Mera v. SA Hospitality Group, LLC
675 F.Supp.3d 442
S.D.N.Y.2023Background
- Plaintiff Danilo Mera was hired as a busser on May 23, 2022, and signed a predispute arbitration agreement governed by the FAA covering disputes "arising out of or in any way relating to" his employment.
- Mera sues Corporate Defendants and two individuals under the FLSA (unpaid wages), NYLL (unpaid wages), NYSHRL and NYCHRL (hostile work environment and sexual-orientation–based harassment).
- Alleged harassment includes repeated Spanish homophobic slurs by co-workers and inappropriate touching and comments by a manager—facts the complaint frames as sexual-orientation–based hostile work environment claims under NYSHRL/NYCHRL.
- Defendants moved to compel arbitration of all claims (or stay the case), relying on the broad arbitration agreement; Plaintiff invoked the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) to avoid arbitration for harassment claims.
- The Court evaluated (1) whether Mera’s allegations fall within the EFAA and (2) whether the arbitration agreement is unenforceable as to some or all claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiff alleged a dispute within the EFAA (i.e., a sexual harassment dispute) | Mera alleges conduct constituting sexual-harassment: repeated homophobic slurs and unwanted touching/comments | Arbitration agreement covers employment disputes but EFAA prevents enforcement for sexual-harassment disputes | Held: Yes. Allegations fall within the EFAA definition of a sexual harassment dispute |
| Whether the EFAA renders the arbitration agreement unenforceable as to the entire case or only claims "relating to" the sexual-harassment dispute | Mera: EFAA makes the predispute arbitration agreement unenforceable as to the entire case | Defs: EFAA should only bar arbitration for claims that actually relate to the sexual-harassment dispute; unrelated claims remain arbitrable | Held: EFAA unenforceable only as to claims that relate to the sexual-harassment dispute; it does not void arbitration for wholly unrelated claims |
| Whether wage-and-hour claims (FLSA, NYLL) must be arbitrated | Mera argues EFAA bars arbitration of entire case (so wage claims stay in court) | Defs argue wage claims are unrelated to the harassment dispute and fall squarely within the arbitration agreement | Held: FLSA and NYLL claims are unrelated to the sexual-harassment dispute and must be compelled to arbitration |
| Case management / remedy | Mera seeks to litigate harassment claims in court and keep all claims there | Defs seek stay pending arbitration and dismissal/compulsion of arbitrable claims | Held: Motion granted in part. Counts I & II (FLSA/NYLL) compelled to arbitration and stayed; Counts III & IV (NYSHRL/NYCHRL) remain in court. Court set deadlines for status update and for Defendants to answer or move on Counts III & IV |
Key Cases Cited
- Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115 (2d Cir. 2010) (FAA governs arbitration agreements affecting interstate commerce)
- Alliance Bernstein Inv. Research & Mgmt., Inc. v. Schaffran, 445 F.3d 121 (2d Cir. 2006) (federal substantive law of arbitrability applies)
- Bird v. Shearson Lehman/Am. Express, Inc., 926 F.2d 116 (2d Cir. 1991) (FAA reflects national policy favoring arbitration)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (arbitration agreements are enforceable save upon general contract defenses)
- Ross v. Am. Express Co., 547 F.3d 137 (2d Cir. 2008) (FAA policy favors arbitration)
- KPMG LLP v. Cocchi, 565 U.S. 18 (2011) (courts must compel arbitration of pendent arbitrable claims)
- Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (arbitration and litigation may proceed in separate forums when appropriate)
- Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986) (hostile work environment actionable under employment discrimination law)
- Katsoris v. WME IMG, LLC, 237 F. Supp. 3d 92 (S.D.N.Y. 2017) (discussing FAA's purpose to place arbitration agreements on equal footing with other contracts)