JOHANA PAOLA BELTRAN; LUSAPHO HLATSHANENI; BEAUDETTE DEETLEFS; ALEXANDRA IVETTE GONZALEZ; JULIANE HARNING; NICOLE MAPLEDORAM; LAURA MEJIA JIMINEZ; SARAH CAROLINE AZUELA RASCON, Plaintiffs - Appellees,
AUPAIRCARE, INC., Defendant-Appellant, and INTEREXCHANGE, INC.; USAUPAIR, INC.; GREATAUPAIR, LLC; EXPERT GROUP INTERNATIONAL INC., d/b/a Expert Au Pair; EURAUPAIR INTERCULTURAL CHILD CARE PROGRAMS; CULTURAL HOMESTAY INTERNATIONAL; CULTURAL CARE, INC., d/b/a Cultural Care Au Pair; AU PAIR INTERNATIONAL, INC.; APF GLOBAL EXCHANGE, NFP, d/b/a Aupair Foundation; AMERICAN INSTITUTE FOR FOREIGN STUDY, d/b/a Au Pair in America; AMERICAN CULTURAL EXCHANGE, LLC, d/b/a GoAuPair; AGENT AU PAIR; A.P.E.X. AMERICAN PROFESSIONAL EXCHANGE, LLC, d/b/a ProAuPair; 20/20 CARE EXCHANGE, INC., d/b/a The International Au Pair Exchange; ASSOCIATES IN CULTURAL EXCHANGE, d/b/a GoAu Pair; GOAUPAIR OPERATIONS, LLC, Defendants.
from the United States District Court for the District of
Colorado (D.C. No. 1:14-CV-03074-CMA-KMT)
B. Quinn (Peggy E. Kozal, Nathan A. Huey, and Jennifer
Arnett-Roehrich with him on the briefs), Gordon & Rees
LLP, Denver, Colorado, for Defendant - Appellant.
H. Seligman, Towards Justice, Denver, Colorado, for
Plaintiffs - Appellees.
McHUGH, KELLY, and MORITZ, Circuit Judges.
MCHUGH, CIRCUIT JUDGE.
pairs and former au pairs filed a class action lawsuit
against AuPairCare, Inc. ("APC") and other au pair
sponsoring companies in federal district court alleging
violations of antitrust laws, the Racketeer Influenced and
Corrupt Organizations Act ("RICO"), the Fair Labor
Standards Act ("FLSA"), federal and state minimum
wage laws, and other state laws. Eventually, the au pairs
amended their complaint and added two former au pairs,
Juliane Harning and Laura Mejia Jimenez, who were sponsored
by APC. In response, APC filed a motion to compel
arbitration, which the district court denied. The district
court found the arbitration provision between the parties
both procedurally and substantively unconscionable and
declined to enforce it. APC now appeals that denial.
the arbitration provision contains only one substantively
unconscionable clause, the district court abused its
discretion by refusing to sever the offending clause and
otherwise enforce the agreement to arbitrate. We therefore
reverse the district court's ruling and remand for
proceedings consistent with this decision.
enter the United States, foreigners require a visa. One type
of visa is granted under the J-1 Visa program, which the
United States Department of State operates under authority
from the Mutual Education and Cultural Exchange Act of 1961,
22 U.S.C. §§ 2451-2464. One of the J-1 Visa
programs is the au pair program. 22 C.F.R. § 62.31. Au
pairs are limited to one-year or less in the United States
for each trip, id. § 62.31(c)(1), and are
required to be "proficient in spoken English,"
id. § 62.31(d)(3), evidenced through a personal
interview in English, id. § 62.31(d)(5).
"Sponsors designated by the Department of State . . .
conduct [the] au pair exchange program." Id.
§ 62.31(c). The sponsors are responsible for selecting
au pairs, id. § 62.31(d), selecting suitable
host families, id. § 62.31(h), and placing au
pairs with particular host families, id. §
62.31(e). APC is a sponsor designated by the Department of
pair program affords foreign nationals "the opportunity
to live with an American host family and participate directly
in the home life of the host family." Id.
§ 62.31(a). Au pairs provide child care services for the
host family subject to weekly and daily hour limitations,
id. § 62.31(j)(2), pursue six semester hours of
academic credit during their year in the United States,
id. § 62.31(k)(1), and receive in exchange
monetary compensation, id. § 62.31(j)(1), and
two-weeks paid vacation over the course of the year,
id. § 62.31(j)(4).
Beltran, a former au pair sponsored by InterExchange, Inc.,
filed suit in the United States District Court for the
District of Colorado on November 13, 2014, against her host
family, her sponsor InterExchange, APC, and other
organizations approved to sponsor au pairs in the United
States. Ms. Beltran amended her complaint on March 13, 2015,
to add four former au pairs as plaintiffs. After receiving
authorization, Ms. Beltran filed a second amended complaint
that added an additional four plaintiffs, including Ms.
Harning and Ms. Jimenez, in a class action against the
sponsoring agencies. Of the named plaintiffs, APC sponsored
only Ms. Harning and Ms. Jimenez. The second amended
complaint alleged the sponsors had violated antitrust laws,
RICO, the FLSA, federal and state minimum wage laws, and
various other state laws.
Harning is originally from Germany. She signed two different
agreements with APC that include arbitration provisions.
Prior to her first stint as an au pair, Ms. Harning signed an
agreement in 2007 when she was nineteen years old. She then
worked as an au pair in Michigan in 2008. She applied to APC
again in 2013, signed another agreement when she was
twenty-four or twenty-five, and worked as an au pair in
Virginia in 2014. Ms. Harning alleges that "[a]t the
time of signing the contract[s], [she] was not familiar with
the concept of arbitration," and "was not aware of
any provision regarding arbitration, or the meaning of the
statutes cited in that provision." App. vol. 3 at 444.
Earlier in the district court proceedings, however, she
provided deposition testimony that she understood the
contracts with APC "because [she] got it in
German." App. vol. 2 at 384. During her deposition, she
further stated that she did not think there were any portions
of the au pair agreement that confused her.
Jimenez is originally from Colombia. She signed her only
agreement with APC in December 2013, when she was twenty-two
years old. She worked as an au pair from July 2014 to July
2015 in Pennsylvania. "Spanish is [her] first
language." App. vol. 3 at 445. Although Ms. Jimenez did
not want to sign the au pair agreement, APC told her it would
not place her as an au pair if she did not sign the
agreement. Ms. Jimenez further avers that at the time of
signing the contract, she "did not know the English word
'arbitration, '" she "did not understand
the meaning of the statutes cited in the arbitration
provision," and the "rules that would govern the
arbitration were not attached to the contract."
Id. at 446. Similar to Ms. Harning, however, Ms.
Jimenez received the agreement in her native language before
she signed it. She also claimed to have read it and to have
found the statements and provisions acceptable before
2013 and 2014 Au Pair Agreements
2013 Au Pair Agreement (signed by Ms. Harning) and the 2014
Au Pair Agreement (signed by Ms. Jimenez) are largely
identical. The opening paragraphs of both agreements state
that "This AuPairCare Au Pair Agreement (the
'Agreement') is entered into between AuPairCare, a
California Corporation and 'Au Pair.'" App. vol.
2 at 263, 270. The agreements also include identical choice
of law provisions: "This Agreement shall be deemed to
have been made in the State of California, U.S., and its
validity, construction, breach, performance and
interpretation shall be governed by the laws of the State of
California, U.S." Id. at 268, 275. Finally, the
agreements contain identical arbitration provisions:
Other Terms and Conditions
The parties to the Agreement acknowledge and agree that any
dispute or claim arising out of this Agreement, including,
but not limited to any resulting or related transaction or
the relationship of the parties, shall be decided by neutral,
exclusive and binding arbitration in San Francisco,
California, U.S [sic] before an arbitration provider
selected by AuPairCare, upon the petition of either party.
In such proceeding, the parties may utilize subpoenas and
have discovery as provided in California Code of Civil
Procedure Sections 1282.6, 1283 and 1283.05. The decision of
the arbitrator shall be final and binding and may be enforced
in any court of competent jurisdiction. Au Pair agrees that
California is a fair and reasonable venue for resolution of
any such dispute and it submits to jurisdiction of the Courts
of the State of California because, among other reasons, this
agreement was negotiated in large part in California, and
AuPairCare is domiciled in California.
In the event that the arbitration clause is deemed void or
inapplicable, each party expressly consents to and submits to
the personal jurisdiction of the federal or state court(s) of
San Francisco County California, U.S. In any action,
including arbitration, brought for breach of this Agreement,
the prevailing party shall be entitled to recover reasonable
attorney's fees and costs, including but not limited to
the costs of arbitration [sic]
Id. at 267-68, 274-75 (paragraph number omitted).
Pair Agreements are six pages long and include approximately
eighty numbered paragraphs. The arbitration provision in the
agreements is located under the heading "Other Terms and
Conditions" together with approximately ten other
provisions. The 2013 and 2014 Au Pair Agreements state:
"Au Pair has fully read this Agreement and agrees to the
terms and conditions contained herein" and
• I am capable of reading and understanding this
Agreement in English
• I have had the opportunity to ask questions and obtain
advice, to ensure I understand this Agreement in its entirety
• I accept the terms of this entire Agreement and
understand that it is legally binding
Id. at 263, 268, 270, 275.
Ms. Beltran filed her second amended complaint, which added
the former APC au pairs, APC filed a motion to compel
arbitration and dismiss the lawsuit or alternatively to stay
the lawsuit. Ms. Harning and Ms. Jimenez opposed APC's
district court denied APC's motion, finding the
arbitration provision unconscionable. Beltran v.
InterExchange, Inc., No. 14-cv-03074-CMA-KMT, 2017 WL
4418711 (D. Colo. Sept. 21, 2017). The district court
concluded the au pair agreements were contracts of adhesion
and procedurally unconscionable because the au pairs were
relatively young at the time they signed the contracts, were
foreigners, spoke English as a second language, and had no
experience with contracts or contract law. Id. at
*6. And, although each had read the contract before signing
it, the district court found that neither understood what
"arbitration" meant. Id. The district
court also found the element of surprise in the agreements
because the arbitration provision was "buried" at
the end of around eighty paragraphs under a nondescript
header and did not explain in plain English that the au pairs
were waiving their rights to access the ...