United States District Court, N.D. California
ORDER GRANTING MOTION TO COMPEL ARBITRATION
CHARLES R. BREYER UNITED STATES DISTRICT JUDGE
pending is Defendant's Motion to Compel Arbitration.
See generally Mot. (dkt. 14) at 2. Defendant
University of Phoenix (hereafter "University") is a
global higher education institution offering degree programs
online and at more than 100 locations across the United
States. Id. Plaintiff Bahar Mikhak is a former
faculty candidate denied a fulltime faculty position.
Opp'n (dkt. 18) at 1-2. Upon denial, Mikhak filed
unsuccessful employment discrimination claims with the Equal
Employment Opportunity Commission. Compl. (dkt. 1)
¶¶ 16-17. Mikhak then filed a complaint in the
Northern District of California alleging ten counts of
unlawful discrimination on the basis of religion, and related
claims in violation of Title VII of the Civil Rights Act, 42
U.S.C. § 2000(e)-2(a)(1), the California Fair Employment
and Housing Act, Cal. Gov't Code § 12940, and
Article 1, Section 8 of the California Constitution. See
generally Compl. The University now moves to compel
arbitration in accordance with an agreement in the University
Faculty Handbook that Mikhak signed consenting to arbitrate
all employment-related disputes. Mot. at 1.
explained below, the Court hereby GRANTS the Motion to Compel
Arbitration and STAYS the action pending the outcome of
University employed Mikhak for one quarter, from April 28,
2014, until October 13, 2014, as a faculty candidate at its
Livermore, California, location. Compl. ¶ 13. During
that time, Mikhak participated in the University's
three-phased process for faculty hiring: the Assessment,
Certification and Mentorship phases. Id. ¶ 21.
As part of the Mentorship phase, Mikhak taught "Research
Methods for Mental Health Counselors" under the
supervision of her assigned mentor. Id. ¶¶
several occasions during her Certification and Mentorship
phases, Mikhak alleges that she perceived bias against her on
the basis of religion. See, e.g., id.
¶¶ 29, 33, 55. Mikhak is a Muslim Submitter of
Iranian descent. Id. ¶ 11. In accordance with
her beliefs and the daily exercise of her religion, whenever
Mikhak contemplates a future action, she utters the phrase
"God willing." Id. According to Mikhak,
she first perceived bias during her second mock teaching
demonstration, when the College Campus Chair, Dr. Ryan
Berman, "stood outside [the classroom] . . . awkwardly
staring at her." Id. ¶ 28. As her course
progressed, Mikhak says that Berman subjected her to in-depth
inquiry, such as conducting unexpected classroom visits and
questions about her pedagogical methods. See id.
¶¶ 30-55. At the same time, Berman allegedly
demanded her to justify her utterance of "God willing,
" which he reported offended students. Id.
¶¶ 37-55. Mikhak contends that she faced repeated
complaints that appeared religiously motivated, including
that "students did not feel comfortable in the
classroom, " that she would retaliate against them in
her grading, and that she changed her behavior when her
mentor was present. Id. ¶ 64; see generally
id. ¶¶ 47-75. According to her, these
experiences detrimentally affected her health and well-being.
Id. ¶ 67. At the end of Mikhak's Mentorship
phase, despite a positive recommendation from her mentor, the
University did not invite her to become a full-time faculty
member. Id. ¶¶ 76-85.
University provided Mikhak with its 2014-2015 Faculty
Handbook, which included a new Dispute Resolution Policy and
Procedure and a binding arbitration agreement. Mot. at 3. The
arbitration agreement "applie[d] to any covered dispute
arising out of or related to the faculty member's
employment with and interactions with the University"
and required resolution of all disputes "only by an
arbitrator . . . and not by way of court or jury trial."
Id. at 3-4. The University emailed a link to all
faculty members and uploaded the document to its eCampus
online web portal, "the main University interface
between faculty and prospective faculty and his or her
students." Id. All faculty members had to
acknowledge receipt and understanding of the handbook by
clicking "Accept" on the "Faculty
Acknowledgment Detail" webpage. Id. at 3.
to Mikhak, the University first provided her with an outdated
2011-2012 handbook that lacked any information about
arbitration. Mikhak Decl. (dkt. 18-1) ¶ 16. The
University shared the updated 2014-2015 version with the
provision included on February 28, one week before requiring
acknowledgment. Id. ¶ 18; Mot. at 3. Mikhak
clicked "Accept" and thereby acknowledged that she
"agree[d] to arbitrate employment-related legal
claims" on March 7, 2014. Mot. at 4. On September 27,
2014, Mikhak accepted an Addendum Acknowledgment to the
handbook, the content of which was unrelated to the
arbitration agreement, declaring a second time that she
"underst[ood] and agree[d] to abide by the policies set
forth in the 2014-2015 Faculty Handbook . . . [her] continued
employment with the University is evidence of said
agreement." Id. at 5.
exhausting her administrative remedies to address her alleged
discrimination, Mikhak filed her complaint on February 26,
2016. See generally Compl. The University's
Motion to Compel Arbitration followed.
Federal Arbitration Act (FAA) provides that an agreement to
submit commercial disputes to arbitration 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. Such commercial
disputes include the employment context. See Circuit City
Stores, Inc. v. Adams, 532 U.S. 105, 109 (2001). The FAA
places arbitration agreements on "an equal footing with
other contracts and requires that private agreements to
arbitrate are enforced according to their terms."
Rent-A-Ctr. West, Inc. v. Jackson, 561 U.S. 63, 67
(2010) (internal citations omitted). A party may petition a
court to compel "arbitration [to] proceed in the manner
provided for in such agreement." 9 U.S.C. § 4.
"a party cannot be required to submit to arbitration any
dispute which he has not agreed so to submit." AT&T
Techs., Inc. v. Commc'ns Workers of Am., 475 U.S.
643, 648 (1986). However, courts have developed a
"liberal federal policy favoring arbitration
agreements." AT&T Mobility LLC v. Concepcion,
563 U.S. 333, 339 (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
that agreement encompasses the dispute at issue. If the
response is affirmative on both counts, then the Act requires
the court to enforce the arbitration agreement in accordance
with its terms." Chiron Corp. v. Ortho Diagnostic
Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000); see
also Howsam v. Dean Witter Reynolds, 537 U.S. 79, 84
agreements are "a matter of contract" and "may
be invalidated by generally applicable contract defenses,
such as fraud, duress or unconscionability."
Rent-A-Ctr., 561 U.S. at 67-68. Parties may
"agree to limit the issues subject to arbitration"
and "to arbitrate according to specific rules."
Concepcion, 563 U.S. at 345. "[T]he party
resisting arbitration bears the burden of proving that the
claims at issue are unsuitable for arbitration."
Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S.
79, 81 (2000).
University's agreement stipulates that the FAA controls,
which Mikhak does not contest. See Mot. at 3; Taylor
Decl. Ex. B (dkt. 14-4) ¶ 1; Opp'n at 3. Rather,
Mikhak disputes (A) the arbitrability of her claims; (B) the
validity of the arbitration agreement; (C) the enforceability
of the agreement on unconscionability grounds; and (D) the
validity of the agreement to arbitrate Title VII claims.
See generally Opp'n.
"gateway" question of arbitrability refers to
"whether the parties have submitted a particular dispute
to arbitration." Howsam, 537 U.S. at 83.
See also Rent-A-Ctr., 561 U.S. at 68-89. "[T]he
federal policy in favor of arbitration does not extend to
deciding questions of arbitrability." Oracle Am.,
Inc., v. Myriad Grp., A.G., 724 F.3d 1069, 1072 (9th
Cir. 2013). Courts should presume that they determine
arbitrability absent "clea[r] and unmistakabl[e]
evidence" that the parties agreed to delegate that
question to an arbitrator. Howsam, 537 U.S. at 83;
see also First Options of Chi., Inc. v. Kaplan, 514
U.S. 938, 939 (1995). Such clear and unmistakable evidence
can include "a course of conduct demonstrating assent .
. . or . . . an express agreement." Momot v.
Mastro, 652 F.3d 982, 988 (9th Cir. 2011) (omissions in
text). Courts should not necessarily resolve
ambiguities regarding the delegation of arbitrability in
favor of arbitration, see First Options, 514 U.S. at
944-45, nor should they apply "ordinary state-law
principles that govern the formation of contracts" as
they normally would, Momot, 652 F.3d at 987-88.
the University argues that the agreement "clearly and
mistakably delegates gateway issues of arbitrability to the
arbitrator" because it covers all "disputes arising
out of or relating to interpretation or application of this
Arbitration Agreement." Mot. at 11. That the agreement
incorporates the National Employment Arbitration Procedures
of the American Arbitration Association (AAA), see
Taylor Decl. Ex. B ¶ 3, further delegates arbitrability
to the arbitrator. See Mot. at 11.
held that incorporation of AAA rules constituted clear and
unmistakable evidence of intent to arbitrate arbitrability.
Brennan v. Opus Bank, 769 F.3d 1125, 1130 (9th Cir.
2015). Oracle previously suggested that its
arbitrability delegation rule applied only to agreements
between "sophisticated parties." Oracle,
724 F.3d at 1075. Joining the "vast majority of the
circuits, " Brennan did not wish to
"foreclose the possibility" that
"unsophisticated" parties whose agreement
incorporated AAA rules could also manifest clear and
unmistakable evidence of intent to arbitrate arbitrability.
Brennan, 796 F.3d at 1130-31. Nonetheless, the court
left open the circumstances of unsophisticated parties raised
by Oracle and said that it would not ". . .
decide here the effect if any of incorporating AAA rules . .
. into contracts of any nature between unsophisticated
parties." Id. at 1131 (internal quotations
omitted); see also Oracle 724 F.3d at 1075 n.2. The
court "limit[ed]" its holding to an arbitration
clause between two "sophisticated parties" in that
case, "an experienced attorney and businessman . . . who
executed an executive-level employment contract" and
"a sophisticated, regional financial institution."
Brennan, 796 F.3d at 1131. Incorporation of AAA
rules sufficed to show their intent to delegate
to Brennan, district courts within the Ninth Circuit
have not resolved if unsophisticated parties can possess the
clear and unmistakable evidence of intent to
arbitrate. In Dickey's, the court ruled
that an assessment of clear and unmistakable intent to
arbitrate between two parties must "first consider the
position of those parties." See Meadows v.
Dickey's Barbecue Restaurants
(Dickey's), No. 15-cv-02139-JST, 2015 WL
7015396, at *6 (N.D. Cal. Nov. 11, 2015) (Tigar, J.) (quoting
Rent-A-Ctr., 516 U.S. at 70 n.1 ("explaining
that the ‘clear and unmistakable' requirement is an
‘interpretive rule, ' based on an assumption about
the parties' expectations")). The
Dickey's plaintiffs represented a putative class
of franchisees and owners of Dickey's Barbeque
Restaurants. Id. at *1. Dickey's moved to compel
arbitration based on a franchise agreement that encompassed
"all disputes . . . arising out of or relating to this
agreement" and "incorporate[d] by reference the
commercial rules of the AAA." Id. at *4-*5. The
court concluded that it was unreasonable to expect that an
"inexperienced individual, untrained in the law, "
would understand that the language of an arbitration
agreement provided clear and unmistakable evidence of
arbitrability. Id. at *6. The individual
Dickey's plaintiffs were "each far less
sophisticated than Dickey's, " and had to agree to a
"complicated, 60-page agreement drafted by
Dickey's"; they apparently had no "legal
training or experience dealing with complicated
contracts." Id. Because these parties were not
sophisticated, the court held that the Brennan rule
did not apply in this context, and the court reserved the
question of arbitrability rather than delegating it to an
arbitrator. Id. at *7.
Galen upheld an arbitrability delegation clause in
an independent contractor agreement signed between the
employer Redfin and the plaintiff. Galen v. Redfin
Corp., No. 14-cv-05229-TEH, 2015 WL 7734137, at *7 (N.D.
Cal. Dec. 1, 2015) (Henderson, J.). The agreement encompassed
"[a]ll disputes among the parties" and incorporated
AAA rules. Id. at *1 ("Any arbitration shall be
conducted in accordance with the rules of the American
Arbitration Association then in effect"). The court
found that the plaintiffs possessed "at least a modicum
of sophistication" because they were real estate agents
required to obtain a professional license. Id. at
*7. This enabled the court to rule that the parties clearly
and unmistakably delegated arbitrability. Id.
in Khraibut, this Court enforced a delegation clause
in a non-disclosure agreement between an entrepreneur and the
defendant founder of the technology start-up firm Gravity4.
Khraibut v. Chahal, No. C15-04463-CRB, 2016 WL
1070662, at *6 (N.D. Cal. Mar. 18, 2016) (Breyer, J.). The
agreement stipulated that "any disputes or controversies
. . . shall be subject to binding arbitration" that
would be "administered by the [AAA] in accordance with
its Rules." See id. at *1. The Court followed
Brennan and "defer[red] to the AAA's Rules
on arbitrability." Id. at *5. The
Khraibut plaintiff was "at least minimally
sophisticated, " as he was a "savvy entrepreneur in
his own right" with previous "dealings in the
business world." Id. at *6. Consequently, the
Court found that there was "clear and unmistakable
evidence of delegation." Id.
Court first considers the "gateway" question of
arbitrability in the instant case. See Rent-A-Ctr.,
561 U.S. at 68-69. The University's arbitration agreement
"applies to any covered dispute arising out of or
related to the faculty member's employment with and
interactions with the University . . . [including] disputes
arising out of or relating to interpretation or
application" of the agreement. Taylor Decl. Ex. B.
¶ 1. The University argues that this broad clause
"clearly and unmistakably" demonstrates the
parties' intent to arbitrate arbitrability. See
Mot. at 11; Reply (dkt. 21) at 4. Mikhak does not directly
dispute the arbitrability of the agreement except by seeking
to invalidate it through standard contract law defenses, such
lack of mutual assent. See Opp'n at 4.
Notwithstanding the question of assent to the contract,
discussed infra Section B, the presence of an
"express agreement" itself is potentially enough to
establish potentially clear and unmistakable evidence of
intent to arbitrate arbitrability. See Momot, 652
F.3d at 988. Also contrary to Mikhak's briefing, the
arbitrability inquiry should not turn on ordinary contract
defenses. See Opp'n at 4; Momot, 652
F.3d at 987-88.
the broad nature of the arbitration agreement should not
weigh heavily in the analysis. The agreement's language
of "any covered dispute" is similar to the broad
language in the challenged clauses in Dickey's,
Galen, and Khraibut. See
Dickey's, 2015 WL 7015396, at *2; Galen,
2015 WL 7734137, at *1; Khraibut, 2016 WL 1070662,
at *1. More critical is whether the parties are
"sophisticated, " and if that finding is
dispositive. There is little question that the University
qualifies as a sophisticated party. It operates online and at
more than 100 locations across the U.S. and worldwide. Mot.
at 2. On the other hand, courts have been unclear on whether
a non-law professor qualifies as a sophisticated party in the
arbitrability and employment context (if, indeed,
sophistication is required). Mikhak is a former researcher
and only recently started to apply to teaching positions.
Mikhak Decl. ¶ 29. She possesses graduate degrees in
Epidemiology and Biostatistics, and Genetic and Molecular
Epidemiology, and she has taught epidemiology courses online
and in person. Compl. ¶¶ 25-26. Mikhak likely had
previously signed employment contracts with universities, and
she is undoubtedly intelligent. As an experienced professor,
she might have the sufficient "modicum of
sophistication" to express intent to arbitrate
arbitrability. See Galen, 2015 WL 7734137, at *7.
Yet based on her field of study, concluding that she is
sophisticated in this context is more difficult. She is not a
"savvy entrepreneur" with prior "dealings in
the business world, " see Khaibut, 2016 WL
1070662, at *6, she does not possess a professional license
in a legal or related field, see Galen, 2015 WL
7734137, at *7, and she certainly is not an "experienced
attorney and business[wo]man, " see Brennan,
796 F.3d at 1131. Her situation might be more analogous to
the inexperienced Dickey's plaintiffs who had no
evidence of "legal training or experience dealing with
complicated contracts, " and who had to sign a
"complicated, 60-page agreement" replete with
"a myriad of legal terms." See
Dickey's, 2015 WL 7015396, at *6. Mikhak had to
accept electronically "a number of terms" presented
in response to "a number of documents" related to
her hiring, including the 2014-2015 Faculty Handbook, which
she felt was "misleading" and contained
"inconsistencies." Mikhak Decl. ¶¶ 9, 15.
Such a barrage of materials might understandably seem
confusing to an individual without experience reviewing legal
documents or negotiating employment contracts. Because the
courts remain divided on whether parties must be
sophisticated to delegate arbitrability and because
Mikhak's sophistication is subject to dispute, it is not
certain that Mikhak clearly and unmistakably delegated
arbitrability. Absent that evidence, courts should not
presume delegation of arbitrability. See Howsam, 537
U.S. at 83. The Court therefore reserves its authority to
determine arbitrability and refuses to delegate that question
to the arbitrator.