Posted March 28th, 2019.
By Braden Campbell
Law360 (March 28, 2019, 12:19 PM EDT) — The former Ogletree Deakins shareholder accusing the firm of systematically underpaying women and stifling their advancement must arbitrate her claims, a California federal judge has ruled, rejecting her argument that the firm’s arbitration agreement doesn’t apply to her because she didn’t sign it.
Ogletree won a motion to make a former shareholder argue her sex bias claims against the firm in arbitration.
Judge James Selna granted Ogletree Deakins Nash Smoak and Stewart PC’s motion to compel Dawn Knepper to arbitrate in an order docketed Wednesday, saying the agreement the firm sent attorneys in 2016 applies to her because Ogletree included language making the provision effective even if unsigned.
“Knepper was on notice that if she did not opt-out, she would be bound to arbitrate,” Judge Selna said. “Since she continued working at Ogletree after March 1, 2016, without opting out, she was bound by the terms of the arbitration agreement.”
Judge Selna also decided several other disputes in the case.
Knepper’s suit includes a claim under California’s Private Attorneys General Act, which deputizes workers to challenge labor code violations for the state. Because these claims are technically the state’s and not the worker’s, they aren’t covered by arbitration agreements, courts have ruled.
But such claims can be stayed, and Judge Selna paused Knepper’s claim pending the outcome of her arbitration, rejecting her argument that doing so would “subordinate the interests of the state.”
“The court finds that ‘the orderly course of justice’ that would result from a stay pending arbitration of issues that bear upon the PAGA claim outweighs ‘the possible damage which may result from the granting of a stay’ because an arbitration finding on Knepper’s individual claims could impact her ability to be a representative on the PAGA claim,” Judge Selna said.
Knepper had also asked to amend her suit to add four plaintiffs and several claims, including allegations Ogletree and individual attorneys breached their fiduciary duty to her and her proposed co-plaintiffs. Judge Selna largely rejected Knepper’s motion to amend, saying the other plaintiffs are “not necessary parties to the case” because their joining is incidental to resolving the PAGA claim, the only claim remaining in court. But Knepper can argue her breach of fiduciary duty claims in arbitration, the judge said.
Judge Selna also affirmed that Knepper can’t represent a class in arbitration, saying the arbitration agreement’s class action waiver provision is valid.
Knepper’s January 2018 complaint accused Ogletree’s largely male leadership group of favoring men in pay, promotions and business development opportunities. She sought to keep her proposed class action in court, arguing Ogletree’s policy of arbitrating employment-related claims didn’t apply to her because she didn’t sign it.
Ogletree distributed the policy in a 2016 email and asked workers to return it signed, with a disclaimer saying that silence would be taken as acceptance. Knepper acknowledged the form but did not return it, according to email records Ogletree cited.
Ogletree said Thursday it was “pleased with the ruling, and looks forward to resolving this matter in the proper forum.”
“Equal opportunity has been a core principle of Ogletree Deakins since the firm’s founding, and we do not tolerate discrimination of any kind — gender or otherwise,” the firm said.
Sanford Heisler Sharp LLP Chairman David Sanford, who represents Knepper, said in an emailed statement Thursday that the “decision illustrates the obstacles forced arbitration creates for employees seeking to address systemic discrimination and the reasons that law reform is needed.”
“We do not agree with the court’s decision, but we are looking forward to moving onto the merits,” he said. “We are also evaluating options for pursuing collective claims and other representative claims on behalf of the female attorneys who have opted in.”
Knepper’s suit is one of several accusing prominent law firms of discriminating against women. Jones Day, Morrison & Foerster LLP and Proskauer Rose LLP have also faced such suits in recent years.
Knepper is represented by David Sanford, Ed Chapin, Jill Sanford, Danielle Fuschetti Sr. and Leigh Anne St. Charles of Sanford Heisler Sharp LLP and Aashish Y. Desai of the Desai Law Firm PC.
Ogletree is represented by Nancy L. Abell, Deborah S. Weiser, Valerie M. Marek and Paul W. Cane Jr. of Paul Hastings LLP.
The case is Dawn Knepper v. Ogletree Deakins Nash Smoak & Stewart PC, case number 8:19-cv-00060, in the U.S. District Court for the Central District of California.
–Additional reporting by Vin Gurrieri. Editing by Alyssa Miller and Jill Coffey.