Crawley v. Macy's East
Filing
79
OPINION AND ORDER re: 65 MOTION to Compel Arbitration , filed by Macy's East. The Court is sympathetic to Plaintiff's expressed concerns about the arbitration process generally and her prior arbitration experience in parti cular. The Court expects that Defendant and the arbitrator will each do their part to ensure that Plaintiff is treated with dignity and that her claims are given appropriately thoughtful consideration. That said, the facts and law are clear that Plai ntiff's claim must proceed to arbitration. Accordingly, and for the reasons set forth above, Defendant's motion to compel arbitration and stay this case is GRANTED. This case is STAYED pending the resolution of the parties' arbitration . To this end, Defendant is ORDERED to file a letter with the Court on or before June 26, 2017, setting forth a timeline for the parties' arbitration. The Clerk of Court is ORDERED to terminate Docket Entry 65. SO ORDERED., Case stayed. (Signed by Judge Katherine Polk Failla on 5/25/17) Copies Mailed By Chambers.(yv)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
ROSEANN CRAWLEY,
:
:
Plaintiff,
:
:
v.
:
:
MACY’S RETAIL HOLDINGS, INC.,
:
:
Defendant. :
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USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: May 25, 2017
______________
15 Civ. 2228 (KPF)
OPINION AND ORDER
KATHERINE POLK FAILLA, District Judge:
Plaintiff Roseann Crawley’s dispute with Defendant Macy’s Retail
Holdings, Inc. continues. In Crawley v. Macy’s Retail Holdings, Inc., No. 15 Civ.
2228 (KPF), 2016 WL 6993777 (S.D.N.Y. Nov. 29, 2016) (“Crawley I”), this
Court granted in part Defendant’s motion to dismiss Plaintiff’s genderdiscrimination Complaint. The Court concluded that Plaintiff had failed to
state a claim for relief under Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§§ 2000e to 2000e-17 (“Title VII”), or the New York State Human Rights Law,
N.Y. Exec. Law §§ 290 to 301 (the “NYSHRL”). However, the Court allowed
Plaintiff’s claim under the Equal Pay Act of 1963, 29 U.S.C. § 206(d) (the
“EPA”), to go forward.
Defendant now moves, pursuant to the Federal Arbitration Act, 9 U.S.C.
§§ 1 to 16 (the “FAA”), to compel arbitration of Plaintiff’s EPA claim and to stay
this case pending the outcome of that arbitration. Plaintiff opposes the motion,
preferring that the instant case go forward. While cognizant of Plaintiff’s
concerns, the Court finds that Plaintiff’s EPA claim falls squarely within the
parties’ binding arbitration agreement, and thus grants Defendant’s motion.
BACKGROUND 1
A.
Factual Background
Crawley I sets forth the history of the parties’ dispute. In short, Crawley
did not receive a pay raise in 2010, but a male co-worker did. Crawley I, 2016
WL 6993777, at *2. In 2013, Plaintiff demanded that Defendant submit to
arbitration. Id. at *3. And in 2014, following an evidentiary hearing, an
arbitrator concluded that Plaintiff was ineligible for a pay raise in 2010 because
of workplace disciplinary issues. Id. Believing that Defendant had denied her
that raise because of her gender, Plaintiff sued Defendant in this Court in
2015, seeking relief under Title VII, the NYSHRL, and the EPA. Id. After
Crawley I, only Plaintiff’s EPA claim remains. Id. at *9.
This Opinion has a different focus. When Plaintiff arbitrated her payraise dispute with Defendant in 2013 and 2014, she did so pursuant to
1
This Opinion draws most of its facts from two declarations Defendant submitted in
support of its instant motion and from those declarations’ exhibits. The first
declaration is the Declaration of Matthew Melody in Support of Defendant’s Motion to
Compel Arbitration and Stay Proceedings (“Melody Decl.” (Dkt. #67)). Attached as
exhibits to this declaration are a Solutions InSTORE Plan Document dated January 1,
2004 (“Solutions InSTORE Plan Document” (Dkt. #67-1)); a Solutions InSTORE
brochure for new employees of Defendant (“Solutions InSTORE Brochure” (Dkt. #67-2));
a Solutions InSTORE Election Form (“Solutions InSTORE Election Form” (Dkt. #67-3));
and a transcript of a training video Defendant shows its new employees (“Training Video
Tr.” (Dkt. #67-6)). All of the documents attached as exhibits to the Melody Declaration
were in effect on the day Defendant hired Plaintiff: September 9, 2004. (Melody Decl.
¶¶ 14-15).
The second declaration that this Opinion relies on is the Declaration of Ragunathan
Veeraraghavan in Support of Defendant’s Motion to Compel Arbitration and Stay
Proceedings (“Veeraraghavan Decl.” (Dkt. #68)). Attached as an exhibit to this
declaration is Plaintiff’s Solutions InSTORE New Hire Online Acknowledgement Form
(“Pl. Solutions InSTORE Acknowledgement Form” (Dkt. #68-7)).
2
Defendant’s internal alternative-dispute-resolution program: the Solutions
InSTORE Early Dispute Resolution Program (“Solutions InSTORE”). Whether
Plaintiff must revisit Solutions InSTORE to arbitrate her EPA claim turns
principally on two issues. The first is the scope of the arbitration provision
contained in Solutions InSTORE’s governing document, the Solutions InSTORE
Plan Document (the “Plan Document”). The second is whether Plaintiff agreed
to be bound by that arbitration provision when Defendant hired her. The
Court addresses each issue in turn.
1.
The Scope of the Solutions InSTORE Plan Document’s
Arbitration Provision
Solutions InSTORE is “a comprehensive early dispute resolution
program” designed to “resolve employment-related disputes as early and fairly
as possible.” (Melody Decl. ¶ 4). Defendant began developing Solutions
InSTORE in 2003, and the program became effective on January 1,
2004 — over nine months before Defendant hired Plaintiff on September 9,
2004. (Id. at ¶¶ 4, 6, 14). Solutions InSTORE’s terms are set forth in the Plan
Document; Defendant revised the Plan Document in 2007 and 2014, but this
Opinion focuses on the original 2004 version (i.e., the version in effect when
Defendant hired Plaintiff). (Id. at ¶ 6).
Solutions InSTORE has four dispute-resolutions steps. At Step 1 (“Open
Door”), Defendant’s employees are encouraged to bring workplace disputes to
“their immediate supervisors.” (Plan Document 3). An employee dissatisfied
“with the result of” Step 1 can proceed to Step 2 (“Review by the Office of Senior
Human Resources Management”), pursuant to which a Human Resources
3
executive will render a written decision on the employee’s grievance. (Id.). And
if an employee is not satisfied with a Step 2 written decision, and if the
employee’s claim “involv[es] legally protected rights,” that employee may move
to reconsider the decision under Step 3 (“Request for Reconsideration”). (Id. at
4).
Step 4 of Solutions InSTORE “is binding arbitration before a neutral
arbitrator and administered by the American Arbitration Association (‘AAA’).”
(Melody Decl. ¶ 8; Plan Document 5). As set forth in the Plan Document, the
breadth of claims subject to arbitration under Step 4 is vast:
Except as otherwise limited, all employment-related
legal disputes, controversies or claims arising out of, or
relating to, employment or cessation of employment
shall be settled exclusively by final and binding
arbitration[.]
***
All unasserted employment-related claims as of
January 1, 2004 arising under federal, state or local
statutory or common law shall be subject to arbitration.
Merely by way of example, these claims include, but are
not limited to, claims arising under the Age
Discrimination in Employment Act (ADEA), Title VII of
the Civil Rights Act of 1964, as amended, including the
amendments of the Civil Rights Act of 1991, the
Americans with Disabilities Act (ADA), the Family and
Medical Leave Act (FMLA), [and] the Fair Labor
Standards Act (FLSA)[.]
(Plan Document 5-6; see also id. at 7 (reiterating that “[a]ny unasserted
employment-related dispute as described in [the Plan Document], raised on or
after [January 1, 2004,] must be arbitrated pursuant to these rules and
procedures”)).
4
Defendant does not require its employees to arbitrate employment-related
disputes as a condition of their employment. Rather, participation in Step 4 “is
voluntary”: Within 30 days of being hired, Defendant’s employees can opt out
of participating in Step 4 by submitting an “Early Dispute Resolution Program
Election Form” (“Solutions InSTORE Election Form”) to Defendant’s Office of
Solutions InSTORE in Mason, Ohio. (Melody Decl. ¶ 10; Solutions InSTORE
Election Form). But if an employee does not opt out of Step 4 by the end of
this 30-day period, then he or she “agree[s] to use arbitration as the sole and
exclusive means to resolv[e] any dispute regarding [his] employment” and
“waive[s] the right to civil action and a jury trial.” (Solutions InSTORE
Brochure 10).
Defendant informs its employees about Solutions InSTORE, and the
terms of arbitration under Step 4, through a variety of means. (Melody Decl.
¶ 15). In addition to receiving copies of the Plan Document, new employees
receive a Solutions InSTORE New Hire Brochure (the “Solutions InSTORE
Brochure”), which explains all four Solutions InSTORE steps; instructs
employees who wish to opt out of Step 4 to submit a Solutions InSTORE
Election Form within 30 days of being hired; and includes a copy of that form.
(Id. at ¶¶ 16-19; see Solutions InSTORE Brochure). After receiving the
Solutions InSTORE Brochure, new employees must “electronically sign a
‘Solutions InSTORE New Hire Acknowledgement Form’” (the “Solutions
InSTORE Acknowledgement Form”). (Melody Decl. ¶ 20; Veeraraghavan Decl.
¶ 4). By signing that form, an employee acknowledges:
5
I have received a copy of [Defendant’s] Solutions
InSTORE brochure and understand that I have 30 days
from my date of hire to review the information and
postmark my form to the Office of Solutions InSTORE if
I elect to decline the benefits of Step 4 of the program,
Arbitration.
(Pl. Solutions InSTORE Acknowledgement Form 1). The Solutions InSTORE
Acknowledgement Form also includes a hyperlink to a website that
“provides … information about the Solutions InSTORE Program.” (Melody Decl.
¶ 21; Pl. Solutions InSTORE Acknowledgement Form 1).
Further, new employees view “a Solutions InSTORE new hire information
video” that outlines Solutions InSTORE’s four steps and explains that
employees must opt out of Step 4 if they do not wish “to receive th[e] benefit” of
arbitration. (Melody Decl. ¶ 23; Training Video Tr. 6).
2.
Plaintiff’s Agreement to Arbitrate Employment Disputes
Defendant hired Plaintiff to work at a retail store in Commack, New York,
on September 9, 2004. (Melody Decl. ¶ 14). At 9:36 a.m. that morning,
Plaintiff electronically signed a Solutions InSTORE Acknowledgement Form.
(Id. at ¶ 20; Veeraraghavan Decl. ¶ 13; Pl. Solutions InSTORE
Acknowledgement Form).
Plaintiff still works at Defendant’s Commack store. (Melody Decl. ¶ 14).
Plaintiff has never completed a Solutions InSTORE Election Form in order to
opt out of Step 4 arbitration. (Id. at ¶ 26). To the contrary, Plaintiff availed
herself of Step 4’s procedures when she arbitrated the pay-raise dispute that
gave rise to the instant litigation. (Id. at ¶ 28; see generally Crawley I, 2016
WL 6993777, at *2-3). And although Plaintiff has “contacted the Office of
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Solutions InSTORE on numerous occasions with various complaints about her
employment, she [has] never made any complaint regarding her inclusion in
the arbitration portion of the [p]rogram.” (Melody Decl. ¶ 27).
B.
Procedural Background
This Court issued Crawley I on November 29, 2016. (Dkt. #61). On
January 13, 2017, Defendant filed the instant motion and supporting
documents. (Dkt. #65-69). Plaintiff responded to that motion with a one-page
letter that the Court received on February 14, 2017. (Dkt. #73). In that letter,
Plaintiff wrote that she “oppose[s] arbitration and would like to stay in civil
proceedings”; the letter cites no legal authority. (Id.). Briefing concluded when
Defendant submitted a reply letter on March 6, 2017. (Dkt. #76).
DISCUSSION
A.
Applicable Law
“The FAA makes arbitration agreements ‘valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity for the
revocation of any contract.’” Kindred Nursing Ctrs. Ltd. P’ship v. Clark,
— S. Ct. —, No. 16-32, 2017 WL 2039160, at *4 (U.S. May 15, 2017) (quoting 9
U.S.C. § 2)). Time and again, the Supreme Court has emphasized that the FAA
“declare[s] a national policy favoring arbitration[.]” Nitro-Lift Techs., L.L.C. v.
Howard, — U.S. —, 133 S. Ct. 500, 503 (2012) (per curiam) (quoting Southland
Corp. v. Keating, 465 U.S. 1, 10 (1984)). “[T]his policy is founded on a desire to
preserve … parties’ ability to agree to arbitrate, rather than litigate, disputes.”
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Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016) (quoting
Schnabel v. Trilegiant Corp., 697 F.3d 110, 118 (2d Cir. 2012)).
“Under [Section Four of] the FAA, a party to an arbitration agreement
may petition a district court for ‘an order directing that ... arbitration proceed
in the manner provided for in such agreement.’” Katsoris v. WME IMG, LLC,
— F. Supp. 3d —, No. 16 Civ. 135 (RA), 2017 WL 775849, at *5 (S.D.N.Y.
Feb. 27, 2017) (quoting 9 U.S.C. § 4)). “In deciding a motion to compel
arbitration under the FAA, [a] [c]ourt must resolve four issues”:
[i] [I]t must determine whether the parties agreed to
arbitration; [ii] it must determine the scope of that
agreement; [iii] if federal statutory claims are asserted,
it must consider whether Congress intended those
claims to be nonarbitrable; and [iv] if the court
concludes that some, but not all, of the claims in the
case are arbitrable, it must determine whether to stay
the balance of the proceedings pending arbitration. 2
Zambrano v. Strategic Delivery Sols., LLC, No. 15 Civ. 8410 (ER), 2016 WL
5339552, at *5 (S.D.N.Y. Sept. 22, 2016) (quoting Genesco, Inc. v. T. Kakiuchi &
Co., 815 F.2d 840, 844 (2d Cir. 1987)). Put simply, “[p]ursuant to the FAA, a
district court must grant a motion to compel arbitration if a valid arbitration
agreement exists and if the scope of the agreement governs the issues in the
2
In Katz v. Cellco Partnership, 794 F.3d 341 (2d Cir. 2015), the Second Circuit concluded
that “a stay of proceedings [is] necessary after all claims” in a case “have been referred
to arbitration and a stay requested.” Katz, 794 F.3d at 345 (emphasis added). But
“Katz did not explicitly address whether the FAA requires a district court to stay all
proceedings where … fewer than all claims have been referred to arbitration.” Katsoris
v. WME IMG, LLC, — F. Supp. 3d —, No. 16 Civ. 135 (RA), 2017 WL 775849, at *13
(S.D.N.Y. Feb. 27, 2017). Because the Court has already dismissed two of Plaintiff’s
three claims, it need not consider Katz’s open question: By granting Defendant’s
motion to compel arbitration, the Court is ordering the parties to arbitrate all of
Plaintiff’s remaining claims. And as the Court will explain infra, Katz thus requires the
Court to stay this case.
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case.” Zambrana v. Pressler & Pressler, LLP, No. 16 Civ. 2907 (VEC), 2016 WL
7046820, at *2 (S.D.N.Y. Dec. 2, 2016); see also HDI Glob. SE v. Lexington Ins.
Co., No. 16 Civ. 7241 (CM), 2017 WL 699818, at *4 (S.D.N.Y. Feb. 7, 2017)
(“Section [Four] of the FAA leaves no place for the exercise of discretion by a
district court, but instead mandates that district courts shall direct the parties
to proceed to arbitration on issues as to which an arbitration agreement has
been signed.” (quoting Lapina v. Men Women N.Y. Model Mgmt. Inc., 86 F. Supp.
3d 277, 283 (S.D.N.Y. 2015))).
“In deciding motions to compel [arbitration], courts apply a standard
similar to that applicable for a motion for summary judgment.” Katsoris, 2017
WL 775849, at *5 (internal quotation marks omitted) (quoting Nicosia, 834 F.3d
at 229). “The party seeking to stay the case in favor of arbitration bears an
initial burden of demonstrating that an agreement to arbitrate was made.” HDI
Glob., 2017 WL 699818, at *4 (internal quotation mark omitted) (quoting
Murray v. UBS Sec., LLC, No. 12 Civ. 5914 (KPF), 2014 WL 285093, at *4
(S.D.N.Y. Jan. 27, 2014)). “Conversely, ‘[a] party to an arbitration agreement
seeking to avoid arbitration generally bears the burden of showing the
agreement to be inapplicable or invalid.’” Murray, 2014 WL 285093, at *4
(quoting Harrington v. Atl. Sounding Co., 602 F.3d 113, 124 (2d Cir. 2010)). In
evaluating whether the parties have made these showings, “[a] court must …
‘consider all relevant, admissible evidence submitted by the parties’ and ‘draw
all reasonable inferences in favor of the non-moving party.’” Katsoris, 2017 WL
775849, at *5 (quoting Nicosia, 834 F.3d at 229).
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B.
Analysis
Plaintiff must arbitrate her EPA claim. Defendant has adduced ample
evidence in support of its instant motion. That evidence unambiguously
establishes that Plaintiff agreed to arbitrate any employment disputes with
Defendant, including any disputes arising under the EPA. Even giving
Plaintiff’s letter opposition the liberal construction it is due, see Lefebvre v.
Morgan, — F. Supp. 3d —, No. 14 Civ. 5322 (KMK), 2017 WL 564090, at *5
(S.D.N.Y. Feb. 10, 2017) (“[B]ecause Plaintiff is proceeding pro se, the Court
must construe his pleadings liberally and interpret them to raise the strongest
arguments that they suggest.” (internal quotation marks and citations
omitted)), Plaintiff has provided this Court no reason to question the validity of
the parties’ agreement to arbitrate. In sum, all four factors this Court must
consider militate in favor of compelling arbitration and staying this case:
First, the parties entered into a binding arbitration agreement. “Whether
or not the parties have agreed to arbitrate is a question of state contract law.”
Fleming v. Crew, No. 16 Civ. 2663 (GHW), 2016 WL 6208570, at *3 (S.D.N.Y.
Oct. 21, 2016) (quoting Schnabel, 697 F.3d at 119). New York law — which
Defendant contends (and Plaintiff does not dispute) governs here — recognizes
a “long-standing rule … that an arbitration clause in a written agreement is
enforceable ... when it is evident that the parties intended to be bound by the
contract.” Fiveco, Inc. v. Haber, 11 N.Y.3d 140, 144 (2008) (internal quotation
marks omitted) (quoting God’s Battalion of Prayer Pentecostal Church, Inc. v.
Miele Assocs., LLP, 6 N.Y.3d 371, 373 (2006)). And this intent must be beyond
10
question: In New York, “[a] party to an agreement may not be compelled to
arbitrate its dispute with another unless the evidence establishes the parties’
clear, explicit and unequivocal agreement to arbitrate.” Id. (internal quotation
marks omitted) (quoting Miele Assocs., 6 N.Y.3d at 374).
Plaintiff and Defendant clearly, explicitly, and unequivocally agreed to
arbitrate employment disputes. By signing a Solutions InSTORE
Acknowledgement Form on the first day of her employment with Defendant,
Plaintiff agreed to be bound by Step 4 unless she opted out of arbitration by
completing a Solutions InSTORE Election Form within 30 days of her hiring
date. Plaintiff never submitted a Solutions InSTORE Election Form. She
therefore agreed to follow Step 4.
In Teah v. Macy’s Inc., No. 11 Civ. 1356 (CBA), 2011 WL 6838151
(E.D.N.Y. Dec. 29, 2011), Judge Amon of the Eastern District of New York
confronted a nearly identical scenario: An employee of Defendant’s, Prince
Teah, electronically signed a Solutions InSTORE Acknowledgement Form after
being hired, did not thereafter submit a Solutions InSTORE Election Form,
then sued Defendant under Title VII. Teah, 2011 WL 6838151, at *1-2. In
granting Defendant’s motion to compel arbitration in that case, Judge Amon
reasoned that Teah had “manifest[ed] his assent [to Step 4] by” signing the
Solutions InSTORE Acknowledgement Form and by declining to complete a
Solutions InSTORE Election Form. Id. at *5. That reasoning applies with
equal force here. Put simply, Plaintiff and Defendant entered into an
arbitration agreement.
11
Second, the scope of the parties’ arbitration agreement explicitly
encompasses Plaintiff’s EPA claim. The Plan Document provides that claims
arising under the Fair Labor Standards Act (the “FLSA”) “shall be subject to
arbitration.” (Solutions InSTORE Plan Document 6). The EPA “was enacted as
an amendment to the [FLSA]” and is part of that statute. Lifrak v. N.Y.C.
Council, 389 F. Supp. 2d 500, 503 (S.D.N.Y. 2005); see 29 U.S.C. § 206.
Third, there is no evidence that Congress intended claims arising under
the EPA “to be nonarbitrable.” Zambrano, 2016 WL 5339552, at *5 (quoting
Genesco, 815 F.2d at 844); see Steele v. L.F. Rothschild & Co., 701 F. Supp.
407, 408 (S.D.N.Y. 1988). The Court is mindful that “[t]he burden of
showing ... legislative intent [to preclude arbitration] lies with the party
opposing arbitration.” Arrigo v. Blue Fish Commodities, Inc., 704 F. Supp. 2d
299, 304 (S.D.N.Y. 2010) (citation omitted) (concluding “that Congress did not
intend FLSA claims to be non-arbitrable”), aff’d, 408 F. App’x 480 (2d Cir.
2011) (summary order). Plaintiff has made no such showing.
Finally, because Plaintiff’s EPA claim is her only remaining claim in this
suit, the Court must stay this case pending the outcome of the parties’
arbitration. Although Defendant requests such a stay, it overlooks the fact
that the Plan Document calls for a different outcome: “If a party files a lawsuit
in court to resolve claims subject to arbitration, both [parties] agree that the
court shall dismiss the lawsuit and require the claim to be resolved through
the Solutions InSTORE program.” (Solutions InSTORE Plan Document 7). But
the Second Circuit’s decision in Katz v. Cellco Partnership, 794 F.3d 341 (2d
12
Cir. 2015), makes plain that the FAA forbids a dismissal here. Per Katz: “[T]he
text, structure, and underlying policy of the FAA mandate a stay of proceedings
when all of the claims in an action have been referred to arbitration and a stay
requested.” Katz, 794 F.3d at 347.
The Plan Document, however, contains a severability provision. It
provides that any part of the Plan Document that is “held to be unlawful or
unenforceable … shall be modified automatically to comply with applicable
law,” and that “[i]n the event of [such] an automatic modification … the
remainder of [the Plan Document] shall not be affected.” (Solutions InSTORE
Plan Document 18). The version of the Plan Document that governs Plaintiff’s
employment relationship with Defendant was issued in 2004, over a decade
before the Second Circuit decided Katz. And Katz forecloses that Plan
Document’s requirement that a court dismiss a case after referring all of the
claims in that case to arbitration. Consequently, the Court concludes that this
provision of the Plan Document is unenforceable, and modifies it to reach the
same result Defendant requests: a stay.
CONCLUSION
The Court is sympathetic to Plaintiff’s expressed concerns about the
arbitration process generally and her prior arbitration experience in particular.
The Court expects that Defendant and the arbitrator will each do their part to
ensure that Plaintiff is treated with dignity and that her claims are given
appropriately thoughtful consideration. That said, the facts and law are clear
that Plaintiff’s claim must proceed to arbitration. Accordingly, and for the
13
reasons set forth above, Defendant’s motion to compel arbitration and stay this
case is GRANTED. This case is STAYED pending the resolution of the parties’
arbitration. To this end, Defendant is ORDERED to file a letter with the Court
on or before June 26, 2017, setting forth a timeline for the parties’
arbitration.
The Clerk of Court is ORDERED to terminate Docket Entry 65.
SO ORDERED.
Dated:
May 25, 2017
New York, New York
__________________________________
KATHERINE POLK FAILLA
United States District Judge
A copy of this Order was mailed by Chambers to:
Roseann Crawley
656 Veterans Highway
Apt. 1C
Hauppauge, NY 11788
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