513 F.Supp.3d 374
S.D.N.Y.2021Background
- Plaintiff Taylor Gilbert, an Indeed senior account executive since 2015, alleges she was raped by colleague Aaron Schwartz at a July 2015 company orientation in Stamford, CT, and thereafter suffered ongoing sexual harassment and retaliation by coworkers and supervisors.
- Gilbert signed Indeed employment documents containing arbitration provisions: a 2015 Nondisclosure Agreement, annual Performance Unit Agreements (2015–2019) that incorporated the NDA, and an updated Confidentiality/Arbitration Agreement in May 2019 governed by Texas law.
- Gilbert filed an EEOC charge (Jan. 24, 2020) and sued in federal court (May 18, 2020), asserting Title VII, ADA, NYSHRL/NYCHRL, wage-equality, aiding/abetting, and state criminal/GMVA claims against Indeed and individual defendants (including Schwartz).
- Gilbert refused to sign the 2020 Performance Unit Agreement (which would have reaffirmed the Confidentiality/Arbitration Agreement); Indeed declined to grant 2020 LTIP units but continued to employ her.
- Indeed defendants moved to compel arbitration and initially sought fee-shifting under the agreement (later waived); Schwartz moved to dismiss for lack of personal jurisdiction. The Court compelled arbitration, held arbitrability delegated to the arbitrator, stayed the action, and dismissed Schwartz for lack of personal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Gilbert is bound by preexisting arbitration agreements despite refusing the 2020 Performance Unit Agreement | Gilbert contends her 2020 refusal cut off any prior arbitration obligation; annual reaffirmation was required | Indeed argues prior signed agreements (2015 NDA, yearly PUAs, 2019 Confidentiality Agreement) remain effective and were not superseded | Court: prior agreements remained binding; refusal to sign 2020 PUA did not unilaterally terminate arbitration obligations |
| Whether NY C.P.L.R. § 7515 (prohibiting mandatory arbitration of discrimination claims) invalidates the arbitration clause | Gilbert asserts § 7515 renders arbitration of discrimination claims void under NY law | Indeed contends FAA preempts § 7515 and the FAA governs enforceability | Court: FAA preempts § 7515; state law cannot categorically exempt these statutory claims from arbitration |
| Whether the agreement is unconscionable (esp. the "Failure to Comply" fee-shifting clause) | Gilbert argues clause chills statutory remedies and makes arbitration substantively unconscionable; also procedural unconscionability (take-it-or-leave-it, limited review time) | Indeed initially defended clause but later waived enforcement of fee-shifting; agreement has severability and mutual arbitration terms | Court: fee-shifting concern removed by waiver; arbitration clause not procedurally or substantively unconscionable; severability preserves arbitration if a provision voided |
| Who decides arbitrability (court or arbitrator)? | Gilbert sought court to resolve arbitrability issues (and statutory preemption) | Indeed points to clear delegation language and incorporated JAMS/AAA rules to have arbitrator decide arbitrability | Court: delegation clause and incorporation of JAMS/AAA rules present clear and unmistakable evidence that arbitrator decides arbitrability; send issues to arbitration |
| Whether the Court has personal jurisdiction over Schwartz (individual defendant accused of rape and later contact) | Gilbert contends Schwartz’s visits to NY office and a LinkedIn invitation suffice for long-arm jurisdiction | Schwartz argues contacts with NY were sporadic, incidental to corporate role, and the rape occurred in Connecticut; no purposeful availment | Court: no general or specific personal jurisdiction over Schwartz; contacts insufficient (rape occurred outside NY; LinkedIn invite/infrequent visits do not show purposeful availment); Schwartz dismissed |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state rules that single out or unduly burden arbitration agreements)
- Southland Corp. v. Keating, 465 U.S. 1 (1984) (FAA displaces state laws that require judicial forum when parties agreed to arbitrate)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (statutory employment claims may be subject to arbitration)
- Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115 (2d Cir. 2010) (courts may scrutinize arbitration terms that effectively waive statutory remedies; severance/waiver can cure problematic terms)
- Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019) (clear-and-unmistakable delegation clauses require courts to defer arbitrability questions to arbitrators)
- Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530 (2012) (FAA contains no carve-out for certain claim types; state rebuttal inconsistent with FAA is preempted)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (arbitrability/severability principles; arbitration clauses generally enforceable even when contract validity contested)
- Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681 (1996) (state laws that single out arbitration agreements for special treatment are preempted)
- Waffle House, Inc. v. E.E.O.C., 534 U.S. 279 (2002) (agency enforcement coexists with private arbitration; arbitration does not bar EEOC from pursuing claims)
- Contec Corp. v. Remote Sols., Co., Ltd., 398 F.3d 205 (2d Cir. 2005) (incorporation of arbitral rules like AAA/JAMS supports delegation of arbitrability to arbitrator)