Norma Marquez v. Brookdale Senior Living
3:13-cv-05320
| N.D. Cal. | Apr 8, 2014Background
- Marquez was hired by Brookdale in 2011 and signed Brookdale’s mandatory Employment Arbitration Agreement as a condition of employment.
- Brookdale terminated Marquez in 2013 after receiving a hotline tip about inappropriate workplace conduct and reports she injured her back; Marquez sued in state court for discrimination (sexual orientation, disability/medical condition) and wrongful termination.
- Brookdale removed the action to federal court and moved to compel arbitration under the signed agreement and sought Rule 11 sanctions against Marquez and counsel.
- Marquez argued the arbitration agreement was unenforceable (waiver, procedural and substantive unconscionability) and opposed arbitration; she also failed to timely file a Local Rule 7-3 opposition.
- The court found Marquez had signed a valid, broadly worded arbitration agreement covering her claims, declined to find Brookdale waived arbitration, struck unconscionable injunctive-relief and fee-shifting provisions, and stayed the case pending arbitration.
- The court denied Brookdale’s sanctions request for procedural and substantive reasons (Local Rule procedural defect and no showing of bad faith).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence and scope of arbitration agreement | Agreement unenforceable; disputes may not be arbitrable | Marquez signed a broad agreement covering employment and termination disputes | Agreement existed and covered Marquez’s claims; arbitration compelled |
| Waiver of arbitration right | Brookdale delayed and thereby waived the right to arbitrate | Brookdale consistently sought arbitration and did not prejudice Marquez | No waiver; delay did not produce prejudice or substantial litigation steps by Marquez |
| Unconscionability (procedural & substantive) | Agreement was oppressive (take-it-or-leave-it) and contained one-sided terms (injunctive clause; fee-shifting) | Agreement is governed by FAA and enforceable; provisions are bilateral on their face | Procedural unconscionability minimal but present; injunctive-relief and certain fee provisions were substantively unconscionable and severed; remainder enforced |
| Sanctions under Rule 11 | N/A (defensive posture) | Complaint frivolous; counsel acted in bad faith | Denied: Brookdale failed to bring a separate motion per local rule and did not show bad faith or objectively frivolous filing |
Key Cases Cited
- Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir. 2000) (court first asks whether parties agreed to arbitrate and whether agreement covers dispute)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (arbitration is a matter of consent defined by contract)
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (U.S. 2001) (FAA covers employment arbitration agreements)
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (U.S. 2011) (FAA preempts state rules that single out arbitration agreements)
- Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (Cal. 2000) (California standard: arbitration clauses in employment contracts must be both procedurally and substantively conscionable; severance doctrine)