Saby v. Lycee Francais De San Francisco

Background

Fanny Saby sued her former employer, Lycee Francais De San Francisco. The employer moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), or alternatively to stay the case and compel arbitration under Sections 3 and 4 of the Federal Arbitration Act.

Saby did not dispute the existence, enforceability, or validity of the arbitration agreement. She also did not argue that her claims fell outside the agreement’s scope. Her only argument was that the employer had waived, or given up, its right to compel arbitration through its litigation conduct.

Waiver Analysis

The court applied the Ninth Circuit’s two-part waiver test: the party opposing arbitration must show that the other party knew about its right to compel arbitration and intentionally acted inconsistently with that right.

The court found the knowledge requirement satisfied because the employer knew about its arbitration right. But the court concluded that Saby had not shown intentional conduct inconsistent with that right.

The court considered the parties’ actions as a whole. It found that the employer had not intentionally chosen litigation instead of arbitration. The employer’s motion to compel arbitration was its first responsive filing after Saby filed her second amended complaint. The employer had not answered the complaint, engaged in discovery, or affirmatively told the court that it would not seek arbitration.

The court also found that the employer had not litigated the merits for a prolonged period to benefit from being in court. Before seeking arbitration, the employer had moved to dismiss based on alleged Labor Management Relations Act preemption and Saby’s failure to arbitrate as required by the contract. The court held that seeking dismissal for failure to arbitrate raised a procedural issue separate from the underlying merits, rather than seeking a decision on the central legal issues in Saby’s claims.

The court acknowledged that, in some circumstances, a motion to dismiss with prejudice can be inconsistent with a later request for arbitration. But it found that the employer’s earlier dismissal requests were based on Saby’s failure to arbitrate, not on the substance of her contractual or statutory claims.

Ruling

The court concluded that the employer’s overall conduct did not waive its right to arbitration. It emphasized that the employer had consistently maintained that Saby was required to arbitrate, had not answered or sought discovery, had not asked for decisions on substantive merits issues, and moved to compel arbitration as its first responsive pleading to the second amended complaint.

The court granted the employer’s motion to compel arbitration and stay the matter pending arbitration. It ordered the employer to file an arbitration status update by May 17, 2024. The order disposed of Docket No. 26.