agreed to submit to arbitration.'" Id. (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995)). Brookdales' records show that Marquez signed the agreement. (Declaration of Nananne Eichermueller ¶ 3, Ex. A). Marquez does not dispute this fact. This provides a sufficient basis to conclude that the parties entered into a valid agreement to arbitrate.

The parties do not contest the agreement covers the dispute at issue. The agreement specifies, "[a]ny controvery or claim arising out of or relating to your employment relationship with

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us or the termination of that relationship, must be submitted for final and binding resolution by a private and impartial arbitrator." As such, the agreement covers Marquez's claims.

Pursuant to Civil Local Rule 7-3(a) Marquez was required to file an opposition to Brookdale's motion to compel arbitration. Marquez failed to do so, instead petitioning the court to accept her untimely opposition. Brookdale argues that this failure should result in granting the motion to compel arbitration, dismissing the case, and awarding it attorney fees. "The failure to file any required paper, or the failure to file it within the deadline, may be deemed consent to the granting or denial of the motion." L.R. 7-12. Although Brookdale is correct that failure to file a timely opposition could result in the court granting the motion on this basis alone, in the interests of resolving the motion on the merits, the parties' claims are addressed as follows.

a. Waiver of Right to Arbitration

Marquez argues Brookdale waived its right to enforce the agreement by delaying filing a motion to compel arbitration. Brookdale contends that no such waiver occurred. There are six factors a court takes into consideration when determining whether a party has relinquished its right to arbitrate: (1) whether the party's actions are inconsistent with the right to arbitrate; (2) whether litigation preparation has substantially begun; (3) whether a party requested arbitration enforcement close to trial or delayed for a significant period of time before seeking enforcement; (4) whether the party filed a counterclaim without seeking a stay of the proceedings; (5) whether "important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place;" and (6) whether the delay "affected, misled, or prejudiced" the opposing party. St. Agnes Medical Center v. PacifiCare of California, 31 Cal. 4th 1187, 1196 (2003). "The moving party's mere participation in litigation is not enough; the party who seeks to establish waiver must show that some prejudice has resulted from the other party's delay in seeking arbitration." Davis v. Continental Airlines, Inc., 59 Cal. App. 4th 205, 212 (1997).

In support of its motion, Brookdale attaches e-mails and letters that it sent to Marquez requesting to arbitrate her claims. These support Brookdale's contention that it has acted consistently in its attempts to enforce its right to arbitrate under the agreement. While Marquez claims she was generally prejudiced by the five months Brookdale waited to file this motion, she

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fails to specify how this prejudice has caused her harm. She does not allege that she has engaged in substantial litigation preparation, provided discovery, or otherwise revealed her litigation strategy.

The cases Marquez cites in support of her contention that a timing delay is sufficient in itself to create prejudice are distinguishable.¹ Many of the motions arose when plaintiffs moved to compel arbitration. That scenario is distinctly different from this case because Brookdale is responding to Marquez's lawsuit, not filing a lawsuit against Marquez and then attempting to pursue arbitration after a lengthy delay and the pursuit of discovery. Marquez fails to establish that she suffered prejudice sufficient to warrant a finding that Brookdale waived its right to arbitrate.

B. Unconscionability of the Agreement

As an employment arbitration policy, the agreement is subject to the Federal Arbitration Act ("FAA"). Circuit City Stores v. Adams, 532 U.S. 105 (2001). Federal policy encourages arbitration, prohibiting state courts from treating arbitration agreements differently than any other contractual agreement. AT&T Mobility v. Concepcion, 131 S. Ct. 1740, 1747 (2011); Gilmer v. Inter-state/Johnson Lane Corp., 500 U.S. 20, 25 (1991). Under the FAA, arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2 (2012). As a result, courts cannot nullify arbitration agreements based either on state law that applies only to arbitration agreements or a general public policy against arbitration. Concepcion, 131 S. Ct. at 1747. The court must apply a contractual defense, like unconscionability, in the same way...