88 A.D.3d 567
N.Y. App. Div.2011Background
- Respondents represent 728 unnamed current JetBlue pilots and 18 named former JetBlue pilots, all captains or first officers, each under standardized employment agreements with JetBlue.
- Each agreement contains a Base Salary clause (section 3A) requiring a pilot’s base salary to be adjusted by the same percentage as increases granted to newly hired pilots in the same roles.
- Arbitration clause provides for arbitration by a single arbitrator in the pilot’s base of operation, under AAA rules, for disputes regarding interpretation or breach of the agreement.
- JetBlue sought to compel individual arbitration (FAA or CPLR), obtain a stay and injunctions, and seal filings, arguing the agreements limit arbitration to signatories and require individual arbitrations.
- The IAS court held FAA governs the dispute (exemption for certain classes of workers in foreign or interstate commerce) and that New York law applies to the substantive issues; it denied relief related to collective arbitration pending arbitrator determination.
- The dispute centers on whether arbitration may be collective/joint for all pilots or must be individual, and on who decides (court vs arbitrator) this gateway issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FAA applies to these pilots' arbitration | JetBlue | Pilots | FAA applies; transportation workers exemption includes pilots primarily moving passengers |
| Who decides if collective arbitration is permissible | JetBlue | Pilots | Arbitrators should decide whether collective arbitration is permitted; gateway issue not for court |
| Whether the forum-selection clause is a gateway issue to be decided by court | JetBlue | Pilots | Forum clause can be waived by pilots; not a gateway issue requiring court decision |
Key Cases Cited
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (U.S. 2001) (exemption for transportation workers; focus on movement of goods in interstate commerce)
- Kowalewski v. Samandarov, 590 F. Supp. 2d 477 (S.D.N.Y. 2008) (car service drivers not exempt where industry largely transports people; primary purpose governs exemption)