                  FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

STEPHANIE BROWN,                        
                  Plaintiff-Appellee,
                 v.
DILLARD’S, INC., a corporation;
DILLARD’S STORE SERVICES, INC.,              No. 03-56719
d/b/a CONDEV WEST, INC., a
corporation,                                  D.C. No.
                                            CV-03-03903-NM
             Defendants-Appellants,            OPINION
                and
DILLARD’S DEPARTMENT STORE, a
corporation,
                          Defendant.
                                        
        Appeal from the United States District Court
            for the Central District of California
         Nora M. Manella, District Judge, Presiding

                   Argued and Submitted
            April 7, 2005—Pasadena, California

                   Filed December 6, 2005

    Before: Thomas G. Nelson, William A. Fletcher, and
               Carlos T. Bea, Circuit Judges.

           Opinion by Judge William A. Fletcher




                            15753
                   BROWN v. DILLARD’S             15755


                      COUNSEL

David Raizman, Bryan Cave LLP, Santa Monica, California,
for the appellant.
15756                 BROWN v. DILLARD’S
Lisa A. Jordan, Van Nuys, California, for the appellee.


                          OPINION

W. FLETCHER, Circuit Judge:

   Defendants Dillard’s Department Store and Dillard’s Store
Services (collectively “Dillard’s”) require employees to agree
to arbitrate employment-related claims under what it calls
“Dillard’s Fairness in Action Program.” Plaintiff Stephanie
Brown was an employee at one of Dillard’s department stores
in California until she was fired.

   Brown filed a notice of intent to arbitrate a wrongful termi-
nation claim under the Fairness in Action Program. Dillard’s
refused to participate in the arbitration proceedings. Brown
then filed suit in Los Angeles County Superior Court. At that
point, Dillard’s decided that it wanted to arbitrate her claim.
Dillard’s removed Brown’s suit to federal court and moved to
compel arbitration. Assuming the truth of Brown’s allega-
tions, the district court denied the motion, holding that the
arbitration agreement was unconscionable and thus unen-
forceable under California law.

   We conditionally affirm on a different ground, and we
remand to the district court. We do not express a view on
whether the agreement was unconscionable under California
law. Rather, assuming the truth of Brown’s allegations, we
hold that when an employer enters into an arbitration agree-
ment with its employees, it must itself participate in properly
initiated arbitration proceedings or forego its right to compel
arbitration. That is, we hold that Dillard’s cannot compel
Brown to honor an arbitration agreement of which it is itself
in material breach.

                               I

  This case comes to us in a somewhat unusual procedural
posture. After Dillard’s removed Brown’s suit to federal dis-
                      BROWN v. DILLARD’S                   15757
trict court, it moved to compel arbitration. The district court
had before it plaintiff’s complaint and defendants’ answer.
Defendants’ answer admitted and denied a few of plaintiff’s
allegations. For most allegations, it asserted that it lacked suf-
ficient information to admit or deny. The district court also
had before it declarations from five individuals — Brown,
Brown’s attorney, an employee from Dillard’s Legal Office,
the Dillard’s store manager, and an attorney representing Dil-
lard’s in this litigation.

   For the limited purpose of ruling on Dillard’s motion to
compel arbitration, the district court assumed the truth of alle-
gations in plaintiff’s complaint. For the limited purpose of
reviewing the district court’s ruling, we, too, assume the truth
of those allegations. To the degree that our conclusion that
Dillard’s breached its arbitration agreement with Brown
depends on disputed facts, Dillard’s is free on remand to con-
test those facts.

   Stephanie Brown started working for Dillard’s Store Ser-
vices as a sales associate in the Juniors Department at a Dil-
lard’s Department Store in Palmdale, California, sometime
around April 2001. On July 21, 2001, Brown was summoned
to the office of her supervisor, Andrea Howard, along with
several coworkers. Howard told the employees that the com-
pany was starting the “Dillard’s Fairness in Action Program.”
In effect, the Fairness in Action Program is an arbitration
agreement, which employees like Brown were deemed to
have accepted simply by continuing their employment. A
guide to the program told employees that “[t]he Fairness in
Action Program is fast, straightforward, and much less expen-
sive than taking a dispute to a court of law — but most of all,
it is fair to both you and Dillard’s.” (Emphasis in original.)
The guide further explained that

    [a]cross the country, many companies and their
    employees are electing to settle disputes using this
    method, and in doing so are avoiding long, drawn-
15758                 BROWN v. DILLARD’S
    out court battles where attorney’s fees may be over-
    whelming for both parties. And more than just sav-
    ing time and money, the Fairness in Action Program
    assures that each party gets a fair deal — that’s what
    justice is about, after all.

   Contrary to the guide’s representation, Dillard’s did not
allow its employees to “elect” — in the sense of “choose
voluntarily”— to settle disputes through arbitration. Rather,
they were required to arbitrate. Howard told Brown and the
other employees that they were required to sign a form titled
“Current Associates: Acknowledgment of Receipt of Rules
for Arbitration.” The form provided,

    Effective immediately, all employees (as hereinafter
    defined) of Dillard’s, Inc., its affiliates, subsidiaries
    and Limited Liability Partnerships (the “Company”)
    shall be subject to the RULES OF ARBITRATION
    (the “Rules”) described below. Employees are
    deemed to have agreed to the provisions of the Rules
    by virtue of accepting employment with the Com-
    pany and/or continuing employment therewith.

   One of Brown’s coworkers, Monika Gonzales, asked How-
ard if she could take the agreement home and discuss it with
her parents. Howard responded that Gonzalez’s job would be
in jeopardy if she did not sign the acknowledgment form
immediately. Along with her coworkers, Brown signed the
form acknowledging receipt of the rules for arbitration and
returned it to Howard. Brown says that she was not provided
with a copy of the rules. The meeting with Howard lasted less
than five minutes.

   Dillard’s admits that Brown worked for its Palmdale store,
that she signed the “Fairness in Action Program” arbitration
agreement, and that she gave it to Howard.

  At the Palmdale store, Dillard’s required employees to
“punch” in and out on a computer system at the beginning and
                      BROWN v. DILLARD’S                   15759
end of their shifts. At shift changes, many people needed to
use the computer, so employees were given a six-minute
grace period during which they could clock in and still be
considered on time. The computer system was frequently
down, so a stack of paper time sheets next to the computer
served as a backup. The paper time sheets allowed Dillard’s
to manipulate employees’ work hours. When working the
evening shift, Brown was scheduled to get off work at 9:15
p.m., but she was often not dismissed until as much as forty
minutes later when the store was fully cleaned. Brown would
fill in a time sheet on some of these occasions, stating that she
had stopped working at 9:15 p.m., because Dillard’s did not
want her to qualify for overtime pay.

   On April 29, 2002, Brown informed Howard that she had
received a job offer from an employer called Countrywide.
Brown told Howard that she intended to work at both Dil-
lard’s and Countrywide so that she could save money to
attend air traffic control school. Howard told Brown that she
would probably not be allowed to work two jobs. The next
day, Brown spoke to the store manager, Tricia Alvillar, who
told her that she was not willing to help Brown arrange a
schedule that would allow her to work both jobs. Brown told
the store manager that she would ask Countrywide to accom-
modate her Dillard’s work schedule.

   On May 2, 2002, Brown received a phone call from an
assistant to Howard. Brown was not scheduled to work that
evening, but the assistant told her the store was shorthanded
and asked her to work the evening shift. Brown agreed to
report to work at 6 p.m. Brown says that she was told not to
report before 6 p.m., because, if she did, she would work
enough hours to qualify for overtime. Brown says that she
arrived at the store at 5:58 p.m. and that upon arriving she
spoke to a coworker (described only as “Sue”) whose shift
ended at 6:00 p.m. Brown clocked in on the computer.

  At work the following day, Brown was asked to report to
Sue Porter, secretary to the operations manager at the store.
15760                BROWN v. DILLARD’S
Porter asked Brown what time she had arrived at work the day
before, and she asked her to fill out a time entry form. Brown
told Porter that she had clocked in on the computer and asked
why she needed to fill in a paper form. Porter told Brown that
the “punch had not taken,” and told Brown that it was “no big
deal.” This was the first time that Brown had been summoned
to complete a time entry form.

   Dillard’s admits that Brown spoke to Alvillar about her
new job, and states that Brown told Alvillar that she would
discuss scheduling conflicts between the two jobs with her
new employer. Dillard’s also admits that Porter’s shift ended
at 6:00 p.m. on May 2, and that Porter saw Brown arrive at
work that evening. Dillard’s also admits that Brown was
asked to report to Porter on May 3, and that she was asked to
fill out a time entry form on the ground that the computer
“had not recorded each of her arrivals and departures on May
2.”

   Later that same day, Brown was summoned to the office of
Karen Burke, the store’s operation manager. Howard and her
assistant were present upon Brown’s arrival. Burke told
Brown that they had reviewed a videotape of the previous day
and that she had arrived at 6:10 p.m., not 6:00 p.m. as she had
recorded on the time form. Burke told Brown that she was
being terminated for falsifying documents to defraud Dillard’s
out of pay for ten minutes of time. Burke told Brown that
“people like you cost the company money.” When Brown
began to cry, Burke said, “You already got another job, right?
Then everything should be okay. This won’t be a problem for
you will it?”

   Dillard’s admits that Brown met with Burke on May 3, and
that Burke asked Brown what time she had arrived at work on
the previous evening. Dillard’s admits that when Brown
replied that she had arrived at 6:00 p.m., Burke responded that
she had reviewed the videotape of her arrival and told her that
                      BROWN v. DILLARD’S                   15761
she had arrived at 6:10 p.m. Dillard’s admits that Burke then
fired Brown.

  On May 5, 2002, Brown requested information about the
Fairness in Action Program. Dillard’s faxed her a copy of the
program brochure. On or about July 1, 2002, Brown filed a
notice of intent to arbitrate with the American Arbitration
Association (AAA), as required under the Fairness in Action
Program. In her notice, she described the nature of her dispute
as follows:

    I was wrongfully terminated from Dillards Dept.
    Store in Palmdale, CA on May 3, 2002 for falsifying
    documents, (a time entry form).

Brown claimed $710 in actual damages. She also requested
the removal of negative statements related to her termination
from her personnel records, a letter of apology, and punitive
damages as deemed appropriate.

   Under the Fairness in Action Program, a non-management
employee’s share of the arbitration fee was $100. Brown paid
her share of the fee when she filed her notice of intent to arbi-
trate. Shortly after filing, Brown was informed by AAA that
Dillard’s had not responded to its request for information.
Brown says that in or about July, 2002, she contacted Dil-
lard’s legal department and spoke with Nannette Savage, who
blamed the problem on AAA. Savage said she would contact
AAA and get back to Brown. Savage did not get back to
Brown and did not respond to Brown’s subsequent attempts
to contact her.

  Dillard’s admits that Brown spoke to Savage in its legal
department in or about July, 2002.

   On July 12 and July 18, 2002, AAA sent letters to Dil-
lard’s, with faxed copies to Brown. The July 18 letter
requested Dillard’s to pay its portion of the filing fee, in the
15762                 BROWN v. DILLARD’S
sum of $400. The letter stated that Brown had already paid
her portion of the fee. Dillard’s did not respond to the AAA
letters, nor did it pay its share of the filing fee. On July 25,
2002, AAA wrote to Brown to inform her that it had not
received Dillard’s share of the filing fee. According to its own
procedures, AAA returned Brown’s notice of intent to arbi-
trate.

   For more than two months, Brown tried to contact Dillard’s
to discuss its refusal to participate in arbitration. She was not
successful until October 2002, when she enlisted the aid of
her mother and arranged a telephone conference call with
Savage. During that call, Savage told Brown that her com-
plaint had no merit and that Dillard’s refused to arbitrate.

  Dillard’s admits that Brown, her mother, and Savage had a
conference call, and that Savage stated during that call that
she had “reviewed plaintiff’s arbitration.”

   Stymied in her attempt to participate in the Fairness in
Action Program, Brown filed suit in Los Angeles County
Superior Court on April 18, 2003. Brown pleaded twelve
causes of action: (1) breach of employment contract (implied
in fact); (2) breach of employment contract (oral); (3) viola-
tion of California’s Labor Code; (4) tortious termination in
violation of public policy; (5) breach of covenant of good
faith and fair dealing; (6) fraud and deceit — intentional mis-
representation; (7) negligent misrepresentation; (8) intentional
infliction of emotional distress; (9) negligent infliction of
emotional distress; (10) defamation — slander per se; (11)
defamation — false light; (12) and unfair and deceptive busi-
ness practices. Dillard’s removed the case to federal district
court and moved to compel arbitration.

  On September 3, 2003, the district court denied Dillard’s
motion. The district court held that the arbitration agreement
was unconscionable and thus unenforceable under California
law. The district court held that Dillard’s method of obtaining
                      BROWN v. DILLARD’S                  15763
its employee’s “agreement” to arbitrate was procedurally
unconscionable, and that the agreement itself was substan-
tively unconscionable. The district court noted that the Fair-
ness in Action Program requires the employee to pay a filing
fee, but does not provide for waiver of the fee upon a showing
of indigence, as would typically be available in a court of law.
The district court also held that the agreement lacked the
“modicum of bilaterality” necessary for enforcement under
California law. The court noted that the claims Dillard’s was
most likely to bring against an employee — claims relating to
unfair competition and disclosure of trade secrets or other
confidential information — are exempt from arbitration under
the agreement. Thus, it is not clear that the agreement binds
Dillard’s to arbitrate its own employment-related claims in
any meaningful sense.

   Dillard’s filed a timely notice of appeal from the district
court’s order denying its motion to compel arbitration, and the
district court stayed proceedings pending the outcome of the
appeal. The denial of a motion to compel arbitration is
reviewed de novo. Ingle v. Circuit City Stores, Inc., 328 F.3d
1165, 1169 (9th Cir. 2003). We may affirm on any ground
supported by the record. Recording Indus. Ass’n of Am. v.
Diamond Multimedia Sys., Inc., 180 F.3d 1072, 1077 n.3 (9th
Cir. 1999).

                               II

  Despite misgivings about both the substance of Dillard’s
Fairness in Action Program and the way in which Dillard’s
obtained its employees’ “agreement,” we assume for present
purposes that Dillard’s and Brown formed an enforceable
contract to arbitrate employment-related claims. Even on this
assumption, we hold that the district court acted properly in
denying Dillard’s motion to compel arbitration. Dillard’s
breached its agreement with Brown by refusing to participate
in the arbitration proceedings Brown initiated. Having
breached the agreement, Dillard’s cannot now enforce it.
15764                 BROWN v. DILLARD’S
   [1] The Federal Arbitration Act (“FAA”) provides that
written agreements to arbitrate disputes arising out of transac-
tions involving interstate commerce “shall be valid, irrevoca-
ble, and enforceable, save upon such grounds as exist in law
or equity for the revocation of any contract.” 9 U.S.C. § 2.
Thus, a party seeking to avoid enforcement of an arbitration
agreement can only invoke a defense that would be available
to a party seeking to avoid the enforcement of any contract.
Stated differently, under the FAA, an arbitration agreement
cannot be avoided by a defense that is only applicable to arbi-
tration agreements. See Doctor’s Assocs. v. Casarotto, 517
U.S. 681, 687 (1996); Circuit City Stores, Inc. v. Adams, 279
F.3d 889, 892 (9th Cir. 2002).

   [2] A bedrock principle of California contract law is that
“[h]e who seeks to enforce a contract must show that he has
complied with the conditions and agreements of the contract
on his part to be performed.” Pry Corp. of Am. v. Leach, 2
Cal. Rptr. 425, 429-30 (Cal. Ct. App. 1960) (citing Cameron
v. Burnham, 80 P. 929, 930 (Cal. 1905)). See also Loral Corp.
v. Moyes, 219 Cal. Rptr. 836, 844 (Cal. Ct. App. 1985) (“The
requirement of performance may be excused by the other
party’s breach.”). This is a contract rule of general application
and is thus available to Brown as a defense against an
attempted enforcement of the arbitration agreement.

   [3] Dillard’s clearly breached the arbitration agreement.
The Rules of Arbitration comprising the agreement explicitly
require Dillard’s to arbitrate “claims of wrongful discharge.”
Brown filed a notice of intent to arbitrate and stated her claim
as follows: “I was wrongfully terminated from Dillards Dept.
Store in Palmdale, CA on May 3, 2002 for falsifying docu-
ments, (a time entry form).”

   Before the district court, Dillard’s admitted that it refused
to arbitrate Brown’s claim. However, Dillard’s “contend[ed]
that their refusal to arbitrate the ‘claims’ made in Plaintiff’s
July 2002 Arbitration Notice [was] not ‘inconsistent’ with the
                      BROWN v. DILLARD’S                   15765
right to arbitrate Plaintiff’s claims in the Complaint because
the prior claims merely alleged that Defendants had acted
unfairly in terminating her and thus did not contain a color-
able claim subject to arbitration.” The district court flatly
rejected this contention, calling it “demonstrably false.”
Brown’s notice clearly alleged that she was “wrongfully ter-
minated,” and wrongful termination claims were explicitly
covered by the arbitration agreement.

   [4] If Dillard’s believed Brown’s claim was meritless, its
proper course of action was to make that argument in arbitra-
tion. Instead, Dillard’s refused to participate in the arbitration
process at all. Under general principles of California contract
law, Dillard’s breach of its obligations under the arbitration
agreement deprives it of the right to enforce that agreement.

   Dillard’s argues that it can compel arbitration notwithstand-
ing any possible breach of the arbitration agreement. Dillard’s
cites two cases in support of its view, neither of which is
apposite. The first case is Local Union No. 721 v. Needham
Packing Co., 376 U.S. 247 (1964). In Needham Packing, a
union sought to compel the Needham Packing Company to
arbitrate grievances pursuant to a collective bargaining agree-
ment. The company argued that it was released from its obli-
gation to arbitrate the grievances because the union had
breached the no-strike provision of the collective bargaining
agreement by staging a walkout of 190 employees. In holding
that the union had not lost its right to compel arbitration of the
grievances, the Court explained that “[a]rbitration provisions,
which themselves have not been repudiated, are meant to sur-
vive breaches of contract, in many contexts . . . .” Id. at 251-
52 (emphasis added) (quoting Drake Bakeries, Inc., v. Local
50, American Bakery & Confectionary Workers Int’l, 370
U.S. 254, 262 (1962).

  In Needham Packing, only the question of whether the
union had breached the no-strike provision was subject to dis-
pute, and the Court held that the intent behind the collective
15766                 BROWN v. DILLARD’S
bargaining agreement was to have such disputes settled in
arbitration. Even assuming that Needham Packing is relevant
to an interpretation of California contract law, see Textile
Workers Union v. Lincoln Mills, 353 U.S. 448 (1957), it is
clearly not apposite. In Needham Packing, the union was
alleged to have breached an unrelated contract provision, not
the arbitration agreement itself. In this case, by contrast, Dil-
lard’s breached the arbitration agreement by refusing to par-
ticipate in properly initiated arbitration proceedings. Dillard’s
breach was tantamount to a repudiation of the arbitration
agreement.

   The second case is New Linen Supply v. Eastern Environ-
mental Controls, Inc., 158 Cal. Rptr. 251 (Cal. Ct. App.
1979). In that case, New Linen Supply, doing business as
Western, filed an unfair competition action against Eastern
Environmental Controls, Inc. (“EEC”). The parties had previ-
ously entered into an agreement that contained an arbitration
provision. When their business relationship turned sour, EEC
wrote a letter to Western saying that it was obliged to cancel
the contract due to Western’s nonperformance. Western
acknowledged receipt of the cancellation and indicated that it
wished to seek arbitration in accord with the procedures of the
AAA. However, Western did not initiate arbitration proceed-
ings. The parties continued to do business together and EEC
wrote to Western, stating, “We understand your continuing to
do business with us to be a withdrawal of your request for
arbitration.” Id. at 253. Western later filed suit in California
Superior Court alleging unfair competition, and EEC moved
to compel arbitration. The question the court confronted was
whether “once having declared the contracts to be terminated
because of the alleged breach by Western, may [EEC] now
invoke a provision within the contract requiring arbitration.”
Id. at 254. The court held that EEC could compel arbitration
notwithstanding the fact that it had earlier declared the con-
tracts to be terminated. In so holding, the court quoted
approvingly the following language from Heyman v. Darwins,
Ltd., [1942] A.C. 356, 373-75:
                      BROWN v. DILLARD’S                   15767
    The key is to be found in the distinction . . . between
    the arbitration clause in a contract and the executive
    obligations undertaken by each party to the other.
    [There is] nothing shocking or repugnant to law in
    one business man saying to another that he regrets he
    finds himself unable to go on with his deliveries
    under a contract between them and at the same time
    asking the other to join with him in a reference under
    an arbitration clause in their contract to ascertain
    what compensation is to be paid for his default.

   We understand the California Court of Appeal to have held
that repudiation of a contract which contains an arbitration
clause does not waive one’s right to arbitrate disputes within
the scope of the clause. That is, New Linen is distinguishable
from the facts of this case in much the same way as Needham
Packing. Dillard’s did not repudiate its obligations under a
contract that contained a clause providing for arbitration of
breach of that contract. Rather, Dillard’s breached the arbitra-
tion agreement itself by refusing to arbitrate.

   If we took Dillard’s view and allowed it to compel arbitra-
tion notwithstanding its breach of the arbitration agreement,
we would set up a perverse incentive scheme. Employers like
Dillard’s would have an incentive to refuse to arbitrate claims
brought by employees in the hope that the frustrated employ-
ees would simply abandon them. This tactic would be costless
to employers if they were allowed to compel arbitration
whenever a frustrated but persistent employee eventually ini-
tiated litigation. We decline to adopt a rule that would encour-
age companies to refuse to participate in properly initiated
arbitration proceedings. To promote our national policy in
favor of arbitration, see Southland Corp. v. Keating, 465 U.S.
1, 10 (1984), we must decline to compel it in this case.

                               III

   [5] Dillard’s urges us to analyze this case under the doc-
trines governing waiver of the right to arbitrate, rather than as
15768                 BROWN v. DILLARD’S
a breach-of-contract case. We believe that it is more accurate
to describe Dillard’s behavior as breach of contract. However,
we briefly note that if we were to approach this as a waiver
case, we would have no difficulty finding that Dillard’s
waived its right to arbitrate Brown’s claims. “A party seeking
to prove waiver of a right to arbitrate must demonstrate (1)
knowledge of an existing right to compel arbitration; (2) acts
inconsistent with that existing right; and (3) prejudice to the
party opposing arbitration resulting from such inconsistent
acts.” Britton v. Co-op Banking Group, 916 F.2d 1405, 1412
(9th Cir. 1990). Dillard’s concedes that it knew of its right to
arbitrate, and its refusal to arbitrate after being served with
Brown’s notice of intent to arbitrate was an act inconsistent
with that right. Thus, the first two prongs of the waiver test
are easily satisfied.

   As to the third prong, Dillard’s argues that Brown did not
suffer any cognizable prejudice as a result of its refusal to
arbitrate. Brown alleges three forms of prejudice: (1) delay
due to Dillard’s refusal to arbitrate; (2) costs and attorneys’
fees incurred due to Dillard’s refusal; and (3) the loss of
potential evidence and witnesses due to the passage of time.
Dillard’s responds by citing cases in which no prejudice was
found despite the fact that the non-moving party had incurred
costs or attorneys’ fees, or had otherwise suffered as a result
of delay. See e.g., Britton, 916 F.2d at 1413; Lake Comm.,
Inc. v. ICC Corp., 738 F.2d 1473, 1477 (9th Cir. 1984), over-
ruled on other grounds by Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 632-35 (1985). The
problem for Dillard’s is that the question in these cases was
whether a delay by a defendant in moving to compel arbitra-
tion after the initiation of litigation caused cognizable preju-
dice to the plaintiff. Unsurprisingly, courts are reluctant to
find prejudice to the plaintiff who has chosen to litigate, sim-
ply because the defendant litigated briefly (e.g., by filing a
motion to dismiss or requesting limited discovery) before
moving to compel arbitration.
                      BROWN v. DILLARD’S                   15769
   [6] Dillard’s does not cite a case in which costs have been
incurred by the plaintiff due to the defendant’s refusal to par-
ticipate in properly initiated arbitration proceedings. Brown
did not choose to litigate. She chose to arbitrate, and when she
was rebuffed by Dillard’s, she sued as a last resort. In this cir-
cumstance, we have no trouble concluding that the delay and
costs incurred by Brown are prejudicial for the purpose of
waiver analysis.

                               IV

   [7] On the assumption that Brown’s narrative is true, this
case displays a dark side of our nation’s policy in favor of
arbitration. When a defendant in a judicial forum refuses to
respond to a complaint that is properly filed and served, the
court has the power to enter and enforce a default judgment.
Arbitration works differently. The American Arbitration
Association could not compel Dillard’s to pay its share of the
filing fee, and in the absence of the fee it could not proceed.
Brown had no choice but to come to court. Many people in
Brown’s position would simply have given up. Because she
did not, we have the occasion to make clear that when an
employer enters into an agreement requiring its employees to
arbitrate, it must participate in the process or lose its right to
arbitrate.

  Conditionally AFFIRMED. REMANDED to the district
court. Attorney’s fees on appeal to Brown.
