Sutherland v. Ernst & Young LLP
2011 U.S. Dist. LEXIS 26889
| S.D.N.Y. | 2011Background
- Sutherland worked for EY as a low-level accountant from Sept 2008 to Dec 2009; most duties were secretarial, clerical, and data-entry tasks.
- She was paid a fixed salary of $55,000 per year and not compensated for overtime hours.
- She consented to EY's Common Ground Dispute Resolution Program arbitration, which provides for individual, not class-wide arbitration under the FAA.
- Sutherland alleges EY improperly classified her as exempt from overtime under FLSA and NY law, seeking $1,867.02 for 151.5 unpaid overtime hours and class/collective certification.
- EY moved to dismiss, stay, or compel arbitration on an individual basis per the arbitration agreement.
- The court found the arbitration agreement, specifically the class waiver, unenforceable under Amex and related authorities, allowing the case to proceed in court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the EY arbitration class waiver enforceable under Amex and related rulings? | Sutherland argues the waiver precludes vindicating statutory rights given prohibitive costs. | EY argues the waiver is enforceable if costs are manageable and the agreement permits only individual arbitration. | Class waiver is unenforceable; Amex persuasive; waiver prevents vindicating statutory rights. |
Key Cases Cited
- In re American Express Merchants' Litigation, 554 F.3d 300 (2d Cir. 2009) (invalidates class waiver if it blocks statutory rights due to cost and recovery dynamics)
- Stolt-Nielsen S.A. v. Animal-Feeds Int'l Corp., 130 S. Ct. 1758 (U.S. 2010) (limits on class arbitration when contract is silent on class proceedings; consent required)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. 1985) (FAA and arbitration of statutory claims; forum must vindicate rights)
- Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115 (2d Cir. 2010) (arbitration scope and vindication of rights)