Here an excerpt of Justin Franks' response to Nielsen's MOTION to Compel Arbitration, or in the Alternative, Motion to Dismiss
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WASHINGTON AT TACOMA
No. 3:23-CV-06150
Plaintiff,
PLAINTIFF’S BRIEF IN OPPOSITION TO DEFENDANTS’
11
THE NIELSEN COMPANY (US), LLC;
GRACENOTE, INC.; JOHN DOES 1-10,
Defendants.
14
MOTION TO COMPEL ARBITRATION, OR IN THE ALTERNATIVE, MOTION TO DISMISS
Note on Motion Calendar: July 17, 2024
15
INTRODUCTION
16
Defendants’ combined motion to compel arbitration and dismiss seeks to have their
17
cake and eat it, too. The Defendants rely on an arbitration “agreement” inside an Employee
Handbook that declared on its first page was “not intended to create any contractual rights or
20 obligations.” (Exhibit A to Declaration of Justin Franks (“Franks Decl.”), Acknowledgment of
21 Receipt.) The Defendants’ motion to compel posits that no court should decide any aspect of
22
this case, yet Defendants simultaneously ask this Court to dismiss some of Franks’s claims.
23
Defendants sought to have this Court dismiss all California claims for lack of a California
24
connection in a first motion to dismiss (Dkt. 13), before disclosing a purported arbitration
policy governed by California law.
1 Defendants cannot have it both ways; the Court should reject Defendants’ contradictory
2 arguments. The motion to compel should be denied because there was no enforceable
3
agreement to arbitrate. The “agreement” itself is a policy within a larger document that
4
disclaims any intent to form a contract, which at a bare minimum prevented Franks from
5
knowingly waiving his right to bring claims in court. Regardless, the language of the purported
6
arbitration policy does not cover claims against Nielsen. And whatever entitlement to arbitrate
Defendants believe they have, they waived it through litigation conduct. Rather than promptly
9 raise the arbitration policy, Defendants “engag[ed] in months . . . of litigation—filing motions
10 to dismiss. . .—before deciding they would fare better in arbitration,” including moving to
11
dismiss the claims for lack of a California nexus before disclosing an arbitration policy
12
governed by California law. Morgan v. Sundance, Inc., 596 U.S. 411, 413 (2022). This suit
13
should remain before this Court, and Defendants’ motion to compel should be denied.
14
When this Court addresses the merits, as Defendants appear to concede “in the
alternative” that it should, it should find that Franks’s California claims are well-pled and
17 timely. Franks challenges California-based conduct and retaliation for his California-based
18 protected activity that occurred or continued within three years of his complaint with the
19
California Department of Fair Employment and Housing. Defendants’ motion to dismiss
20
should therefore be denied, as well.
21
STATEMENT OF FACTS
In 2015, Defendant Gracenote, Inc. hired Plaintiff Justin Franks as a manager of a small
team in California. (SAC ¶¶ 6–7.) At the time, Franks was an experienced and successful
25 information technology leader with more than two decades of experience at both start-ups and
26
large corporations. (Id. ¶ 6.). During in-person onboarding, Gracenote presented Franks with its
Employee Handbook, which contained Gracenote’s company policies, including its Arbitration
2 Policy, and an acknowledgement form. (Franks Decl. ¶¶ 3–5, 7; Exhibit A.) Franks was
3
required to acknowledge receipt of the Employee Handbook by signing an acknowledgement
4
page that provided, “I understand that the policies contained in the Handbook are not intended
5
to create any contractual rights or obligations.” (Franks Decl. ¶ 7; Exhibit A.) The next page
6
contained the arbitration policy on which Defendants rely. (Exhibit A at 2.) Gracenote
presented Franks with all onboarding documents and directed him to sign certain pages of the
9 Handbook. Franks did not understand that Gracenote was asking him to sign away his right to
10 pursue statutory discrimination claims in court. (Franks Decl. ¶ 8–10, 13.)
11
Once onboarded, Franks quickly succeeded. Franks grew two key IT departments at
12
Gracenote from the ground up, increasing the run rate of his departments by over 1000x. (Id.
13
¶ 8.) Nielsen acquired Gracenote in 2017 and took over the business, including Franks’s
14
successful departments. (Id. ¶ 10.) After the merger, Nielsen’s IT leadership visited Franks and
his team at their Emeryville, California office to discuss their work. (Id. ¶ 13.) But despite
17 acknowledging Franks’s objectively excellent work, Nielsen removed him from his leadership
18 role and replaced him with a white outside hire at two levels higher than Franks. (Id. ¶¶ 14–
19
- ) Recognizing the poor optics of the replacement, Nielsen “corrected” Franks’s title in a
20
“promotion” under which Nielsen often used Franks as a glorified administrative assistant,
21
setting up conference rooms and changing the snacks in the office. (Id. ¶¶ 14, 16–17.)
In 2019, Franks moved from California to Washington. (Id. ¶ 92.) But his official work
location remained Gracenote’s headquarters in Emeryville, California. (Id.) He regularly
25 traveled to California to conduct business until COVID made travel infeasible beginning in
26
- Until May 2022, he was managed by California-based Senior Vice President of TechOps
Tricia Higgins. (Id. ¶¶ 17, 92.) Higgins assigned Franks menial tasks, asking the former lead of
2 two departments to create spreadsheets listing contracts and vendors and create a Wiki page for
3
listing products. (Id. ¶ 17.) Because of the actions of Higgins and others at Nielsen, Franks was
4
“removed from his position of real responsibility and growth potential . . . and forced by
5
Nielsen into a glorified project management role,” causing his career to stagnate. (Id. ¶ 21.)
6
Throughout his tenure, Nielsen attempted to placate Franks and other Black employees
with meaningless “diversity” awards, programs, and roles, all the while “refusing to fairly pay
9 and promote talented and high-performing Black employees.” (Id. ¶ 19.) Thus, Franks was
10 repeatedly passed over for advancement opportunities, for which “Nielsen’s standard practice
11
with respect to favored non-Black employees is to simply place them in roles of increasing
12
responsibility and higher pay.” (Id. ¶ 20.) For example, in July 2022, Nielsen promoted a white
13
employee whom Franks had trained to Vice President of Cloud/CloudOps at Gracenote—one
14
of the departments Franks had built. (Id. ¶ 26.)
In the diversity roles Nielsen foisted on Franks, he learned that Black employees
17 throughout the company had experienced similar discrimination and career stagnation at
18 Nielsen. (Id. ¶ 25.) In 2022, Franks traveled to Nielsen’s Emeryville, California office, where
19
he reported to both Nielsen’s Chief Diversity Officer Sandra Sims-Williams and Nielsen
20
executive Sujit Das Munshi that he and other Black employees were denied advancement. (Id.
21
¶¶ 27–28.) Following this protected activity and follow-up communications and conversations
with high-level Nielsen executives about endemic discrimination at Nielsen, (id. ¶¶ 29–36),
Franks met one-on-one with Nielsen’s CEO David Kenny in January 2023. (Id. ¶ 37). Franks
25 described his career stagnation and preferential treatment of white colleagues, to which Kenny
26
asked Franks why he “stuck around” and encouraged Franks to look for jobs elsewhere. (Id.)
1 Franks learned that Nielsen executives had branded him as “disruptive” because of his
2 protected activity of reporting discrimination and “wanted him ‘out.’” (Id. ¶¶ 41, 49.) Nielsen
3
conducted layoffs in January 2023 and forced Franks to implement leadership’s decision to lay
4
off his only Black direct report and retain a less-experienced, less-tenured, lower-performing
5
white employee, following a pattern of disproportionately laying off Black employees. (Id.
6
¶ 43–45.) In March 2023, a week after a colleague warned Franks that “key leaders at Nielsen
‘really wanted him out’ because he was ‘making waves,’” (id. ¶ 49), Nielsen fired Franks,
9 using the same script it used in the reduction in force that had long since concluded. (Id. ¶ 50.)
10 On November 22, 2023, Franks filed a complaint of discrimination with the California
11
Department of Fair Employment & Housing (“DFEH”) and received a right-to-sue notice on
12
November 30, 2023. (Id. ¶ 98.) Franks then filed this action alleging, among other things, race
13
discrimination and retaliation under the California Fair Employment and Housing Act
14
(“FEHA”), in December 2023. (Dkt. 1.) On February 16, 2024, Defendants moved to dismiss
the FEHA claims on the merits, arguing that Franks insufficiently alleged a nexus to California
17 and that his claims were time-barred. (Dkt. 13.) Defendants did not move to compel arbitration,
18 nor did they note that the purported arbitration policy is governed by California law. (Id.) In
19
response, Franks amended his complaint to add additional facts. (Dkt. 15.) And after receiving
20
his right-to-sue notice from the EEOC, Franks sought to amend to raise the now-exhausted
21
Title VII claims. (Dkt. 19). Defendants “consent[ed] to Plaintiff amending the Complaint” and
did not raise the arbitration policy. (Id. ¶ 3.)
On May 3, 2024, five months into the litigation, after the filing of two amended
25 complaints and a Rule 12(b)(6) motion seeking the Court to resolve the case on the merits,
26
Defendants first raised the issue of the arbitration policy. (Dkt. 25.) In support, Defendants
1 submitted the declaration of a Nielsen director who averred that the agreement was available in
2 Franks’s employment file. (Dkt. 26 ¶ 7.)
3
LEGAL STANDARD
4
In considering a motion to compel arbitration, courts look to the Federal Arbitration
5
Act (“FAA”) for guidance. The FAA provides that contracts for arbitration are enforceable
6
“save upon such grounds as exist at law or in equity for the revocation of any other contract.” 9
U.S.C. § 2. The Supreme Court has made clear that “federal policy is about treating arbitration
9 contracts like all others, not about fostering arbitration.” Morgan v. Sundance, Inc., 596 U.S.
10 411, 418 (2022); see also, e.g., Nat’l Found. for Cancer Rsch. v. A.G. Edwards & Sons, Inc.,
11
821 F.2d 772, 774 (D.C. Cir. 1987) (“‘[S]trong federal policy in favor of enforcing arbitration
12
agreements’ is based upon the enforcement of contract, rather than a preference for arbitration
13
as an alternative dispute resolution mechanism.”). Courts cannot “devise novel rules to favor
14
arbitration over litigation.” Morgan, 596 U.S. at 418. And generally applicable state-law
contract defenses, such as fraud, duress, or unconscionability, will defeat an arbitration
17 agreement. McBurnie v. RAC Acceptance E., LLC, 95 F.4th 1188, 1191 (9th Cir. 2024).
18 “To survive a Rule 12(b)(6) motion, the complaint does not need detailed factual
19
allegations, but must contain sufficient factual matter, accepted as true, to state a claim to relief
20
that is plausible on its face.” Zimmerman v. PeaceHealth, — F. Supp. 3d —, 2023 WL
21
7413650, at *3 (W.D. Wash. 2023) (cleaned up). “The Court ‘must accept as true all factual
allegations in the complaint and draw all reasonable inferences in favor of the nonmoving
party.’” Id. (quoting Retail Prop. Tr. v. United Bhd. Of Carpenters & Joiners of Am., 768 F.3d
25 938, (9th Cir. 2014)). “[O]nly in rare circumstances can a defendant prevail on [an affirmative]
26
defense in a Rule 12(b)(6) motion.” Id. at *1. “[D]ismissal on that ground is proper only if the
defendant shows some obvious bar to securing relief on the face of the complaint or in any
2 judicially noticeable materials.” Id. at *6 (quoting Bolden-Hardge v. Off. of Cal. State
3
Controller, 63 F.4th 1215, 1224 (9th Cir. 2023)).
4
ARGUMENT
5
Franks Cannot Be Compelled to Arbitration.
6
Defendants’ attempt to enforce their Arbitration Policy is not grounded in accepted
7
principles of arbitration or California contract law. The plainly contradictory and inconsistent
terms of the Employee Handbook’s Acknowledgement Agreement and Arbitration Policy stop
10 Defendants from forcing Franks into arbitration, or at a minimum, prevented him from
11 knowingly waiving his right to access the courts. Even if such a construction were permissible,
12
the Arbitration Policy covers Franks’s employment with Gracenote, not Nielsen. Nielsen has
13
done nothing to demonstrate that it is a third-party beneficiary with any right to enforce the
14
Arbitration Policy. Finally, Defendants have waived any entitlement to arbitrate by first
insisting that this Court rule on the merits. Thus, the motion to compel should be denied.
17 A. The Enforcement of Arbitration Policy Is Challenged on The Same Basis as Any Other Contract.
18
Because arbitration is a matter of contract law, “a party cannot be required to submit to
19
arbitration any dispute which he has not agreed so to submit.” Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79, 83 (2002). Therefore, the district court’s role on a motion to
22 compel arbitration is limited “to determining whether a valid arbitration agreement exists, and
23 whether the agreement encompasses the disputes at issue.” Nguyen v. Barnes & Noble Inc.,
24
763 F.3d 1171, 1175 (9th Cir. 2014).
25
26
1 In making this determination, courts consider what, if anything, the parties agreed to.
2 See Coinbase, Inc. v. Suski, 144 S. Ct. 1186, 1192 (2024). This consideration requires the court
3
to assess “state-law principles that govern the formation of contracts.” Lowden v. T-Mobile
4
USA, Inc., 512 F.3d 1213, 1217 (9th Cir. 2008). And importantly, the party seeking to compel
5
arbitration bears the burden to prove that a valid contract was formed. Knutson v. Sirius XM
6
Radio Inc., 771 F.3d 559, 565 (9th Cir. 2014). Here, Franks agrees with Defendants’ assertion
(at 7) that California contract law applies. Thus, Defendants must prove that a valid contract to
9 arbitrate was formed under generally applicable principles of California law.
10 B. The Disclaimer in the Acknowledgement Agreement Forbids
Formation of Any Contract.
Franks is not bound by any policy in the Employee Handbook, including the
Arbitration Policy. “[A]n offeree, regardless of apparent manifestation of his consent, is not
14 bound by inconspicuous contractual provisions of which he was unaware, contained in a
15
document whose contractual nature is not obvious.” Knutson, 771 F.3d at 566 (quoting
16
Windsor Mills, Inc. v. Collins & Aikman Corp., 25 Cal. App. 3d 987, 993 (Cal. Ct. App.
17
- ). “This principle of knowing consent applies with particular force to provisions for
18
arbitration.” Id. (quoting Windsor Mills, Inc., 25 Cal. App. 3d at 993). “If a party wishes to
bind in writing another to an agreement to arbitrate future disputes, such purpose should be
21 accomplished in a way that each party to the arrangement will fully and clearly comprehend
22 that the agreement to arbitrate exists and binds the parties thereto.” Id. (quoting Com. Factors
23
Corp. v. Kurtzman Bros., 131 Cal. App. 2d 133, 136 (Cal. Ct. App. 1955)) (internal quotation
24
marks and citation omitted).
25
26
1 Defendants present the arbitration provision as though it is a standalone document. In
2 fact, it was a page in a larger Employee Handbook, as shown by Defendants’ exhibit labeling it
3
as page “2” and excluding other pages. (Dkt. 26-1.) The Employee Handbook was given to
4
Franks at his onboarding and contained other relevant provisions, including the
5
Acknowledgement Agreement. (Franks Decl. ¶ 5; Exhibit A.) In resolving contractual disputes,
6
the terms of an employer’s promulgated employee handbook are the “central focus of the
contractual analysis.” Guz v. Bechtel Nat. Inc., 24 Cal. 4th 317, 345 (2000). When that
9 handbook contains a disclaimer, courts should not ignore them when ascertaining the terms of
10 the employment relationship. Id. at 340.
11
Here, two disclaimers in the Acknowledgement Agreement portion of the Employee
12
Handbook establish that the arbitration provision is not a binding agreement. First, the
13
Acknowledgement Agreement expressly supersedes other agreements. (Exhibit A.) The
14
Acknowledgement states that its terms “supersedes all previous agreements, whether written or
or-l, express or implied, relating to the subjects covered in this [herein.]”. (Id.) The Arbitration
17 Policy is among the policies covered. (Id.) Thus, the executed Acknowledgement Agreement is
18 the controlling document. Second, the Acknowledgement Agreement prohibits contract
19
formation. The Acknowledgement explains that all “policies contained in the Handbook are not
20
intended to create any contractual rights or obligations.” (Id.) (emphasis added). Defendants
21
disregard the Acknowledgement Agreement entirely. By doing so, they ask this Court to ignore
the express intent of the Acknowledgement Agreement, but courts reject similar arguments.
In Esparza v. Sand & Sea, Inc., 2 Cal. App. 5th 781 (Cal. Ct. App. 2016), the Court of
25 Appeal held that an arbitration agreement in an employee handbook did not create an
26
enforceable agreement to arbitrate. Like Franks, the employee in Esparza signed an
1 acknowledgement form accompanying an employee handbook. The form stated that “[T]his
2 handbook is not intended to be a contract . . . nor is it intended to otherwise create any legally
3
enforceable obligations on the part of the Company or its employees.” Id. at 789. Although the
4
employee signed the handbook acknowledgement form, which mentioned the arbitration
5
agreement contained in the handbook, the form did not state that the employee agreed to the
6
arbitration. Id. at 789–91. As such, the appellate court held that the trial court properly denied
the employer’s petition to compel arbitration. Id.
9 In reaching this conclusion, the Esparza court relied on Mitri v. Arnel Management Co.,
10 157 Cal. App. 4th 1164 (Cal. Ct. App. 2007); Esparza, 2 Cal. App. 5th at 788–89. In Mitri, the
11
employer also sought to compel arbitration based on a handbook that contained a section titled,
12
“Arbitration Agreement.” The “Arbitration Agreement” section provided that all employees
13
would be given a copy of an arbitration agreement that they were required to sign. Id. While
14
the employer failed to provide any evidence of the signed arbitration agreement, Esparza found
Mitri persuasive in two ways. First, the employee handbook indicated there was no intent to
17 establish an agreement (as such, applying contract law, the courts in Mitri and Esparza each
18 concluded that the handbook provision did not constitute an agreement to arbitration.). Id.
19
Second, the Mitri acknowledgement failed to specifically state that the employee agreed to
20
abide by the arbitration agreement provision in the handbook. Id. at 789–90.
21
This case is like both Mitri and Esparza. Like the plaintiffs in those cases, Franks
signed the Acknowledgement Agreement accompanying the Employee Handbook which
explicitly forbids contract formation. The Acknowledgement Agreement could not be clearer
25 in its intent to prevent the parties from being contractually bound by any policy in the
26
Handbook. (Exhibit A.) Defendants will undoubtedly attempt to distinguish Mitri and Esparza
by noting that the acknowledgement agreements in Mitri and Esparza did not contain any
2 reference to agreeing to the employer’s arbitration policies while Franks’s Acknowledgement
3
Agreement does. The flaw in that argument lies in the construction of Defendant’s
4
Acknowledgement Agreement.
5
For one thing, Franks’s Acknowledgement Agreement is intended to control the terms
6
of his employment and forbids any contract formation. But moreover, its language makes no
attempt to exclude the Arbitration Policy from these intentions. Indeed, Defendants drafted the
9 Agreement with clear intent that no policy could create a contract. Defendants could have
10 excluded the arbitration policy from this disclaimer or otherwise set it apart. Other employers
11
have done so, and courts find such exclusions sufficient to bind an employee. Here, Defendants
12
took no such action. In fact, they went so far as to distinctly mention the Arbitration Policy
13
twice in the Employee Handbook (one being immediately before the disclaimer prohibiting
14
contract formation) but express no intent in writing or otherwise to set it apart from the
prohibition or ensure it survival. At bottom, Defendants ask the Court to insert an exception to
17 the Acknowledgement Agreement’s disclaimers that excludes its arbitration policy. But the
18 Court’s role “is simply to ascertain and declare what is in terms or in substance contained [in
19
an instrument], not to insert what has been omitted.” Mitri, 157 Cal. App. 4th at 1173 (quoting
20
Cal. Code Civ. Proc. § 1858). Defendants’ omission is fatal to this argument.
21
The disclaimers and construction of the Acknowledgement Agreement leaves only one
plausible conclusion: the “policies” contained in the Handbook and referenced in the
Acknowledgement Agreement, including the arbitration policy, are just that, policies—subject
25 to the same restrictions as any other.
26
1 C. Franks Did Not Knowingly Waive His Right to Litigate His Discrimination and Retaliation Claims.
2
At a minimum, the Acknowledgement Agreement’s insistence that the Handbook
3
created no contractual rights or obligations prevented Franks from knowingly waiving his right
to bring statutory discrimination and retaliation claims in court, making any purported
6 arbitration policy ineffective. Though the FAA authorizes enforcement of arbitration
7 agreements, “[a] particular statute . . . may either preclude or limit the enforcement of
8
arbitration agreements with regard to claims arising under that statute.” Kummetz v. Tech Mold,
9
Inc., 152 F.3d 1153, 1155 (9th Cir. 1998). When, as here, an employee raises statutory
10
discrimination claims, “Congress intended there to be at least a knowing agreement to arbitrate
employment disputes before an employee may be deemed to have waived the comprehensive
statutory rights, remedies and procedural protections prescribed in Title VII and related state
14 statutes.” Prudential Ins. Co. of Am. v. Lai, 42 F.3d 1299, 1304 (9th Cir. 1994).
15
Franks did not “knowingly agree” to arbitrate his claims where the Arbitration Policy
16
was placed within his Employee Handbook that declared itself to create no contractual rights or
17
obligations. Nelson v. Cyprus Bagdad Copper Corp., 119 F.3d 756, 762 (9th Cir. 1997). As the
18
Ninth Circuit has explained, “the right to a judicial forum is not waived even though the
Handbook is furnished to the employee and the employee acknowledges its receipt and agrees
21 to read and understand its contents.” Id. Receiving a document that promised on an
22 introductory page to create no contractual rights or obligations, and within that document
23
purports to do just the opposite, is not the sort of express and unambiguous language required
24
to waive access to court for discrimination claims.
25
26
1 D. Even if an Arbitration Contract Exists, it Would Not Cover Franks’s Claims Against Nielsen.
2
Even if it were enforceable, the arbitration policy does not cover Franks’s claims
3
against Nielsen. It is a “fundamental principle that ‘arbitration is a matter of consent.’” Viking
River Cruises, Inc. v. Moriana, 596 U.S. 639, 659 (2022) (quoting Stolt-Nielsen S.A. v.
6 AnimalFeeds Int’l Corp., 559 U.S. 662, 684 (2010)). “A court may order arbitration of a
7 particular dispute only where . . . the parties agreed to arbitrate that dispute.” Granite Rock Co.
8
v. Int’l Bhd. of Teamsters, 561 U.S. 287, 297 (2010) (emphasis in original). “In construing the
9
scope of an arbitration agreement, [courts] ‘apply ordinary state-law principles that govern the
10
formation of contracts.’” Diaz v. Macys W. Stores, Inc., 101 F.4th 697, 703 (9th Cir. 2024)
(quoting First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)).
Here, the express language of the arbitration policy provides that only disputes arising
14 from Franks’s employment with Gracenote are subject to arbitration. Nothing in the agreement
15
requires Franks to arbitrate disputes arising from his employment with Nielsen. Thus, Franks’s
16
discrimination and retaliation claims against Nielsen—arising from his work for them between
17
2017 and 2023—must remain in federal court.
18
The Acknowledgement Agreement explains that “Gracenote Inc.” shall be referred to
throughout the Handbook as “Gracenote” or “Company.” (Exhibit A.) A few pages later, on
21 page “2” of the Handbook, the arbitration policy appears. (Dkt. 26-1.) It states:
22 The Company and the undersigned employee hereby agree that any dispute with
23 any party (including the Company’s affiliates, successors, predecessors, contractors, employees, and agents), that may arise from the employee’s
24 employment with the Company or the termination of the employee’s employment with the Company must be submitted for resolution by mandatory, binding
25 arbitration.
26 Id. (emphasis added). It continues:
1 The arbitration requirement applies to all statutory, contractual, and/or common law claims arising from employment with the Company including, but not limited to,
2 claims arising under the Title VII of the Civil Rights Act of 1964 . . . [and] the
California Fair Employment and Housing Act . . . .
Id. (emphasis added). This plain and unambiguous language of the arbitration policy shows
that arbitration applied only to Franks’s “employment with the Company”—Gracenote. Id.
6 (emphasis added). No language suggests that Franks consented to arbitrate claims arising from
7 his employment with Nielsen.
8
Franks’s claims largely concern the discrimination and retaliation he faced at Nielsen.
9
In 2015, Gracenote hired Franks to lead and build out its DevOps and Cloud departments,
10
which he did with great success, even if he was not afforded a title and salary commensurate
with his responsibilities. (See SAC at 3.) But in early 2017, Nielsen acquired Gracenote and
assumed control over Franks’s work. (Id. at 3–4.) Nielsen removed Franks from his leadership
14 role in the DevOps and Cloud departments in order to put two white men in charge. Id. Nielsen
15
then directed Franks to report to its CTO and Senior Vice President of Tech Ops, who
16
relegated him to performing humiliating and menial make-work assignments. (See, e.g., id. at
17
4–5.) Further, it was various Nielsen executives to whom Franks brought his concerns
18
regarding racial discrimination against himself and other Black employees at Nielsen. (See,
e.g., id. at 7–12.) And it was Nielsen executives who unlawfully retaliated against Franks by
21 terminating him in 2023 under the pretext of a reduction in force. (See id. at 12–15.)
22 These discriminatory and retaliatory acts support Franks’s claims and arise out of
23
Franks’s employment by Nielsen rather than Gracenote. They thus fall outside the scope of the
24
arbitration agreement. And where there is no “affirmative contractual basis for concluding that
25
[Plaintiff] agreed to” arbitrate these claims, he “cannot be coerced into” doing so.
26
1 E. Defendants Waived Any Entitlement to Arbitrate by Seeking to Litigate This Case on the Merits.
2
Even if the Arbitration Policy had any effect, Defendants waived their right to arbitrate.
3
“The right to arbitration, like any other contractual right, can be waived.” U.S. v. Park Place
Assocs., Ltd., 563 F.3d 907, 921 (9th Cir. 2009). Waiver “is the intentional relinquishment or
6 abandonment of a known right.” Morgan, 596 U.S. at 417. Litigants waive their right to
7 arbitrate when they engage in acts inconsistent with that right. Van Ness Townhouses v. Mar
8
Industries Corp., 862 F.2d 754, 759 (9th Cir. 1988) (quoting Nat’l Found. for Cancer Research
9
v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 777 (D.C. Cir. 1987)).
10
Under the Ninth Circuit’s standard for waiver, the party opposing arbitration and
asserting waiver must show the other party's “(1) knowledge of an existing right to compel
arbitration and (2) intentional acts inconsistent with that existing right.” Hill v. Xerox Bus.
14 Servs., LLC, 59 F.4th 457, 468 (9th Cir. 2023).1 Concerning the second prong, the Ninth
15
Circuit does not follow any “concrete test to determine whether a party has engaged in acts that
16
are inconsistent with its right to arbitrate.” Martin v. Yasuda, 829 F.3d 1118, 1125 (9th Cir.
17
- . Instead, the totality of the parties’ actions are examined. Hill, 59 F.4th at 471.
18
Here, the first prong is satisfied. While Franks maintains that there was never a binding
arbitration agreement, Defendants’ motion to compel shows that they knew Franks signed the
21 Acknowledgement Agreement and arbitration policy in 2015. (Dkt. 26-1.) “Knowledge of a
22 contractual right to arbitrate is imputed to the contract's drafter. Plows v. Rockwell Collins,
23
24
25 1 The Ninth Circuit no longer requires prejudice to establish waiver. Hill, 59 F.4th at 468. In 2022, the Supreme Court held it improper “to condition a waiver of the right to arbitrate on a showing of
26 prejudice,” because “a court may not devise novel rules to favor arbitration over litigation.” Morgan, 596 U.S. at 417–18.
1 Inc., 812 F. Supp. 2d 1063, 1066 (C.D. Cal. 2011). Moreover, Defendants acknowledge that
2 Nielsen has a regular practice for maintaining Gracenote employee records; that declarant Kelli
3
Dawson, Director of Enterprise HRBP at Nielsen has access to these records; and that she
4
knew “the location where Nielsen keeps the former Gracenote employee records.” (Dkt. 26