Lee v. Marriott International, Inc.

Background

Taylor Lee sued Marriott International, Inc.; Marriott International Administrative Services, Inc.; Starwood Hotels & Resorts Worldwide, LLC; and Samuel Spurrier. The opinion states that Lee worked at the Westin Maui until she resigned in early 2024 and claimed she was constructively discharged. Her claims include discrimination based on pregnancy, pregnancy disability, and gender; retaliation; alleged violations of the federal Pregnant Workers Fairness Act; and claims under Title VII, the California Fair Employment and Housing Act, the California Family Rights Act, the Family and Medical Leave Act, and California Labor Code section 1102.5.

The defendants moved to compel arbitration based on an “Acknowledgment of Agreement” Lee signed in August 2016 while working at the Ritz-Carlton San Francisco. The acknowledgment referred to a broader document called “The Ritz-Carlton Employee Agreement,” which contained a mandatory arbitration provision for most employment-related claims. Lee did not dispute that she signed the acknowledgment, but said she did not remember receiving or reviewing the full employee agreement and recalled being rushed when she signed.

Contract Formation

The court rejected Lee’s argument that she was not subject to the full Employee Agreement. It found that the defendants supplied substantial circumstantial evidence, including the signed acknowledgment and evidence about the hotel’s orientation and training practices, showing that Lee had been given the agreement. The court also noted that Lee did not unequivocally state that she never received it.

Contract Interpretation

The court then interpreted the agreement’s scope. The agreement described itself as an agreement between The Ritz-Carlton Hotel Company, L.L.C., or a related entity, and Lee. The defendants were not The Ritz-Carlton Hotel Company, L.L.C., so they had to show that they were a “related entity” under the agreement.

The evidence showed affiliations among the entities: The Ritz-Carlton Hotel Company, L.L.C., and Starwood Hotels & Resorts Worldwide, L.L.C., were both wholly owned subsidiaries of Marriott International, Inc.; separate entities managed the two hotels and paid Lee’s wages; and Marriott International, Inc. provided policies and common benefits to managed properties. But the court found that “related entity” was ambiguous. It concluded that the agreement’s Ritz-Carlton title and language favored Lee’s narrower interpretation rather than an interpretation covering every Marriott entity. Under California law, the ambiguity was construed against the company that drafted the agreement.

The court therefore held that the defendants were not a “related entity” for purposes of the Employee Agreement and could not invoke its arbitration provision for Lee’s Westin Maui employment.

Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act

The court identified an independent reason to deny arbitration. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act provides that, when a person alleging conduct constituting a sexual-harassment dispute elects a court forum, a predispute arbitration agreement is not enforceable for a case filed under federal, state, or tribal law that relates to that dispute.

Lee had not brought a separate claim labeled sexual harassment. The court nevertheless held that the Act applies based on the substance of the allegations rather than the label of a cause of action. Lee alleged a campaign of conduct related to her pregnancy and status as a working mother, including comments about “everyday Mom” employees, demands that she work during leave, new travel requirements after leave, and exclusion and marginalization at work. The court found that she plausibly alleged conduct relating to sexual harassment. It also rejected the defendants’ argument that only a separate harassment claim could prevent arbitration of the rest of the case, noting that the statute refers to the entire “case” and that the alleged harassment was intertwined with the discrimination allegations.

Disposition

Judge Chen denied the defendants’ motion to compel arbitration. The order states two independent grounds: the defendants were not covered “related entit[ies]” under the Employee Agreement, and, even if the agreement applied, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act allowed Lee to elect a judicial forum. The order disposed of Docket No. 33.