UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Freida Rosen

v. Case No. 20-cv-1059-PB Opinion No.

Genesis Healthcare, LLC et al.

MEMORANDUM AND ORDER

Freida Rosen filed this employment discrimination action

against her former employer, Genesis Healthcare, LLC and related

entities (collectively, “Genesis”). Genesis has moved to compel

arbitration and stay the complaint pursuant to the Federal

Arbitration Act,

et seq. (“FAA”). Genesis argues

that Rosen agreed to arbitrate her claims against Genesis and

that the arbitration agreement delegates to an arbitrator the

authority to resolve threshold issues of arbitrability. Rosen

objects to arbitration on the grounds that the arbitration

agreement lacks consideration, is unconscionable, and was

induced by fraud. Although the arbitration agreement delegates

these types of challenges to the arbitrator, she argues that

they should be addressed by the court because the challenges

apply in the same way to both the agreement as a whole and its

delegation provision. I agree with Rosen that her challenges

must be resolved by the court, but I ultimately determine that

1 her challenges are meritless. Accordingly, I grant Genesis’

motion to compel arbitration and stay the complaint.

I. BACKGROUND

Rosen was employed by Genesis as the business office

manager at the Crestwood Center retirement home in Milford, New

Hampshire. She worked there from August 2000 until July 2019,

when she was allegedly forced to retire at the age of eighty-

one. Rosen asserts claims for discrimination and retaliation in

violation of the Age Discrimination in Employment Act,

et seq., the Americans with Disabilities Act,

et seq., and Chapter 354-A of the New Hampshire Revised

Statutes,

-A:1 et seq.

On May 1, 2019, approximately two weeks before Rosen

submitted her notice of retirement, Genesis asked all employees

to sign a Mutual Arbitration Agreement (“MAA”). See Supp. Aff.

of Gwen Eagen, Doc. No. 10-1 ¶¶ 6-7. The MAA was assigned to

each employee as a task in the company’s “On-Track” electronic

database to review and sign by May 31, 2019. Doc. No. 10-1

¶¶ 6, 11. Rosen signed it on May 7. Doc. No. 10-1 ¶ 15.

Section 2 of the MAA, titled “DISPUTES COVERED BY THE

AGREEMENT,” provides:

Employer and I mutually agree to the resolution by arbitration of all disputes, claims or controversies, past, present or future, including without limitation, claims arising out of or related to my application for employment, employment, and/or the termination of my

2 employment that Employer may have against me or that I may have against [Employer] . . . .

Covered disputes also include any claim or controversy regarding the Agreement or any portion of the Agreement or its interpretation, enforceability, applicability, unconscionability, or formation, or whether the Agreement or any portion of the Agreement is void or voidable . . . .

Ex. 2 to Aff. of Gwen Eagen, Doc. No. 7-1 at 6. The MAA

stipulates that “[t]he mutual obligations by Employer and me to

arbitrate disputes provide consideration for this Agreement.”

Doc. No. 7-1 at 6.

The MAA permits the parties to exchange requests for

production of documents and gives each party a right to conduct

two depositions, in addition to depositions of the other party’s

experts. It obligates Genesis to pay all of the arbitrator’s

costs except for a $200 filing fee, which must be paid by the

party seeking arbitration. It also specifies that each party

will be responsible for its own costs and attorney’s fees unless

a party prevails on a claim which allows for the recovery of

fees or the parties have a written agreement that allows fees to

be received. Doc. No. 7-1 at 8.

Rosen alleges that she was not given a meaningful

opportunity to review the MAA or consult with an attorney before

she was required to sign it. See Aff. of Freida Rosen, Doc. No.

8-2 ¶¶ 4-10, 14-15. A company representative informed Rosen

that the MAA was mandatory, that her employment would not

3 continue if she did not sign it, and that by signing it she “was

being offered continued employment.” Doc. No. 8-2 ¶¶ 7, 15.

Rosen signed the MAA on May 7 because she “was under the

impression” that she would otherwise be terminated that same

day. Doc. No. 8-2 ¶ 14. Her supervisor, Judith Matchett, had

previously told Rosen on multiple occasions that it was time for

Rosen to retire, and Rosen feared that the company would use her

failure to sign the MAA as an excuse to terminate her

employment. Doc. No. 8-2 ¶¶ 2-5. Matchett ratcheted up the

pressure the same week Rosen was presented with the MAA by

falsely claiming that there were issues with Rosen’s performance

and informing Rosen that she would be terminated if she did not

retire.1 See Doc. No. 8-2 ¶ 19.

Rosen also believed that she had to sign the MAA to

continue to have full access to the On-Track system, including

training and payroll information, because she could not “figure

out” how to access other portions of the system once the MAA

came up. Doc. No. 8-2 ¶ 8. She also could not “figure out” how

to print the MAA before signing it. Doc. No. 8-2 ¶ 8. Genesis

has submitted evidence showing that each employee had the option

to print the MAA before signing it and retained full access to

1 Rosen does not specify whether this incident occurred before or after she signed the MAA. 4 the On-Track system even if the employee did not sign the MAA.

See Doc. No. 10-1 ¶¶ 9-10.

II. STANDARD OF REVIEW

The First Circuit has yet to identify the proper standard

of review for a motion to compel arbitration. Baker v.

Montrone,

,

, at *1 (D.N.H. Jan. 10,

2020). In my view, “[i]f the answer is apparent on the face of

the complaint, the Rule 12(b)(6) standard will suffice. If the

court must consult evidence to resolve the issue, the summary

judgment standard must be employed.”

(quoting Pla-Fit

Franchise, LLC v. Patricko, Inc.,

,

,

at *3 (D.N.H. May 20, 2014)). Here, the parties primarily rely

on affidavits and exhibits that cannot be considered in ruling

on a motion to dismiss. Accordingly, I will resolve the motion

using the summary judgment standard.

Summary judgment is appropriate when the record reveals “no

genuine dispute as to any material fact and the movant is

entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a); Tang v. Citizens Bank, N.A.,

(1st Cir.

2016). In this context, a “material fact” is one that has the

“potential to affect the outcome of the suit.” Cherkaoui v.

City of Quincy,

(1st Cir. 2017) (internal

quotation marks omitted). A “genuine dispute” exists if a jury

5 could resolve the disputed fact in the nonmovant’s favor. Ellis

v. Fidelity Mgmt. Trust Co.,

(1st Cir. 2018).

The movant bears the initial burden of presenting evidence

that “it believes demonstrates the absence of a genuine issue of

material fact.” Celotex Corp. v. Catrett,

(1986); accord Flovac, Inc. v. Airvac, Inc.,

(1st Cir. 2016). Once the movant has properly presented such

evidence, the burden shifts to the nonmoving party to designate

“specific facts showing that there is a genuine issue for

trial,” Celotex,

, and to “demonstrate that a

trier of fact could reasonably resolve that issue in its favor.”

Flovac,

(internal quotation marks and brackets

omitted). If the nonmovant fails to adduce such evidence on

which a reasonable factfinder could base a favorable verdict,

the motion must be granted. See

In considering the

evidence presented by either party, all reasonable inferences

are to be drawn in the nonmoving party’s favor. See Theriault

v. Genesis HealthCare LLC,

(1st Cir. 2018).

III. ANALYSIS

The FAA directs courts to treat arbitration agreements as

“valid, irrevocable, and enforceable, save upon such grounds as

exist at law or in equity for the revocation of any contract.”

. There is a strong federal presumption in favor of

arbitration. Moses H. Cone Memorial Hosp. v. Mercury Constr.

6 Corp.,

, 24–25 (1983). Even so, “[a]rbitration is

strictly a matter of consent, and thus is a way to resolve those

disputes — but only those disputes — that the parties have

agreed to submit to arbitration.” Dialysis Access Ctr. v. RMS

Lifeline, Inc.,

(1st Cir. 2011) (quoting

Granite Rock Co. v. Int’l Bhd. of Teamsters,

, 299

(2010)).

A party seeking to compel arbitration must demonstrate

“that a valid agreement to arbitrate exists, that the movant is

entitled to invoke the arbitration clause, that the other party

is bound by that clause, and that the claim asserted comes

within the clause’s scope.” Dialysis Access Center,

(internal quotation marks omitted). At issue in this case

is only the first requirement — the existence and validity of

the arbitration agreement.

I begin by addressing the question of who should decide the

gateway issues of arbitrability. I then resolve those

challenges that are reserved for the court.

A. Who Decides Arbitrability

Rosen opposes arbitration on the grounds that the MAA lacks

consideration, is unconscionable, and was induced by fraud.

These challenges concern threshold issues of arbitrability.

Rosen’s first argument raises a contract formation question,

that is, whether an agreement to arbitrate was formed in the

7 first place. The parties agree that the court must resolve this

dispute. The remaining two challenges pertain to the validity

of the arbitration agreement. The parties dispute whether the

court or the arbitrator should resolve those challenges.

Genesis argues that the MAA delegates to the arbitrator the

power to resolve challenges to the validity or enforceability of

the agreement. Rosen responds that the delegation clause is

unenforceable because it suffers from the same defects as the

MAA as a whole and, therefore, the court has the authority to

decide whether the MAA is valid and enforceable.2

2 In her motion papers, Rosen only challenged the validity of the MAA as a whole, and both parties assumed that the court should resolve all arbitrability disputes. At the motion hearing, however, Genesis argued that the MAA delegates to the arbitrator the authority to resolve Rosen’s challenges to the validity of the MAA, citing Rent–A–Center, West, Inc. v. Jackson,

, 68–69 (2010). Rosen responded that Rent-A-Center does not apply because the MAA’s delegation clause is invalid on the same grounds as the MAA as a whole. Ordinarily, a party “cannot utilize oral argument as a forum for unveiling new arguments of which [the opposing party] did not have proper notice or opportunity to challenge.” Cashmere & Camel Hair Mfrs. Inst. v. Saks Fifth Ave.,

(1st Cir. 2002). In this case, however, I permitted the parties to orally supplement their briefs to incorporate their belated arguments because each side had a meaningful opportunity to respond and the court was not deprived “of the benefit of a robust debate informed by zealous advocacy.” Outdoor Media Grp., Inc. v. City of Beaumont,

(9th Cir. 2007). Further, to the extent Rosen argues that Genesis waived the right to arbitrate arbitrability by failing to raise it in its papers, she has failed to show any prejudice from the delay. See Creative Sols. Grp., Inc. v. Pentzer Corp.,

(1st Cir. 2001) (“Waiver [of the right to arbitrate] is not to be lightly inferred, and mere delay in seeking arbitration without some resultant prejudice to a party cannot carry the day.”). 8 Disputes about gateway issues such as the validity,

enforceability, or scope of an arbitration agreement raise

questions of arbitrability. See Rent–A–Center, West, Inc. v.

Jackson,

, 68–69 (2010); Howsam v. Dean Witter

Reynolds, Inc.,

(2002). Ordinarily,

arbitrability questions are decided by a court. AT&T Techs.,

Inc. v. Commc’n Workers of Am.,

(1986). The

parties, however, may agree to delegate arbitrability questions

to an arbitrator, “so long as the parties’ agreement does so by

‘clear and unmistakable’ evidence.” Henry Schein, Inc. v.

Archer & White Sales, Inc.,

(2019) (quoting

First Options of Chi., Inc. v. Kaplan,

(1995)). Such an agreement, often called a delegation clause,

“is simply an additional, antecedent [arbitration] agreement the

party seeking arbitration asks the federal court to enforce, and

the FAA operates on this additional arbitration agreement just

as it does on any other.” Rent–A–Center,

.

Section 2 of the FAA establishes the rule that “an

arbitration provision is severable from the remainder of the

contract.”

at 70–71 (quoting Buckeye Check Cashing, Inc. v.

Cardegna,

(2006)). The severability rule

applies whether an arbitration provision is codified as a clause

within a broader contract or as a separate arbitration contract

altogether. See id. at 72. As a result, a delegation clause

9 within an arbitration agreement is severable from the underlying

agreement, and “a party’s challenge to another provision of the

contract, or to the contract as a whole, does not prevent a

court from enforcing” it. Id. In other words, when an

arbitration agreement contains a delegation clause, and the

party objecting to arbitration challenges the validity of the

arbitration agreement as a whole, or the validity of a contract

of which the arbitration agreement is simply a part, any such

challenges must be referred to the arbitrator. But if the party

opposing arbitration specifically challenges the validity of the

delegation clause itself, then the court, rather than the

arbitrator, must decide those challenges. Id. at 71. “A court

cannot reach the question of the arbitration agreement’s

enforceability unless a party challenged the delegation clause

and the court concludes that the delegation clause is not

enforceable.” MacDonald v. CashCall, Inc.,

(3d Cir. 2018).

In Rent–A–Center, the parties signed an agreement to

arbitrate claims arising out of their employment relationship.

. The plaintiff challenged the arbitration

agreement on unconscionability grounds.

The arbitration

agreement contained a delegation clause, in which the parties

specified that the arbitrator would decide arbitrability

disputes.

Because the delegation clause was severable from

10 the rest of the arbitration agreement, and the plaintiff failed

to specifically challenge the delegation clause, the Court

concluded that it had to give effect to the delegation clause

and allow the arbitrator to determine whether the arbitration

agreement was unconscionable.

.

The Supreme Court suggested, however, that if the plaintiff

in Rent-A-Center had challenged the delegation clause on the

same basis as the arbitration agreement as a whole, then the

court could decide that challenge. See

(“It may be

that had [plaintiff] challenged the delegation provision by

arguing that these common [arbitration] procedures as applied to

the delegation provision rendered that provision unconscionable,

the challenge should have been considered by the court.”).

Based on this dictum, as least two circuit courts have held that

“[i]n specifically challenging a delegation clause, a party may

rely on the same arguments that it employs to contest the

enforceability of other arbitration agreement provisions.”

MacDonald,

; accord Gibbs v. Sequoia Capital

Operations, LLC,

, 291 (4th Cir. 2020). “As a

result, courts have construed a party’s argument that the

‘delegation clause suffers from the same defect as the

arbitration provision’ to be a sufficient challenge to the

delegation provision itself.” Gibbs, 966 F.3d at 291 (quoting

MacDonald,

).

11 In this case, as in Rent-A-Center, the delegation clause is

part of a stand-alone arbitration agreement. The MAA defines

“[c]overed disputes” as “any claim or controversy regarding the

[MAA] or any portion of the [MAA] or its interpretation,

enforceability, applicability, unconscionability, or formation,

or whether the [MAA] or any portion of the [MAA] is void or

voidable.” Doc. No. 7-1 at 6. This language clearly and

unmistakably commits authority over arbitrability disputes to

the arbitrator. As a result, under Rent-A-Center, the

delegation clause is severable from the rest of the MAA. Unlike

the plaintiff in Rent-A-Center, however, Rosen specifically

contests the validity of the delegation clause. She argues that

the delegation clause is unconscionable and a product of fraud

for the same reasons as the entire MAA. Therefore, it is for

the court, not the arbitrator, to resolve her challenges to the

delegation clause. See Rent-A-Center,

; Gibbs,

966 F.3d at 291; MacDonald,

.

B. Contract Formation Challenge

Rosen challenges the MAA’s formation on the ground that she

received no consideration when she signed it. Genesis concedes

that this contract formation challenge must be resolved by the

court.3 It argues that the parties’ mutual obligations to

3 The Supreme Court has suggested, and numerous circuit courts have held, that contract formation disputes are not delegable 12 arbitrate, its agreement to pay the costs of arbitration, and

Rosen’s continued employment provided sufficient consideration.

When resolving disputes concerning the existence of an

arbitration agreement, courts “apply ordinary state-law

principles that govern the formation of contracts.” Kaplan,

. Under New Hampshire law, consideration is an

essential element of a contract. Tsiatsios v. Tsiatsios,

(1995). “Consideration is present if there is

either a benefit to the promisor or a detriment to the

promisee.” Chisholm v. Ultima Nashua Indus. Corp.,

(2003). “[F]orbearance of a legal right . . . provides

consideration sufficient to form a contract.” Derry & Webster,

LLC v. Bayview Loan Servicing, LLC,

,

, at *3 (D.N.H. Dec. 29, 2014) (citing Latulippe v. New

and must always be decided by a court. See Rent-A-Center,

n.2 (noting that its holding does not apply to “the issue whether any agreement between the parties ‘was ever concluded’”) (quoting Buckeye,

n.1); Fedor v. United Healthcare, Inc.,

, 1105 (10th Cir. 2020) (“The issue of whether an arbitration agreement was formed between the parties must always be decided by a court, regardless of whether the alleged agreement contained a delegation clause or whether one of the parties specifically challenged such a clause.”); In re: Auto. Parts Antitrust Litig.,

, 385-86 (6th Cir. 2020); Berkeley Cnty. Sch. Dist. v. Hub Int’l Ltd.,

, 234 (4th Cir. 2019); Lloyd’s Syndicate 457 v. FloaTEC, L.L.C.,

(5th Cir. 2019); cf. Nat’l Fed’n of the Blind v. The Container Store, Inc.,

(1st Cir. 2018) (noting that there is “an important distinction between arguments challenging the validity of an agreement and those challenging an agreement’s formation”). 13 Eng. Inv. Co.,

(1913); 3 Williston and Lord,

Williston on Contracts § 7:47 (4th ed.)). “In bilateral

contracts, bargained-for reciprocal promises fulfill the

consideration element.” Downeast Energy Corp. v. Frizzell, No.

2010-0401,

, at *1 (N.H. July 6, 2011); see

Swanson v. Priest,

(1948) (“It is fundamental

that mutual promises furnish adequate consideration for each

other.”). Courts applying this basic principle “have held that

the equal obligation of an employee and employer to arbitrate

disputes . . . is enough to ensure mutuality of obligation and

thus constitute consideration.” Soto v. State Indus. Prod.,

Inc.,

(1st Cir. 2011) (internal quotation marks

omitted) (citing cases and holding the same under Puerto Rico

law).

Rosen’s argument that the MAA fails for want of

consideration is unavailing. Rosen and Genesis made mutual

promises to arbitrate any claims against each other and thus

relinquished their legal rights to litigate such claims in

court. These reciprocal promises constitute consideration

sufficient to form a contract. See Downeast Energy,

, at *1; Soto,

; Derry & Webster,

, at *3.

Rosen contends that consideration is lacking because she

gave up her rights to an already existing dispute concerning

14 age-based harassment, whereas Genesis only gave up rights to

hypothetical disputes that, due to the nature of their

relationship, were unlikely to materialize. This is a challenge

to the adequacy of consideration, not its existence. It is a

general principle of contract law that “courts will not inquire

into the adequacy of consideration in an agreed-upon exchange,

unless that consideration is so grossly inadequate as to shock

the conscience of the court.” P.R. Elec. Power Auth. v. Action

Refund,

(1st Cir. 2008) (internal quotation

marks omitted). The parties’ mutual promises to arbitrate do

not satisfy this demanding standard.

In any event, Genesis also agreed to pay the costs of

arbitration (apart from the initial filing fee) and continued to

employ Rosen, an at-will employee, for two months after she

signed the MAA. Cf. Smith, Batchelder & Rugg v. Foster,

(1979) (“Continued employment after signing an

employment contract constitutes consideration for a covenant not

to compete contained therein.”). Genesis, therefore, provided

adequate consideration for Rosen’s promise to arbitrate her

claims against the company.

C. Validity Challenges

Rosen argues that the delegation clause is invalid because

it is procedurally and substantively unconscionable and was

induced by fraud. These are the same arguments she employs to

15 contest the validity of the entire MAA. Genesis maintains that

the record does not support Rosen’s arguments.

1. Unconscionability

“[U]nder the FAA, courts analyze unconscionability issues

under normal state law unconscionability standards.” Britto v.

Prospect Chartercare SJHSRI, LLC,

(1st Cir.

2018) (internal quotation marks and brackets omitted). The New

Hampshire Supreme Court has recognized that unconscionability

generally requires “an absence of meaningful choice on the part

of one of the parties together with contract terms which are

unreasonably favorable to the other party.” Pittsfield Weaving

Co. v. Grove Textiles, Inc.,

(1981) (per

curiam) (internal quotation marks omitted). In other words, the

complaining party must demonstrate both procedural and

substantive unconscionability. See id.; Landry v. Time Warner

Cable, Inc.,

,

, at *4 (D.N.H. Aug.

9, 2017).

Rosen argues that the delegation clause is procedurally

unconscionable for the same reasons as the MAA as a whole.

Specifically, she claims she was under pressure to sign the MAA,

had no meaningful opportunity to review it, had to sign it as a

condition of employment, could not negotiate its terms, and was

not provided with a copy of the applicable American Arbitration

Association (“AAA”) rules. These arguments are meritless.

16 The record does not support Rosen’s claim that Genesis

either exerted undue pressure on her to sign the MAA or gave her

inadequate time to review its contents. Genesis has submitted

evidence showing that Rosen, like all other employees, had 31

days (from May 1 to May 31, 2019) to review and sign the MAA.

Although Rosen states that she “was under the impression” that

she had to sign it on May 7, she does not specify what action,

if any, Genesis took to create this impression. Her

unsubstantiated belief that she had to sign the MAA in a matter

of days is not enough to create a genuine dispute of fact. See

Quinones v. Houser Buick,

(1st Cir. 2006)

(“Without first-hand knowledge of facts supporting his

allegations, [the plaintiff] could not simply testify to a

belief . . . .”).

As for Rosen’s argument that the urgency stemmed from her

lack of access to the On-Track system until she signed the MAA,

her affidavit merely establishes that she could not “figure out”

how to access the system. Considering that there is no evidence

that she sought help with this issue or otherwise raised a

concern with Genesis at the time, Rosen has not controverted

evidence submitted by Genesis that she, like all other

employees, continued to have full access to the system even if

17 she did not sign the MAA.4 Therefore, the record is bereft of

evidence that Genesis deprived Rosen of a meaningful opportunity

to review the MAA.

Next, Rosen argues that the MAA is procedurally

unconscionable because it was imposed as a condition of her

employment. Even if signing the MAA was a condition of Rosen’s

employment, this would not prove “an absence of meaningful

choice.” See Pittsfield Weaving Co.,

. Rather,

it would show “a personally difficult choice, but hardly a

legally unconscionable one.” Landry,

, at *4;

see Soto,

(“[A]n arbitration agreement is not

made unenforceable . . . merely because signing it was a

condition of continued employment.”); Rosenberg v. Merrill

Lynch, Pierce, Fenner & Smith, Inc.,

(1st Cir.

1999) (holding that although signing arbitration agreement was

condition of employment, agreement was not unconscionable).

Rosen also argues that Genesis had greater bargaining power

and she could not negotiate the terms of the MAA. “Mere

inequality in bargaining power, however, is not a sufficient

reason to hold that arbitration agreements are never enforceable

4 The same is true with respect to Rosen’s claim that she could not “figure out” how to print the MAA before signing it. Genesis has submitted evidence showing that she had the ability to print the agreement for later review, and Rosen does not claim that she tried to get help with the printing issue.

18 in the employment context.” Gilmer v. Interstate/Johnson Lane

Corp.,

(1991). Similarly, the fact that the

terms of an arbitration agreement are not negotiable does not

render it unconscionable. See Rosenberg,

, 19

n.16 (rejecting unconscionability claim where plaintiff “had no

ability to choose or even negotiate the terms of the arbitration

agreement”); cf. Carnival Cruise Lines, Inc. v. Shute,

(1991) (rejecting challenge to enforceability of non-

negotiable forum selection clause).

Lastly, Rosen’s claim that she was not provided with a copy

of the AAA rules is flatly contradicted by the record. The MAA

expressly provided that “the AAA Rules are available through

Employer’s Human Resources Department or via the internet at

www.adr.org/employment.” Doc. No. 7-1 at 7. In today’s age,

“following a hyperlink is like turning a page in a printed

document. Any reasonable viewer would realize that access to

the text of the terms would be simple and immediate.” In re

Daily Fantasy Sports Litig., No. MDL 16-02677-GAO,

, at *10 (D. Mass. Nov. 27, 2019); see Landry,

, at *4 (rejecting procedural unconscionability claim

where employer provided access to arbitration rules through the

internet). Therefore, Rosen’s procedural arguments are not

sufficient to challenge the validity of the delegation clause,

or, by extension, the validity of the MAA. Cf. Gibbs,

at 292 (“[B]ecause the challenge to the delegation provision

necessarily encompassed and included arguments that related to

the entire arbitration agreement, the district court did not err

by assessing those arguments.”).

Even if Rosen had established procedural unconscionability,

however, her unconscionability challenge cannot succeed because

she has not shown that the delegation clause is substantively

unconscionable. Rosen’s substantive unconscionability arguments

assail the MAA’s limitation on the number of depositions and her

inability to recover the costs of arbitration. Both arguments

fail as a matter of law because there is no evidence that the

challenged terms, as applied to the delegation clause, are

“unreasonably favorable” to Genesis. See Pittsfield Weaving

Co.,

.

First, both parties waived their right to recover costs.

In addition, Genesis agreed to pay all costs of the arbitrator

but the $200 filing fee, and even the filing fee can be waived

if a party demonstrates inability to pay it. See Doc. No. 7-1

at 8. There is no evidence what other costs, if any, Rosen

would have to bear to arbitrate her arbitrability claims. Thus,

the record does not permit a reasonable inference that paying

such costs would be “prohibitively expensive” to Rosen. See

Biller v. S-H OpCo Greenwich Bay Manor, LLC,

, 517

20 (1st Cir. 2020) (quoting Green Tree Fin. Corp.-Ala. v. Randolph,

, 90–92 (2000)).

Second, Rosen has not shown that deposing only two fact

witnesses in the context of submitting threshold questions of

arbitrability to the arbitrator would impede her ability to

challenge the MAA. In any case, the MAA gives the arbitrator

discretion to allow additional discovery, alleviating any

concern that the limitation on the number of depositions would

stifle Rosen’s ability to arbitrate arbitrability.

In sum, Rosen has not shown that the delegation clause is

either procedurally or substantively unconscionable.

Accordingly, there is no basis to invalidate the delegation

clause on the ground of unconscionability.

2. Fraudulent Inducement

Rosen claims that Genesis fraudulently induced her to sign

the MAA and that, by extension, the delegation clause is a

product of fraud. Specifically, she maintains that Genesis

misled her by promising continued employment if she signed the

MAA, while all along intending to terminate her. Genesis

responds that Rosen confuses the recognition that her continued

employment as an at-will employee would constitute ratification

of the MAA, with a guarantee of indefinite employment.

Under New Hampshire law, fraud in the inducement can be

raised to invalidate a contract. See, e.g., Van Der Stok v. Van

21 Voorhees,

(2005). To prevail on a claim of

fraudulent inducement, a plaintiff must show that the defendant

(1) made a misrepresentation; (2) had the purpose to induce the

plaintiff to act or refrain from action in reliance on that

misrepresentation; (3) the plaintiff acted in justifiable

reliance upon the misrepresentation; and (4) the plaintiff

suffered some pecuniary loss. Restatement (Second) of Torts

§ 525 (1977); see Gray v. First NH Banks,

(1994) (citing Restatement (Second) of Torts § 525 (1977)). The

standard of justifiable reliance “is not that of ordinary care,

but an individual standard, based upon [the plaintiff’s] own

capacity and knowledge.” Smith v. Pope,

(1961). The plaintiff’s “educational level, intelligence,

experience in the business world, and common sense are all

relevant in determining whether reliance was justified.”

Trefethen v. Liberty Mut. Grp., Inc.,

,

, at *7 (D.N.H. May 31, 2013).

For the purpose of resolving this claim, I accept Rosen’s

statement that it was “represented to [her] by Matchett and

other Company representatives that by signing [the MAA], [she]

was being offered continued employment, and [she] relied on this

representation when [she] agreed to sign the agreement.” Doc.

No. 8-2 ¶ 7. Rosen maintains that this was a misrepresentation

because that same week, Matchett told Rosen she would be

22 terminated if she did not retire, and she was in fact terminated

approximately two months after she signed the MAA. See Doc. No.

8-2 ¶¶ 19-20.

It is undisputed that Rosen was an at-will employee,

meaning that both Rosen and Genesis were “free at any time to

terminate the employment relationship, with or without cause.”

Porter v. City of Manchester,

(2004) (internal

quotation marks omitted). Having worked as a business office

manager for nearly two decades, Rosen was experienced enough in

the business world to understand the terms of her employment.

Her reliance on a promise of continued employment was not

justifiable because her experience and common sense would have

informed her that, as at-will employee, she could be dismissed

at any time. Thus, as a matter of law, Rosen has not

demonstrated that she was fraudulently induced to sign the MAA,

precluding her fraud-based challenge to the delegation clause.

IV. CONCLUSION I do not write on a clean slate. The United States Supreme

Court has given real bite to the FAA in its many decisions

supporting arbitration agreements, and the New Hampshire Supreme

Court has established the ground rules for challenges to the

formation and validity of a contract. Because Rosen has failed

to successfully challenge the formation of the MAA or the

validity of the delegation clause, I must enforce the delegation

23 clause by staying this action under § 3 of the FAA,

, and compelling arbitration.5 Accordingly, the defendants’

motion to stay this action and compel arbitration (Doc. No. 6)

is granted. The case shall be stayed, and the clerk shall

administratively close the case, subject to reopening at the

request of either party, as appropriate, following arbitration.

SO ORDERED.

/s/ Paul J. Barbadoro Paul J. Barbadoro United States District Judge

February 5, 2021

cc: Timothy J. Brock, Esq. Trevor Brice, Esq. K. Joshua Scott, Esq.

5 To the extent Rosen’s challenges to the delegation clause rely upon arguments that necessarily relate to the MAA as a whole, she cannot relitigate those issues in arbitration by challenging the validity of the MAA on the same grounds. Cf. Gibbs, 966 F.3d at 292. 24