Be Careful What You Ask For

Samura v. Savaseniorcare Administrative Services, LLC presented a Maryland District Court with the issue of whether a lawsuit by a former employee was required to be arbitrated. The court, reviewing an Employment Dispute Resolution Program Agreement, concluded that arbitration was required.

However, the court turned the tables on the employer, who in addition to seeking an order to compel arbitration, sought to recover attorneys’ fees from the plaintiff, claiming that his challenge to the EDR Agreement was frivolous. The court expressed displeasure that the company, for an extended period of time, had failed to meaningfully respond to the former employee’s attempt to avail himself of the arbitration program. As the court explained,

“Plaintiff also details how his attempts to progress through the steps of the EDR Program, starting all the way back in September of 2019, have been stymied at very turn. The EDR Agreement specifies that employees generally must progress through its four-step process in order before reaching Step 4 (Arbitration). See ECF 9-2 at 11, 17 (stating that
employees can only proceed directly to arbitration at ‘the sole discretion of the EDR
Administrator’). Yet Plaintiff was unable to engage in Steps 1 (Open Door) or 2 (Facilitation) because company administrators and the HR Department never responded to his numerous outreach attempts.”

Against this factual background, the court, not only rejected the employer’s request for attorneys’ fees, but held that the employer’s “own motion for attorneys’ fees toes the line of frivolity.” As the court explained,

“Defendants sought attorneys’ fees ‘as a sanction for Plaintiff’s lack of justification for his
refusal to arbitrate, ‘… while simultaneously failing to provide Plaintiff with the ‘required arbitration documents’ or otherwise to respond to Plaintiff’s numerous attempts to engage in the EDR Program over the course of the past year. Even the filing of the lawsuit did not trigger Defendants to respond by engaging in the EDR process with Plaintiff. Indeed, it was only after the Court scheduled a hearing explicitly to learn ‘what steps defendants have taken to advance plaintiff’s claims through the EDR program,’… that Defendants provided Plaintiff with copies of the documentation he needed to invoke mediation or arbitration. To seek sanctions for refusing to arbitrate-after Plaintiff attempted for more than a year to engage in the EDR process to no avail-while simultaneously failing to provide Plaintiff with the necessary EDR paperwork until after filing the motion for sanctions and receiving a request from the presiding judge, appears on its face to be the very definition of frivolous.”

Accordingly, the court determined that, sua sponte, it would consider “whether sanctions should be imposed against Defendants for their conduct. Defendants will be ordered to show cause, under Federal Rule of Civil Procedure 11(c)(3), as to why their pursuit of sanctions for Plaintiff’s alleged ‘refusal to arbitrate’ is not, itself, frivolous and worthy of sanctions.”

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