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Allison Schall v. Adecco U.S.A.

January 28, 2010

ALLISON SCHALL, PLAINTIFF,
v.
ADECCO U.S.A., INC., AND ADECCO RPO,
DEFENDANTS.



The opinion of the court was delivered by: Schiller, J.

MEMORANDUM

Allison Schall was eight months pregnant when Adecco U.S.A., Inc. ("Adecco") fired her. Schall alleges Adecco fired her because she requested maternity leave, and timely brought a claim under the Family and Medical Leave Act ("FMLA"). Adecco filed an answer, engaged in discovery, participated in a Rule 16 conference with the Court, and now moves to compel arbitration. Schall asserts that Adecco waived its right to arbitrate these claims by actively litigating the case for five months prior to raising the issue of arbitration. Because Schall fails to make out a sufficient showing of prejudice to support a finding of waiver, the Court will grant Adecco's motion.

I. BACKGROUND

Allison Schall worked for Adecco as a recruiter, telecommuting from her home in Pennsylvania. (Compl. ¶¶ 14-16.) Adecco fired her effective January 15, 2010. (Id. ¶ 20.) Schall was eight months pregnant, and alleges Adecco's management was aware that she had requested leave under the FMLA to care for her newborn. (Id. ¶ 21.) Schall also asserts Adecco fired her because she took time off from work due to her pregnancy. (Id. ¶ 22.)

Schall filed this action on March 25, 2010. Adecco answered Schall's Complaint on July 26, 2010. Adecco's Answer raises seven affirmative defenses, but offers no indication that Adecco intended to compel arbitration or was aware that an arbitration agreement existed. The parties attended a scheduling conference with the Court on November 10, 2010, and the Court set a trial date of July 5, 2011. The Court directed the parties to complete discovery by March 4, 2011.

Adecco moved to compel arbitration on January 4, 2011, attaching a copy of the arbitration agreement Schall signed when she was hired. This document indicates that Schall and Adecco agreed to arbitrate all statutory claims arising from her employment. (Def.'s Mot. to Compel Arb. and Dismiss the Compl. Ex. B [Arb. Agr.] 4.) Adecco is responsible for paying arbitration costs "to the extent such costs would not otherwise be incurred in a court proceeding," and both parties may conduct discovery pursuant to the arbitration agreement. (Id.)

Schall acknowledges signing the agreement, but opposes Adecco's motion to compel arbitration solely on the basis of Adecco's purported waiver of its right to arbitrate Schall's claims. (Pl.'s Mem. in Opp'n to Defs.' Mot. to Compel Arb. 2.) Schall argues that Adecco intentionally waited to seek arbitration until it had obtained her responses to the company's interrogatories and document requests. (Id. at 2, 6.) According to Schall, Adecco has meanwhile refused to provide responsive discovery to her in an attempt to "jump into federal court and to obtain everything it needs from [Schall] and then to jump out of federal court when it is done getting responsive discovery." (Id. at 2, 8.)

Adecco disputes that substantial discovery has taken place. Neither party has taken a deposition, and Adecco has not yet responded to discovery requests. (Def.'s Reply Br. in Further Supp. of its Mot. to Dismiss and Compel Arb. 2.) Adecco represents that it has received only twenty pages of discovery from Schall: seventeen pages in response to Adecco's document requests and three pages in response to the company's interrogatories. (Id. at 3.)

II. STANDARD OF REVIEW

Courts, not arbitrators, "decide the question of whether a party has waived its right to arbitrate by actively litigating the case in court." Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207, 217-18 (3d Cir. 2007). Consistent with the strong preference for arbitration, federal courts find that a party has waived its right to arbitration "only where the demand for arbitration came long after the suit commenced and when both parties had engaged in extensive discovery." Nino v. Jewelry Exch., Inc., 609 F.3d 191, 208 (3d Cir. 2010) (quoting PaineWebber Inc. v. Faragalli, 61 F.3d 1063, 1068-69 (3d Cir. 1995)). Courts find a waiver of arbitration rights if "a sufficient showing of prejudice has been made by the party seeking to avoid arbitration." Id.; see also Ehleiter, 482 F.2d at 222.

III. DISCUSSION

Six factors are relevant to the court's waiver analysis: (1) the timeliness of the motion to arbitrate; (2) the degree to which the party seeking to compel arbitration has contested its opponent's claims on the merits; (3) whether that party informed its adversary of its intention to seek arbitration; (4) the extent of its non-merits motion practice; (5) its assent to the court's pretrial orders; and (6) the extent to which both parties have engaged in discovery. Jewelry Exch., 609 F.3d at 208-09 (citing Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912, 926-27 (3d Cir. 1992)). Schall has not made a strong showing that Adecco waived its right to arbitrate her claims with respect to any of these factors.

Although Adecco did not move to compel arbitration swiftly, the company's delay was not extreme. Schall filed this action on May 25, 2010, approximately seven months before Adecco moved to compel arbitration on January 4, 2011. A seven-month delay does not weigh heavily in Schall's favor. See Peltz ex rel. Peltz v. Sears, Roebuck & Co., 367 F. Supp. 2d 711, 722 (E.D. Pa. 2005) (granting motion to compel arbitration despite seven-month delay during which moving party filed two motions to dismiss, answered interrogatories, and conducted a deposition); see also Gray Holdco, Inc. v. Cassady, Civ. A. No. 09-1519, 2010 WL 4687744, at *3 (W.D. Pa. Nov. 10, 2010) (comparing cases in which courts concluded a party waived arbitration rights after delays exceeding eleven months).

During the seven months Adecco has been involved in this case, the company has not argued the merits of Schall's claims beyond filing its Answer. While Adecco included various affirmative defenses in its Answer, there has been no motion practice on the merits. An answer alone is not a waiver of arbitration rights. See Coca-Cola Bottling Co. of N.Y., Inc. v. Soft Drink and Brewery Workers Union Local 812, 242 F.3d 52, 57-58 (2d Cir. 2001) (noting that ...


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