Employer Who Refuses to Arbitrate Loses the Right to Enforce Arbitration Clause

Plaintiff? was? fired? for ?allegedly? adding? to? her time card ten minutes that she did not work.? She served her employer with notice of intent to arbitrate the dispute seeking $710 in damages through the American Arbitration Ass?n as required by her employer?s ?Fairness in Action? program.?? ?Dillard?s?? ignored? ?her? ?notice? ?and refused to arbitrate so Plaintiff filed her action in California ?state ?court.?? Dillard?s ?removed ?the case? ?to? ?federal? ?court? ?seeking?? to? ?compel arbitration. The district court denied the request finding ?Dillard?s? arbitration ?contract procedurally and substantively unconscionable under California law.? The Ninth Circuit affirmed on different grounds holding that once Dillard?s refused to arbitrate, its breach prevented it from later? enforcing? the? arbitration? provision.?? The court remarked: ?If we took Dillard?s view…we would set up a perverse incentive scheme…to refuse to arbitrate claims brought by employees in the hope that the frustrated employees would simply abandon them.? ??[This case displays a dark side of our nation?s policy in favor of arbitration….Many people in Brown?s position would simply have given up.]?? The Court awarded fees on appeal to the Plaintiff.? Brown v. Dillard?s, Inc., No. 03-56719 (Dec. 6, 2005, Nelson, Wm. Fletcher, Bea).