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Employer can invoke arbitration clause

Where a delay in filing motions did not prejudice the plaintiff, an employer did not waive its right to compel arbitration in a discrimination suit.

Background

Smiley, a 50-year-old white man, worked for Forcepoint as a salesman. He says that Forcepoint engaged in a pattern of disparate treatment in favor of younger, female client executives. In support of that theory, Smiley claims that Forcepoint redirected established client accounts from older, male client executives to their younger, female colleagues and failed to discipline younger, female employees for poor performance. Because of this practice, Forcepoint eventually fired Smiley for failing to generate revenue.

Approximately seven months after Smiley filed his complaint, Forcepoint filed this motion to compel arbitration. Before Forcepoint filed this motion, Forcepoint had filed a motion for extension of time to file an answer, an answer, a proposed discovery plan, a motion for extension of time to respond to a discovery motion, a response in opposition to a motion to compel discovery and a motion for entry of an agreed protective order. Forcepoint filed no dispositive motions before moving to compel arbitration.

Smiley responds that the arbitration agreement is “ambiguous, non-mutual and unconscionable,” and asks the court to delay ruling on this motion until the parties conduct discovery regarding the employment agreement.

Analysis

The arbitration provision requires binding arbitration involving “any dispute or controversy whatsoever pertaining to or arising out of the relationship . . . [with] the Company.” Smiley’s employment discrimination claims arise out of his relationship with Forcepoint. Accordingly, the parties agreed to arbitrate Smiley’s claims under Title VII and the ADEA.

Smiley argues that the prohibitive costs of arbitration render the arbitration clause unconscionable and one-sided. When “a party seeks to invalidate an arbitration agreement on the ground that arbitration would be prohibitively expensive, that party bears the burden of showing the likelihood of incurring such costs.” Smiley has failed to demonstrate that the arbitration agreement prevents him from effectively vindicating his claims in arbitration. Other than a generalized “risk” that arbitration would result in prohibitive costs, Smiley has provided no evidence that arbitration would cause him to incur such costs. Because the parties consented to arbitration of Smiley’s claims and arbitration provides a means for him to vindicate his claims, the FAA governs the arbitration agreement in this case.

Smiley also claims that Forcepoint defaulted on its right to compel arbitration by failing to mention arbitration in its answer and for taking nearly seven months to invoke the arbitration clause. Forcepoint delayed invoking the arbitration clause for six months and twenty days. Such a short amount of time prevents Smiley from demonstrating actual prejudice from Forcepoint’s delay. Smiley argues that he suffered prejudice because he incurred approximately $20,000 in legal fees, but provides no facts to substantiate that claim. Smiley, therefore, suffered no actual prejudice from Forcepoint’s minimal delay.

Because Forcepoint filed no motions to dismiss, motions for summary judgment or any other dispositive motions before moving to compel arbitration, Forcepoint did not attempt to litigate this matter on the merits. Because neither Forcepoint’s delay nor its minimal trial-related activities demonstrate that Smiley suffered actual prejudice, Forcepoint has not defaulted on its right to enforce the arbitration agreement.

Motion granted.

Smiley v. Forcepoint Federal LLC, Case No. 18-cv-00026, Nov. 5, 2018. EDVA at Richmond (Gibney). VLW 018-3-475. 8 pp.

VLW 018-3-475