14 F. Supp. 3d 322
S.D.N.Y.2014Background
- Marciano applied for a DCH Auto Group job in New York in Jan 2009 and signed an Employment Application containing an Arbitration Agreement and related Acknowledgement pages.
- She began employment as Internet Manager in Feb 2009 and alleges gender harassment/discrimination and disability discrimination over roughly two years, culminating in termination on March 30, 2011.
- Plaintiff filed a multi-stage procedural history starting pro se in 2011, with a Third Amended Complaint filed April 16, 2013 and service completed May 13, 2013.
- Defendants moved to compel arbitration under the FAA on July 1, 2013, and the Court engaged in comprehensive briefing, responses, and sur-replies.
- The Court found the Arbitration Agreement valid and the scope broad enough to cover Title VII, ADA, and NYHRL claims, stayed the action pending arbitration, and denied attorneys’ fees to Defendants.
- The arbitration clause potentially binds Marciano to arbitrate her claims against Fee and Lam as well, and the case remains stayed pending arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of the arbitration clause | Marciano contends she did not assent, and the clause was illusory, with lack of consideration and possible coercion. | Arbitration clause was signed and binding; there was assent, no illusory promise, adequate consideration, and no unconscionability. | Arbitration agreement is valid and enforceable. |
| Scope of the arbitration clause | Plaintiff argues the arbitration clause does not cover her asserted Title VII, ADA, or NYHRL claims. | Arbitration clause covers any claim arising from employment, including discrimination claims under Title VII, ADA, NYHRL. | Claims fall within the scope of the arbitration agreement. |
| Remedy: stay vs dismissal and costs/fees | Request for dismissal and potential recovery of costs; argues arbitration could be costly and burdensome. | FAA requires stay; seek fees only in limited circumstances. | Court stays action pending arbitration and denies attorneys’ fees. |
Key Cases Cited
- In re Am. Express Fin. Advisors Sec. Litig., 672 F.3d 113 (2d Cir.2011) (two-step arbitrability and scope framework)
- Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (Supreme Court, 2000) (costs can render arbitration prohibitively expensive but burden on asserting party)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (Supreme Court, 2002) (two-part test for arbitrability (contract formation and scope))
- Wachovia Bank, N.A. v. VCG Special Opportunities Master Fund, Ltd., 661 F.3d 164 (2d Cir.2011) (summary-judgment-like standard for arbitrability)
- Specht v. Netscape Communications Corp., 306 F.3d 105 (2d Cir.2002) (assent to arbitration even where not read; signing can bind)
- Chelsea Square Textiles, Inc. v. Bombay Dyeing & Mfg. Co., 189 F.3d 289 (2d Cir.1999) (arbitration clause on reverse side enforcing contract terms)
- Patterson v. Somerset Investors Corp., 96 A.D.3d 817 (N.Y. App. Div.2012) (party bound by signed contract absent excusable ignorance)