Reynaud v. Riverbed Technology, LLC

Background

Bridget Michelle Reynaud served as Riverbed Technology, LLC’s Vice President of Global Field Operations from November 30, 2020, until Riverbed terminated her on August 19, 2022. Reynaud alleges that Riverbed discriminated against her because of her sex and retaliated against her for opposing gender discrimination. Riverbed says it terminated her for violating company policies and financial controls in connection with an attempted multi-million-dollar customer deal.

Reynaud and Riverbed’s offer letter contained an arbitration provision covering disputes arising from her employment or termination, including discrimination claims. The agreement also excluded certain claims, including disputes solely before government agencies and claims that the law expressly prohibited from arbitration. The letter stated that Texas law would govern except where the Federal Arbitration Act applied.

After Riverbed began an earlier arbitration concerning Reynaud’s retention bonus, Reynaud filed a counterclaim alleging sex discrimination under Title VII of the federal Civil Rights Act. Riverbed argued in that proceeding that the Title VII claim was not ready for arbitration, was excluded from arbitration, and had to proceed first through the Equal Employment Opportunity Commission and then in court. The arbitrator recorded that Riverbed had waived arbitration of the Title VII claim, and Reynaud voluntarily withdrew that counterclaim. The arbitrator later stated that the Title VII claims were outside the scope of the earlier arbitration.

Reynaud then filed this federal lawsuit asserting two Title VII claims, three claims under California’s Fair Employment and Housing Act, and one wrongful-termination claim based on public policy. Riverbed moved to compel arbitration of all claims and to dismiss the complaint until arbitration concluded.

Title VII Claims

The court applied the rule that a party waives arbitration when it knows about its arbitration right and acts inconsistently with that right. The parties agreed that Riverbed knew it had a right to arbitrate Reynaud’s sex-discrimination claims.

The court found that Riverbed acted inconsistently with that right during the earlier arbitration. Riverbed told the arbitrator that the Title VII claims had to be litigated in court after the required administrative process. The arbitrator twice recorded that position, and Riverbed did not correct those orders. The court found that Riverbed’s conduct caused Reynaud to withdraw her Title VII counterclaim and that Riverbed therefore waived arbitration of the Title VII claims.

The court denied Riverbed’s motion to compel arbitration of the Title VII claims.

California State-Law Claims

The court found that Riverbed did not waive arbitration of Reynaud’s California Fair Employment and Housing Act claims or her wrongful-termination claim. Reynaud had not brought those claims in the earlier arbitration, and the court concluded that Riverbed’s waiver applied only to the Title VII claims that Reynaud had actually asserted there.

The court also rejected Reynaud’s judicial-estoppel argument. Judicial estoppel is a rule that can prevent a party from taking a position that is clearly inconsistent with an earlier position. The court found that Riverbed’s current position—that the California claims had to be arbitrated—was not clearly or totally inconsistent with its earlier position, which the court understood as applying to the Title VII claims raised in the earlier arbitration.

The court granted Riverbed’s motion to compel arbitration of the California state-law claims.

Stay of Title VII Litigation

The parties agreed that the court had discretion to decide whether to pause the Title VII claims while the California claims proceeded in arbitration. Riverbed requested a stay, while Reynaud opposed one.

The court declined to stay the Title VII claims. It reasoned that Riverbed’s earlier position had prevented the Title VII claims from being resolved in the earlier arbitration and that a stay would cause further delay in resolving Reynaud’s civil-rights claims.

Disposition

Judge Susan Illston denied the motion to compel arbitration of the Title VII claims, granted the motion to compel arbitration of the California state-law claims, and declined to stay litigation on the Title VII claims pending arbitration of the California claims. The parties were directed to address the schedule for the Title VII claims at the initial case-management conference.