Marquez v. Living
| Decision Date | 08 April 2014 |
| Docket Number | No. 13-cv-05320-RS,13-cv-05320-RS |
| Court | U.S. District Court — Northern District of California |
| Parties | NORMA MARQUEZ, Plaintiff, v. BROOKDALE SENIOR LIVING, Defendants. |
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.
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.
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. . 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 withus 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, shefails 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.
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 it would to any contract dispute. Id. at 1748.Accordingly, review of the agreement must be in the context of the FAA's mandate to encourage arbitration coupled with consideration of Marquez's unconscionability claim under California contract law. Id. at 1745; Ackerberg v. Citicorp USA, Inc., 898 F. Supp. 2d 1172, 1175 (N.D. Cal. 2012).
Under California law, a contractual clause is unenforceable only if it is both procedurally and substantively unconscionable. See Armendariz v. Found Health Psychcare Servs., Inc., 24 Cal. 4th 83 (2000); Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1280 (9th Cir. 2006). "The more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa." Armendariz, 24 Cal. 4th at 114. Still, "both [must] be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability." Id.
Procedural unconscionability arises from circumstances surrounding the formation and negotiation of a contract. Armendariz, 24 Cal. 4th at 113. It focuses on two elements: oppression and surprise. Id. "Oppression" occurs where one party has little or no ability to negotiate the terms of the contract, resulting in an unequal bargaining position and lack of meaningful choice. Id. "Surprise" looks to the extent to which the terms of the contract were hidden by the party in the stronger bargaining position. Id.
Marquez argues that Brookdale's "take it or leave it" imposition of the agreement as a condition of employment makes the agreement oppressive, while Brookdale contends that such employment conditions are not per se unconscionable. "Take it or leave it" agreements are "standardized contract[s], which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it." Id. (quoting Neal v. State Farm Ins. Cos., 188 Cal. App. 2d 690 (1961)). Here, Marquez had no bargaining power, a fact which weighs in favor of finding the contract procedurally unconscionable.
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