Caccavelli v. Jetro Holdings, LLC, 1:17-cv-07306

Background

Plaintiffs Marisa Caccavelli and Lee Prophet are former Restaurant Depot employees who filed an FLSA collective action alleging unpaid overtime on December 15, 2017.
Both plaintiffs electronically signed the employer’s Arbitration Agreement (Caccavelli upon rehiring in Jan. 2016; Prophet on Nov. 2, 2015).
The Agreement designates arbitration as the mandatory and exclusive dispute-resolution method and contains (1) a one-year filing period for disputes from the date they accrued and (2) a clause stating claims not timely submitted will be dismissed with prejudice as waived, plus a class/collective-action waiver.
Plaintiffs argued their claims fall outside the Agreement’s temporal scope (filed more than one year after accrual) and that the class/collective-action waiver is unenforceable under the NLRA and Norris–LaGuardia Act.
Defendants moved to compel arbitration and, while noting the Agreement shortens the filing period to one year, asked the court not to enforce automatic dismissal and instead permit arbitration (pointing out unsettled Second Circuit law on shortening statutes of limitations and that FLSA’s statute of limitations might still apply).
The court considered contractual text, FAA precepts favoring arbitration, and recent Supreme Court precedent when resolving temporal scope and enforceability of the class/collective waiver.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Agreement’s one-year temporal filing provision places claims filed after one year outside arbitration	Caccavelli/Prophet: claims filed after the one-year filing period are outside the Agreement and thus not arbitrable	Defendants: Agreement covers disputes and shortens limitations; if claims fall within subject matter, they should be arbitrated (and Defs. offered not to seek automatic dismissal)	Court: Agreement is reasonably read to cover the asserted disputes and arbitration is compelled; claims filed after one year would be dismissed under the Agreement, but Defs. waived that defense for purposes of the motion so arbitration ordered
Whether the Agreement’s clause that dismissal with prejudice follows untimely arbitration is enforceable	Plaintiffs: temporal limit distinct from statute-of-limitations waiver; arbitration only mandatory within one year so later suits could proceed in court	Defendants: contract language and intent show arbitration is mandatory and covers disputes during the (possibly truncated) limitations period	Court: Section 4(c) allows dismissal for untimely claims; plain-language and contra-absurdity principles favor interpreting the Agreement to require arbitration for claims within the contractual scope; arbitration compelled
Enforceability of the Agreement’s class/collective-action waiver in an FLSA/wage case	Plaintiffs: waiver violates NLRA and Norris–LaGuardia Act; thus unenforceable for collective actions	Defendants: waiver is valid and should be enforced as agreed	Court: Epic Systems requires enforcement of individualized arbitration waivers; because claims are subject to the Agreement, the class/collective waiver is enforceable
Whether proceedings should be stayed pending arbitration	Plaintiffs: (implicit) proceed in court if arbitration inapplicable	Defendants: move to compel arbitration and request stay	Court: Granted motion to compel arbitration and stayed proceedings pending arbitration (FAA requires stay when claims are referred and stay requested)

Key Cases Cited

AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (national policy favoring arbitration and enforcement of arbitration agreements)
Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (court must be satisfied parties agreed to arbitrate dispute)
Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840 (doubts as to arbitrability resolved in favor of coverage)
Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (arbitration agreements may lawfully require individualized proceedings; NLRA does not override FAA)
Katz v. Cellco P’ship, 794 F.3d 341 (FAA requires stay of proceedings when claims are referred to arbitration and a stay is requested)