Nadeau v. Equity Residential Properties Management Corp.
251 F. Supp. 3d 637
S.D.N.Y.2017Background
- Plaintiff Janice Nadeau worked for Equity Residential from Feb 2015 to June 2016 and signed a pre-employment arbitration agreement covering employment-related disputes to be resolved before the AAA; Equity agreed to pay filing and arbitrator fees.
- Nadeau alleges she was required to work off-the-clock and received a disciplinary counseling report after exchanging an off-duty text complaining about a mandatory, unpaid event.
- Nadeau filed an AAA arbitration demand describing the write-up and related dispute; AAA requested defendant’s payment but later closed the file after Equity failed to pay required fees.
- After Nadeau filed the AAA demand, she was terminated; she alleges retaliation and then sued under the FLSA and New York law for unpaid wages, wage statement violations, overtime, and retaliation.
- Equity moved to compel arbitration and stay the litigation; plaintiff contends Equity breached (or waived) the arbitration agreement by refusing to participate in the AAA proceedings.
- The court denied the motion to compel, finding Equity materially breached the arbitration agreement by refusing to participate in properly initiated arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Equity can compel arbitration despite refusing to participate in AAA proceedings | Nadeau: Equity breached (and alternatively waived) the arbitration agreement by refusing to arbitrate after she properly initiated AAA arbitration | Equity: The arbitration demand was deficient and did not properly initiate arbitration, so Equity’s refusal was not a breach | Court: Nadeau — Held for plaintiff; Equity materially breached by refusing to arbitrate; motion denied |
| Whether Nadeau’s AAA Demand met procedural/form requirements to trigger arbitration | Nadeau: Demand was adequate; AAA treated it as initiated | Equity: Demand lacked signature/date and did not check statutory-rights box, so it was defective | Court: Formalistic defects immaterial; AAA rules and AAA’s initial acceptance show Demand was sufficient to trigger Equity’s obligation |
| Whether the claims in the Demand were within the Arbitration Agreement’s scope | Nadeau: Demand related to employment discipline and unpaid work and falls within broad arbitration clause | Equity: Demand raised non-arbitrable or different claims outside the agreement | Court: Arbitration clause construed broadly; the Demand raised disputes within the clause and Equity should have challenged arbitrability before AAA, not refuse to participate |
| Whether the court should resolve arbitration-scope issues now | Nadeau: Court should enforce contract and deny enforcement when employer breaches | Equity: Issues of arbitrability go to AAA or could justify refusal | Court: Where employer refused to arbitrate, its right to compel is forfeited; court did not need to resolve waiver claim |
Key Cases Cited
- Bensadoun v. Jobe-Riat, 316 F.3d 171 (2d Cir. 2003) (motion to compel arbitration reviewed under summary-judgment–like standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard authority)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (federal policy favoring arbitration and enforcement of arbitration agreements)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (doubts about arbitrability resolved in favor of arbitration)
- Brown v. Dillard’s, Inc., 430 F.3d 1004 (9th Cir. rule that an employer who refuses to participate in properly initiated arbitration may be barred from enforcing the arbitration agreement)
- AT&T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643 (arbitrability ambiguities favor arbitration unless expressly excluded)
- United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574 (principles on arbitrability and exclusion of claims)