United States District Court, N.D. California
ORDER GRANTING MOTION TO COMPEL ARBITRATION AND DENYING SANCTIONS RE:
DKT. NOS. 17, 18
JAMES DONATO, District Judge.
Yvette Assi, a former Citibank ("Citi") employee, filed suit after being discharged in May 2013. Despite agreeing to Citi's dispute arbitration policy when she was hired, Assi now seeks to litigate her employment claims in this Court on the ground that the Citi policy is unconscionable and unenforceable. This district has reviewed the Citi arbitration agreement in other cases and found it enforceable. This Court agrees and orders the case to arbitration. Citi's request for sanctions is denied.
The record before the Court is replete with facts showing Assi's consent to arbitration. When Assi initialed all pages and signed her employment offer with Citi on January 19, 2012, she agreed that any "controversy or dispute relating to [her] employment with or separation from Citi" would be subject to Citi's arbitration policy. Dkt. No. 17, Exs. A, B. She again agreed to be bound by this policy when she signed her Dual Offer Agreement and the Principles of Employment. Id. at Exs. B, C. She also initialed the pages containing the arbitration provisions. Id. at Exs. A, B, C. In addition, Assi completed an employment application, which required her to acknowledge that she understood that Citi had an employment arbitration policy described in the Employee Handbook and the Principles of Employment. Id. at Ex. D. She acknowledged receiving the handbook and a copy of the policy. Id. at Ex. E.
The Citi policy requires employment-related disputes to be conducted under the Employment Dispute Resolution Rules of the American Arbitration Association ("AAA"), as modified and expanded by Citi. Id. at Ex. G. The applicable rules are laid out in the policy itself. Id. The policy also states that if the rules are in conflict with AAA's rules at the time of filing an arbitration action, AAA rules prevail. Id.
After Assi was discharged from Citi in May 2013, she filed suit in the San Francisco County Superior Court. Dkt. No. 17, Ex. 1. Citi removed the case to federal court and demanded arbitration, but Assi refused. Id. This motion to compel arbitration and the motion for sanctions followed. Dkt. Nos. 17, 18.
I. MOTION TO COMPEL ARBITRATION
A. Legal Standard
Defendant's motion to compel arbitration is governed by the Federal Arbitration Act ("FAA"). The FAA's "overarching purpose... is to ensure the enforcement of arbitration agreements according to their terms so as to facilitate informal, streamlined proceedings." AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1748 (2011). "Agreements to arbitrate that fall within the scope and coverage of the Federal Arbitration Act... must be enforced in state and federal courts." KPMG LLP v. Cocchi, 132 S.Ct. 23, 24 (2011). A district court's role under the FAA is limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue. Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). If the district court determines that a valid arbitration agreement encompasses the dispute, then the FAA requires the court to enforce the arbitration agreement in accordance with its terms. Id.
Plaintiff does not dispute that an arbitration agreement exists and that it encompasses Assi's claims. The parties diverge with respect to the validity of the agreement. Specifically, plaintiff contends that the agreement is invalid because it is unconscionable.
Well-established precedent resolves this issue against Assi. To determine whether a valid, enforceable arbitration agreement exists, a district court must look to state law. Lowden v. T-Mobile USA, Inc., 512 F.3d 1213, 1217 (9th Cir. 2008) ("We apply state-law principles that govern the formation of contracts to determine whether a valid arbitration agreement exists."). A court may consider "generally applicable contract defenses, such as fraud, duress, or unconscionability... without contravening § 2 [of the FAA]." Doctor's Assocs. Inc., v. Casarotto, 517 U.S. 681, 687 (1996). Here, both parties have briefed and argued the issues solely under California ...