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One-Sided Job Arbitration Agreement Not Enforceable

Nino v. Jewelry Exchange, Inc., Case No. 09-1268 (C.A. 3, Jun. 15, 2010)

Rajae Nino brought this action against his former employer, alleging that he was discriminated against on account of his gender and national origin. After litigating the matter before the District Court for fifteen months, the employer invoked an arbitration provision in Nino’s employment contract and moved the District Court to compel the parties to arbitrate their dispute. Nino opposed the motion, arguing (1) that the arbitration agreement was unconscionable and, therefore, unenforceable, and (2) that by engaging in extensive litigation of this dispute, the employer had waived its right to compel arbitration. The District Court concluded that although the arbitration agreement contained unconscionable terms, those provisions could be severed from the contract and the remainder of its terms could be enforced. The Court then concluded that the employer did not, through its litigation conduct, waive its right to compel arbitration. We disagree.

In our view, the pervasively one-sided nature of the arbitration agreement’s terms demonstrates that the employer did not seek to use arbitration as a legitimate means for dispute resolution. Instead, the employer created a system that was designed to give it an unfair advantage through rules that impermissibly restricted employees’ access to arbitration and that gave the employer an undue influence over the selection of the arbitrator. We hold that it is not appropriate, in the face of such pervasive one-sidedness, to sever the unconscionable provisions from the remainder of the arbitration agreement. We further conclude that the employer, by engaging in protracted litigation of this matter before belatedly seeking to arbitrate its dispute, waived its right to compel arbitration. We will thus reverse the District Court’s order compelling the parties to arbitrate.

I.

A.


Diamonds International (“DI”) is one of the world’s largest jewelry retailers. Nino is a Jordanian national who, in January 2000, agreed to work for DI as a salesperson and gemologist. Because Nino did not have a United States work visa when he was hired, he was assigned to DI’s Aruba store, where he was paid $450 per week, plus commissions and housing. DI helped Nino obtain a United States work visa, after which it transferred him to its Alaska store. In September 2000, DI asked Nino to transfer to its St. Thomas location, and he agreed.

Upon his arrival at the St. Thomas store, Nino was given a copy of the company’s standard employment contract. The following are some of the procedures and deadlines contained in the contract that we find most troublesome. Article IV of the contract sets forth a grievance and arbitration procedure that the contract describes as “the sole, final, binding and exclusive remedy for any and all employment[-]related disputes.” (J.A. at 80.) The remedial process outlined in Article IV requires an aggrieved employee to satisfy a series of requirements before he is eligible to arbitrate a dispute. First, the employee must file with his manager a detailed written grievance within five days of having received notice of the action complained of; the manager is then required to respond with a decision within two days. If the employee is unsatisfied with the manager’s decision, he must re-file the grievance with the managing director within two days of having received the manager’s decision; the managing director is then required to respond with a decision within five days. If the employee is not satisfied with the managing director’s decision, he must file a written request for arbitration with the managing director within five days of having received the decision.
 

 

Judge(s): McKee, Fuentes, Nygaard
Jurisdiction: U.S. Court of Appeals, Third Circuit
Related Categories: ADR , Contracts , Employment
 
Circuit Court Judge(s)
Julio Fuentes
Theodore McKee
Richard Nygaard

 
Plaintiff Lawyer(s) Plaintiff Law Firm(s)
Terri L. Griffiths, Esq.

 
Defendant Lawyer(s) Defendant Law Firm(s)
Jessica Chung Moore Dodson & Russell PC
Treston Moore Moore Dodson & Russell PC
Charles Russell, Jr. Moore Dodson & Russell PC

 
Amicus Lawyer(s) Amicus Law Firm(s)
Anne Occhialino Equal Employment Opportunity Commission

 

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employee's failure to adhere to the strict five-day filing that "[t]he peremptory challenge is `an important aspect of trial a result of the defendants' belated invocation of their right to 70c lindbergh bay, suite 134 of having received notice of the action complained of; the stenographer are to be borne equally by the parties. under the discovery not available in the arbitration forum," hoxworth, 980 having to participate in fifteen months' worth of discovery in of arbitration. we note that if the unconscionable terms had the same time that it filed its motion to compel arbitration, and compel arbitration. while the case-specific waiver analysis is to seek arbitration even if it has not yet filed a nino's claims, rather than staying litigation pending the results agreement are likewise unconscionable. we do not find these 212, 213 (3d cir. 2003). under the faa, arbitration agreements reveals unmistakably that di "was not seeking a bona fide entire contract [as opposed to the validity of the arbitration -33- expenses, is substantively unconscionable.5 scope of the parties' discovery during the fifteen-month period the unconscionable terms may be severed from the agreement without pay and was threatened with termination. the rationale instructed him to "read it and sign it," (s.a. at 18), without spinetti, 324 f.3d at 216 (internal quotations and citations exchange' of promises" between the parties. spinetti, 324 f.3d preclude severance and enforcement of arbitration if they because di included mandatory arbitration among the ten at 214 (quoting restatement (second) of contracts 184(1)). . interpret, apply and be bound by the employer's rules, diminished the longer di litigated this case without raising the -22- the manager wrote up both nino and lettsome for being also ehleiter, 482 f.3d at 222 (such expense and delay constitute requirement amounts to a default on his claims, the agreement agreement is unenforceable is not an essential part of the agreed under virgin islands law, "[t]he doctrine of nature of this agreement, "no reasonable finder of fact could employee is permitted to strike just one. grounds that the parties' contract made arbitration the sole mechanisms with conflicting deadlines and other irreconcilable a. prejudice). while we are mindful of the fact that "waiver is not and submitted a joint proposed case management order (which elements." edwards, 497 f.3d at 362 (citation omitted). the arbitration. the district court concluded that although the invoked an arbitration provision in nino's employment contract 500 u.s. 20, 31 (1991). consequently, a party's evidentiary and clauses from the arbitration agreement and enforce the their own attorney's fees, costs, and expenses work to "the c. waived where a sufficient showing of prejudice has been made intended to encourage private citizens to enforce the statute's affirmative defenses asserted in the answer, di had "informed deadlines. these procedures provided di with an c. to compel arbitration has contested the merits of its opponent's who will be the arbitrator for this grievance or the inter alia, that he had been discriminated against on the basis of the district court had jurisdiction over this case under confers a benefit, even if the arbitration panel is composed of unduly unfavorable to di. nino likewise argues that a provision challenge in jury selection--it enables the parties to eliminate an with adequate notice of the fact that it would eventually move mechanism for dispute resolution, but rather sought to impose one of nino's co-workers, jason lettsome, falsely accused nino b. arbitrator's and stenographer's fees is unconscionable. in order see alexander, 341 f.3d at 265. good reason: limited in arbitration than in litigation," in re cotton yarn severed "requires more than a count of the unconscionable business as diamonds international, and we, like the parties, first, we agree with nino and the district court that the arbitrate . . . [; 2] the degree to which the party united states, 451 u.s. 182, 188 n.6 (1981)). indeed, it would -36- federal court)." ehleiter, 482 f.3d at 223. the employee handbook, in turn, sets forth a process for complaint led it to believe that the parties had somehow altered evidence a deliberate attempt by an employer to impose an employee who does not file grievances within the applicable terms than in parilla, but, much more significantly, those terms just one. the employee is required to give notice to di of the agreement of both parties," (id. at 82), meaning that an arbitration agreement is thus procedurally unconscionable. first an agreement, including the use therein of fine print and is permitted to strike just one. under these circumstances we can readily infer (citation omitted), and although we have addressed instances of ehleiter, 482 f.3d at 223, and di's delay "caused [nino] the relied primarily upon this factor in its analysis, reasoning that hoxworth factors, and, consequently, to the more practical address these unreasonable contract terms in turn below. challenges the validity of the agreement, a threshold question of to pretrial orders is not remotely comparable to the conduct at independent bases for declining to sever the unconscionable in which we held that an employment contract was not through arbitration." puleo v. chase bank usa, n.a, --- f.3d litigation, become the employer's opening bid in a negotiation arbitration. nino filed this timely appeal of the district court's the authorities upon which di relies do not compel a parties can decide on an arbitrator that would be the "defendants were able to use the federal rules to conduct arbitration may more easily show that its position arbitration agreement was unconscionable and, therefore, at di's place of business "at a date and time mutually that the party claiming waiver has already waiver. unconscionable. we agree. as we have explained: 131 m. street, n.e. be bound to enforce an unlawful employment policy. arbitration agreement contained unconscionable terms, those behind nino's suspension was that nino had allegedly used a id., makes clear that when a party to an arbitration agreement case is unconscionable presents such a question of arbitrability. the investment of considerable time and money litigating a case attorney fees to prevailing claimants rather than antitrust litig., 505 f.3d 274, 286 (4th cir. 2007), and that, as factor weighs against a finding of waiver, as it did not engage in di advances several arguments in defense of the provision requiring parties to bear their own fees, costs, and arbitration clause is unconscionable, we apply the "ordinary to arbitrate. this recognition that the right to arbitrate may be the jewelry exchange, inc.; wendy tarapani if a thirty-day filing window is "clearly unreasonable," unreasonably favorable to [di]." alexander, 341 f.3d at 267. will refer to it by that name. consideration that the district court failed to address in its of his gender and national origin. after litigating the matter mention them only briefly. first, nino suggests that the (where an award of attorney's fees was available) or arbitrated the filing requirement in nino's arbitration agreement is not called for, and the court should decline to enforce the -30- arbitrator's fees would likely amount to, and nino made no such [w]here a party fails to demand arbitration during restoration preservation masonry, inc. v. grove europe ltd., procedurally and substantively unconscionable, and that the contract describes as "the sole, final, binding and exclusive unconscionability, may be applied to invalidate arbitration choice of dispute resolution and does not infringe barely address this point--indeed, nino raises it only in passing doctor's assocs., 85 f.3d at 981. f.3d at 222 (quotations and citations omitted). as the hoxworth contract's arbitration agreement. di's contention that the arbitrators from the four-member aaa panel, whereas the here, we not only have a greater number of unconscionable suspension, and he alleges that he was constructively engages in pretrial activity inconsistent with an a decision within five days. if the employee is not satisfied with nino's contention that the arbitration agreement at issue in this 173 f.3d 933, 940 (4th cir. 1999), and we have consistently arbitration at any of these conferences, nor did it object to any usvi 00802 -18- before receiving the motion to compel arbitration, nino was not unconscionable. the court held, however, that the litigating the case in court, and would be required personal or financial interests in the controversy does not mean throughout which di was silent as to the matter of arbitration; the arbitration clause's ban on attorney's fees is unconscionable, employees]." alexander, 341 f.3d at 271. when the litigation of this matter before belatedly seeking to arbitrate its guarantees and [] if successful plaintiffs were forced to bear -37- (3d cir. 2004) ("it is up to the court, prior to granting such an (characterizing a four-year delay as especially "egregious"), di the unconscionability analysis. id. (citation omitted); see also order compelling such arbitration." id. (citing, inter alia, 9 their dispute. nino opposed the motion, arguing (1) that the (citation omitted). we have consistently found that adhesion transferred. given that the contract was presented to nino on a september 2007, when it finally filed a motion to dismiss based right to enforce the arbitration clause, notwithstanding its rajae nino, from the affirmative defense asserted in its answer to the 28 u.s.c. 1331 and 48 u.s.c. 1612(a). we have a. the timeliness of di's motion employer, alleging that he was discriminated against on account the decision of the managing director final as to all decisions -2- litigated with no further indication that a motion to compel although "a district court should ordinarily be accorded the parties to proceed to arbitration, and dismissed all the claims v. contract in question, undercutting di's explanation for its delay. agreement's one-sided provisions is to stack the deck in di's federal, state, local and common law." (j.a. at 82.) nino gender and national origin. as the seventh of the ten2 financial corp.-alabama v. randolph, 531 u.s. 79, 89 (2000) power between the two parties at the time the contract was 102-40(i), civil rights act of 1991 (apr. 24, 1991)). the counsel for appellees manager is then required to respond with a decision within two deposition that di understood which contract the complaint was complaint. nino, who is a gay man, did not initially disclose his commencement of the lawsuit and the filing of the defendant's to his co-workers that he was gay. according to the complaint, title vii cases, just like courts, must be guided by be "valid and enforceable" before arbitration can be compelled, having received the decision. by no means de minimis. unconscionable provisions were severable from the remainder neutral, impartial arbitrators, as must be presumed, di will not arbitration. although nino argues that this factor tilts in his contrary to the district court's reasoning that nino could the complaint states that di refused to provide nino8 -12- opposed the motion on the grounds that the one-sided nature of 926-27. unconscionable by demonstrating that the contract contains arbitrability is presented for the court to decide. see howsam3 in the agreement requiring the parties to evenly share the behind arbitration itself--arbitration is meant to streamline the products co., 43 f.3d 1244, 1248-49 (9th cir. 1994). as we proceedings, lower costs, and conserve private and judicial arbitration agreement's provision requiring that an employee file days after the selection of an arbitrator has been made." (id.) (1996) ("[g]enerally applicable contract defenses, such as . . . their own attorneys' fees, few aggrieved parties would be in the whether the arbitration provision unreasonably favors the party spinetti, 324 f.3d at 216. saddled with the consequences of the provision as drafted." over the employee in the selection of an arbitrator are september 2007 weighs firmly in favor of a finding of waiver. inconsistency between the defendant's litigation conduct and its arbitrate has been waived by litigation conduct." ehleiter, 482 (explaining that "where . . . the district court has ordered the process, the process cannot be considered unreasonably supplementation of disclosures pursuant to federal rule of civil assert that the dispute should have been arbitrated, not litigated, parilla v. iap worldwide servs., vi, inc., 368 f.3d 269, 275-76 agreement a mechanism for striking potential arbitrators if the practice, di's assent to the magistrate judge's pretrial orders, arbitration even if it has not yet filed a motion to stay the district were the agreements at issue in alexander and parilla. indeed, employee handbook contain disparate dispute resolution (j.a. at 81.) although it is phrased in neutral, procedural terms, has been compromised, i.e., prejudiced, because employee. of the four members of the arbitration panel, the -42- see parilla, 368 f.3d at 277-78; alexander, 341 f.3d at 266. as the rules of evidence," gilmer v. interstate/johnson lane corp., arbitration does not mean that nino was not prejudiced by where, as here, "the demand for arbitration came long after the favor." parilla, 368 f.3d at 289; see also, e.g., nagrampa v. specifically, the process described in the handbook differs from (opinion filed: june 15, 2010) inadequate responses to his discovery requests, which resulted or may so limit the application of any unconscionable term as to on its relative importance in the light of the entire agreement on september 26, 2007, after litigating this dispute for in the first place. 412, 417 (1978),] and must ordinarily grant zimmer, 523 f.3d at 228. "are enforceable to the same extent as other contracts." reject di's suggestion that it would derive no benefit from complaint's language supports such an inference. second, if di p.o. box 310 own fees and costs were unconscionable. 368 f.3d at 277-79. was silent as to the question of arbitration); they attended no provisions from an arbitration agreement. that is, if the from invoking the continuing violation and tolling doctrines." contract in this case is even more unduly favorable to di than would be mutually acceptable," (j.a. at 81)--the selection designed to give it an unfair advantage through rules that charlotte amalie, st. thomas to his allegations, nino's co-workers began to fixate upon the 265 (quoting restatement (second) of contracts 208 cmt. d). the upshot of this provision is that di is permitted to strike two not hesitated to conclude that provisions in arbitration if an employee manages to navigate the labyrinth of potential arbitrators from the panel is akin to a peremptory complaint and di's invocation of arbitration was significant, see dwarfs the delay involved in cases where we have found no 523 f.3d at 228 ("substantive unconscionability looks to and attending four depositions. if an employee satisfies these grievance filing "prejudice is the touchstone for determining whether the right to june 2006 and september 2007, the magistrate judge convened their only possible purpose is to undermine the neutrality of the manner, and this factor weighs firmly in favor of waiver. as in di asked nino to transfer to its st. thomas location, and he personal or financial interest in the results of the proceeding in compensation; "di had difficulty in locating this document"; a party may show that an agreement is procedurally 61 f.3d at 1069 (two months); gavlik (defendant moved for stay omitted); see also spinetti, 324 f.3d at 214. mutually acceptable. (j.a. at 13.) -19- opportunity to rule on the issue of severance based on a practice and the fact that di listed arbitration as an affirmative for the district of the virgin islands who was weighing "multiple offers of employment at the time court proceedings." 980 f.2d at 926-27. the district court enforce the contract." restatement 208 over the arbitrator selection process. the ability to strike performance is an essential part of the agreed exchange depends inferior forum that works to the employer's advantage." parilla, -35- -23- claims." hoxworth, 980 f.2d at 926. di is correct that this the contract further provides that the parties are entitled to be decreased the longer di participated in this litigation without invested considerable time and expense in scope of arbitration agreements." zimmer v. cooperneff -32- manifestly did not move to compel arbitration in a timely between june 2006, when it was served with the complaint, and "alter[] the terms [of the arbitration agreement] so that the aaa governing the selection of an arbitrator, which nino contends is [section] 208 of the restatement (second) of (4th cir. 2002) (internal quotations and citations omitted). finding of waiver, and "[t]he waiver determination must be essential aspect of the arbitration agreement as a whole, then the advisors, inc., 523 f.3d 224, 228 (3d cir. 2008) (citation if the unconscionable aspects of the clause do not comprise an relevant to the prejudice inquiry." ehleiter, 482 f.3d at 222. provisions are not uncommon in arbitration agreements, see, provisions could be severed from the contract and the remainder clause--the fact that di did not engage in merits-based motion requires employees to file the initial grievance within two shipping corp., s.a., 310 f.3d 102, 105 (2d cir. 2002) -41- enforce an arbitration agreement must use it or lose it. diamonds international ("di") is one of the world's position of the party claiming waiver. remaining names of panel members. this process bound by the employer's rules, regulations, policies and gain any benefit by having an additional strike." (di br. 16.) dispute, waived its right to compel arbitration. we will thus practice that transpired in this case during the fifteen-month disinterested and unbiased candidates. darbin v. nourse, 664 after having made that initial invocation without making any is apparently not required to provide detailed and written notice at issue in this case. f.2d at 926-27. although "the length of the time period proceeding," hooters, 173 f.3d at 938 (emphasis added), the employer. the employee will then be asserting it.") (quotation marks and citation omitted). we exercising its contractual right to strike twice as many potential to the store manager, and lettsome in turn complained to the arbitrator for whatever reason is unacceptable to unenforceable, and (2) that by engaging in extensive litigation did not seek to use arbitration as a legitimate means for dispute banc); hooters, 173 f.3d at 939-40; graham oil co. v. arco the absence of substantive prejudice to the legal selection of an arbitrator has been made." (j.a. at 81.) that is, additional provisions to be unreasonable, and we therefore not susceptible to precise line-drawing, certainly di's arbitration). cmt. a. the waiver context, where prejudice to the non-movant is the american recovery corp. v. computerized thermal11 hostile working environment. nino did not file a grievance with upon statutory protections. therefore, if we first address the district court's decision to sever the opinion of the court assent to the court's pretrial orders; and [6] the additionally, the court determined that di had not waived its employee, not simply as an alternative to litigation, but as an plaintiffs incurred in participating in thirteen pretrial endure [fifteen months] of what would have been (had [di] nino's challenge is limited to the provisions of the arbitration key, an initial invocation of the defense of arbitration becomes it is well established that arbitration is merely a provided to nino do not purport to reconcile the differences for arbitration with the managing director within five days of discovery." painewebber inc., 61 f.3d at 1068-69 (internal otherwise unconscionable," the time period designated by the -21- pending arbitration "immediately" after removing the action to had signed a new contract updating the terms of nino's will continue until there remains one arbitrator treston e. moore, esq. trade the procedures and opportunity for review of the explained in parilla, the principle of foreclosing severance (where, on paper at least, such an award was unavailable). in before it, that decision is `final' within the meaning of it confers an advantage upon di for no discernable purpose exclusive remedy for my employment-related disputes." (id.) "diamonds international agreement," in which nino we have, moreover, consistently emphasized that "nature of the provisions" themselves. parilla, 368 f.3d at 286. had no opportunity to negotiate with di over the contract's -8- di, in arguing that the parties' discovery-related activities supplies a panel of five (5) arbitrators instead of four (4)." (di visa when he was hired, he was assigned to di's aruba store, normally be found only where the demand for arbitration came connected to the controversy or biased against a party. j.e.b. v. appears to overlook the context in which the court made the three detailed motions to compel, which di opposed. id. at 925. reverse the district court's decision to sever the unconscionable inconsistent with an intent to arbitrate, notes that the parties' and moved the district court to compel the parties to arbitrate more serious untimeliness, see ehleiter, 482 f.3d at 223 we have explained, such a provision enhances the unfairness of agreements without contravening 2 [of the faa]."); see also enforce the remainder of the agreement. we have repeatedly expense of litigating in court, as well as . . . making [nino] as di notes, rather than declining to enforce the agreement in 368 f.3d at 288 (quoting ferguson v. countrywide credit unconscionable terms. as we have explained, "[b]ecause the to the trial court's pretrial orders for thirteen months longer than that a party derives no benefit from having a greater influence [trial] court's pretrial orders," id. at 926-27, an important resources, and it furthers none of those purposes when a party acknowledged that he had received di's employee handbook. severance of those provisions and enforcement of the remainder -24- upon the arbitration clause. in particular, the parties conferred parilla, we remanded for further proceedings as to whether f.3d at 264 (quoting 1 v.i. code ann. 4). section 208 of the requirements for filing and refiling grievances in order to make as we recognized most recently in parilla, two lines of arbitration agreement in its entirety. see id. at 288; alexander, complaint, di filed a motion to dismiss nino's claims on the according to nino's allegations, on february 2, 2005, the arbitrator. we hold that it is not appropriate, in the face of its adversary of the intention to seek arbitration," and the fact http://www.adr.org/sp.asp?id=32904#12 (last visited june 14, indeed, the arbitration agreement in this case imposes no notice rajae nino brought this action against his former waived under such circumstances is consistent with the purpose unconscionable provisions of an arbitration agreement should be litigate, and the more that party's litigation results in prejudice right to compel arbitration. we disagree. _____________ we pause to note an additional concern under the4 production in this case, di produced the very document it now were the plaintiffs in alexander, we cannot agree with di that (emphasis added). accordingly, we must agreement in any way addressed or modified the original the arbitration agreement's requirement that the parties bear (first) of contracts 603, or `serious misconduct,' restatement with a copy of the company's employment contract and advantage, then severance of the unconscionable provisions is enforcement of the bargain will be denied if the person seeking alabama ex rel. t.b., 511 u.s. 127, 148 (1994) (o'connor, j., contrary conclusion. di draws our attention to maxum found., issue in maxum. di's long-term assent to the magistrate11 inappropriate.6 unconvincing. first, di contends that because the agreement alexander, 341 f.3d at 267. such provisions also undermine the obligation to provide any notice to the employee. the employee hackwell v. united states, 491 f.3d 1229, 1240 (10th cir. 2007) advantages for the employer that are not afforded to the agreement's provision requiring that the arbitration take place at the contract insulates di against a comparable risk of contended that nino was "contractually barred to any remedy provisions of the parties' arbitration agreement comprise an conduct, waived its right to compel arbitration. see ehleiter v. remainder of the agreement.7 favorable to di. such reasoning would provide cold comfort to discharged, i.e., that he was compelled to resign due to the procedure, and that the fees and expenses of the arbitrator and sexual orientation to his co-workers in st. thomas. according the narrow filing window because it "prevents an employee 341 f.3d at 270-71. expressed in the restatements of the law approved by the based on the circumstances and context of the particular case." motion to compel arbitration. di litigated this case and assented seriously prejudiced by having received the dismissal motion a host of employment offers at the time he negotiated his long after the suit commenced and when both parties had take-it-or-leave-it basis." id. at 266 (citation omitted). as nino defendant waived its right to seek arbitration because the although nino contends that this was a pretext for put more succinctly, at some point a party seeking to10 avoid any unconscionable result." citations omitted). notwithstanding the preference for (rather than five) days of the complained-of action, and it makes decision; the managing director is then required to respond with the arbitration agreement enforced. see id. "whether the forum. id., then the five-day filing requirement imposed by the parties' strategize around the initially disclosed prospect of arbitration, ----, 2010 wl 1838762, at *3 (3d cir. may 10, 2010) (citation between the contract and the handbook, nor do they explain pervasively one-sided nature of the agreement forecloses any the business entity named as a defendant in this1 their arbitration agreement is unconvincing, as nothing in the favor of a finding of waiver. id. (internal quotations and citations omitted). in other words, f. extent to which both parties engaged in discovery no. 09-1268 by jury,'" the ability to strike potential arbitrators undoubtedly understood that the complaint's reference to a new contract was, restatement (second) of contracts 184. the court thus held nino's claims. see 9 u.s.c. 3; lloyd v. hovensa, llc., affirmative defenses asserted in its answer to the complaint, di through its litigation conduct, waived its right to compel effect on our analysis. fifteen months with no mention of the arbitration clause apart resources on discovery-related matters as a result of di's affording him any opportunity to negotiate over its terms. as discovery needs will be substantially different depending upon with a copy of this agreement, and so di admittedly could not prospect of arbitration. resolution of the waiver issue. in the fifteen months between waive certain contract provisions can have no take place "in no event more than thirty (30) days after the f.2d at 926, di contends that there could be no prejudice in this who will be the arbitrator for this grievance or the employer sought to impose arbitration on the employee as an is substantively unconscionable. we have twice held in no instance, not by a federal or state court." preston v. ferrer, 552 ii. method of resolving employment-related disputes. nino third, on november 20, 2006, as part of its discovery that the remainder of the arbitration agreement was enforceable. delayed in moving to compel arbitration. underlying dispute or to the parties or their counsel that may claims not to have been able to locate. finally, notwithstanding district court's analysis overstates its significance in this case. looking first to the question of procedural in favor of a finding of waiver. state law principles . . . of the involved state or territory," which, di next suggests that because "the panel is comprised of agreement as a whole, or if the agreement demonstrates that the discrimination. nino did not return to work following his as we now explain, we further conclude that the district where the contractual terms demonstrate a systematic effort to clause. unconscionability holding on the convoluted nature of the conclude that the clause, like the five-day filing window and the cited statement. in maxum, the plaintiff argued that the favorable" to the employer. alexander, 341 f.3d at 266. signed, we agree with nino and the district court that the -27- timely manner, "the last decision given by [di] shall be a final remaining names of panel members. this process for above are binding and may not be waived except by written precedential on a take-it-or-leave-it basis"--satisfy the procedural element of its litigation conduct, di had waived any right to enforce the the unconscionable provisions was appropriate. id. at 289. mailcoups, inc., 469 f.3d 1257, 1293-94 (9th cir. 2006) (en that nino's counsel received the dismissal motion two days nino could not have known that outcome as the case was being factors themselves make clear, the concept of prejudice includes additional terms were unconscionable and whether severance of dispositive one, for the waiver analysis. hoxworth, 980 f.2d at br. 16.) our precedent forecloses such an approach, and with bargaining power and presented to the other party "for signature gemologist. because nino did not have a united states work review over questions of law concerning the applicability and the case were now to proceed in the arbitral challenge to the arbitration agreement is to determine whether no aspect of this explanation withstands scrutiny. first, on the same day that nino signed the employment lacking in the rudiments of even-handedness." murray v. where he was paid $450 per week, plus commissions and trial court ruled on the motion. id. at 982-83. there was no the risk of default for any failure to adhere to its own filing basis, the time constraints placed upon such discovery would intent to arbitrate, the party later opposing is a large corporation that "conducts business throughout the right to compel arbitration--as in hoxworth, di "inadequately sufficiently developed record," given the inescapably one-sided contract with the defendant, nino depended upon di for his very they "unreasonably favor [di] to the severe disadvantage of [its defense--the district court relied most heavily upon di's "impermissible advantage," parilla, 368 f.3d at 289, because 497 f.3d 355, 362-63 (3d cir. 2007); parilla, 368 f.3d at 275; thomas store, di's human resources manager provided him court initially noted that aspects of the arbitration clause were the extent of the parties' discovery between june 2006 and demonstrates "a systematic effort to impose arbitration on an di's delay was significant, and its explanations for the delay are 5035 (14a) norre gade, suite 1 did the defendant in american recovery. imaging, inc., 96 f.3d 88 (4th cir. 1996), also cited by di, is contract sets forth a grievance and arbitration procedure that the a copy of the company's standard employment contract. the however, is `not unconscionable merely because the parties to a request for arbitration, di is required to submit a request to the production, and attended the depositions of four witnesses. we likewise conclude that the arbitration agreement is discrimination are not central to the issues presented in this ("[w]aiver is more likely to be found the longer the litigation terms, that di was the stronger contractual party, and that the impermissibly restricted employees' access to arbitration and default--it provides that if di fails to respond to an employee's disadvantage of an employee needing to obtain legal assistance." c. whether di informed nino of its intent to seek nino's prior contract. (di br. 24.) the employer. the employee will then be instance, will differ based upon whether the case is to be suit commenced and when both parties had engaged in extensive arbitration scheme designed to discourage an employee's resort nino further contends that additional provisions of the5 workers, which escalated to both verbal and physical assaults to we are unpersuaded by di's argument that the6 of "coming on" to him. (j.a. at 43.) nino reported this incident explains that it delayed filing a motion to enforce the arbitration this provision is "one-sided in the extreme and agreement must still be reasonable. alexander, 341 f.3d at 266; 223 (internal quotations and citations omitted). days. if the employee is unsatisfied with the manager's with the employee or the court over the agreement's determine unconscionability as of the time the of the agreement. see alexander, 341 f.3d at 271 ("[w]e fuentes, circuit judge: court, "[a]fter the defendants raised the affirmative defense of unpersuasive. the first hoxworth factor thus weighs heavily in aaa for a panel of four arbitrators. the parties select a single nino's unconscionability challenge to the arbitration agreement largest jewelry retailers. nino is a jordanian national who, in1 finally, the parties engaged in significant discovery -6- in serious misconduct if the performance as to which the requirement exacerbates this unfairness. as in alexander, di's another, even if the potential arbitrator is not personally the parties then select a single arbitrator from this list according "a harvard-educated economist, previously employed by j.p. is eligible to arbitrate a dispute. first, the employee must file which they are appointed and . . . have no relation to the -26- concurring). just as no experienced trial lawyer would dispute -17- referred to and whether that contract had, in fact, affected the nino's bargaining leverage was even remotely comparable to expressly insulates di from any risk of default--under the finally, di proposes that, rather than determining that the contracts--that is, contracts prepared by the party with greater unconscionability involves both `procedural' and `substantive' and as in hoxworth, the consequence of the parties' motion sided five-day filing requirement is manifestly unreasonable and may be forthcoming and had the opportunity to plan his agreement for another two months after the deposition. in short, to the opposing party[.]"). a party's approach to discovery, for district court gave insufficient consideration to the remaining compel arbitration after litigating this case for fifteen months. arbitration association ("aaa") for a panel of four arbitrators. aluminum prods. co., 969 f.2d 585, 588 (7th cir. 1992)), and be restricted by private contractual language. arbitration. in our case, by contrast, di participated actively in in dispositive motion practice prior to moving to compel appropriate," and in doing so, "must interpret, apply and be agreement permits di to strike two and the employee to strike arbitration agreement; di's interrogatories do not mention the8 arbitration agreement is substantively unconscionable. arbitrate. exchange." restatement (second) of contracts 184(1). we issue with the agreement's requirement that "[t]he arbitrator . . because di had raised arbitrability as an affirmative defense in time frame loses the opportunity to arbitrate a dispute altogether. in light of hoxworth's finding that the plaintiffs in that case had will continue until there remains one arbitrator arbitration, meaning that its pursuit of discovery and its assent answered [nino's] discovery requests," requiring nino to file court's order compelling arbitration and remand for further the employer did not, through its litigation conduct, waive its in granting di's motion, the district court dismissed7 agreement are unenforceable, "a court may nevertheless enforce these is whether the unconscionable aspects "of the employment after it had filed its motion to compel arbitration, but before the practice over these discovery disputes was to require nino to create a one-sided, employer-friendly forum is derived from the order [compelling arbitration], to determine whether the parties employees." (id.) nino further acknowledged "that the agreement's unreasonable terms should be severed. di likens ehleiter, the fifteen-month delay in this case substantially "unfair advantage is only compounded by the fact that [di itself] a "strong federal policy in favor of the resolution of disputes regulations, policies, and procedures without prior notice to its in significant discovery-related motion practice. while the omitted); see also spinetti v. service corp. intern., 324 f.3d to the following method: -14- represented by counsel at their own expense, that discovery may jurisdiction pursuant to 9 u.s.c. 16(a)(3). see green tree clause itself] are to be resolved by the arbitrator in the first between nino and di to modify the terms of his compensation, substantively unconscionable because it contains terms appellant allowed to strike one arbitrator from the acceptable" arbitrator, (id.), and it does not diminish the unfair cannot give effect to an agreement to arbitrate afflicted by so 80.) the remedial process outlined in article iv requires an the grievance process described in the employment contract. remedies available under title vii, arbitrators in whether di moved to compel arbitration on a timely basis. 980 inquiry are relevant to the question of severability. the first of provisions] will not defeat the primary purpose of the bargain,' applies to an employee's grievances. that case, the defendant invoking arbitration participated in decisively against di's right to belatedly invoke the arbitration position to advance the public interest.") (citing h.r. rep. 325 f.3d 54, 61 (1st cir. 2003) (noting, inter alia, the expense have been much more restrictive, and, by consequence, the (citation omitted). with these principles in mind, we turn to and it was not until nino's july 25, 2007 deposition that di intent to arbitrate in that case, because the litigation conduct in the managing director's decision, he must file a written request arbitration agreement constitute[] `an essential part of the agreed mention of arbitration, propounded interrogatories, served and district judge: honorable curtis v. gomez -7- agreeing to arbitration in lieu of litigation, the parties agree to delay, di's stated rationale for having waited so long to seek to to arbitration or to produce results biased in the employer's these two considerations provide separate and a whole. presented the arbitration agreement to nino "for signature on a arbitration," but they do not accede to procedures "utterly legislative intent behind fee-shifting statutes like title vii. cf. anna n. occhialino, esq. -16- do not demonstrate that it engaged in pretrial activity -10- our final task in addressing nino's unconscionability 288. under that provision, even if "`disregard of [illegal the intention to seek arbitration," hoxworth, 980 f.2d at 926-27, iv. alternative avenue for selecting an arbitrator does not render less while the parties would undoubtedly have had some opportunity "exceeds the eleven month time lapse at issue in hoxworth, and period between when di was served with the complaint and that di was authorized "to unilaterally amend its rules, f.2d 1109, 1113 n.4 (9th cir. 1981) (quoting rosales-lopez v. had in fact experienced difficulty in locating the contract it -11- for simplicity, we refer to di and tarapani collectively2 factors in turn below. not only "substantive prejudice to the legal position of the party provides a secondary method for selecting an arbitrator--it comments during his employment. eventually, nino revealed interrogatories to nino to clarify which contract the complaint judge's pretrial orders weighs heavily in favor of a finding of this case to parilla, in which we explained that a thirty-day filing provision and a requirement that arbitrating parties bear their (second) of contracts 184(1)." id. at 289. unconscionable provisions may be severed and the remainder of we conclude, in sum, that the arbitration agreement is must file a detailed grievance regarding the matter he seeks to members from the list of potential arbitrators, but the employee shall be a final and binding resolution of the grievance." (id.) finally, we turn to the arbitration agreement's provision may amount to sufficient prejudice to bar a later-asserted right we explained in alexander and reiterated in parilla, while "a in rejecting nino's argument that di had waived its right question of whether di has "acted inconsistently with the right director within two days of having received the manager's charlotte amalie, st. thomas prosecuting the action." id. at 926 this factor weighs strongly of the arbitration agreement, because they did not constitute an them individually. with the right to arbitrate." st. mary's, 969 f.2d at 588; see enforce the arbitration agreement is utterly unconvincing. di additionally, as was noted supra, nino expended additional participation in ten pretrial conferences over the course of discovery during the two-month period between the while the precise details of nino's allegations of moreover, a significant disparity in bargaining power engaged in extensive discovery." painewebber inc. v. faragalli, contract, he signed a separate one-page document entitled -3- (id. at 84.) in this one-page agreement, nino also acknowledged when it filed its motion to compel arbitration. id. significantly, court erred in determining that di did not waive its right to alexander, 341 f.3d at 271. put differently, "a multitude of arbitration in their answer, nino was on notice that arbitration comprised of arbitrators with no connection to, or interest in, the differences. we find it hard to imagine that an employee in 2010). but the fact that potential arbitrators are pre-screened for although nino, as a college graduate, was better educated than further invoking or even mentioning the prospect of arbitration. which we discussed in alexander and elaborated upon in parilla, of its terms could be enforced. the court then concluded that edwards, 497 f.3d at 362; parilla, 368 f.3d at 276. "a contract, the parties do not reach such an agreement. the presence of an that, by including mandatory arbitration among the ten contracts provides the rule of decision here. that we cannot agree. di is of course correct that the panel is to be is substantively unconscionable under virgin islands law. g. summary 912 (3d cir. 1992), we set forth "a nonexclusive list of factors by contrast, "questions concerning the validity of the3 it is undoubtedly true that di's answer disclosed the possibility enforced [five]-day time period." alexander, 341 f.3d at 267. 5 floorth to duplicate its efforts, to at least some degree, if in summary, four of the hoxworth factors--the it are unequal in bargaining position.'" alexander, 341 f.3d at case, since discovery would have been available in the arbitral "equitable override provision of the restatement." 368 f.3d at notwithstanding this invocation of arbitration in its initial the mere fact that some discovery would have been available in court's determination of whether di, through its litigation arbitration of nino's claims. we address the six hoxworth (2d cir. 1996) (quoting st. mary's medical ctr. v. disco u.s. 346, 349 (2008) (citing buckeye check cashing, inc. v. other than to stack the deck in its favor. courts of appeals have which di's management turned a blind eye. employees' access to arbitration. as we explained in alexander, have explained, however, the significance of this factor 61 f.3d 1063, 1068-69 (3d cir. 1995) (internal quotations and further conclude that the employer, by engaging in protracted mutually acceptable. before the district court for fifteen months, the employer ask that nino produce the agreement during discovery. to enforce the arbitration agreement. according to the district and the extent of the parties' discovery--weigh firmly in favor management panel for final resolution. the materials that di its answer to nino's complaint, and because di had not engaged manager that nino "acted and talked like a female" when he it has been `guilty of serious moral turpitude,' restatement di's rules, even if those rules are unlawful. we do not grapetree shores, inc., 482 f.3d 207, 215 (3d cir. 2007). we -4- alexander, 341 f.3d at 267 (citing ingle v. circuit city stores, to an employee of any of its own claims within a strictly the unnecessary delay and expense incurred by the plaintiffs as agreed. waiver. see palcko (38 days); wood (1 1/2 months); faragalli, whether a case is to be litigated or arbitrated. f.3d at 277. the one-sided nature of the five-day filing conclude that severance is appropriate." alexander, 341 f.3d at contract was formed, and an after-the-fact offer to gave it unfair advantages and that unreasonably restricted provisions in arbitration clauses requiring parties to bear provisions from the remainder of the arbitration agreement. we see, e.g., doctor's assocs., inc. v. casarotto, 517 u.s. 681, 687 have frequently emphasized that determining whether or not the agreement in an employment contract does not, in the context of conclude that the one-sided nature of the arbitration agreement we next consider "the degree to which the party seeking unconscionability challenges to arbitration agreements on grounds must also show that the contract is substantively be had by either party pursuant to the federal rules of civil substantively unconscionable, alexander, 341 f.3d at 267. "by "terms unreasonably favorable to the stronger party." id. arbitrator selection provision, all of which are thoroughly requirements, di must submit a request to the american nino's contention that it did not even mention the prospect of the first hoxworth factor requires that we consider one-sided, with only one discernable purpose--to create -25- -31- inc. v. salus corp., 779 f.2d 974, 983 (4th cir. 1985), and, in party has informed its adversary of the intention of a finding of waiver. of the two factors that do not tip or term thereof is unconscionable at the time the contract is pleading, di actively litigated this case for fifteen months such a claim to the defendant is not necessarily unfair or which of these two dispute resolution mechanisms actually iii. award attorney's fees, costs, and expenses is substantively cardegna, 546 u.s. 440, 445-46 (2006)) (emphasis added). p r o c e d u r e s , r u l e 1 2 ( b ) ( 2 ) , under hoxworth, we also consider the non-merits motion quotations and citations omitted). dismissal order. capacity to work in st. thomas, where he had just been litigated or arbitrated. likewise, although we have concluded9 "devote[] substantial amounts of time, effort, and money in particular, to that court's observation that "the party seeking order to preserve his or her opportunity to arbitrate the dispute section provides, in relevant part, that "[i]f a the litigation for well over a year before moving to compel its explanation that it was not until nino's july 25, 2007 provision limiting the time to bring a claim or provide notice of the contract makes clear that "[t]he time limits provided resources expended on discovery would have been much more wendy tarapani, a manager of di's st. thomas store, alleging, realistically understand what sort of dispute resolution di related to his suspension and eventual resignation. from the panel the employer will strike the first aggrieved employee to satisfy a series of requirements before he the rest of the agreement in favor of a party who did not engage clause itself; he does not challenge the validity of the contract as existed between nino and di. as was the case in alexander, di issue in hoxworth and ehleiter, the discovery in this case was except terminations, which may be further appealed to a -29- goes on, the more a party avails itself of the opportunity to we need not discuss whether the unconscionable advantage" upon the party with greater bargaining power are an "important counterweight[,] . . . arbitrators are not bound by at 267 (same). procedural component of the unconscionability inquiry looks to january 2000, agreed to work for di as a salesperson and process does not unreasonably favor di. this argument invites should have stayed litigation in this case rather than dismissing before: mckee, chief judge, fuentes and nygaard, unconscionable, see, e.g, hooters of america, inc. v. phillips, unfair the one-sided mechanism set forth in the arbitration take-it-or-leave-it basis, and given the disparity in bargaining circuit judges that it would seek to compel arbitration, and that this disclosure f.3d at 289; alexander, 341 f.3d at 271; graham oil, 43 f.3d review the district court's factual findings for clear error. see enforce the arbitration agreement. hoxworth, 980 f.2d at 926- us to conclude that because the agreement authorizes di not to merits of its opponent's claims; [3] whether that which it transferred him to its alaska store. in september 2000, american law institute'" in evaluating whether the provisions at 13.) quite unlike the plaintiff in zimmer, who was fielding but the significance of this notice diminished the longer di arbitrator whose "sympathies" appear to align with one side or arbitrate within five days of the underlying events or lose the contained in di's answer to the complaint "informed [nino] of particularly unreasonable because it is both inflexible and one- (d. v.i. no. 3-06-cv-00039) entered a valid agreement to arbitrate.") (citation omitted). omitted). we likewise exercise plenary review over the district possibility of severing the unfair provisions from the remainder differ based upon whether the case was being litigated in court -9- hoxworth, 980 f.2d at 926-27 (internal citations omitted). as the hoxworth factors are: unreasonably favorable to di, the stronger party. see zimmer, timeliness should consider the movant's explanation for its hoxworth, in which the defendant was found to have waived its the arbitration clause made it unconscionable and that, through less significant the longer and more actively a party litigates recognized that arbitration provisions that confer an "unfair untimeliness of di's motion, the extent of non-merits motion agreements that give the employer an unreasonable advantage federal court before di elected to move to compel arbitration. discovery. as "di" or "defendants," except where it is necessary to identify also significant is the fact that di "assent[ed] to the the contract in that it does not mention a right to arbitration, it inclusion of arbitration in its answer to the complaint. as we accord parilla, 368 f.3d at 277-78. a thirty-day filing period, unconscionable aspects of the parties' arbitration agreement and no fewer than ten pretrial conferences. di does not dispute -39- association, employment arbitration rules and mediation contract, the arbitrator "may make any award deemed legal and at 1248-49. the only conceivable purpose of the arbitration the provisions in question do not simply accord an advantage interacted with lettsome. (id.) in response to these complaints, grievance on a timely basis, "the last decision given by [di] that gave the employer an undue influence over the selection of resolution. instead, the employer created a system that was forum. prejudice of this sort is not mitigated by in this case, is the law of the virgin islands. gay v. likewise readily distinguishable from the facts of our case. in courts to stay, not dismiss, cases when compelling arbitration). motion to stay the district court proceedings; [4] profanity when he was informed that he was being written up, arbitration is to offer claimants the full scope of alexander, 341 f.3d at 266. di likens nino's case to zimmer, of the arbitration agreement is not appropriate. see parilla, 368 to enforce the arbitration clause, the district court focused seeking to compel arbitration has contested the however, the significance, for purposes of the waiver the "process by which an agreement is reached and the form of -13- indus., inc., 298 f.3d 778, 787-88 (9th cir. 2002)); see also involved alone is not determinative," zimmer, 523 f.3d at 232 arbitration agreement where, for example, `the alleged "we will not hesitate to hold that the right to arbitrate has been allowed to strike one arbitrator from the in hoxworth v. blinder, robinson & co., inc., 980 f.2d 1175 (10th cir. 2007), and we do not agree that this term is substantively unconscionable. under the arbitration agreement, essential aspect of the agreement as a whole, because we the third hoxworth factor is whether the party seeking to arbitrate." st. mary's, 969 f.2d at 588. we conclude that di, restatement (second) of contracts explains, where aspects of an is whether the unconscionability of the arbitration clause the contract provides that the arbitration must take place b. between the parties." restatement (second) of contracts 184, of the magistrate judge's pretrial orders based upon its intent to is an important consideration, although it is by no means a agreement. arbitrator from this list according to the following process: conferences in concluding that defendant waived right to compel inc., 328 f.3d 1165, 1175 (9th cir. 2003)); see also parilla, 368 choice in accepting the challenged arbitration agreement." courtroom for the simplicity, informality, and expedition of ("title vii's fee-shifting provision, 42 u.s.c. 2000e-5(k), was u.s.c. 3-4) (emphasis added). pursuing discovery in the face of a court-ordered deadline." di parties can decide on an arbitrator that would be with an impermissible advantage." parilla, 368 f.3d at 289. party could not have known what it was that he was agreeing to. except by written agreement of both parties." (j.a. at 82.) as extent to which both parties have engaged in morgan chase and the federal reserve bank of new york" b. whether di contested the merits of nino's claims on march 3, 2006, nino filed a complaint against di and on appeal from the u.s. district court with his manager a detailed written grievance within five days courts, waiver is not to be lightly inferred, and waiver will create an appearance of bias." see american arbitration such pervasive one-sidedness, to sever the unconscionable remedy for any and all employment[-]related disputes." (j.a. at 271 n.13. limited. see restoration preservation masonry, 325 f.3d at 61. _____________ arbitrate,'" doctor's assocs., inc. v. stuart, 85 f.3d 975, 981 decision, he must re-file the grievance with the managing recognized that the federal arbitration act ("faa") establishes claims he intends to arbitrate, while di is under no such unconscionable provisions comprise essential aspects of the drafted and in assessing its impact upon the parties' arbitration procedures as well as applicable federal, state, local and unconscionable arbitration provisions "are so one-sided that agreement, it could (and presumably would) have propounded following are some of the procedures and deadlines contained arbitration "has informed its adversary of the intention to seek favor because di filed a motion to dismiss one of his claims at -20- issue of his sexual orientation, making increasingly hostile reverse the district court's order compelling the parties to that di had not filed a dispositive motion prior to moving to litigation strategy accordingly." (j.a. at 23.) nino likewise argues, and the district court found, that to be lightly inferred," it is not appropriate to compel arbitration he accepted [defendant's] job offer." 523 f.3d at 229. almost exclusively on two of the six hoxworth factors: the fact the district court explained, "nino was given no reasonable zimmer, 523 f.3d at 228. in this case, the contract and di's usvi 00802 a scheme that it knew or should have known would provide it been severable from the arbitration agreement, the district court united food & commercial workers intern., 289 f.3d 297, 303 prepared a proposed case management order which contained no just two days before the motion to compel arbitration. in his reply brief--we do not rest our procedural v. i. explained in his deposition, during his first week at the st. "mandates that we turn to `the rules of the common law, as contract or term thereof is unconscionable at the affirmative defenses asserted in its answer, it had provided nino in the united states court of appeals arbitration agreement's terms demonstrates that the employer much fundamental and pervasive unfairness.") we will thus it is well recognized that "discovery generally is more9 for the foregoing reasons, we will reverse the district defaulting party has acted inconsistently with the right to moreover, to the extent that our review of the motion's to challenge such a provision, a plaintiff must show what the here the non-merits motion practice is equivalent to that in parties did not stand to benefit from the exercise. we therefore "essential part of the agreed exchange" between nino and di. arbitrator selection clause is unconscionable, we should simply arbitrators as nino. valid and enforceable arbitration agreement is entitled to a stay arbitration is forthcoming. cf. thyssen, inc. v. calypso actively litigates a case for an extended period only to belatedly agree--the agreement does not suggest that the arbitrator would parilla, 368 f.3d at 285 (emphasis in original). an arbitration omitted); parilla, 368 f.3d at 279 (same); alexander, 341 f.3d such that the remainder of its terms may be enforced. as the claiming waiver," but also extends to "prejudice resulting from convenient to both parties but in no event more than thirty (30) during the fifteen-month period before di filed its motion to agreement because nino's complaint alleged that nino and di supplemented disclosures, exchanged requests for document arbitration agreement is procedurally unconscionable.4 their own attorney's fees, costs, and expenses is substantively nino's position reading these contradictory materials could the remainder of the contract without the unconscionable term, parties or dispute at hand. the aaa's rules require that disruptive. shortly thereafter, nino was suspended for one week p.o. box 307557 arbitrator for whatever reason is unacceptable to litigated, and his litigation strategy was thus almost certain to housing. di helped nino obtain a united states work visa, after motion practice on the merits prior to moving to compel spinetti, 324 f.3d at 217-18 n.2 (citation omitted). di's efforts succeeded) wasted litigation." st. mary's, 969 f.2d at 591; see mechanism he was agreeing to. however, because the parties e.g., ridge at red hawk, l.l.c. v. schneider, 493 f.3d 1174, e. di's assent to the court's pretrial orders the likelihood of arbitration diminishes the longer the case is to defend the arbitrator selection clause are unavailing, and we demonstrate that di created a one-sided arbitration system that provisions," and instead calls for an examination of the specific power" than did nino, a single, retail-level employee. that of the plaintiff in zimmer. as the district court -38- the extent of its non-merits motion practice; [5] its and most significantly, as the district court expressly found, di the preceding qualification that an arbitration agreement analysis, of di's invocation of arbitration in its answer -5- d. extent of non-merits motion practice sided. with regard to its inflexibility, the agreement states that the second consideration for the question of severability, a. arbitration procedure 26, service and supplementation of written discovery, numerous occasions. see, e.g., edwards v. hovensa, llc, in our view, the pervasively one-sided nature of the and they engaged in extensive discovery, including service and -40- di's place of business is substantively unconscionable. such procedurally unconscionable where the employee-plaintiff was [1] the timeliness or lack thereof of a motion to use the advantage it holds in the one-sided arbitrator selection terri l. griffiths, esq. [argued] restatement (second) of contracts provides that "[i]f a contract for discovery had the arbitration clause been invoked on a timely fifteen months shows unmistakably that it "acted inconsistently alexander v. anthony int'l, l.p., 341 f.3d 256, 263 (3d cir. convoluted or unclear language." alexander, 341 f.3d at 265 16(a)(3), and therefore appealable"). "we exercise plenary nation and the world, [and it] clearly possessed more bargaining unconscionable provisions in an agreement to arbitrate will time the contract is made a court may refuse to equal employment opportunity commission -28- while the complaint indeed refers to a may 22, 2002 agreement 2003) (internal quotations and citations omitted). "a party to a alexander, 341 f.3d at 264. virgin islands statutory law permits the parties simply to agree upon "an arbitrator that and binding resolution of the grievance." (j.a. at 82.) the one- while di is correct that this factor weighs in its favor, the the arbitration agreement's firm requirement that the arbitration parilla, 368 f.3d at 278; alexander, 341 f.3d at 266. nonexclusive list, not all the factors need be present to justify a -34- for the third circuit recognized, nino was dependent upon di "with respect to his from the panel the employer will strike the first the complaint certainly does not suggest that this subsequent this revelation served only to intensify the harassment by his co- lawsuit is jewelry exchange, inc. jewelry exchange does procedural unconscionability analysis. we have recognized that the fifteen-month delay between the service of the in the contract that we find most troublesome. article iv of the washington, dc 20507 of this dispute, the employer had waived its right to compel proceedings. by the party seeking to avoid arbitration." ehleiter, 482 f.3d at a party's capacity to develop a litigation strategy with regard to right to go to arbitration altogether, while di is insulated against been prejudiced by the fact that, in litigating the case in court, unconscionability, we agree with the district court that nino further mention of arbitration. in short, the affirmative defense10 "consistent with the strong preference for arbitration in federal pretrial proceedings, and, in the meantime, the force of this argument is undermined, however, by unconscionable where the agreement is so "convoluted" that the in fact, a reference to a letter of understanding that amended we made clear in both cases, is "clearly unreasonable and unduly at issue in this case was not as extensive as the discovery at arbitration agreement authorizes the parties to conduct discovery common laws." (id. at 81-82.) upon di indirectly or by happenstance. instead, they are baldly christiansburg [garment co. v. eeoc, 434 u.s. its filing requirements "are binding and may not be waived a grievance within five days of the complained-of incident in appeal, we summarize them to provide the basis for his federal fewer than ten pretrial conferences before the magistrate judge, requirement upon di whatsoever. moreover, while an an employee who is unable to agree with di upon a "mutually 369 f.3d 263, 268-69 (3d cir. 2004) (explaining that 3 directs compel arbitration. during this time the parties conferred and instead, a party challenging a contract on unconscionability agreement, if di fails to process an employee's grievance in a question transpired after the defendant had demanded of an arbitration agreement are unconscionable. alexander, 341 grievance procedure[] set forth in the employee handbook is my arbitration agreement's restriction on the arbitrator's ability to upon his arrival at the st. thomas store, nino was given d. arbitrate." id. at 224. for example, we stated in hoxworth that: arbitration does not lose its contractual right by prudently employer drafted the arbitration agreement, the employer is "[n]eutral arbitrators serving under these rules . . . have no uncertain terms that a thirty-day filing requirement in an defendant participated in discovery and pretrial conferences jessica chung, esq. [argued] immigration status at the time he accepted the job offer." (j.a. referring to, di still did not move to enforce the arbitration v. dean witter reynolds, inc., 537 u.s. 79, 83 (2002); see also -15- showing. see alexander, 341 f.3d at 269. finally, nino takes is evident by our repeated characterization of these factors as a puleo, 2010 wl 1838762, at *5. in addressing a claim that an creditinform, 511 f.3d 369, 388 (3d cir. 2007) (citations the district court granted di's motion to dismiss. the "pursuant to the federal rules of civil procedure." (j.a. at 81.) favor, making severance of the unconscionable terms agreement. unconscionable, as the district court correctly concluded. see other than one achieved by arbitration." (id. at 54.) made a court may refuse to enforce the contract, or may enforce argued december 1, 2009 moore, dodson & russell, p.c. we have reviewed virgin islands law governing be difficult to understand the point of including in the arbitration fifteen-month delay in filing the motion to compel arbitration, regulations, policies and procedures as well as applicable arbitration, however, "a court may refuse to enforce an dispute resolution that partially resembles, but is not identical to, counsel for appellant of federal court proceedings pending arbitration as well as an suggests that this provision requires the arbitrator to enforce inferior, one-sided forum that worked to the employer's advantage accorded to di over the selection of an arbitrator if counsel for amicus appellant (id. at 81.) stated more directly, di is permitted to strike two 27. as we now explain, in emphasizing these factors, the


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