Brown v. Dillard's, Inc.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

STEPHANIE BROWN, 

Plaintiff-Appellee,

v.

DILLARD’S, INC., a corporation;

DILLARD’S STORE SERVICES, INC., No. 03-56719

d/b/a CONDEV WEST, INC., a

corporation,  D.C. No.

CV-03-03903-NM

Defendants-Appellants, OPINION

and

DILLARD’S DEPARTMENT STORE, a

corporation,

Defendant.



Appeal from the United States District Court

for the Central District of California

Nora M. Manella, District Judge, Presiding

Argued and Submitted

April 7, 2005—Pasadena, California

Filed December 6, 2005

Before: Thomas G. Nelson, William A. Fletcher, and

Carlos T. Bea, Circuit Judges.

Opinion by Judge William A. Fletcher

15753

BROWN v. DILLARD’S 15755

COUNSEL

David Raizman, Bryan Cave LLP, Santa Monica, California,

for the appellant.

15756 BROWN v. DILLARD’S

Lisa A. Jordan, Van Nuys, California, for the appellee.

OPINION

W. FLETCHER, Circuit Judge:

Defendants Dillard’s Department Store and Dillard’s Store

Services (collectively “Dillard’s”) require employees to agree

to arbitrate employment-related claims under what it calls

“Dillard’s Fairness in Action Program.” Plaintiff Stephanie

Brown was an employee at one of Dillard’s department stores

in California until she was fired.

Brown filed a notice of intent to arbitrate a wrongful termi-

nation claim under the Fairness in Action Program. Dillard’s

refused to participate in the arbitration proceedings. Brown

then filed suit in Los Angeles County Superior Court. At that

point, Dillard’s decided that it wanted to arbitrate her claim.

Dillard’s removed Brown’s suit to federal court and moved to

compel arbitration. Assuming the truth of Brown’s allega-

tions, the district court denied the motion, holding that the

arbitration agreement was unconscionable and thus unen-

forceable under California law.

We conditionally affirm on a different ground, and we

remand to the district court. We do not express a view on

whether the agreement was unconscionable under California

law. Rather, assuming the truth of Brown’s allegations, we

hold that when an employer enters into an arbitration agree-

ment with its employees, it must itself participate in properly

initiated arbitration proceedings or forego its right to compel

arbitration. That is, we hold that Dillard’s cannot compel

Brown to honor an arbitration agreement of which it is itself

in material breach.

I

This case comes to us in a somewhat unusual procedural

posture. After Dillard’s removed Brown’s suit to federal dis-

BROWN v. DILLARD’S 15757

trict court, it moved to compel arbitration. The district court

had before it plaintiff’s complaint and defendants’ answer.

Defendants’ answer admitted and denied a few of plaintiff’s

allegations. For most allegations, it asserted that it lacked suf-

ficient information to admit or deny. The district court also

had before it declarations from five individuals — Brown,

Brown’s attorney, an employee from Dillard’s Legal Office,

the Dillard’s store manager, and an attorney representing Dil-

lard’s in this litigation.

For the limited purpose of ruling on Dillard’s motion to

compel arbitration, the district court assumed the truth of alle-

gations in plaintiff’s complaint. For the limited purpose of

reviewing the district court’s ruling, we, too, assume the truth

of those allegations. To the degree that our conclusion that

Dillard’s breached its arbitration agreement with Brown

depends on disputed facts, Dillard’s is free on remand to con-

test those facts.

Stephanie Brown started working for Dillard’s Store Ser-

vices as a sales associate in the Juniors Department at a Dil-

lard’s Department Store in Palmdale, California, sometime

around April 2001. On July 21, 2001, Brown was summoned

to the office of her supervisor, Andrea Howard, along with

several coworkers. Howard told the employees that the com-

pany was starting the “Dillard’s Fairness in Action Program.”

In effect, the Fairness in Action Program is an arbitration

agreement, which employees like Brown were deemed to

have accepted simply by continuing their employment. A

guide to the program told employees that “[t]he Fairness in

Action Program is fast, straightforward, and much less expen-

sive than taking a dispute to a court of law — but most of all,

it is fair to both you and Dillard’s.” (Emphasis in original.)

The guide further explained that

[a]cross the country, many companies and their

employees are electing to settle disputes using this

method, and in doing so are avoiding long, drawn-

15758 BROWN v. DILLARD’S

out court battles where attorney’s fees may be over-

whelming for both parties. And more than just sav-

ing time and money, the Fairness in Action Program

assures that each party gets a fair deal — that’s what

justice is about, after all.

Contrary to the guide’s representation, Dillard’s did not

allow its employees to “elect” — in the sense of “choose

voluntarily”— to settle disputes through arbitration. Rather,

they were required to arbitrate. Howard told Brown and the

other employees that they were required to sign a form titled

“Current Associates: Acknowledgment of Receipt of Rules

for Arbitration.” The form provided,

Effective immediately, all employees (as hereinafter

defined) of Dillard’s, Inc., its affiliates, subsidiaries

and Limited Liability Partnerships (the “Company”)

shall be subject to the RULES OF ARBITRATION

(the “Rules”) described below. Employees are

deemed to have agreed to the provisions of the Rules

by virtue of accepting employment with the Com-

pany and/or continuing employment therewith.

One of Brown’s coworkers, Monika Gonzales, asked How-

ard if she could take the agreement home and discuss it with

her parents. Howard responded that Gonzalez’s job would be

in jeopardy if she did not sign the acknowledgment form

immediately. Along with her coworkers, Brown signed the

form acknowledging receipt of the rules for arbitration and

returned it to Howard. Brown says that she was not provided

with a copy of the rules. The meeting with Howard lasted less

than five minutes.

Dillard’s admits that Brown worked for its Palmdale store,

that she signed the “Fairness in Action Program” arbitration

agreement, and that she gave it to Howard.

At the Palmdale store, Dillard’s required employees to

“punch” in and out on a computer system at the beginning and

BROWN v. DILLARD’S 15759

end of their shifts. At shift changes, many people needed to

use the computer, so employees were given a six-minute

grace period during which they could clock in and still be

considered on time. The computer system was frequently

down, so a stack of paper time sheets next to the computer

served as a backup. The paper time sheets allowed Dillard’s

to manipulate employees’ work hours. When working the

evening shift, Brown was scheduled to get off work at 9:15

p.m., but she was often not dismissed until as much as forty

minutes later when the store was fully cleaned. Brown would

fill in a time sheet on some of these occasions, stating that she

had stopped working at 9:15 p.m., because Dillard’s did not

want her to qualify for overtime pay.

On April 29, 2002, Brown informed Howard that she had

received a job offer from an employer called Countrywide.

Brown told Howard that she intended to work at both Dil-

lard’s and Countrywide so that she could save money to

attend air traffic control school. Howard told Brown that she

would probably not be allowed to work two jobs. The next

day, Brown spoke to the store manager, Tricia Alvillar, who

told her that she was not willing to help Brown arrange a

schedule that would allow her to work both jobs. Brown told

the store manager that she would ask Countrywide to accom-

modate her Dillard’s work schedule.

On May 2, 2002, Brown received a phone call from an

assistant to Howard. Brown was not scheduled to work that

evening, but the assistant told her the store was shorthanded

and asked her to work the evening shift. Brown agreed to

report to work at 6 p.m. Brown says that she was told not to

report before 6 p.m., because, if she did, she would work

enough hours to qualify for overtime. Brown says that she

arrived at the store at 5:58 p.m. and that upon arriving she

spoke to a coworker (described only as “Sue”) whose shift

ended at 6:00 p.m. Brown clocked in on the computer.

At work the following day, Brown was asked to report to

Sue Porter, secretary to the operations manager at the store.

15760 BROWN v. DILLARD’S

Porter asked Brown what time she had arrived at work the day

before, and she asked her to fill out a time entry form. Brown

told Porter that she had clocked in on the computer and asked

why she needed to fill in a paper form. Porter told Brown that

the “punch had not taken,” and told Brown that it was “no big

deal.” This was the first time that Brown had been summoned

to complete a time entry form.

Dillard’s admits that Brown spoke to Alvillar about her

new job, and states that Brown told Alvillar that she would

discuss scheduling conflicts between the two jobs with her

new employer. Dillard’s also admits that Porter’s shift ended

at 6:00 p.m. on May 2, and that Porter saw Brown arrive at

work that evening. Dillard’s also admits that Brown was

asked to report to Porter on May 3, and that she was asked to

fill out a time entry form on the ground that the computer

“had not recorded each of her arrivals and departures on May

2.”

Later that same day, Brown was summoned to the office of

Karen Burke, the store’s operation manager. Howard and her

assistant were present upon Brown’s arrival. Burke told

Brown that they had reviewed a videotape of the previous day

and that she had arrived at 6:10 p.m., not 6:00 p.m. as she had

recorded on the time form. Burke told Brown that she was

being terminated for falsifying documents to defraud Dillard’s

out of pay for ten minutes of time. Burke told Brown that

“people like you cost the company money.” When Brown

began to cry, Burke said, “You already got another job, right?

Then everything should be okay. This won’t be a problem for

you will it?”

Dillard’s admits that Brown met with Burke on May 3, and

that Burke asked Brown what time she had arrived at work on

the previous evening. Dillard’s admits that when Brown

replied that she had arrived at 6:00 p.m., Burke responded that

she had reviewed the videotape of her arrival and told her that

BROWN v. DILLARD’S 15761

she had arrived at 6:10 p.m. Dillard’s admits that Burke then

fired Brown.

On May 5, 2002, Brown requested information about the

Fairness in Action Program. Dillard’s faxed her a copy of the

program brochure. On or about July 1, 2002, Brown filed a

notice of intent to arbitrate with the American Arbitration

Association (AAA), as required under the Fairness in Action

Program. In her notice, she described the nature of her dispute

as follows:

I was wrongfully terminated from Dillards Dept.

Store in Palmdale, CA on May 3, 2002 for falsifying

documents, (a time entry form).

Brown claimed $710 in actual damages. She also requested

the removal of negative statements related to her termination

from her personnel records, a letter of apology, and punitive

damages as deemed appropriate.

Under the Fairness in Action Program, a non-management

employee’s share of the arbitration fee was $100. Brown paid

her share of the fee when she filed her notice of intent to arbi-

trate. Shortly after filing, Brown was informed by AAA that

Dillard’s had not responded to its request for information.

Brown says that in or about July, 2002, she contacted Dil-

lard’s legal department and spoke with Nannette Savage, who

blamed the problem on AAA. Savage said she would contact

AAA and get back to Brown. Savage did not get back to

Brown and did not respond to Brown’s subsequent attempts

to contact her.

Dillard’s admits that Brown spoke to Savage in its legal

department in or about July, 2002.

On July 12 and July 18, 2002, AAA sent letters to Dil-

lard’s, with faxed copies to Brown. The July 18 letter

requested Dillard’s to pay its portion of the filing fee, in the

15762 BROWN v. DILLARD’S

sum of $400. The letter stated that Brown had already paid

her portion of the fee. Dillard’s did not respond to the AAA

letters, nor did it pay its share of the filing fee. On July 25,

2002, AAA wrote to Brown to inform her that it had not

received Dillard’s share of the filing fee. According to its own

procedures, AAA returned Brown’s notice of intent to arbi-

trate.

For more than two months, Brown tried to contact Dillard’s

to discuss its refusal to participate in arbitration. She was not

successful until October 2002, when she enlisted the aid of

her mother and arranged a telephone conference call with

Savage. During that call, Savage told Brown that her com-

plaint had no merit and that Dillard’s refused to arbitrate.

Dillard’s admits that Brown, her mother, and Savage had a

conference call, and that Savage stated during that call that

she had “reviewed plaintiff’s arbitration.”

Stymied in her attempt to participate in the Fairness in

Action Program, Brown filed suit in Los Angeles County

Superior Court on April 18, 2003. Brown pleaded twelve

causes of action: (1) breach of employment contract (implied

in fact); (2) breach of employment contract (oral); (3) viola-

tion of California’s Labor Code; (4) tortious termination in

violation of public policy; (5) breach of covenant of good

faith and fair dealing; (6) fraud and deceit — intentional mis-

representation; (7) negligent misrepresentation; (8) intentional

infliction of emotional distress; (9) negligent infliction of

emotional distress; (10) defamation — slander per se; (11)

defamation — false light; (12) and unfair and deceptive busi-

ness practices. Dillard’s removed the case to federal district

court and moved to compel arbitration.

On September 3, 2003, the district court denied Dillard’s

motion. The district court held that the arbitration agreement

was unconscionable and thus unenforceable under California

law. The district court held that Dillard’s method of obtaining

BROWN v. DILLARD’S 15763

its employee’s “agreement” to arbitrate was procedurally

unconscionable, and that the agreement itself was substan-

tively unconscionable. The district court noted that the Fair-

ness in Action Program requires the employee to pay a filing

fee, but does not provide for waiver of the fee upon a showing

of indigence, as would typically be available in a court of law.

The district court also held that the agreement lacked the

“modicum of bilaterality” necessary for enforcement under

California law. The court noted that the claims Dillard’s was

most likely to bring against an employee — claims relating to

unfair competition and disclosure of trade secrets or other

confidential information — are exempt from arbitration under

the agreement. Thus, it is not clear that the agreement binds

Dillard’s to arbitrate its own employment-related claims in

any meaningful sense.

Dillard’s filed a timely notice of appeal from the district

court’s order denying its motion to compel arbitration, and the

district court stayed proceedings pending the outcome of the

appeal. The denial of a motion to compel arbitration is

reviewed de novo. Ingle v. Circuit City Stores, Inc., 328 F.3d

1165, 1169 (9th Cir. 2003). We may affirm on any ground

supported by the record. Recording Indus. Ass’n of Am. v.

Diamond Multimedia Sys., Inc., 180 F.3d 1072, 1077 n.3 (9th

Cir. 1999).

II

Despite misgivings about both the substance of Dillard’s

Fairness in Action Program and the way in which Dillard’s

obtained its employees’ “agreement,” we assume for present

purposes that Dillard’s and Brown formed an enforceable

contract to arbitrate employment-related claims. Even on this

assumption, we hold that the district court acted properly in

denying Dillard’s motion to compel arbitration. Dillard’s

breached its agreement with Brown by refusing to participate

in the arbitration proceedings Brown initiated. Having

breached the agreement, Dillard’s cannot now enforce it.

15764 BROWN v. DILLARD’S

[1] The Federal Arbitration Act (“FAA”) provides that

written agreements to arbitrate disputes arising out of transac-

tions involving interstate commerce “shall be valid, irrevoca-

ble, and enforceable, save upon such grounds as exist in law

or equity for the revocation of any contract.” 9 U.S.C. § 2.

Thus, a party seeking to avoid enforcement of an arbitration

agreement can only invoke a defense that would be available

to a party seeking to avoid the enforcement of any contract.

Stated differently, under the FAA, an arbitration agreement

cannot be avoided by a defense that is only applicable to arbi-

tration agreements. See Doctor’s Assocs. v. Casarotto, 517

U.S. 681, 687 (1996); Circuit City Stores, Inc. v. Adams, 279

F.3d 889, 892 (9th Cir. 2002).

[2] A bedrock principle of California contract law is that

“[h]e who seeks to enforce a contract must show that he has

complied with the conditions and agreements of the contract

on his part to be performed.” Pry Corp. of Am. v. Leach, 2

Cal. Rptr. 425, 429-30 (Cal. Ct. App. 1960) (citing Cameron

v. Burnham, 80 P. 929, 930 (Cal. 1905)). See also Loral Corp.

v. Moyes, 219 Cal. Rptr. 836, 844 (Cal. Ct. App. 1985) (“The

requirement of performance may be excused by the other

party’s breach.”). This is a contract rule of general application

and is thus available to Brown as a defense against an

attempted enforcement of the arbitration agreement.

[3] Dillard’s clearly breached the arbitration agreement.

The Rules of Arbitration comprising the agreement explicitly

require Dillard’s to arbitrate “claims of wrongful discharge.”

Brown filed a notice of intent to arbitrate and stated her claim

as follows: “I was wrongfully terminated from Dillards Dept.

Store in Palmdale, CA on May 3, 2002 for falsifying docu-

ments, (a time entry form).”

Before the district court, Dillard’s admitted that it refused

to arbitrate Brown’s claim. However, Dillard’s “contend[ed]

that their refusal to arbitrate the ‘claims’ made in Plaintiff’s

July 2002 Arbitration Notice [was] not ‘inconsistent’ with the

BROWN v. DILLARD’S 15765

right to arbitrate Plaintiff’s claims in the Complaint because

the prior claims merely alleged that Defendants had acted

unfairly in terminating her and thus did not contain a color-

able claim subject to arbitration.” The district court flatly

rejected this contention, calling it “demonstrably false.”

Brown’s notice clearly alleged that she was “wrongfully ter-

minated,” and wrongful termination claims were explicitly

covered by the arbitration agreement.

[4] If Dillard’s believed Brown’s claim was meritless, its

proper course of action was to make that argument in arbitra-

tion. Instead, Dillard’s refused to participate in the arbitration

process at all. Under general principles of California contract

law, Dillard’s breach of its obligations under the arbitration

agreement deprives it of the right to enforce that agreement.

Dillard’s argues that it can compel arbitration notwithstand-

ing any possible breach of the arbitration agreement. Dillard’s

cites two cases in support of its view, neither of which is

apposite. The first case is Local Union No. 721 v. Needham

Packing Co., 376 U.S. 247 (1964). In Needham Packing, a

union sought to compel the Needham Packing Company to

arbitrate grievances pursuant to a collective bargaining agree-

ment. The company argued that it was released from its obli-

gation to arbitrate the grievances because the union had

breached the no-strike provision of the collective bargaining

agreement by staging a walkout of 190 employees. In holding

that the union had not lost its right to compel arbitration of the

grievances, the Court explained that “[a]rbitration provisions,

which themselves have not been repudiated, are meant to sur-

vive breaches of contract, in many contexts . . . .” Id. at 251-

52 (emphasis added) (quoting Drake Bakeries, Inc., v. Local

50, American Bakery & Confectionary Workers Int’l, 370

U.S. 254, 262 (1962).

In Needham Packing, only the question of whether the

union had breached the no-strike provision was subject to dis-

pute, and the Court held that the intent behind the collective

15766 BROWN v. DILLARD’S

bargaining agreement was to have such disputes settled in

arbitration. Even assuming that Needham Packing is relevant

to an interpretation of California contract law, see Textile

Workers Union v. Lincoln Mills, 353 U.S. 448 (1957), it is

clearly not apposite. In Needham Packing, the union was

alleged to have breached an unrelated contract provision, not

the arbitration agreement itself. In this case, by contrast, Dil-

lard’s breached the arbitration agreement by refusing to par-

ticipate in properly initiated arbitration proceedings. Dillard’s

breach was tantamount to a repudiation of the arbitration

agreement.

The second case is New Linen Supply v. Eastern Environ-

mental Controls, Inc., 158 Cal. Rptr. 251 (Cal. Ct. App.

1979). In that case, New Linen Supply, doing business as

Western, filed an unfair competition action against Eastern

Environmental Controls, Inc. (“EEC”). The parties had previ-

ously entered into an agreement that contained an arbitration

provision. When their business relationship turned sour, EEC

wrote a letter to Western saying that it was obliged to cancel

the contract due to Western’s nonperformance. Western

acknowledged receipt of the cancellation and indicated that it

wished to seek arbitration in accord with the procedures of the

AAA. However, Western did not initiate arbitration proceed-

ings. The parties continued to do business together and EEC

wrote to Western, stating, “We understand your continuing to

do business with us to be a withdrawal of your request for

arbitration.” Id. at 253. Western later filed suit in California

Superior Court alleging unfair competition, and EEC moved

to compel arbitration. The question the court confronted was

whether “once having declared the contracts to be terminated

because of the alleged breach by Western, may [EEC] now

invoke a provision within the contract requiring arbitration.”

Id. at 254. The court held that EEC could compel arbitration

notwithstanding the fact that it had earlier declared the con-

tracts to be terminated. In so holding, the court quoted

approvingly the following language from Heyman v. Darwins,

Ltd., [1942] A.C. 356, 373-75:

BROWN v. DILLARD’S 15767

The key is to be found in the distinction . . . between

the arbitration clause in a contract and the executive

obligations undertaken by each party to the other.

[There is] nothing shocking or repugnant to law in

one business man saying to another that he regrets he

finds himself unable to go on with his deliveries

under a contract between them and at the same time

asking the other to join with him in a reference under

an arbitration clause in their contract to ascertain

what compensation is to be paid for his default.

We understand the California Court of Appeal to have held

that repudiation of a contract which contains an arbitration

clause does not waive one’s right to arbitrate disputes within

the scope of the clause. That is, New Linen is distinguishable

from the facts of this case in much the same way as Needham

Packing. Dillard’s did not repudiate its obligations under a

contract that contained a clause providing for arbitration of

breach of that contract. Rather, Dillard’s breached the arbitra-

tion agreement itself by refusing to arbitrate.

If we took Dillard’s view and allowed it to compel arbitra-

tion notwithstanding its breach of the arbitration agreement,

we would set up a perverse incentive scheme. Employers like

Dillard’s would have an incentive to refuse to arbitrate claims

brought by employees in the hope that the frustrated employ-

ees would simply abandon them. This tactic would be costless

to employers if they were allowed to compel arbitration

whenever a frustrated but persistent employee eventually ini-

tiated litigation. We decline to adopt a rule that would encour-

age companies to refuse to participate in properly initiated

arbitration proceedings. To promote our national policy in

favor of arbitration, see Southland Corp. v. Keating, 465 U.S.

1, 10 (1984), we must decline to compel it in this case.

III

[5] Dillard’s urges us to analyze this case under the doc-

trines governing waiver of the right to arbitrate, rather than as

15768 BROWN v. DILLARD’S

a breach-of-contract case. We believe that it is more accurate

to describe Dillard’s behavior as breach of contract. However,

we briefly note that if we were to approach this as a waiver

case, we would have no difficulty finding that Dillard’s

waived its right to arbitrate Brown’s claims. “A party seeking

to prove waiver of a right to arbitrate must demonstrate (1)

knowledge of an existing right to compel arbitration; (2) acts

inconsistent with that existing right; and (3) prejudice to the

party opposing arbitration resulting from such inconsistent

acts.” Britton v. Co-op Banking Group, 916 F.2d 1405, 1412

(9th Cir. 1990). Dillard’s concedes that it knew of its right to

arbitrate, and its refusal to arbitrate after being served with

Brown’s notice of intent to arbitrate was an act inconsistent

with that right. Thus, the first two prongs of the waiver test

are easily satisfied.

As to the third prong, Dillard’s argues that Brown did not

suffer any cognizable prejudice as a result of its refusal to

arbitrate. Brown alleges three forms of prejudice: (1) delay

due to Dillard’s refusal to arbitrate; (2) costs and attorneys’

fees incurred due to Dillard’s refusal; and (3) the loss of

potential evidence and witnesses due to the passage of time.

Dillard’s responds by citing cases in which no prejudice was

found despite the fact that the non-moving party had incurred

costs or attorneys’ fees, or had otherwise suffered as a result

of delay. See e.g., Britton, 916 F.2d at 1413; Lake Comm.,

Inc. v. ICC Corp., 738 F.2d 1473, 1477 (9th Cir. 1984), over-

ruled on other grounds by Mitsubishi Motors Corp. v. Soler

Chrysler-Plymouth, Inc., 473 U.S. 614, 632-35 (1985). The

problem for Dillard’s is that the question in these cases was

whether a delay by a defendant in moving to compel arbitra-

tion after the initiation of litigation caused cognizable preju-

dice to the plaintiff. Unsurprisingly, courts are reluctant to

find prejudice to the plaintiff who has chosen to litigate, sim-

ply because the defendant litigated briefly (e.g., by filing a

motion to dismiss or requesting limited discovery) before

moving to compel arbitration.

BROWN v. DILLARD’S 15769

[6] Dillard’s does not cite a case in which costs have been

incurred by the plaintiff due to the defendant’s refusal to par-

ticipate in properly initiated arbitration proceedings. Brown

did not choose to litigate. She chose to arbitrate, and when she

was rebuffed by Dillard’s, she sued as a last resort. In this cir-

cumstance, we have no trouble concluding that the delay and

costs incurred by Brown are prejudicial for the purpose of

waiver analysis.

IV

[7] On the assumption that Brown’s narrative is true, this

case displays a dark side of our nation’s policy in favor of

arbitration. When a defendant in a judicial forum refuses to

respond to a complaint that is properly filed and served, the

court has the power to enter and enforce a default judgment.

Arbitration works differently. The American Arbitration

Association could not compel Dillard’s to pay its share of the

filing fee, and in the absence of the fee it could not proceed.

Brown had no choice but to come to court. Many people in

Brown’s position would simply have given up. Because she

did not, we have the occasion to make clear that when an

employer enters into an agreement requiring its employees to

arbitrate, it must participate in the process or lose its right to

arbitrate.

Conditionally AFFIRMED. REMANDED to the district

court. Attorney’s fees on appeal to Brown.