Sanchez v. Clipper Realty, Inc. et al

Filing 146

ORDER denying 121 Motion for Certificate of Appealability. Before the Court can consider certifying the notice issue for interlocutory appeal, it must consider the threshold issue of whether notice was received in the manner the Court contempla ted. Accordingly, the Court DENIES Plaintiff's motion for interlocutory appeal, without prejudice to its later renewal. In addition, the Court ORDERS Defendants to file a supplemental submission addressing the scope of notice issues raised in t his Order on or before April 4, 2025. If Plaintiff wishes to respond to Defendants' submission, he shall do so on or before April 18, 2025. If either party believes that the existing schedule for briefing on Plaintiff's class certification motion should be delayed pending resolution of this issue, that party must promptly notify the Court. The Clerk of Court is directed to terminate the motion at docket entry 121. (Signed by Judge Katherine Polk Failla on 3/10/2025) (rro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
RODNEY SANCHEZ, on behalf of
himself, FLSA Collective Plaintiff and
the Class,
Plaintiff,
-v.-

21 Civ. 8502 (KPF)
ORDER

CLIPPER REALTY, INC., d/b/a
CLIPPER REALTY, et al.,
Defendants.
KATHERINE POLK FAILLA, District Judge:
The instant wage and hours case has yielded three opinions from this
Court and one from the Second Circuit. In the first opinion, Sanchez v. Clipper
Realty, Inc., 638 F. Supp. 3d 357 (S.D.N.Y. 2022) (“Sanchez I”), aff’d, No. 222917-cv, 2023 WL 7272062 (2d Cir. Nov. 3, 2023) (“Sanchez III”), the Court
found that although the union of which Plaintiff Sanchez was a member had
the authority to bind him to a collective bargaining agreement (or “CBA”)
during the term of his employment, Plaintiff was not bound by amendments to
the CBA in March 2022 that purported to require arbitration of disputes
between the parties as to “any federal, state, and/or local law or regulation” —
here, the Fair Labor Standards Act (the “FLSA”) and the New York Labor Law
(the “NYLL”). Sanchez I, 638 F. Supp. 3d at 468-71. In relevant part, the Court
found that (i) the CBA in place during the time of Plaintiff’s employment did not
“clearly and unmistakably compel arbitration of Plaintiff’s FLSA and NYLL
claims,” and (ii) the March 2022 Addendum and the 2023 CBA, which did have

sufficiently specific arbitration provisions, were not binding on Plaintiff because
his employment had ended before their issuance. Id. In its second opinion,
this Court granted Defendants’ motion to stay the case while they sought
interlocutory appeal of the Court’s denial of their motion to compel arbitration.
Sanchez v. Clipper Realty, Inc., No. 21 Civ. 8502 (KPF), 2022 WL 17091007
(S.D.N.Y. Nov. 21, 2022) (“Sanchez II”).
After the Second Circuit affirmed this Court’s decision denying the
motion to compel arbitration, see Sanchez III, 2023 WL 7272062, at *1-2, the
parties continued with discovery and Plaintiff submitted a motion for
conditional certification of a collective action under Section 216(b) of the FLSA.
This motion precipitated the fourth opinion in this case, in which this Court
granted in part Plaintiff’s motion for conditional certification, approved in large
part Plaintiff’s proposed notice of the collective action, and denied Plaintiff’s
motion for equitable tolling. Sanchez v. Clipper Realty, Inc., No. 21 Civ. 8502
(KPF), 2024 WL 3159821, at *1 (S.D.N.Y. June 25, 2024) (“Sanchez IV”). As
relevant here, the Court granted the motion to conditionally certify a collective
action
limited to: (i) porters, handymen, concierges, and
repairmen, i.e., the specific types of employees that
Plaintiff has sufficiently detailed being subject to
Defendants’ common policy or plan; and (ii) employees
who worked at Clover House, 50 Murray Street, and 53
Park Place, i.e., the buildings at which Plaintiff and the
declarants attest to experiencing the alleged common
policy or plan.
Sanchez IV, 2024 WL 3159821, at *8. However, the Court excluded from the
collective those “employees who are bound by the 2022 Addendum or the
2

collective bargaining agreement between the Union and Clover House effective
March 1, 2023, through February 28, 2025.” Id. at *9; see also id. at *6
(discussing the “‘two schools of thought’ with respect to whether courts should
exclude from a proposed collective putative collective members who are subject
to an arbitration agreement with the employers involved in the proceeding”).
After meeting and conferring with defense counsel, Plaintiff’s counsel
submitted a revised proposed collective notice, which this Court approved by
endorsement dated July 16, 2024. (Dkt. #116). That same day, the Court
endorsed a briefing schedule for Plaintiff’s contemplated motion for
interlocutory appeal of that portion of Sanchez IV withholding notice from
putative members of the collective who were subject to the 2022 Addendum or
the 2023 CBA. (Dkt. #117). The parties briefed Plaintiff’s motion throughout
July and August 2024. (See Dkt. #122 (Plaintiff’s memorandum in support
(“Pl. Br.”)); Dkt. #127 (Defendants’ memorandum in opposition (“Def. Opp.”));
Dkt. #128 (Plaintiff’s reply memorandum in further support (“Pl. Reply”))).
Broadly speaking, Plaintiff argues that this Court’s recognition of the
divide among courts in the Second Circuit as to the appropriateness of
including employees subject to arbitration agreements within FLSA collectives
militates in favor of interlocutory appeal, insofar as the issue implicates a
“controlling question of law,” as to which there is “substantial ground for
difference of opinion,” for which resolution would materially advance the
instant litigation. (See Pl. Br.). Defendants object, arguing that the Court’s
decision as to the conditional certification of a collective action under FLSA is
3

an exercise of its discretion that did not involve a “controlling question of law,”
and that Plaintiff has failed to demonstrate “substantial reason to doubt the
correctness of the Court’s ruling.” (See Def. Opp.). In the remainder of this
Order, the Court resolves Plaintiff’s motion.
APPLICABLE LAW
A district court may certify an order for interlocutory appeal where it
finds that “such order [i] involves a controlling question of law [ii] as to which
there is substantial ground for difference of opinion and [iii] that an immediate
appeal from the order may materially advance the ultimate termination of the
litigation.” 28 U.S.C. § 1292(b). The party bringing the motion to certify an
order for interlocutory appeal bears the burden of demonstrating that these
criteria are met. See Casey v. Long Island R.R. Co., 406 F.3d 142, 146 (2d Cir.
2005).
“To satisfy prong one of [Section] 1292(b), [the moving party] must
demonstrate that the question is both controlling and a question of law.”
Tantaros v. Fox News Network, LLC, 465 F. Supp. 3d 385, 389 (S.D.N.Y. 2020).
The term “question of law” “‘refer[s] to a pure question of law that the reviewing
court could decide quickly and cleanly without having to study the record.’”
Capitol Recs., LLC v. Vimeo, LLC, 972 F. Supp. 2d 537, 551 (S.D.N.Y. 2013)
(quoting Consub Del. LLC v. Schahin Engenharia Limitada, 476 F. Supp. 2d
305, 309 (S.D.N.Y. 2007) (internal quotation marks omitted)); accord CBRE, Inc.
v. Pace Gallery of N.Y., Inc., No. 17 Civ. 2452 (ALC) (SN), 2022 WL 683744, at
*4 (S.D.N.Y. Mar. 8, 2022). A question of law is “controlling” where “‘[i] reversal
4

of the district court’s opinion could result in dismissal of the action, [ii] reversal
of the district court’s opinion, even though not resulting in dismissal, could
significantly affect the conduct of the action, or [iii] the certified issue has
precedential value for a large number of cases.’” Flo & Eddie, Inc. v. Sirius XM
Radio Inc., No. 13 Civ. 5784 (CM), 2015 WL 585641, at *1 (S.D.N.Y. Feb. 10,
2015) (quoting In re Lloyd’s Am. Trust Fund Litig., No. 96 Civ. 1262 (RWS), 1997
WL 458739, at *4 (S.D.N.Y. Aug. 12, 1997) (citing Klinghoffer v. S.N.C. Achille
Lauro, 921 F.2d 21, 24 (2d Cir. 1990)); accord Tantaros, 465 F. Supp. 3d at
389.
As to the second prong of Section 1292(b), substantial ground for
difference of opinion on an issue exists when “[i] there is conflicting authority
on the issue, or [ii] the issue is particularly difficult and of first impression for
the Second Circuit.” In re Enron Corp., Nos. 06 Civ. 7828 (SAS) & 07 Civ. 1957
(SAS), 2007 WL 2780394, at *1 (S.D.N.Y. Sept. 24, 2007) (internal quotation
marks omitted). In determining whether there is conflicting authority on an
issue, the question is, put simply, whether there are “differing rulings [by
district court judges] within this Circuit” on the issue. Yu v. Hasaki Rest., Inc.,
874 F.3d 94, 98 (2d Cir. 2017).
Finally, an interlocutory appeal materially advances the ultimate
termination of a litigation when it “promises to advance the time for trial or to
shorten the time required for trial.” Transp. Workers Union of Am., Loc. 100,
AFL-CIO v. N.Y.C. Transit Auth., 358 F. Supp. 2d 347, 350 (S.D.N.Y. 2005); see
also Primavera Familienstifung v. Askin, 139 F. Supp. 2d 567, 570 (S.D.N.Y.
5

2001). In evaluating this factor, courts must consider the “institutional
efficiency of both the district court and the appellate court.” SEC v. Rio Tinto
PLC, No. 17 Civ. 7994 (AT) (DCF), 2021 WL 1893165, at *2 (S.D.N.Y. May 11,
2021). Courts “place particular weight” on this third factor, Transp. Workers,
358 F. Supp. 2d at 350, which, in practice, is closely connected to the first
factor, see, e.g., In re Facebook, Inc., IPO Sec. & Derivative Litig., 986 F. Supp.
2d 524, 536 (S.D.N.Y. 2014).
Courts must assess motions to certify an order for interlocutory appeal
against the backdrop of the “basic tenet of federal law [that] delay[s] appellate
review until a final judgment has been entered.” Koehler v. Bank of Berm. Ltd.,
101 F.3d 863, 865 (2d Cir. 1996). Indeed, “‘[i]nterlocutory appeals are strongly
disfavored in federal practice’” because “‘[m]ovants cannot invoke the appellate
process as a vehicle to provide early review of difficult rulings in hard cases.
Only exceptional circumstances will justify a departure from [this] basic
policy[.]” Glatt v. Fox Searchlight Pictures Inc., No. 11 Civ. 6784 (WHP), 2013
WL 5405696, at *1 (S.D.N.Y. Sept. 17, 2013) (quoting In re Ambac Fin. Grp., Inc.
Sec. Litig., 693 F. Supp. 2d 241, 282 (S.D.N.Y. 2010) (internal quotation marks
omitted)); see also Hermès Int’l v. Rothschild, 590 F. Supp. 3d 647, 651
(S.D.N.Y. 2022) (“Interlocutory appeals are designed to be rare and reserved for
exceptional circumstances, lest they disrupt the orderly disposition of lawsuits
in their due course.” (citing SEC v. Citigroup Glob. Mkts., Inc., 827 F. Supp. 2d
336, 337 (S.D.N.Y. 2011))). Accordingly, Section 1292(b) “must be strictly
construed.” Wausau Bus. Ins. Co. v. Turner Constr. Co., 151 F. Supp. 2d 488,
6

491 (S.D.N.Y. 2001) (internal quotation marks omitted); accord In re Facebook,
986 F. Supp. 2d at 530.
At the same time, “[w]hen a ruling satisfies [the Section 1292(b)] criteria
and ‘involves a new legal question or is of special consequence,’ then the
district court ‘should not hesitate to certify an interlocutory appeal.’” Balintulo
v. Daimler AG, 727 F.3d 174, 186 (2d Cir. 2013) (quoting Mohawk Indus., Inc.
v. Carpenter, 558 U.S. 100, 111 (2009)). As the Second Circuit has explained,
“Congress passed [Section 1292(b)] primarily to ensure that the courts of
appeals would be able to ‘rule on … ephemeral question[s] of law that m[ight]
disappear in the light of a complete and final record.’” Weber v. United States,
484 F.3d 154, 159 (2d Cir. 2007) (omission and second and third alterations in
original) (quoting Koehler, 101 F.3d at 864); see also id. (“[By enacting section
1292(b),] Congress also sought to assure the prompt resolution of knotty legal
problems.” (citing Note, Interlocutory Appeals in the Federal Courts Under 28
U.S.C. § 1292(b), 88 HARV. L. REV. 607, 609 (1975))).
Finally, “even where the three legislative criteria of [S]ection 1292(b)
appear to be met, district courts have unfettered discretion to deny certification
if other factors counsel against it.” Transp. Workers Union of Am., Loc. 100,
358 F. Supp. 2d at 351 (internal quotation marks omitted). “Such unfettered
discretion can be for ‘any reason, including docket congestion’ and ‘the systemwide costs and benefits of allowing the appeal[.]’” In re Facebook, 986 F. Supp.
2d at 530 (quoting Klinghoffer, 921 F.2d at 24).

7

DISCUSSION
The Court acknowledges that there is merit to certain of Plaintiff’s
arguments in favor of interlocutory appeal. For one thing, courts in this
Circuit remain divided on the propriety of including employees potentially
subject to arbitration provisions within conditionally certified collectives. See
Sanchez IV, 2024 WL 3159821, at *6 (collecting cases); see also Zambrano v.
Strategic Delivery Sols., LLC, No. 15 Civ. 8410 (ER), 2021 WL 4460632, at *10
(S.D.N.Y. Sept. 28, 2021) (collecting cases). And while three circuits have
found that a valid arbitration agreement can preclude issuance of notice in a
FLSA collective action in certain circumstances, see Clark v. A&L Homecare &
Training Ctr., LLC, 68 F.4th 1003, 1011-12 (6th Cir. 2023); Bigger v. Facebook,
Inc., 947 F.3d 1043, 1047 (7th Cir. 2020); In re JPMorgan Chase & Co., 916
F.3d 494, 502-03 (5th Cir. 2019), the Second Circuit has yet to weigh in on the
issue.
Conversely, Defendants are wrong that a court’s resolution of a Section
216(b) motion is a discretionary action that forecloses interlocutory appeal.
See, e.g., Provencher v. Bimbo Bakeries USA, Inc., No. 22 Civ. 198 (WKS), 2024
WL 5164688, at *1 (D. Vt. June 3, 2024) (granting interlocutory appeal to
consider district court’s ability to exercise personal jurisdiction over employees
in other states); cf. Davella v. Ellis Hosp., Inc., No. 20 Civ. 726 (MAD) (MJK),
2024 WL 98352, at *8 (N.D.N.Y. Jan. 9, 2024) (finding that motion for
interlocutory appeal of two-step conditional certification process under FLSA
presented a controlling question of law as to which there was a substantial
8

difference of opinion, but declining to certify interlocutory appeal after
concluding that resolution would not materially advance the litigation); Scott v.
Chipotle Mexican Grill, Inc., No. 12 Civ. 8333 (ALC), 2017 WL 4326081, at *1
(S.D.N.Y. Sept. 25, 2017) (certifying for interlocutory review proper analysis for
decertification of FLSA collective action), aff’d in part, rev’d in part, 954 F.3d
502 (2d Cir. 2020).
After reviewing the parties’ submissions, however, the Court is concerned
about a more fundamental issue, namely, that its imprecision in Sanchez IV
may have caused a result different from that the Court intended. To review,
unlike many of the decisions in which employers merely advert to arbitration
provisions, this Court had the opportunity to review and pass on the
enforceability of the 2022 Addendum and the 2023 CBA. See Sanchez I, 638 F.
Supp. 3d at 362-63, 365-71; see also, e.g., Davis v. Dynata, LLC, No. 22 Civ.
1062 (SVN), 2023 WL 6216809, at *18 (D. Conn. Sept. 25, 2023) (“excluding
from the potential collective those individuals whose claims would be subject to
arbitration” pursuant to the court’s earlier analysis of the enforceability vel non
of various arbitration provisions); cf. Bigger, 947 F.3d at 1047 (allowing notice,
except where “(1) no plaintiff contests the existence or validity of the alleged
arbitration agreements, or (2) after the court allows discovery on the alleged
agreements’ existence and validity, the defendant establishes by a
preponderance of the evidence the existence of a valid arbitration agreement for
each employee it seeks to exclude from receiving notice”); In re JP Morgan
Chase & Co., 916 F.3d at 503 (“Where a preponderance of the evidence shows
9

that the employee has entered into a valid arbitration agreement, it is error for
a district court to order notice to be sent to that employee as part of any sort of
certification. But if the employer fails to establish the existence of a valid
arbitration agreement as to an employee, that employee would receive the same
notice as others.” (footnote omitted)). In other words, given its prior ruling on
enforceability in Sanchez I, the Court felt comfortable excluding “the members
of the Proposed Collective who are subject to the 2022 Addendum or 2023 CBA
[and thus] are bound to arbitrate their FLSA claims.” Sanchez IV, 2024 WL
3159821, at *9; see also id. at *10 (“The Court thus limits the collective to the
above-mentioned types of employees who are bound by neither the 2022
Addendum nor the 2023 CBA.”); id. at *14 (“Third, the notice must be modified
to exclude the aforementioned employees who are subject to the 2022
Addendum or 2023 CBA.”).
The problem, as the Court now realizes, is that its prior decision did not
adequately contend with Plaintiff’s argument in support of conditional
certification that certain employees subject to the 2022 Addendum or the 2023
CBA may have been posted to other job sites that were not subject to either
agreement. (See Dkt. #95 at 1 (“Defendants shift employees around between
buildings requiring them to engage in non-union work.”), 2 (“Mitigating
circumstances also include the already known practice of requiring employees
to engage in work for non-covered buildings or in non-covered roles.”)).
Plaintiff is likely correct that work performed by these employees at noncovered worksites would not be covered by the arbitration provision; at the very
10

least, this fact would seem to warrant such employees receiving notice of the
collective. 1 Defendants appear to acknowledge as much in their opposition.
Early on, they note that
Plaintiff misconstrues the Order because the exclusion
therein was expressly contingent on whether the
employee at issue was bound by the 2022 Addendum
and/or 2023 CBA. If an employee was not subject to
the 2022 Addendum and/or 2023 CBA because they
performed work at another … building or for any other
reason, he or she would be entitled to a collective notice
pursuant to the Order.
(Def. Opp. 2). Defendants reiterate the point at the end of their memorandum:
Plaintiff does not appear to grasp the fact that the Order
only excludes those who are subject to the 2022
Addendum or 2023 CBA. Thus, if certain individuals
were not subject to 2022 Addendum and/or 2023 CBA
because they worked at multiple buildings (as Plaintiff
contends), they would have been included on the
collective list and received a notice.
(Id. at 8).
The question for the Court is the same as that suggested by Plaintiff in
his reply brief (see Pl. Reply 1-2): How can the parties, and the Court, be sure
that employees who are subject to the 2022 Addendum or the 2023 CBA, but
who also worked at a non-covered site during the time period covered by this
litigation, were identified to Plaintiff and provided with notice of the action?

1

The fact that employees of Defendants who were subject to a particular CBA may have
worked at sites not subject to that CBA distinguishes this case from others in this
Circuit in which all of the work performed by the employee was covered by an
agreement with an arbitration provision. See, e.g., Errickson v. Paychex, Inc., 447 F.
Supp. 3d 14, 26 (W.D.N.Y. 2020) (addressing claims brought by Implementation
Coordinators and Implementation Project Managers whose work was covered in full by
arbitration agreements); Morangelli v. Chemed Corp., No. 10 Civ. 0876 (BMC), 2010 WL
11622886, at *3 (E.D.N.Y. June 17, 2010) (same result for case involving service
technicians).

11

After all, Sanchez IV did not explicitly address Plaintiff’s arguments concerning
work at other locations. (See Dkt. #95 at 1-2; see also Pl. Reply 2 (noting that
the Court’s “directive is not qualified according to where individuals subject to
the arbitration agreements actually performed work”)). This uncertainty in the
record is in tension with the Court’s obligation to conclude that employees
excluded from a putative collective are in fact foreclosed from participating by
dint of an arbitration agreement. See McLean v. Cornucopia Logistics, LLC,
No. 19 Civ. 0864 (JS) (AYS), 2021 WL 3709260, at *5 (E.D.N.Y. Aug. 20, 2021)
(“where, as here, it is undisputed that arbitration agreements executed by all
employees are valid and binding … [it] would waste everyone’s time and
resources to conditionally certify a group of individuals that the Court is
virtually certain to decertify at step two” (internal quotation marks and citation
omitted)). Accordingly, the Court directs Defendants to explain to it how they
arrived at the list of names provided to Plaintiff for notice, with particular
emphasis on how Defendants were certain that individuals excluded from
notice because they were subject to the 2022 Addendum or the 2023 CBA
performed no work that was outside of the scope of these agreements.
Depending on the information it receives, the Court may reconsider its prior
restrictions on notice. See generally Esposito v. Suffolk Cnty. Cmty. College,
517 F. Supp. 3d 126, 134 (E.D.N.Y. 2021) (“A district court possesses the
inherent authority to sua sponte reconsider its own interlocutory orders before
they become final.”), aff’d, No. 21-521-cv, 2023 WL 192671 (2d Cir. Jan. 17,
2023) (summary order).
12

CONCLUSION
Before the Court can consider certifying the notice issue for interlocutory
appeal, it must consider the threshold issue of whether notice was received in
the manner the Court contemplated. Accordingly, the Court DENIES Plaintiff’s
motion for interlocutory appeal, without prejudice to its later renewal. In
addition, the Court ORDERS Defendants to file a supplemental submission
addressing the scope of notice issues raised in this Order on or before April 4,
2025. If Plaintiff wishes to respond to Defendants’ submission, he shall do so
on or before April 18, 2025. If either party believes that the existing schedule
for briefing on Plaintiff’s class certification motion should be delayed pending
resolution of this issue, that party must promptly notify the Court.
The Clerk of Court is directed to terminate the motion at docket entry
121.
SO ORDERED.
Dated: March 10, 2025
New York, New York
KATHERINE POLK FAILLA
United States District Judge

13