A federal district court in the District of Columbia has held that merely petitioning a state court to remove a matter to federal court is not litigation behavior that constitutes a waiver of the right to arbitrate.

In Martin v. Citibank, Inc., No. CIV. 07-2297(RCL), 2008 WL 2492068 (D.D.C. June 24, 2008), Martin was employed by Citibank. During the course of employment, Citibank produced an employee handbook containing an arbitration agreement. The agreement was required as an "essential" condition of employment. Martin signed a form acknowledging the receipt of the employee handbook.

Later, Martin filed suit against Citibank, alleging employment discrimination. Citibank removed the matter to federal court, and then filed a motion to dismiss the suit and compel arbitration. Martin objected, alleging waiver, challenging the existence of the agreement, and maintaining that the agreement was unconscionable.

Martin maintained that Citibank had waived its right to arbitrate by removing the matter to federal court after the agreement's one year time limitation for initiating arbitration had passed. The Court noted that "merely removing the action, without attempting to engage in discovery or to dispute the plaintiff's claims on the merits, does not constitute active participation in the lawsuit" that would constitute waiver. Also, the Court found that the contractual time limit on bringing arbitration claims applied to the plaintiff's assertion of claims, not the defendant's motion to compel, which, nevertheless, was clearly asserted within one year after the claim arose upon the plaintiff's initial court filing.

The Court then rejected Martin's allegations that the agreement did not exist, finding that Citibank had given Martin an opportunity to review the handbook and lawfully made the arbitration agreement a condition of employment. As to unconscionability, the Court found the contract did not deprive Martin of meaningful choice by lawfully making the agreement a condition of employment and did not impose any unreasonable terms that could not be severed in appropriate circumstances.