An Ogletree Deakins nonequity shareholder must arbitrate her claims that the firm discriminated against her in pay, promotions, and other job opportunities because she is a woman, a federal judge ruled March 27.
Dawn Knepper, who worked out of the firm’s Orange County, Calif., office, sued Ogletree for $300 million in January 2018 on behalf of herself and a proposed class of other female shareholders, alleging systemic discrimination.
But Knepper is required to arbitrate her claims against the firm rather than pursue them in court. She received notice of its arbitration agreement in 2016, failed to opt-out of the agreement by the deadline for doing so, and continued to work for Ogletree after that date, the U.S. District Court for the Central District of California said March 27.
Opting to file in court instead of proceeding with arbitration depends on the case and the alleged agreement, said senior litigation counsel Danielle Fuschetti of attorney Sanford Heisler Sharp. The firm represents Knepper, and says Knepper isn’t “righly bound” by the arbitration agreement,
“Not all documents purporting to be arbitration agreements are actually agreements, and not all arbitration agreements are enforceable,” Fuschetti said in an email. “The best way to push back on arbitration is to resist firms’ attempts to impose arbitration agreements in the first place.”
Judge James V. Selna, however, ruled that Knepper’s claims must be arbitrated individually, not collectively, because the firm’s arbitration agreement includes a class action waiver. The U.S. Supreme Court has instructed federal judges to enforce arbitration agreements according to their terms and Knepper didn’t dispute the validity of Ogletree’s agreement or the pact’s class action waiver, Selna said. He cited the justices’ decision in Epic Systems Corp. v. Lewis.
Other prominent firms like Proskauer Rose, Winston & Strawn, Jones Day, and Chadbourne & Parke have defended and, in some cases, settled pay bias claims brought by female lawyers. It’s a trend that would continue until the industry changes, Fuschetti said.
“Pay equity is a wide-spread problem in the legal profession, including for shareholders/partners,” she said. “The number of lawsuits alleging pay discrimination has increased dramatically in recent years.”
Ogletree didn’t immediately provide comment.
PAGA Claim Paused
Knepper’s class claim under California’s Private Attorneys General Act isn’t subject to arbitration. But that claim must be stayed until the arbitration is completed, the judge said.
PAGA claims offer an avenue for significant redress, but a workers’ right to pursue full damages in court cannot be replaced, Fuschetti said.
A separate PAGA pay bias class action was filed against Ogletree in January.
Selna rejected Knepper’s argument that the usual and better course in employment discrimination cases involving both class and individual claims is to proceed with the class claims first and then the class members’ individual claims. Unlike in cases where that rule is followed, Knepper’s individual claims don’t “depend on a prior resolution of the PAGA claim,” he said.
Selna granted Ogletree’s motions to compel arbitration without hearing oral argument. He also allowed Knepper to add an individual claim for breach of fiduciary duties-discrimination to her list of claims.
She wasn’t allowed to add two Ogletree nonequity shareholders—one from Colorado and one from Texas—or an equity shareholder from San Diego as plaintiffs, it said.
The court is capable of granting relief under PAGA, the sole remaining class claim, “regardless of whether the proposed plaintiffs are joined” in Knepper’s case, Selna said.
Sanford Heisler Sharp LLP and Desai Law Firm PC represent Knepper. Paul Hastings LLP represents Ogletree.
The case is Knepper v. Ogletree, Deakins, Nash, Smoak and Stewart, P.C., C.D. Cal., No. 8:19-cv-00060, 3/27/19.
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(Updated to reflect additional reporting.)