Knepper v. Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

Filing 74

ORDER GRANTING MOTIONS TO TRANSFER. Transferred to the Central District of California. Signed by Judge William H. Orrick on 1/9/2019. (jmdS, COURT STAFF) (Filed on 1/9/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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DAWN KNEPPER,
Plaintiff,

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OGLETREE, DEAKINS, NASH, SMOAK
& STEWART, P.C., et al.,

United States District Court
Northern District of California

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Defendants.

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ORDER GRANTING MOTIONS TO
TRANSFER

v.

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Case No. 18-cv-00303-WHO
Case No. 18-cv-00304-WHO

Plaintiff Dawn Knepper was a non-equity shareholder of defendant Ogletree, Deakins,
Nash, Smoak & Stewart, P.C. (Ogletree), specializing in employment law, when she received

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three notices that she would be bound by the firm’s Arbitration Agreement if she did not opt out of

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it by March 1, 2016. She did not opt out. For that reason, as discussed below, Ogletree’s motions

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to transfer these cases to the Central District of California, where arbitration can be compelled
pursuant to the Agreement, is GRANTED. The question of whether plaintiff should be allowed to
amend her FAC in Case No. 18-cv-00303 is deferred for resolution by the transferee court.

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BACKGROUND
I.

PROCEDURAL BACKGROUND
In Case No. 18-cv-00303, under the operative First Amended Complaint (FAC), Knepper

seeks to represent a class of current and former non-equity shareholders of defendant Ogletree.
She claims that Ogletree engaged in systematic gender discrimination and asserts claims for

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violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. (“Title VII”),

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violation of the Equal Pay Act of 1963, 29 U.S.C. §§ 206 et seq. (“EPA”), and violation of related

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California statutes. First Amended Complaint in Case No. 18-cv-00303 (Dkt. No. 33) ¶ 4.
On the same day that Knepper filed her class and collective action, she also filed a

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declaratory relief action. See Case No. 18-cv-00304. In that case, she seeks a declaration that she

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is not bound by any agreement to arbitrate with respect to the claims asserted in Case No. 18-

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00303, that she did not waive her right to bring a class or collective action, and that she did not

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delegate to an arbitrator the issue of arbitrability. In the alternative, if an agreement was formed,

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Knepper seeks a declaratory judgment that any provisions purporting to waive her right to bring a

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class or collective action or delegate issues of arbitrability to an arbitrator are unenforceable.

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Case. No. 18-cv-00304, Complaint ¶ 4.

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Ogletree moved to transfer venue in both cases to the Central District of California. It
argued that Knepper was covered by an Arbitration Agreement that is dispositive of the motions to

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transfer and mandates transfer to the Central District. It also pointed out that, on the facts alleged

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United States District Court
Northern District of California

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by Knepper as well as facts it provided, transfer was appropriate because Knepper was a non-

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equity shareholder in Ogletree’s Orange County office and the majority of defense witnesses were

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based in the Central District.

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Knepper opposed the motions to transfer. She argued that she was not bound by and did

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not agree to an Arbitration Agreement. Given the nationwide scope of her allegations on behalf of

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non-equity shareholders across the country and Ogletree’s alleged policy of discrimination as

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applied to those disperse non-equity shareholders, she asserted that venue was as proper in the

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Northern District (where Ogletree did substantial business) as it was in the Central District (where

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Knepper last worked and where many of the complained-of decisions as to Knepper were made).

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At the hearing on the motions to transfer venue, I explained my tentative view that

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regardless of whether a binding Arbitration Agreement existed between Knepper and Ogletree that

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required disputes to be arbitrated in the Central District, transfer appeared appropriate given that

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the vast majority of operative facts in Knepper’s First Amended Complaint – namely the decisions

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regarding Knepper’s compensation and the terms of her non-equity shareholder arrangement, as

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well as claims regarding a hostile environment directed towards Knepper specifically – were made

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and taken in the Central District. However, during the hearing, Knepper’s counsel asked to file a

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Second Amended Complaint (“proposed SAC”) in Case No. 18-00303, arguing that the

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amendment would strengthen her position that venue was appropriate in the Northern District. I
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deferred ruling and allowed Knepper to file a motion seeking leave to file the proposed SAC. She

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promptly filed that motion, attaching her proposed SAC. Dkt. No. 52. The proposed SAC would

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add as named plaintiffs additional current and former non-equity shareholders (based outside of

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California), additional defendants (based within and outside of California), and one equity

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shareholder (also based outside of California) as a named plaintiff. See Dkt. No. 52-1.1 Ogletree

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opposed leave to amend, arguing that amendment was futile because: (i) Knepper’s claims were

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subject to mandatory arbitration in the Central District, (ii) the claims of the proposed additional

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non-California non-equity shareholders were irrelevant to venue (as those claims were likely

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subject to arbitration in venues outside of California), and (iii) the proposed named equity

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shareholder plaintiff’s claims were likewise subject to binding arbitration. Dkt. No. 59.
At that juncture, it was clear that I could not resolve the motions to transfer (as well as the

United States District Court
Northern District of California

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motion for leave to file the proposed SAC) without determining whether Knepper was at least

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facially covered by an agreement to arbitrate with Ogletree. Ogletree had avoided filing a petition

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to compel arbitration before me and rested instead on its motions to transfer venue. It contends

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that under the Arbitration Agreement and applicable caselaw, the only district that could compel

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arbitration to the appropriate forum (Orange County) is the Central District of California. Lacking

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sufficient information regarding the dissemination of the Arbitration Agreement and to give the

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parties the opportunity to focus on whether the Arbitration Agreement was at least facially

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enforceable against Knepper, I ordered Ogletree to either file a motion under FRCP 12 (b)(1) to

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determine the existence of the agreement or, alternatively, file supplemental briefing (allowing a

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further opposition from Knepper), so that the issue of whether Knepper was covered by an

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Arbitration Agreement would be adequately presented and considered in determining the pending

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motions. Dkt. No. 63. The supplemental briefing is now complete and the issues are ready for

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resolution.2

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Unless otherwise specified, the docket numbers cited are to the docket in Case No. 18-cv-00303.

In support of her opposition to defendant’s supplemental brief, Knepper seeks to file parts of the
Supplemental Declaration of Jill Sanford under seal. Finding compelling justifications exist to
seal the attorney-client privileged information, that request is GRANTED. Dkt. No. 72 in Case
No. 18-cv-00303 and Dkt. No. 60 in 18-cv-00304. Ogletree seeks leave to file a one-page
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II.

RELEVANT FACTUAL BACKGROUND
There is no dispute that on January 15, 2016 at 4:45 a.m. PST, Ogletree sent out an email

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to staff, including Knepper, titled “IMPORTANT – Two New Programs for 2016,” that described
the firm’s new “Open Door Policy & Mutual Arbitration Agreement.” Declaration of Gary Berger

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(Dkt. No. 28-1), Ex. A (“Email Notice 1”); Berger Decl. ¶¶ 4-6. Knepper opened Email Notice 1
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on January 15, 2016, at 6:32 a.m. PST. Id. ¶ 6. Email Notice 1 explained that “the attached

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Mutual Arbitration Agreement provides that you and the Firm both agree to submit such matters to
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binding arbitration. The Mutual Arbitration Agreement builds on an arbitration program that was
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implemented in January 2014 that has been applicable to all Equity Shareholders since that time.
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The Firm is now expanding arbitration to apply to the rest of our community.” Email Notice 1 at
1. The Agreement is described as a “mutual agreement, and it is a binding contract.” Id. at 2.

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United States District Court
Northern District of California

The Notice went on:
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You have the right to opt out of the arbitration program if you wish.
To do so, you must sign an Opt-Out form and return it to Kay
Straky, the Firm's Director of Human Resources via email to
[e-mail],on or before March 1, 2016. The
Opt-Out form is available under the “Resources” tab on the OD
Connect homepage of the Firm’s Human Resources Department. If
you do not return an Opt-Out form by March 1, 2016 and remain
employed by the Firm after that date, you will be deemed to have
accepted the terms of the Agreement.
Id. The section describing the Arbitration Agreement concluded:

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Please sign and return a copy of the Mutual Arbitration
Agreement to your Office Administrator. Signing the Agreement
signifies that you understand you have the option to opt out and
that if you do not opt out on or before March 1, 2016 you will be
deemed to have accepted the Agreement.
Id. at 3 (emphasis in original).

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The attached Arbitration Agreement provided that:
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Ogletree Deakins (the “Firm”) and the undersigned (“Individual”)
recognize that disputes may arise in the workplace setting from time
to time that cannot be resolved without the assistance of an outside
party. Individual and the Firm (collectively “the Parties”) therefore
enter into this Agreement to provide for arbitration as the forum for
resolving any such disputes:

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response, contesting some of the facts asserted in Sanford’s Supplemental Declaration. That
request is also GRANTED. Dkt. No. 73 in 18-cv-00303, Dkt. No. 61 in 18-cv-00304.
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Arbitration Agreement (Dkt. No. 28-1 at ECF page 10 of 40). Pertinent here, paragraph 11

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provides:

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11. Opt Out. Individual may opt out of this Agreement by delivering
a completed and signed Opt-Out Form to the Director of Human
Resources on or before March 1, 2016. Opt-Out Forms and
instructions on how to return them are available on the OD Connect
home page of the Human Resources Department, under the
“Resources” tab. Failure to deliver an executed Opt-Out Form on or
before March 1, 2016, and continued employment with the Firm
after that date, shall be deemed acceptance of the terms of this
Agreement.

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Id. At the end of the Arbitration Agreement, above the signature line, is the following:

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Special Note: This Agreement is an important document that affects
your legal rights. You should familiarize yourself with it. By signing
below, you acknowledge that you understand you have the option to
opt out of this Agreement by returning an Opt Out form to the
Director of Human Resources on or before March 1, 2016 and that
failure to return an Opt Out form and remaining in the employment
of the Firm after that date will be deemed an acceptance of this
Agreement.

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United States District Court
Northern District of California

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Id. (emphasis in original).3

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On January 27, 2016, at 4:31 p.m., Vicki Myers sent an e-mail to all Orange County non15
equity shareholders, of counsel, staff attorneys, associates, and staff (including the e-mail address
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the Firm assigned to Dawn Knepper: [e-mail]). Berger Decl., Ex. D
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(“Email Notice 2”); Berger Decl. ¶ 7. Email Notice 2 explained:

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If you haven’t already done so, please sign and return a copy of the
Mutual Arbitration Agreement to me as soon as possible. Also,
please print your name under your signature to ensure that HR files
your document in the correct HR file.

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As indicated below: Signing the Agreement signifies that you
understand you have the option to opt out and that if you do not opt
out on or before March 1, 2016 you will be deemed to have accepted
the Agreement.

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You have the right to opt out of the arbitration program if you wish.
To do so, please read the instructions in the email below.

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Dkt. No. 28-1 at ECF page 17 of 40 (emphasis in original). Email Notice 2 then included the full

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text from Email Notice 1 as well as the attached Arbitration Agreement.

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The Arbitration Agreement also provides that any arbitration be “held in or near the city in which
individual is or was last employed.” Dkt. No. 58-4 (“Arbitration Agreement”), ¶ 4.
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On March 1, 2016, at 3:41 p.m. PST, Vicki Myers sent an e-mail to all Orange County

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non-equity shareholders, of counsel, staff attorneys, associates, and staff (including the e-mail

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address the Firm assigned to Dawn Knepper: [e-mail]). Berger

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Decl., Ex. E (“Email Notice 3”); Berger Decl. ¶ 8. Email Notice 3 explained:

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As a reminder, if you haven’t already done so, today is the deadline
to sign and return a copy of the Mutual Arbitration Agreement to
me. Also, please print your name under your signature to ensure
that HR files your document in the correct HR file.
As indicated below: Signing the Agreement signifies that you
understand you have the option to opt out and that if you do not opt
out on or before March 1, 2016 you will be deemed to have accepted
the Agreement.
You have the right to opt out of the arbitration program if you wish.
To do so, please read the instructions in the email below.

United States District Court
Northern District of California

Dkt. No. 28-1 at ECF pg. 24 0f 40 (emphasis in original).
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On March 1, 2016 at 3:46 p.m. PST, Knepper responded to Myers’ email, saying “I will
turn mine in tomorrow. Thanks.” Berger Decl., Ex. F (Dkt. No. 28-1 at ECF pg. 31 of 40);

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Berger Decl. ¶ 9. There is no dispute that Knepper did not turn in either a signed Arbitration
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Agreement or an opt out form.
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In her declaration, Knepper states that she does not “recall receiving, viewing, or opening

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any email from anyone at Ogletree that contained an arbitration agreement that would cover
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disputes between the Firm and me,” she does not “recall receiving, viewing, or opening any email

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from anyone at Ogletree that discussed opting-out of an arbitration agreement that would cover
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disputes between the Firm and me,” and she “does not recall reviewing any arbitration agreement

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that would cover disputes between the Firm and me, and I did not consider entering into any
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arbitration agreement that would cover such disputes. I did not knowingly enter into any
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arbitration agreement that would cover disputes between the Firm and me. Had I been aware that I
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needed to opt-out of the agreement, I would have done so.” Knepper Decl. (Dkt. No. 70-6) ¶¶ 2-4.

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Knepper does not recall sending and cannot recall what she meant or what the context was for her
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March 1, 2016 response to Myers that “I will turn mine in tomorrow. Thanks.” Knepper Decl. ¶

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6. She declares that given the attention demanded by her clients, other work, and family
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obligations, it was not uncommon for her to “overlook administrative emails.” Id. ¶ 7. She has no

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knowledge of whether the Arbitration program was discussed at Ogletree’s October 2015 attorney

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retreat (which she did not attend) or at the January 2016 annual shareholder meeting (which she

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did attend). Id. ¶ 8.
DISCUSSION

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I.

KNEPPER IS FACIALLY COVERED BY THE ARBITRATION AGREEMENT

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A.

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Initially, Ogletree argues that any question as to the “enforceability” of the Arbitration

Authority to Decide Whether an Agreement to Arbitrate Exists

Agreement must be decided by an arbitrator because the Arbitration Agreement unambiguously

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commits disputes regarding the “interpretation, applicability, enforceability, or formation of this

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United States District Court
Northern District of California

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Agreement, including without limitation any claim that the Agreement is void or voidable,” to the

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Arbitrator. Ogletree Supp. Brief (Dkt. No. 66) at 5-6. That may be, but the issue of whether

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Knepper is covered by the Arbitration Agreement or was excused from failing to opt out are issues

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to be decided by a court. See, e.g., Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1120 (9th Cir.

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2008) (noting “particular contractual defenses to enforcement of the arbitration clause . . . were

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properly heard by the district court”); Covillo v. Specialty's Cafe, C-11-00594 DMR, 2012 WL

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3537058, at *6 (N.D. Cal. Aug. 14, 2012) (“the court must determine as a threshold matter

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whether a valid agreement to arbitrate exists”).

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Ogletree’s authority is not to the contrary. See, e.g., Mohamed v. Uber Techs., Inc., 848

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F.3d 1201, 1206 (9th Cir. 2016) (noting that arguments as to enforceability of any arbitration

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provision was within province of arbitrator where plaintiff “accepted the agreements and did not

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opt out.”); see also Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015) (noting there has

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to be a “clear and unmistakable” agreement to confer on the arbitrator the question of arbitrability

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before a court is precluded from deciding that issue). The issue of whether Knepper agreed to

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arbitration when she did not sign the Agreement and failed to opt out, but then continued to work

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at Ogletree are contract formation issues that must be decided by a court in the first instance.
Knepper’s Consent and Knowledge

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B.

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Under the Federal Arbitration Act, a party may challenge the validity or applicability of an
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arbitration provision by “raising the same defenses available to a party seeking to avoid the

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enforcement of any contract.” Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1121 (9th Cir.

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2008) (internal citations omitted). These “contract-based challenges are governed by applicable

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state law.” Id.

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Knepper argues that she cannot be considered to have agreed to the Arbitration Agreement

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because she was unaware Ogletree sent her the Arbitration Agreement by email prior to July 2017

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and therefore her knowing assent is lacking. However, Ogletree’s records show that Knepper

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opened Email Notice 1 and responded to Email Notice 3. That Knepper – an experienced

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employment law attorney – may not have read or fully comprehended the contents of those emails
and their attachments does not preclude a determination that she is bound by the Arbitration

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United States District Court
Northern District of California

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Agreement. See, e.g., Mohamed v. Uber Techs., Inc., 109 F. Supp. 3d 1185, 1198 (N.D. Cal.

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2015), aff'd in part, rev'd in part and remanded, 836 F.3d 1102 (9th Cir. 2016), and aff'd in part,

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rev'd in part and remanded, 848 F.3d 1201 (9th Cir. 2016) (“it is essentially irrelevant whether a

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party actually reads the contract or not, so long as the individual had a legitimate opportunity to

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review it.”); Cir. City Stores, Inc. v. Ahmed, 283 F.3d 1198, 1200 (9th Cir. 2002) (rejecting

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argument that arbitration agreement was procedurally unconscionable when plaintiff asserted he

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“did not have the degree of sophistication necessary to recognize the meaning of the opt-out

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provision or to know how to avoid it.”); see also Brookwood v. Bank of Am., 45 Cal. App. 4th

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1667, 1673 (Cal. App. 6th Dist. 1996) (rejecting argument that plaintiff could “rescind a contract

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simply by proving her unilateral ignorance of the contractual terms” where plaintiff argued she

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was unaware that security registration agreement contained arbitration provision).4
Knepper also argues that because she did not sign the Arbitration Agreement, or otherwise

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That Knepper did not read or fully understand the Email Notices and Arbitration Agreement does
not make her agreement to it – through her failure to opt out – unknowing under Title VII. The
“knowing” agreement cases under Title VII relied on by Knepper address the inapposite
circumstance where an employee signs an “acknowledgment” form affirming receipt of a
handbook and an employee’s duty to become familiar with the handbook’s contents without
disclosing that the handbook contains an arbitration provision. See, e.g., Ashbey v. Archstone
Prop. Mgt., Inc., 785 F.3d 1320, 1325 (9th Cir. 2015). Here, the Arbitration Agreement was
presented directly to Knepper, described in detail in Email Notice 1, and attached in full to all
three Email Notices.
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manifest express consent to it, she cannot be bound by it. However, numerous courts (including

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from this District) have concluded that employees can be bound by agreements to arbitrate where,

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like the Notices and Agreement here, the relevant employer documents and communications

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disclose that an employee’s failure to opt out manifests assent to an “implied-in-fact” arbitration

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agreement. For example, in Hicks v. Macy's Dept. Stores, Inc., C 06-02345 CRB, 2006 WL

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2595941 (N.D. Cal. Sept. 11, 2006) the company twice mailed a packet of information to plaintiff

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explaining the company’s multi-step dispute resolution program. “Step 4” was mandatory

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arbitration “if the employee agreed to be bound by arbitration.” Id. at *1. Both times the

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employee was also mailed an “election” form to opt out of the Step 4 arbitration and advised he

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would be bound unless he opted out. Id. Plaintiff did not return the opt out form either time. Id.

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United States District Court
Northern District of California

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The court concluded that on those facts “plaintiff impliedly agreed to arbitrate his employment-

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related claims. Plaintiff’s assertion that he did not intend to enter into an arbitration agreement

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with Macy’s is incredible in light of plaintiff’s failure to explain why he did not return the opt out

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form.” Id. at *2; see also Castro v. Macy’s, Inc., C 16-5991 CRB, 2017 WL 344978, at *3 (N.D.

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Cal. Jan. 24, 2017) (no affirmative agreement needed, agreement implied where employee failed

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to opt out); Aquino v. Toyota Motor Sales USA, Inc., 15-CV-05281-JST, 2016 WL 3055897, at *4

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(N.D. Cal. May 31, 2016) (“it is undisputed that Ms. Aquino received the Agreement (at least via

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email), that she failed to opt out of it, and that she continued to work at Toyota after the

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Agreement went into effect. . . . Moreover, Ms. Aquino does not argue that she ever attempted to

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communicate her lack of consent to the Agreement to Toyota in any way. Under California law,

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these facts establish an enforceable agreement between Ms. Aquino and Toyota.”); see also Davis

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v. Nordstrom, Inc., 755 F.3d 1089, 1093 (9th Cir. 2014) (where the original arbitration program

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was described in employee handbook and subsequently notice was provided to employees of a

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new provision (barring class or collective claims), the court recognized that “[w]here an employee

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continues in his or her employment after being given notice of the changed terms or conditions, he

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or she has accepted those new terms or conditions.”).5

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In Castro, the fact that the plaintiff “unequivocally denies receiving the arbitration agreement
and Opt Out Form in the mail” was insufficient to show lack of an agreement, where the company
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Knepper attempts to distinguish the facts of the Hicks and Castro cases from this one,

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emphasizing that in those cases the record reflected that the employers took steps to inform

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employees about the arbitration agreement and opt out option that were not taken by Ogletree

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here. See, e.g., Hicks, 2006 WL 2595941 at *1 (noting that defendant held daily meetings for its

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employees about the new dispute resolution policy, provided brochures explaining the policy, and

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posted signs regarding the policy in employee common areas). What constitutes sufficient notice

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in the consumer context or in the more typical employer-employee context is not particularly

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persuasive in this context, where a law firm specializing in employment law notifies non-equity

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shareholders that it is extending an arbitration program to cover them. While Knepper’s
experience as an employment law attorney may not be dispositive, it is significant and weighs in

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United States District Court
Northern District of California

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favor of concluding that she is facially covered by the Arbitration Agreement.6 Knepper’s attempt

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to analogize Ogletree’s actions to situations where defendants attempt to impose arbitration on

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unsophisticated workers or on consumers is not well-taken.
Close to the facts here, in Circuit City Stores, Inc. v. Najd, 294 F.3d 1104, 1106 (9th Cir.

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2002), the company instituted a dispute resolution program (DRA) that was distributed to

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employees in a packet with other materials, including an opt out form. The employees had to

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acknowledge receipt of the packet but were not required to affirmatively agree to be bound by the

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DRA. The acknowledgement form clearly explained the right to and consequence of failing to opt

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had evidence that the information packets and opt out forms were at least mailed to plaintiff (and
plaintiff did not dispute having received other mail at that address). Castro, 2017 WL 344978 at
*3. The evidence here is similar, although delivered and in one case responded to electronically.
See also Craig v. Brown & Root, Inc., 84 Cal. App. 4th 416, 421 (Cal. App. 2d Dist. 2000)
(despite declaration from plaintiff that she did not receive mailed copy of arbitration agreement,
court of appeal affirmed trial court’s enforcement of arbitration agreement as defendant’s
“declarations and documents (mailing lists) are circumstantial evidence from which the court was
entitled to infer that Craig had received the memorandum and brochure.”).
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The repeated explanations of the consequences of failing to opt out, the explicit disclosure that
absent opt out continued employment will be deemed acceptance, as well as the consistent
limitation of the “signature” language to acknowledgment of the opportunity to opt out,
distinguish this case from Gorlach v. Sports Club Co., 209 Cal.App.4th 1497 (2012). There,
where the employees were presented with a new employee handbook that contained a provision
stating that as a “condition of employment” all employees “must sign” an arbitration agreement
and plaintiff employee declined to sign the agreement and continued working, the court concluded
that plaintiff’s continued employment did not create an implied-in-fact agreement. Id. at 1507-10.
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out. In those circumstances the Ninth Circuit held that “inaction is indistinguishable from overt

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acceptance,” and the court “may conclude that the parties have come to agreement,” and “infer

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that Najd assented to the DRA by failing to exercise his right to opt out of the program.” Id. at

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1109.
Here, although Knepper did not sign the Agreement to acknowledge her understanding of

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her right to opt out and did not submit the opt out form, she did – at least once – affirmatively

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acknowledge receipt of notice about both the arbitration program and the right to opt out when she

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responded on March 1, 2016 to Email Notice 3. She says that she cannot currently recall her

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understanding of or knowledge of what she meant by that response, but that does not alter her

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acknowledgement of receipt of the information on that date.7
Finally, and relatedly, Knepper argues that even if she could theoretically be bound to an

United States District Court
Northern District of California

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arbitration agreement sent by email without her affirmative assent, she cannot be considered to

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have agreed to the Arbitration Agreement at issue. She argues that the Arbitration Agreement

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contains language indicating that to be bound by it, the recipient was required to sign it; it is

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undisputed that she did not.
Some of the language used by Ogletree in its Notices, as well as the internal emails sent

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among Ogletree’s HR personnel, show that Ogletree wanted to have each covered individual sign

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and return the Arbitration Agreement to their HR representative. See, e.g., Dkt. No. 70-1 (January

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15, 2016 Email from HR director to office administrators noting that “all” employees “have been

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asked to return the signed Mutual Arbitration Agreement to their local Office Administrator” but

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To be clear, I am not endorsing a general “silence equals consent” position. As the Ninth Circuit
itself recognized, “[i]n other circumstances acceptance by silence may be troubling, and explicit
consent indispensable.” Najd, 294 F.3d at 1109. Here, however, there was not complete silence.
Knepper affirmatively acknowledged receipt on March 1, 2016. See Hicks, 2006 WL 2595941 at
*3 (concluding that the fact that “plaintiff never signed a form acknowledging receipt of the SIS
materials [ ] is immaterial as plaintiff does not dispute defendant’s evidence that he did in fact
receive such materials; indeed, he does not even dispute that he read the materials.”). Moreover,
Knepper is an experienced employment law attorney, and that she acknowledged receipt of the
materials at least once (in addition to Ogletree’s evidence that Knepper received the information at
least three times) makes a finding of implied consent appropriate. Cf. Dotson v. Amgen, Inc., 181
Cal. App. 4th 975, 981 (Cal. App. 2d Dist. 2010) (taking into consideration, when determining
procedural unconscionability, the fact that plaintiff was not a “low-wage employee without the
ability to understand that he was agreeing to arbitration” but was “a highly educated attorney.”).
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recognizing that because “the policy does allow current employees to opt-out of the arbitration

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program so you may not receive an agreement from every employee.”). However, each of the

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Email Notices, as well as the text above the signature line in the Arbitration Agreement, explain

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that the signature indicates only that the signer understood that the signer had the right to opt out

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of the arbitration program. See Arbitration Agreement (“Special Note: This Agreement is an

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important document that affects your legal rights. You should familiarize yourself with it. By

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signing below, you acknowledge that you understand you have the option to opt out of this

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Agreement by returning an Opt Out form to the Director of Human Resources on or before March

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1, 2016 and that failure to return an Opt Out form and remaining in the employment of the Firm
after that date will be deemed an acceptance of this Agreement.”); see also Email Notice 1

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United States District Court
Northern District of California

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(“Please sign and return a copy of the Mutual Arbitration Agreement to your Office

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Administrator. Signing the Agreement signifies that you understand you have the option to opt

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out and that if you do not opt out on or before March 1, 2016 you will be deemed to have

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accepted the Agreement.”); Email Notice 2 (“As indicated below: Signing the Agreement signifies

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that you understand you have the option to opt out and that if you do not opt out on or before

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March 1, 2016 you will be deemed to have accepted the Agreement.”); Email Notice 3 (same).

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The “signature” language applies to acknowledgment only of the right to opt out, not an

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acknowledgement of an agreement to be bound.8

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Knepper cites cases declining to enforce arbitration agreements where the employers expressly
sought or required employee consent to an arbitration agreement, in effect creating a bilateral as
opposed to a unilateral contract. However, the language and structure of the Arbitration
Agreement is starkly different than the language and structure of bilateral agreements in those
cases. See Romo v. Y-3 Holdings, Inc., 87 Cal.App.4th 1153, 1160 (2001) (where employees
signed various provisions in their employment application, but did not sign the separate arbitration
section within that application, employees “did not assent” to arbitration); Mitri v. Arnel
Management Co., 157 Cal.App.4th 1164, 1173 (2007) (where the employee handbook contained
an arbitration policy stating that employees would be required to sign a separate arbitration
agreement, and none of the affected employees signed the separate agreement, there was no
consent or effective agreement to arbitrate); Recinos v. SBM Site Services LLC, A151253, 2018
WL 3801844, at *5 (Cal. App. 1st Dist. Aug. 10, 2018) (where arbitration provision was
separately set forth in the job application with its own signature line, applicants did not sign the
arbitration provision, and there was no disclosure that arbitration was a term and condition of
employment, there was no agreement to arbitrate); Stagner v. Luxottica Retail N.A., Inc., C 1102889 CW, 2011 WL 3667502, at *5 (N.D. Cal. Aug. 22, 2011) (rejecting motion to compel
arbitration where employee signed her agreement to terms and conditions of employment in
employee handbook but did not sign separate section expressly agreeing to be bound by dispute
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Moreover, the language of Email Notices as well as the Arbitration Agreement itself

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clearly explain that failure to opt out plus continued employment will be “deemed” agreement to

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the Arbitration Agreement. See Email Notice 1 (“If you do not return an Opt-Out form by March

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1, 2016 and remain employed by the Firm after that date, you will be deemed to have accepted the

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terms of the Agreement.”); Email Notice 2 (“if you do not opt out on or before March 1, 2016 you

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will be deemed to have accepted the Agreement”); Email Notice 3 (same). In these circumstances,

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Knepper’s failure to sign the Agreement is not dispositive. It is her failure to opt out – the need

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for which and consequences of were clearly explained to her in multiple emails received by

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Knepper – and her continued employment which facially binds Knepper to the Arbitration

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Agreement.

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Northern District of California

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C.

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Knepper argues that even if the Agreement applies to her, I should nonetheless deny the

Unconscionability

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motions to transfer venue because the Agreement is both procedurally and substantively

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unconscionable and therefore unenforceable. However, the Agreement contains a delegation

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clause providing that:

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Except as provided below, the arbitrator shall have the authority to
resolved any dispute relating to the interpretation, applicability,
enforceability, or formation of this Agreement, including without
limitation any claim that the Agreement is void or voidable.
Agreement at ¶ 6. The “except as” language carves out from the arbitrator’s powers only the

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ability to consolidate claims of other individuals into a single proceeding. Id. Under this clause,
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disputes over the unconscionability of the Agreement – procedurally and substantively – are to be

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decided by the arbitrator. See Mohamed v. Uber Techs., Inc., 848 F.3d 1201, 1209 (9th Cir. 2016).
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Knepper argues that the delegation clause does not preclude me from determining
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unconscionability because there are serious doubts whether the Agreement applies to her and the
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language in the delegation clause is confusing and contradictory. Both of those arguments are
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meritless. I have already determined above that the Agreement facially applies to her. Despite her
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protestations, the language of the delegation clause clearly conveys to the arbitrator the general
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resolution agreement).
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question of the Agreement’s enforceability as well as the narrower question of whether her claims

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(individual or collective) are subject to arbitration.
In Mohamed, because the plaintiffs raised arguments concerning why the delegation clause

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itself was procedurally or substantively unconscionable, the court resolved those challenges.

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Mohamed v. Uber Techs., Inc., 848 F.3d at 1210-1212 (addressing unconscionability narrowly as

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to delegation clause only). Here, Knepper’s arguments for procedural unconscionability are the

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unfairness, ambiguity, and surprise arguments to the existence of the Agreement that I addressed

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and rejected above. Her substantive unconscionability arguments are based on “one-sided”

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provisions in the Agreement itself, not the delegation provision. Those questions are to be

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resolved by the arbitrator.
The delegation provision is clear and not unconscionable. Knepper’s arguments

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Northern District of California

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challenging the Agreement must be resolved by the arbitrator.
For the foregoing reasons, I conclude that Ogletree has demonstrated that the Arbitration

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Agreement facially applies to Knepper.

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II.

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MOTION TO TRANSFER
In moving to transfer these cases to the Central District of California, Ogletree argued that

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the existence of the Arbitration Agreement – requiring arbitration of Knepper’s claims in the

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Central District – was dispositive and requires granting its motions to transfer. See, e.g., Atlantic

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Marine Const. Co., Inc. v. U.S. Dist. Ct. for W. Dist. of Texas, 571 U.S. 49, 64 (2013) (“forum-

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selection clauses should control except in unusual cases.”). In the extensive briefing to date in this

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case, Knepper does not argue or explain why this case should not be transferred to the Central

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District if she is at least facially bound by the Arbitration Agreement.

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Given the showing that Knepper is at least facially bound to the Arbitration Agreement by

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her failure to opt out, the forum selection clause in that Agreement mandates that these cases be

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transferred to the Central District. See Arbitration Agreement ¶ 4 (“[t]he arbitration hearing shall

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be held in or near the city in which individual is or was last employed by the Firm.”). The motions

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to transfer these two cases are GRANTED. The motion for leave to file an amended complaint in

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Case No. 18-00303 is deferred for resolution by the judge in the transferee district.
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CONCLUSION

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Defendant’s motions to transfer Case Nos. 18-cv-00303 and 18-cv-00304 are GRANTED.
These cases are transferred to the Central District of California.
IT IS SO ORDERED.
Dated: January 9, 2019

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William H. Orrick
United States District Judge

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United States District Court
Northern District of California

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